<PAGE>
As filed with the Securities and Exchange Commission on May 30, 1997
Registration No. 333-24023
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 1 TO
FORM S-3
REGISTRATION STATEMENT
under
THE SECURITIES ACT OF 1933
FIRST NBC CREDIT CARD MASTER TRUST
(Issuer of the Certificates)
FIRST NATIONAL BANK OF COMMERCE
(Originator of the Trust described herein and registrant)
(Exact name as specified in registrant's charter)
United States 72-0269760
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification Number)
210 Baronne Street
New Orleans, Louisiana 70112
(504) 623-1371
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
Michael A. Flick
Chief Administrative Officer
First Commerce Corporation
201 Saint Charles Avenue, 29th Floor
New Orleans, Louisiana 70170
(504) 623-1492
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copies to:
Robert F. Hugi, Esq. Edward M. DeSear, Esq.
MAYER, BROWN & PLATT ORRICK, HERRINGTON & SUTCLIFFE LLP
190 South LaSalle Street 666 Fifth Avenue
Chicago, Illinois 60603 New York, New York 10103
(312) 782-0600 (212) 506-5000
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 being 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 of 1933, please check the
following box and list the Securities Act registration statement 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 of 1933, please 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. [ ]
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
=================================================================================================
Proposed Proposed
maximum maximum
Title of offering aggregate Amount of
securities to Amount to be price per offering registration
be registered registered certificate(1) price(1) fee(2)
<S> <C> <C> <C> <C>
Asset Backed $750,000,000 100% $750,000,000 $227,272.73
Certificates(3)
=================================================================================================
(1) Estimated solely for the purpose of calculating the registration fee.
(2) Includes amount previously paid.
(3) Also registered hereby are secondary market sales in Asset Backed
Certificates to be effected by First National Bank of Commerce, the
volume of which cannot be determined.
</TABLE>
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.
<PAGE>
INTRODUCTORY STATEMENT
This Registration Statement contains (i) the form of
Prospectus relating to the offering of a series of Asset Backed
Certificates issued by First NBC Credit Card Master Trust, and (ii)
a form of Prospectus Supplement relating to offerings of particular
series of Asset Backed Certificates. Each Prospectus Supplement
relates only to the securities described therein and is a form
which may be used by First National Bank of Commerce ("First NBC"),
among others, to offer Asset Backed Certificates under this
Registration Statement.
Because First NBC or an affiliate of First NBC intends to make
a market in the Certificates for which it acts as an underwriter
and may prepare a separate market-making prospectus and prospectus
supplement in connection therewith, immediately following the form
of Prospectus Supplement, there follow (i) alternate pages of the
Prospectus and (ii) alternate pages of the form of Prospectus
Supplement, which may be used by First NBC or such affiliate in
connection with any offers and sales relating to market-making
transactions in the Certificates. All other pages of the Prospectus
and the form of Prospectus Supplement are also to be used for the
market-making Prospectus and Prospectus Supplements.
<PAGE>
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 SUPPLEMENT AND ACCOMPANYING 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 May 29, 1997
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED __________ ___, 199_
$
FIRST NBC CREDIT CARD MASTER TRUST
$ Class A [Floating Rate] [__%] Asset
Backed Certificates, Series 199_-_
$ Class B [Floating Rate] [__%] Asset
Backed Certificates, Series 199_-_
First National Bank of Commerce
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") will represent the right to receive
certain payments from the First NBC Credit Card Master Trust, created
pursuant to a Pooling and Servicing Agreement between First National Bank
of Commerce ("First NBC" or the "Bank"), as transferor and servicer, and
The First National Bank of Chicago, as trustee. Certain capitalized terms
used in this Prospectus Supplement are defined elsewhere in this Prospectus
Supplement and the accompanying Prospectus. Please refer to the "Index of
Defined Terms for Prospectus Supplement" on page S-50 and the "Index of
Defined Terms for Prospectus" on page 78 for a listing of the pages on
which such terms are defined.
The property of the Trust includes receivables (the "Receivables")
generated from time to time in a portfolio of MasterCard(R), VISA(R) and
private label revolving credit card accounts (the "Accounts"), 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, all monies in certain bank accounts of the Trust and certain
other property as described herein. In addition, the Collateral Interest will
be issued in the initial amount of $_________ and will be subordinated to the
Certificates as described herein. First NBC will initially own the remaining
undivided interest in the Trust not represented by the Certificates, the
<PAGE>
Collateral Interest and other interests issued by the Trust from time to time
and will initially service the Receivables. First NBC may from time to time
offer other Series of certificates that evidence undivided interest in certain
assets of the Trust, which may have terms significantly different from the
Certificates.
(continued on next page)
There currently is no secondary market for the Certificates, and there is
no assurance that one will develop or, if one does, that it will continue
until the Certificates are paid in full. Potential investors should
consider, among other things, the information set forth in "Risk Factors"
commencing on page S-17 herein and page 78 in the Prospectus.
THE CERTIFICATES REPRESENT INTERESTS IN THE TRUST ONLY AND DO NOT REPRESENT
INTERESTS IN OR OBLIGATIONS OF FIRST NBC OR ANY AFFILIATE THEREOF. A
CERTIFICATE IS NOT A DEPOSIT AND NEITHER THE CERTIFICATES NOR THE
UNDERLYING ACCOUNTS OR RECEIVABLES ARE INSURED OR GUARANTEED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION OR (EXCEPT FOR RECEIVABLES ARISING IN PRIVATE
LABEL ACCOUNTS) ANY OTHER GOVERNMENTAL AGENCY.
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>
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<S> <C> <C> <C>
Price to Underwriting Proceeds to
Public(l) Discount Transferor(l)(2)
Per Class A Certificate........ % % %
Per Class B Certificate........ % % %
Total.......................... $ $ $
(1) Plus accrued interest, if any, at the Class A Rate or the Class B Rate, as applicable,
from ________________, 199____.
(2) Before deduction of expenses estimated to be $______________.
</TABLE>
The Certificates are offered by the Underwriters and First NBC
when, as and if issued by the Trust and accepted by the Underwriters and
First NBC 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_
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 London interbank offered rate for ___-month United States
dollar deposits ("LIBOR"), determined as described herein, prevailing on
the related LIBOR Determination Date (as defined herein) with respect to
such period] (the "Class A 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
LIBOR prevailing on the related LIBOR Determination Date with respect to
each such period] (the "Class B Rate"). [The initial LIBOR Determination
Date is ____________ ___, 199_.] Interest with respect to the Certificates
will be distributed on ______________ ___, 199_ and on the [15th] day of
each month thereafter (or, if such [15th] 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 the 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 the circumstances described herein. See
"Maturity Assumptions."
The Class B Certificates will be subordinated to the Class A
Certificates, and 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.]
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN
TRANSACTIONS THAT STABILIZE, MAINTAIN, OR OTHERWISE AFFECT THE PRICE OF THE
CERTIFICATES, INCLUDING OVER-ALLOTMENT TRANSACTIONS, STABILIZING
TRANSACTIONS, SYNDICATE COVERING TRANSACTIONS AND PENALTY BIDS. FOR A
DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITING."
The Certificates offered hereby constitute a separate Series of
certificates being offered by the 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.
<PAGE>
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 the terms are defined is found
in the "Index of Defined Terms for Prospectus Supplement" on page S-50 and
the "Index of Defined Terms for Prospectus" on page 78.
The Trust............................ The First NBC Credit Card Master
Trust.
Title 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").
Class A Rate......................... [____% per annum.] [For each Interest
Period, a rate per annum equal to
___-month LIBOR for United States
dollar deposits, plus ___%.]
Class B Rate......................... [____% per annum.] [For each Interest
Period, a rate per annum equal to
___-month LIBOR for United States
dollar deposits, plus ___%.]
Distribution Dates.................... The ___ day of each _________ (or, if
any such day is not a business day,
the next succeeding business day),
commencing on ______________, 1997.
Class A Scheduled Payment Date....... The __________, 200_ Distribution
Date.
Class B Scheduled Payment Date....... The __________, 200_ Distribution
Date.
Closing Date......................... _______________, 1997.
Credit Enhancement................... For the Class A Certificates, the
subordination of the Collateral
Interest (in an initial amount of
$______________, ___% of the
initial Investor Interest) and the
Class B Certificates, as described
herein. For the Class B
Certificates, the subordination of
the Collateral Interest, as
described herein.
Class Structure...................... The Class A and Class B Certificates
differ in terms of priorities and
are expected to differ in terms of
ratings. The Class B Certificates
are subordinated to the Class A
Certificates to the extent
described herein in order to
provide credit enhancement for the
Class A Certificates. The
Collateral Interest (which is not
offered hereby) is subordinated to
both the Class A and the Class B
Certificates to the extent
described herein in order to
provide credit enhancement. (See
"Description of Certificates--
Subordination" and "--Application
of Collections.") See "Risk
Factors-- Effect of Subordination"
in the Prospectus for a discussion
of the risks associated with
purchasing certificates of a
subordinated class. Also see "Class
A Certificate Rating" and "Class B
Certificate Rating" below in this
Summary of Terms.
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 Holders (the "Class A Investor
Interest"), the Class B Holders
(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. As
used in this Prospectus Supplement,
the term "Holders" refers to
holders of the Certificates, the
term "Class A Holders" refers to
holders of the Class A
Certificates, the term "Class B
Holders" refers to holders of the
Class B Certificates, the term
"Collateral Interest Holder" refers
to the holder of the Collateral
Interest and the term "Agreement"
(unless the context requires
otherwise) refers to the Agreement
as supplemented by the Series
199_-_ Supplement pursuant to which
the Certificates are issued (the
"Series 199_-_ Supplement").
The Class A Certificates will repre-
sent 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
the Closing Date through _________
__, 199_, and from __________ __,
199_ through __________ __, 199_
and with respect to each Interest
Period thereafter, at the Class A
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 repre-
sent 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_ and from
________ __, 199_ through
___________ __, 199_ and with
respect to each Interest Period
thereafter, at the Class B 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 Holders until the Class A
Investor Interest is paid in full.
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 Investor
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
Investor 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, Net
Default Amounts and Net Recoveries
with respect to each Monthly
Period, the Class A Investor
Interest will be further reduced by
the amount on deposit in the
Principal Funding Account from time
to time (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
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 and subject to any
reallocation of such amounts as
described herein) varying
percentages of collections of
Finance Charge Receivables (subject
to reallocation of Group Investor
Finance Charge Collections to other
Series in Group I, as described
under "Description of the
Certificates -- Reallocations Among
Certificates in Different Series
within a Reallocation Group" in the
Prospectus), Principal Receivables
and will be allocated varying
percentages of Net Default Amounts
and Net Recoveries during each
calendar month (a "Monthly
Period"). Collections of Finance
Charge Receivables, Net Default
Amounts and Net Recoveries 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 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, no further
principal or interest payments will
be made on the Certificates (except
as described in "Description of the
Certificates -- Final Payment of
Principal; Termination" in the
Prospectus).
[Other Series...................... The Certificates will be the
_____________ Series of investor
certificates issued by the Trust,
all of which will be outstanding on
the Closing Date. See "Annex I--
Other Series" for a summary of the
principal terms of the __________
outstanding Series of investor
certificates. Additional Series are
expected to be issued from time to
time by the Trust. See "The Pooling
and Servicing Agreement Generally
-- New Issuances" and "--
Reallocations Among Certificates of
Different Series within a
Reallocation Group" in the
Prospectus and "Maturity
Considerations" herein.]
Receivables.......................... The Receivables arise in Accounts in
the Bank Portfolio that satisfy the
eligibility criteria set forth in
the Agreement as of the Cut-Off
Date. The Receivables consist of
Principal Receivables and Finance
Charge Receivables. In addition,
certain amounts of Interchange and
Other Account Revenues attributed
to the Accounts will be allocated
to the Certificates and treated as
Finance Charge Receivables. See
"First NBC's Credit Card
Activities-- Interchange and Other
Account Revenues" in the
Prospectus.
The aggregate amount of Receivables
in the Accounts as of the end of
the day on the day after the
Cut-Off Date 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 amount of 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. Holders may elect
to hold their Certificates through
DTC (in the United States) or Cedel
or Euroclear (in Europe). 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.
The Servicing Fee Rate for the
Certificates will be ___% (the
"Servicing Fee Rate"). 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 Monthly 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.
Revolving Period.................... The "Revolving Period" for the
Certificates means the period from
and including the Closing Date to,
but not including, the commencement
of the earlier of (a) the
Controlled Accumulation Period and
(b) the Rapid Amortization Period.
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 has occurred,
be treated as Shared Principal
Collections and allocated to the
holders of certificates of other
Principal Sharing Series issued and
outstanding or, subject to certain
limitations, paid to the holder of
the Transferor Certificate or
deposited into the Excess Funding
Account. 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 occurs, the
controlled accumulation period for
the Certificates (the "Controlled
Accumulation Period") is scheduled
to begin at the close of business
on ____________ __, _____. 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 not later
than the close of business on
__________ ____. The Controlled
Accumulation Period 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) Available
Investor Principal Collections for
the related Monthly Period, (b) the
sum of the Controlled Accumulation
Amount for such Monthly Period and
any portion of the Controlled
Accumulation Amount for any prior
Monthly Period that has not yet
been deposited (such 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 month in which the
Controlled Accumulation Period
begins until the Principal Funding
Account Balance is equal to the
Class A Investor Interest. On each
Transfer Date during the Controlled
Accumulation Period beginning with
the Transfer Date after the one on
which the Class A Investor Interest
has been provided for, an amount
equal to the lesser of (a)
Available Investor Principal
Collections for the related Monthly
Period (less any amount allocated
to the Class A Investor Interest as
described in the prior sentence)
and (b) the Class B Investor
Interest on such Transfer Date will
be deposited into the Distribution
Account for distribution to the
Class B Holders 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 sum of the Class A
Monthly Principal and the Class B
Monthly Principal for the related
Transfer Date, 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 Principal Collections and
allocated to the holders of
certificates of other Principal
Sharing Series or, subject to
certain limitations, paid to the
holder of the Transferor
Certificate or deposited into the
Excess Funding Account. 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 occurs, prior
to the payment of the Class A
Investor Interest in full, all
funds on deposit in the Principal
Funding Account will be invested at
the direction of the Servicer by
the Trustee in certain Permitted
Investments. Investment earnings
(net of investment losses and
expenses) on funds on deposit in
the Principal Funding Account (the
"Principal Funding Investment
Proceeds") during the Controlled
Accumulation Period will be used to
pay interest on the Class A
Certificates in an amount up to,
for each Transfer Date, 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] [one-twelfth], (b) the Class A
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
"Class A Covered Amount"). If, for
any Transfer Date, the Principal
Funding Investment Proceeds are
less than the Class A Covered
Amount, the amount of such
deficiency (the "Class A Principal
Funding Investment Shortfall")
shall be paid, to the extent
available, from the Reserve Account
and, if necessary, from Excess
Spread and Reallocated Principal
Collections.
Funds on deposit in the Principal
Funding Account will be available
to pay the Class A Holders 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. 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 Holders on the Class
A Scheduled Payment Date, no
assurance can be given in that
regard. See "Maturity Assumptions"
in the Prospectus and herein.
On the Class B Scheduled Payment
Date, provided that the Class A
Investor Interest is 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 Holders
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.
Although it is anticipated that
scheduled principal will be
available for distribution to the
Class B Holders on the Class B
Scheduled Payment Date, no
assurance can be given in that
regard. See "Maturity Assumptions"
in the Prospectus and "Maturity
Assumptions" herein.
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
Holders 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
percentages. See "Description of
the Certificates -- Exchanges" in
the Prospectus for a discussion of
the potential terms of any other
Series.
Rapid Amortization Period........... During the period from 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, (b) the Series
199_-_ Termination Date and (c) the
Trust Termination Date (the "Rapid
Amortization Period"), Available
Investor Principal Collections will
be distributed monthly on each
Distribution Date to the Class A
Holders and, following payment of
the Class A Investor Interest in
full, to the Class B Holders 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
and effect on Certificateholders of
this feature.
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 B
Certificates. If the Class B
Investor Interest and the
Collateral Interest are reduced to
zero, the Class A Holders will bear
directly the credit and other risks
associated with their interest in
the Trust. If the Collateral
Interest is reduced to zero, the
Class B Holders will bear directly
the credit and other risks
associated with their interest in
the Trust. To the extent the Class
B Investor Interest is reduced, the
percentage of collections of
Finance Charge Receivables
allocable to the Class B Holders 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 Holders will be reduced.
See "Description of the
Certificates -- Subordination."
Additional Amounts Available to
Holders ............................. 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 Amount" means the amount,
if any, by which 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 means the sum of
the Class A Required Amount and the
Class B Required Amount for such
Monthly Period. "Excess Spread" for
any Transfer Date will equal the
sum of (1) the excess of (A) Class
A Available Funds for the related
Monthly Period over (B) the sum of
the amounts referred to in clauses
(a), (b) and (c) in the definition
of "Class A Required Amount" above,
(2) the excess of (A) Class B
Available Funds for the related
Monthly Period over (B) the sum of
the amounts referred to in clauses
(a)(i) and (a)(ii) in the
definition of "Class B Required
Amount" above, (3) Collateral
Available Funds for the related
Monthly Period not used under
certain circumstances to pay the
Collateral Interest Servicing Fee,
as described herein and (4) Excess
Finance Charge Collections
allocated to the Investor Interest.
If, on any Transfer Date, Excess
Spread is less than the Class A
Required Amount, then 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
Holders 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."
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, then Reallocated
Principal Collections allocable to
the Collateral Interest for the
related Monthly Period not required
to pay the Class A Required Amount
will be allocated 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 Holders)
will be reduced by the amount of
such deficiency (but not by more
than the Class B Investor Default
Amount for such Monthly Period). If
such reduction would cause the
Collateral Interest to be a
negative number, the Collateral
Interest will be reduced to zero,
and the Class B Investor Interest
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 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 Holders.
Reallocated Investor
Finance Charge Collections............ Series 199_-_ will be the first
Series issued by the Trust in a
Group ("Group I") constituting a
Reallocation Group. Collections of
Finance Charge Receivables
allocable to the investor
certificates of each Series in
Group I will be aggregated and made
available for certain required
distributions to all Series in
Group I pro rata based upon the
relative amount of such required
distributions for each Series in
Group I as described under
"Description of the Certificates--
Reallocations Among Certificates of
Different Series within a
Reallocation Group" in the
Prospectus. Consequently, any
issuance of a new Series in Group I
may have the effect of reducing or
increasing the amount of
collections of Finance Charge
Receivables allocable to the Series
199_- _ Certificates. See "Risk
Factors-- Issuance of New Series"
in the Prospectus. In addition, it
has not been determined whether any
Series issued by the Trust in the
future will be included in Group I.
Shared Excess Finance
Charge Collections.................. Each Series in Group I, including
Series 199_-_, will be an Excess
Allocation Series. See "Description
of the Certificates -- Shared
Excess Finance Charge Collections."
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 Invested Amount is
reduced, the investor interest of
the Paired Series may 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 Holders. See
"Maturity Assumptions -- Paired
Series," "Description of the
Certificates -- Paired Series" and
"Description of the Certificates --
Allocation Percentages" herein.
Shared Principal
Collections.......................... Series 199_-_ is a Principal Sharing
Series. To the extent that
collections of 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 ("Shared Principal
Collections") will be allocated to
cover certain principal payments
due to or for the benefit of
certificateholders of other
Principal Sharing Series or, under
certain circumstances, paid to the
Transferor or deposited into the
Excess Funding Account. 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 Principal Sharing Series, 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
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
Principal Collections." Also see
"Prospectus Summary-- Shared
Principal Collections" in the
Prospectus for a general discussion
of the purpose and effect on
Certificateholders of this feature.
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.
[Defeasance........................... The Transferor may, at its option and
subject to the conditions specified
in "Description of the
Certificates -- Defeasance," be
discharged from its substantive
obligations in respect of the
Certificates or in respect of all
Series issued by the Trust by
irrevocably depositing with the
Trustee, under the terms of an
irrevocable trust agreement, as
trust funds in trust, any of (i)
dollars in an amount, (ii)
Permitted Investments, or (iii) a
combination of the two, in each
case sufficient to pay and
discharge, and which will be
applied by the Trustee to pay and
discharge, all remaining scheduled
interest and principal payments on
all outstanding Certificates or on
all outstanding certificates of all
Series issued by the Trust, as the
case may be, on the dates scheduled
for such payments and all amounts
owing to the Collateral Interest
Holder, and if applicable, all
other Credit Enhancement Providers
with respect to the Trust. See
"Description of the Certificates --
Defeasance."]
The Trustee.......................... [ ]
Tax Status............................ Special Tax Counsel to the Transferor
will opine on the Closing Date that
under existing law the Certificates
will be characterized as debt for
Federal income tax purposes and the
Trust will not be an association
(or publicly traded partnership)
taxable as a corporation. Under the
Agreement, the Transferor, the
Servicer, the Holders and the
Certificate Owners will agree to
treat the Certificates as debt for
Federal, state, local and foreign
income and franchise tax purposes.
See "U.S. Federal Income Tax
Consequences" in the Prospectus for
additional information concerning
the application of 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. At or before the
conclusion of the offering, the
Underwriters will notify the
Transferor and the Trustee as to
whether or not the Class A
Certificates will be expected to be
held by at least 100 separately
named persons at the conclusion of
the offering, although no
assurances can be made and no
monitoring or other measures will
be taken to assure that this
condition has been satisfied. The
Transferor anticipates that the
other conditions of the regulation
will be met. If the Trust's assets
were deemed to be "plan assets" 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. 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
with plan assets of (a) any
employee benefit plan that is
subject to ERISA, or (b) any plan
or other arrangement (including an
individual retirement account or
Keogh plan) that is subject to
section 4975 of the Code. By its
acceptance of a Class B Certificate
or an interest therein, each Class
B Holder 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 benefits of
the Collateral Interest.
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 benefits of the
Collateral Interest.
[Listing............................ Application will be made to list the
Certificates on the Luxembourg
Stock Exchange.]
<PAGE>
RISK FACTORS
Potential investors should consider among other things, the risk
factors discussed under "Risk Factors" in the Prospectus and the following
risk factors in connection with the purchase of the Certificates.
Limited Amounts of Credit Enhancement. Although Credit Enhancement
with respect to the Class A Certificates will be provided by the
subordination of the Class B Certificates to the extent described herein
and by the Collateral Interest, and with respect to the Class B
Certificates, will be provided by the Collateral Interest, the amount
available thereunder is limited, may decline during the Controlled
Accumulation Period and will be reduced by payments made pursuant thereto.
If the Collateral Interest has been reduced to zero, Class B
Certificateholders will bear directly the credit and other risks associated
with their undivided interests in the Trust, and the Class B Investor
Interest may be reduced. If the Class B Investor Interest is reduced to
zero, Class A Certificateholders will bear directly the credit and other
risks associated with their undivided interest in the Trust, and the Class A
Investor Interest may be reduced. Further, in the event of a reduction of
the Class B Investor Interest or the Collateral Invested, the amount of
principal and interest available to make distributions with respect
to the Class A Certificates and the Class B Certificates may be reduced.
Effect of Subordination of Class B Certificates; Principal Payments.
The Class B Certificates are subordinated in right of payment of principal
to the Class A Certificates. Payments of principal in respect of the Class
B Certificates will not commence until after the final principal payment
with respect to the Class A Certificates has been made as described herein.
Moreover, the Class B Investor Interest is subject to reduction if the
Class A Required Amount for any Monthly Period is greater than zero and is
not funded from Excess Spread and Excess Financial Charge Collections
allocated to Series 199__-_, Reallocated Principal Collections with respect
to the Collateral Interest and reductions in the Collateral Interest, if
any. To the extent the Class B Investor Interest is reduced, the percentage
of collections of Finance Charge Receivables allocable to the Class B
Investor Interest in future 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 and interest
distributable to the Class B Certificateholders will be reduced. See
"Description of the Certificates -- Allocation Percentages" and "--
Subordination" herein.
Increasing Credit Card Losses. As set forth under "First NBC's Credit
Card Portfolio -- Delinquency and Loss Experience" herein, losses and
delinquencies in the Bank Portfolio have increased in recent years. Based
upon published reports, First NBC understands that this has been the case
for most domestic credit card issuers. Increasing losses and delinquencies
in the Bank Portfolio may result in the occurrence of a Pay Out Event
and the commencement of the Rapid Amortization Period.
FIRST NBC'S CREDIT CARD PORTFOLIO
General
The Receivables to be conveyed to the Trust by First NBC pursuant to
the Agreement have been or will be generated from transactions made by
holders of selected VISA, MasterCard and private label credit card
accounts, including premium accounts and standard accounts, in the Bank
Portfolio. A description of the Bank's credit card business is contained in
the Prospectus under the heading "First NBC's Credit Card Activities."
Billing and Payments
First NBC generates and mails to cardholders monthly statements
summarizing account activity and processes cardholder monthly payments at
the end of each Billing Cycle, generally within 3 business days after the
cycle date assigned to such account by the Servicer. Currently, the
Servicer has ten Billing Cycles within each calendar month. The monthly
billing statement reflects all purchases, cash advances, administrative
charges, if applicable (such as currency conversion charges, late charges,
and returned payment charges), annual fees, if any, credit life insurance
charges and finance charges incurred by the account during the Billing
Cycle or a prior Billing Cycle and reported to the Servicer, all payments
or credits applicable to the account and the outstanding balance of the
account as of the cycle date, including the available credit thereunder.
Customers receive a 25-day grace period on purchases. Currently,
cardholders in the programs included in the Trust Portfolio must make a
monthly minimum payment at least equal to the greater of (i) 2.5% or 10%
(depending upon the program) of the statement balance (excluding any
disputed amounts) plus past due amounts and (ii) a stated minimum payment
(generally $10) plus past due amounts.
The finance charges on purchases are assessed monthly and are
calculated by multiplying the account's average daily purchase balance
times the applicable annual periodic rate times the actual number of days
in the applicable Billing Cycle divided by 365. Finance charges are
calculated on purchases from the date of the purchase or the first day of
the Billing Cycle in which the purchase is posted to the account, whichever
is later. Monthly periodic finance charges are not assessed on purchases if
all balances shown in the billing statement are paid by the due date, which
is 25 days after the billing date. Finance charges are calculated on cash
advances (including balance transfers) from the date of the transaction.
Currently, First NBC generally treats the date before posting as the
transaction date for cash advance checks.
The Trust Portfolio includes fixed rate and variable rate credit card
accounts. Generally, fixed annual percentage rates range from 5.9% to
21.0%, and variable rates range from prime plus 4.0% per annum to prime
plus 8.4% per annum. First NBC imposes no minimum finance charge. Certain
accounts in the Trust Portfolio may include a structure by which a portion
of finance charges, annual fees, cash advance fees or purchase volume are
rebated to agent banks or affinity groups.
A portion of the accounts require payment of annual fees (generally
ranging from $5.00 to $40.00), although under various marketing programs
these fees may be waived or rebated. First NBC also assesses late fees
(generally $10.00 to $20.00), overlimit fees (generally $10.00 to $15.00)
and returned check charges (generally $15.00). First NBC assesses a cash
advance fee, generally 2.5% of the cash advance amount, with a minimum fee
of $2.50 and a maximum fee of $20.00.
Payments in respect of the Accounts are processed by the FCSC (on
behalf of the Servicer) and are generally allocated at the end of the
applicable Billing Cycle to the outstanding balance of such Accounts in the
following order: (i) to fees assessed on the account, (ii) to finance
charges, and (iii) to the unpaid principal balance of purchases.
Delinquency and Loss Experience
An account is contractually delinquent if the minimum payment is not
received by the due date indicated on the customer's statement. An account
may be restricted for subsequent activity until the customer makes all past
due payments. Account restrictions may be instituted within a range of one
to 40 days delinquency, based upon the customer's internal "behavioral
score" and credit bureau score. Generally, once a customer is four payments
delinquent, the account is permanently closed.
Efforts to collect contractually delinquent credit card receivables
include statement messages, telephone calls and formal collection letters.
First NBC updates monthly an internal "behavioral score", developed with
Fair, Isaac and Company, Inc., for each cardholder based upon payment and
transaction history. Each cardholder's credit bureau score, under a credit
scoring model developed with Fair, Isaac and Company, Inc., is also updated
quarterly. The behavioral score and the credit bureau score are used to
prioritize accounts for initial contact with the objective of contacting
the highest risk and balance accounts first. Accounts are worked
continually at each stage of delinquency. Accounts are charged off at 179
days delinquent, except for bankruptcy and deceased losses, which are
charged off within 45 days of notification. Charged off accounts are placed
with collection personnel at First NBC, outside collection agencies or
outside attorneys.
In First NBC's historical experience, delinquency and loss ratios
for a group of accounts opened at around the same time have
peaked during the second and third years after the accounts were
opened and then dropped off significantly thereafter. Although there can be
no assurance that the delinquency and loss experience for the Receivables
in the future will be similar to First NBC's historical experience,
addition of a large number of newly created Additional Accounts to the
Trust Portfolio might be expected to increase delinquency and loss ratios
for the Trust Portfolio during the second and third years after such
addition of accounts.
The following tables set forth the delinquency and loss experience for
each of the periods shown for the Bank Portfolio of credit card accounts.
The Bank 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 overall Bank Portfolio of
credit card accounts. As of the beginning of the day on ___________ __,
1997, the Receivables in the Trust Portfolio represented approximately ___%
of the Bank Portfolio. Because the Trust Portfolio is only a portion of the
Bank Portfolio, actual delinquency and loss experience with respect to the
Receivables may be different from that set forth below for the Bank
Portfolio. 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 Bank Portfolio set forth below.
<TABLE>
<CAPTION>
Delinquency Experience Bank Portfolio(1)(2)
(Dollars in thousands)
as of December 31
1996 1995 1994 1993
-------------------------- -------------------------- -------------------------- -------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Percentage Percentage Percentage Percentage
of Total of Total of Total of Total
Receivables Receivables Receivables Receivables Receivables Receivables Receivables Receivables
Receivables
Outstanding(3)$ $ $ $
Receivables
Delinquent...
31 - 60 Days $ % $ % $ % $ %
61 - 90 Days % % % %
91-120 Days % % % %
121 Days Or
More......... % % % %
------- ------- ------- -------
Total. $ % $ % $ % $ %
======== ======== ======== ========
- -------------------
(1) The above information is for First NBC's First BankCard Division
only. Amounts have not been restated for acquisitions of portfolios
from the Corporation's acquired banks which were accounted for as
poolings-of-interests.
(2) The above information includes the private label portfolio guaranteed
by USAF Services ("USAF"). These balances are charged back to USAF at
90 days past due. The balances in such accounts and the related
delinquencies at December 31, 1996, 1995, 1994 and 1993, respectively,
were: $______ outstanding, ____% delinquent; $_________ outstanding,
____% delinquent; $_______ outstanding, _____% delinquent; and
$_________ outstanding, ____% delinquent.
(3) 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.
<CAPTION>
Loss Experience(1)(2)
Bank Portfolio
(Dollars in Thousands)
Year Ended December 31
1996 1995 1994 1993
------ ------ ------ -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Percentage Percentage Percentage Percentage
of Total of Total of Total of Total
Receivables Receivables Receivables ReceivablesReceivables Receivables Receivables Receivables
Average Receivables Outstanding(3) $ $ $ $
Gross Charge-Offs(4)........ $ % $ % $ % $ %
Recoveries.................. % % % %
--- --
Net Charge-Offs............... $ % $ % $ % $ %
= = = =
- --------------------
(1) The above information is for First NBC's First BankCard Division
only. Amounts have not been restated for acquisitions of portfolios from
the Corporation's acquired banks which were accounted for as poolings-
of-interests.
(2) Interest and fees on charged off accounts are reversed
from finance charge revenues and fee income accounts, respectively, and
are not included in charge-offs.
(3) Average Receivables Outstanding is the average of the daily receivable
balance during the period indicated.
(4) Gross Charge-Offs are total principal 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.
</TABLE>
Interchange and Other Account Revenues
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.
For administrative convenience, the Transferor may exclude from the
calculation of Interchange certain interchange received from merchants for
whom First NBC acts as the MasterCard or VISA clearing bank. Interchange
arising under the Accounts will be allocated to the Certificates on the
basis of the percentage equivalent of the ratio of (i) the Floating
Investor Percentage of cardholder charges for goods and services in the
Accounts to (ii) the total amount of cardholder charges for goods and
services in the MasterCard and VISA credit card accounts owned by First
NBC, 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 Monthly Investor Servicing Fee required to
be paid on each Transfer Date. See "Description of the Certificates --
Servicing Compensation and Payment of Expenses" herein and "First NBC's
Credit Card Activities -- Interchange" in the Prospectus.
The Transferor will also be required, pursuant to the terms of the
Agreement, to transfer to the Trust, for the benefit of the Certificates,
a percentage of the Other Account Revenues (which presently consist of
advertising revenues and experience-based rebates of credit insurance
premiums). The amount of Other Account Revenues to be so included shall be
equal to the portion of the revenues in each applicable category for the
entire Bank Portfolio that is allocable to the Accounts, as determined by
Transferor using any reasonable method, multiplied by the Floating Investor
Percentage.
THE RECEIVABLES
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_,
Receivables arising in Accounts in agent bank, affinity or military
relationship programs made up approximately __% in the aggregate of the
total Receivables in the Trust Portfolio, of which approximately __% arose
in the single largest program of this type. See "Risk Factors -- Affinity
Programs" in the Prospectus. As of such date, __% 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. Because approximately __%, __%, __% and __% of the
cardholders whose Accounts are included in the Trust Portfolio had a
billing address in Louisiana, Alabama, Mississippi, __% Texas and Florida,
the Trust Portfolio as a whole may be adversely affected by material
adverse legal, economic and social changes in such states. First NBC is not
aware of any material trends in such states that would likely adversely
impact the Trust Portfolio. See "Risk Factors -- Effect of Social, Legal
and Economic Factors on Credit Card Usage" in the Prospectus. As of the
beginning of the day on _________ ____, 199_, Receivables arising in
accounts in First NBC's military programs made up approximately __% in the
aggregate of the total Receivables in the Trust Portfolio. See "Risk
Factors -- Effects of Applicable Law -- Limitations Imposed by Consumer
Protection Laws" in the Prospectus.
Credit applications for the Accounts under which the Receivables in
the Trust Portfolio arise are processed through an automated application
processing system using a credit scoring system based on models developed
by Fair, Isaac and Company, Inc. Those applications that are flagged for
further review (i.e., those that are neither accepted nor rejected) by the
automated application processing system are reviewed by a First BankCard
credit analyst who makes a credit and limit assignment decision based on a
review of (i) the score generated by the credit scorecard, (ii) information
contained in the application, (iii) an independent credit report and (iv)
an analysis of the applicant's capacity to repay. First BankCard also uses
a prescreening process as a method of acquiring new accounts. First
BankCard primarily identifies potential prospects for pre-approved
solicitations through lists obtained from (i) First NBC and its affiliated
banks, (ii) agent banks and (iii) affinity groups. First BankCard submits
to the credit bureaus its credit criteria and cutoff scores for those
criteria to screen prospects. Lists of individuals who meet the criteria
are returned to the mailing list vendor, and a pre-approved offer for a
credit card is made to those individuals. An offeree's response to the
solicitation is reviewed and confirmed, and a credit card is issued. [Where
an individual's creditworthiness undergoes rapid and substantial change
following the initial prescreening, First BankCard may refuse to extend any
credit to that individual despite the pre-approved offer.]
The primary factors considered in the non-military credit scoring
model include (a) the presence or absence of existing credit references and
checking and savings account references, (b) the number of recently
reported installment loans reflected in the credit file, (c) revolving
utilization reflected in the credit file and (d) the number of inquiries by
other credit providers. The primary factors considered in the military
credit scoring model include (a) occupation, (b) high credit card
utilization reflected in the credit file, (c) the number of major
derogatory ratings reflected in the credit file and (d) the number of
inquiries by other credit providers.
The Trust Portfolio will initially consist of all Receivables in the
Bank Portfolio, with the exception of Receivables arising under Accounts
identified as lost, stolen, fraudulent, voluntarily canceled, deceased,
bankrupt, internal expense accounts or foreign accounts. The following
tables summarize the Trust Portfolio by various criteria as of the [end of
the day on __________ __, 199_] [dates indicated]. 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.
<TABLE>
<CAPTION>
Composition by Account Balance
the Trust Portfolio
<S> <C> <C> <C> <C>
Percentage
of Total Percentage of
Number of Number of Total
Account Balance Range Accounts Accounts Receivables Receivables
- --------------------- --------- --------- ------------- -----------
Credit Balance...........................
No Balance...............................
$.01 - $5,000.00.........................
$5,000.01 - $10,000.00...................
$10,000.01 - $15,000.00..................
$15,000.01 - $20,000.00..................
$20,000.01 - $25,000.00..................
$25,000.01 or More.......................
TOTAL........................... 100.0% 100.0%
===== =====
<CAPTION>
Composition by Credit Limit
the Trust Portfolio
<S> <C> <C> <C> <C>
Percentage
of Total Percentage of
Number of Number of Total
Accounts Accounts Receivables Receivables
Credit Limit Range
Less than or equal to $5,000.00..........
$5,000.01 - $10,000.00...................
$10,000.01 - $15,000.00..................
$15,000.01 - $20,000.00..................
$20,000.01 - $25,000.00..................
$25,000.01 or More.......................
TOTAL........................... 100.0% 100.0%
===== =====
<CAPTION>
Composition by Period of Delinquency
the Trust Portfolio
<S> <C> <C> <C> <C>
Percentage
of Total Percentage of
Period of Delinquency Number of Number of Total
(Days Contractually Delinquent) Accounts Accounts Receivables Receivables
- ------------------------------- --------- --------- ------------- -----------
Not Delinquent............................
Up to 30 Days.............................
31 to 60 Days.............................
61 to 90 Days.............................
91 or More Days...........................
TOTAL............................ 100.0% 100.0%
===== =====
<CAPTION>
Composition by Account Age
the Trust Portfolio
<S> <C> <C> <C> <C>
Percentage
of Total Percentage of
Number of Number of Total
Account Balance Range Accounts Accounts Receivables Receivables
- --------------------- --------- --------- ------------- -----------
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......................... 100.0% 100.0%
===== =====
<CAPTION>
Geographic Distribution of Accounts
the Trust Portfolio
<S> <C> <C> <C> <C>
Percentage
of Total Percentage of
Number of Number of Total
State(1) Accounts Accounts Receivables Receivables
- ----- --------- --------- ------------- -----------
Alabama..................
Louisiana................
[List other material
states]
- ---------------------------
(1) No more than __% of the aggregate principal balance of the
Receivables as of the Cut-Off Date were represented by Receivables owed
by obligors located in any state other than those listed in this table.
</TABLE>
MATURITY ASSUMPTIONS
The Agreement provides that Class A Holders 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 Class B Holders 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 equals the sum of the
Controlled Accumulation Amount for such Monthly Period and any portion of
the Controlled Accumulation Amount for any prior Monthly Period that was
not deposited in the Principal Funding Account) 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 Servicer 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, Available Investor Principal Collections, to the
extent required, will be distributed to the Class B Holders on each
Distribution 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 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 Holders on the Class A
Scheduled Payment Date and the Class B Investor Interest will be paid to
the Class B Holders 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 Holders 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 Holders 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 Certificates 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 Holders within the
time periods stated in the Agreement, (b) material breaches of certain
representations, warranties or covenants of the Transferor, (c) certain
insolvency events involving the Transferor, (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 failure of the Transferor to
convey Receivables arising under Additional Accounts or Participations to
the Trust when required by the Agreement, (g) the occurrence of a Servicer
Default which would have a material adverse effect on the Holders, (h)
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 Transferor becomes unable for any reason to
transfer Receivables to the Trust in accordance with the provisions of the
Agreement. See "Description of the Certificates -- Pay Out Events." The
term "Base Rate" means, with respect to any Monthly Period, the sum of (a)
the weighted average of the Class A Certificate Rate, the Class B
Certificate Rate, and the Collateral Rate (each for the related Interest
Period) plus (b) the Servicing Fee Percentage. 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 Reallocated
Investor Finance Charge Collections, 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 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 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 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 Holders and a possible slowdown
in the repayment of principal to such Holders because of such reduction in
allocation of collections. See "Description of the Certificates --
Allocation Percentages" and "-- Paired Series" herein.
Payment Rates and Creation of Additional Receivables. The following
table sets forth the highest and lowest cardholder monthly payment rates
for the Bank Portfolio 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 opening 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.
<PAGE>
<TABLE>
<CAPTION>
Cardholder Monthly Payment Rates
Bank Portfolio
Year Ended December 31
-----------------------
<S> <C> <C> <C> <C>
1996 1995 1994 1993
----------- ----------- ----------- --------
Lowest Month......................... % % % %
Highest Month........................ % % % %
Monthly Average...................... % % % %
</TABLE>
Currently, cardholders must make a monthly minimum payment at least
equal to the greater of (i) [2.5% or 10% (depending upon the program)] of
the statement balance (excluding any disputed amounts) plus past due
amounts and (ii) a stated minimum payment (generally $10) plus past due
amounts. 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, any election by the Transferor to designate (or
increase) a Discount Percentage may, by causing certain collections of
Principal Receivables to be treated as collections of Finance Charge
Receivables, reduce the effective principal payment rate with respect to
the Receivables. (See "Description of the Certificates -- Discount Option"
in the Prospectus.) The Receivables may be paid at any time and there is no
assurance that there will be additional Receivables created in the
Accounts.
A significant decline in the amount of Receivables generated during
the Controlled Accumulation Period could result in the occurrence of a Pay
Out Event. In addition, a significant decline in the amount of Receivables
generated during the Rapid Amortization Period could significantly extend
the average life to maturity of the Certificates. The amount of collections
of Receivables and the creation of additional Receivables in the Accounts
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 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 decline in the creation of new Receivables in
the Accounts or 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 -- Payments
Other than at Expected Maturity" in the Prospectus.
Any factors which effectively slow the principal payment rate with
respect to the Receivables, and hence slow the accumulation of principal
for distribution to the Certificateholders, may have the additional effect
of extending the period of time during which the Certificateholders are
exposed to losses on the Receivables.
RECEIVABLE YIELD CONSIDERATIONS
The gross revenues from finance charges and fees billed to accounts in
the Bank Portfolio for each of the four calendar years contained in the
period ended December 31, 1996 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 four
calendar years contained in the period ended December 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 any annual membership fees and other fees, changes in the
delinquency rate on the Receivables and the 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.
<TABLE>
<CAPTION>
Bank Portfolio Yield(1)(2)
(Dollars in Thousands)
Year Ended December 31
-----------------------
<S> <C> <C> <C> <C>
1996 1995 1994 1993
-------------- ------ ------ -----
Average Receivables Outstanding (3)................ $ $ $ $
Total Finance Charges and Fees (3)(4).............. $ $ $ $
Total Finance Charges and Fees
as a percentage of Average
Receivables Outstanding................... % % % %
(1) Amounts have not been restated for acquisitions of portfolios from
the Corporation's acquired banks which were accounted for as
poolings-of-interests.
(2) Interest and fees on charged off accounts are reversed from
finance charge revenues and fee income accounts, respectively,
and are not included in charge-offs.
(3) Fees include Annual Fees, Interchange, Cash Advance Fees, Late Fees,
Overlimit Fees and Other Fees as allocated to the Bank Portfolio.
(4) Finance Charges and Fees are presented net of adjustments pursuant to
First NBC's normal servicing procedures, including removal of incorrect
or disputed monthly periodic finance charges.
</TABLE>
The revenue for the Bank Portfolio 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 Bank Portfolio, actual yield with
respect to Receivables may be different from that set forth above for the
Bank Portfolio. See "First NBC's Credit Card Portfolio" herein and "First
NBC Credit Card Activities" in the Prospectus.
FIRST NBC AND FIRST COMMERCE CORPORATION
First NBC is a national banking association and a wholly owned
subsidiary of First Commerce Corporation (the "Corporation"). The Bank's
main office is located at 210 Baronne Street, New Orleans, Louisiana 70112,
telephone (504) 623-1371. The Corporation is a Louisiana corporation and a
bank holding company under the Bank Holding Company Act of 1956, as amended
(the "BHC Act"), and maintains its headquarters in New Orleans, Louisiana.
As of December 31, 1996, First NBC had assets of $5.9 billion and
stockholder's equity of $374 million. As of December 31, 1996, the
Corporation had assets of $9.2 billion and stockholders' equity of $724
million. The Corporation has six wholly owned bank subsidiaries, each in
Louisiana: the Bank, City National Bank of Baton Rouge, Central Bank
(Monroe), The First National Bank of Lafayette, Rapides Bank & Trust
Company in Alexandria and The First National Bank of Lake Charles, which
offer a full range of banking and related financial services to commercial
and consumer customers, including numerous types of interest-bearing and
noninterest-bearing deposit accounts, commercial and consumer loans
(including credit card loans), credit card merchant services, trust
services, correspondent banking services and safe deposit facilities.
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.
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. Each Class A Certificate represents the right to receive payments of
interest at the Class A Rate for the related Interest Period funded from
collections of Finance Charge Receivables 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 Principal Receivables 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 Rate 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. In addition to representing the right to
payment from collections of Finance Charge Receivables and Principal
Receivables, each Class A Certificate also represents the right to receive
payments 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 Principal Collections and
certain other available amounts (including, under certain circumstances,
amounts on deposit in the Excess Funding Account). In addition to
representing the right to payment from collections of Finance Charge
Receivables and Principal Receivables, each Class B Certificate also
represents the right to receive payments from Excess Spread, Reallocated
Collateral Principal Collections and Shared Principal Collections and
certain other available amounts (including, under certain circumstances,
amounts on deposit in the Excess Funding Account). 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 Holders in whose names
the Certificates were registered on the last business day of the calendar
month preceding such Distribution Date (each, a "Record Date").
[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 Holders and/or Class B Holders 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 Holders and/or Class B Holders shall refer to distributions,
notices, reports and statements to DTC or Cedel, 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. Holders 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. Cede
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.
Interest Payments
Interest will accrue on the Class A Certificates at the Class A Rate
and on the Class B Certificates at the Class B Rate from the Closing Date.
Interest will be distributed to Holders on ______ 15, 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," and collectively, the "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
Reallocated Investor Finance Charge Collections 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), (b) Principal Funding Investment
Proceeds, if any, with respect to the related Transfer Date (up to the
Class A Covered Amount for such 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 Reallocated Investor Finance Charge Collections 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).
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 LIBOR prevailing on the related LIBOR Determination Date
with respect to each such period] (the "Class A 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
LIBOR prevailing on the related LIBOR Determination Date with respect to
each such period] (the "Class B Rate").
[The Trustee will determine LIBOR 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 second business day prior to the
Distribution Date on which such Interest Period commences (each, a "LIBOR
Determination Date"). For purposes of calculating LIBOR, a business day is
any business day on which dealings in deposits in United States dollars are
transacted in the London interbank market.
"Interest Period" means, with respect to any Distribution Date, the
period from and including the previous Distribution Date through the day
preceding such Distribution Date, except the initial Interest Period will
be the period from and including the Closing Date through the day preceding
the initial Distribution Date.
"LIBOR" means, as of any LIBOR Determination Date, the rate for
deposits in United States dollars for a period equal to the relevant
Interest Period (commencing on the first day of such Interest Period) which
appears on Telerate Page 3750 (as defined below) as of 11:00 a.m., London
Time, on such date. If such rate does not appear on Telerate Page 3750, the
rate for that day will be determined on the basis of the rates at which
deposits in United States dollars are offered by the Reference Banks (as
defined below) at approximately 11:00 a.m., London Time, on that day to
prime banks in the London interbank market for a period equal to the
relevant Interest Period (commencing on the first day of such Interest
Period). The Trustee will request the principal London office of each of
the Reference Banks to provide a quotation of its rate. If at least two
such quotations are provided, the rate for the day will be the arithmetic
mean of the quotations. If fewer than two quotations are provided as
requested, the rate for that day will be the arithmetic mean of the rates
quoted by major banks in New York City, selected by the Trustee, at
approximately 11:00 a.m., New York City time, on that day for loans in
United States dollars to leading international banks for a period equal to
the relevant Interest Period (commencing on the first day of such Interest
Period). If the banks selected by the Trustee are not quoting rates as
provided in the immediately preceding sentence, LIBOR for such Interest
Period will be LIBOR in effect for the immediately preceding Interest
Period.
"Reference Banks" means three major banks in the London interbank
market selected by the Trustee.
The Class A Rate and the Class B Rate applicable to the current and
immediately preceding Interest Period may be obtained by telephoning the
Trustee at its Corporate Trust Office at (__) ____- ____.
Interest on the Certificates will be calculated on the basis of [the
actual number of days in the Interest Period] [twelve 30-day months] and a
360-day year.
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 Principal Collections or, under certain circumstances, deposited
into the Excess Funding Account.
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
Holders on the Class A Scheduled Payment Date. After the Class A Investor
Interest has been paid or provided for 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 Holders until the
Class B Investor Interest has been paid in full. Such amounts in the
Distribution Account will be paid to the Class B Holders 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 Holders, 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 Principal Collections or,
under certain circumstances, deposited into the Excess Funding Account.
"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, in each case which are allocable to the Investor Interest, minus
(ii) the amount of Reallocated Principal Collections with respect to such
Monthly Period used to fund interest on the Certificates or the Class A
Servicing Fee or Class B Servicing Fee, plus (b) any Shared Principal
Collections with respect to other Principal Sharing Series that are
allocated to Series [199_-_].
On each Distribution Date commencing with the first Distribution Date
following the date the Rapid Amortization Period begins, the Class A
Holders 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 and the Series 199_-__ Termination Date. After payment in
full of the Class A Investor Interest, the Class B Holders 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 and 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 and each Rating
Agency, the Servicer 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
Servicer may make such election only if the Accumulation Period Length
(determined as described below) is less than _____ months. On each
Determination Date on or after the ________ Determination Date, until the
Controlled Accumulation Period begins, the Servicer will determine the
"Accumulation Period Length," which is a number of months such that the
amount available for distribution of principal on the Class A Certificates
on the Class A Scheduled Payment Date is expected to equal or exceed the
Class A Investor Interest, assuming (a) the expected monthly collections of
Principal Receivables expected to be distributable to the Holders of all
Series have a principal payment rate no greater than the lowest monthly
principal payment rate on the Receivables for the preceding twelve months,
(b) the amount of principal expected to be distributable to Holders of all
Series remains constant at the level on such date of determination, (c) no
Pay Out Event with respect to any Series will subsequently occur and (d) no
additional Series will be subsequently issued. If the Accumulation Period
Length is less than ______ 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 Holders 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 and interest distributable to the Class B Holders will be
reduced. 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 Net Default Amounts and Net Recoveries
with respect to such Monthly Period.
Collections of Finance Charge Receivables, Net Default Amounts and Net
Recoveries 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. Collections of Finance Charge Receivables
that are so allocated will then be reallocated among all Series in Group I
as described in the "Description of the Certificates -- Reallocations Among
Certificates of Different Series within a Reallocation Group" in the
Prospectus.
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 (a) the Aggregate Principal Receivables as of the close of
business on the last day of the preceding Monthly Period (or with respect
to the first Monthly Period, the Aggregate Principal Receivables as of the
close of business on the day immediately preceding the Closing Date) and
(b) the sum of the numerators used to calculate the Investor Percentages
for allocations with respect to Finance Charge Receivables, Net Default
Amounts, Net Recoveries or Principal Receivables, as applicable, for all
outstanding Series on such date of determination; provided, however, that
if one or more Reset Dates occur in a Monthly Period, the Floating Investor
Percentage for the portion of the Monthly Period falling after each such
Reset Date (the "subject Reset Date") and prior to the earlier of the last
day of the current Monthly Period and any subsequent Reset Date shall be
determined using a denominator equal to the greater of the amounts
specified in clause (a) and (b) above determined as of the subject Reset
Date.
The amounts so allocated (or reallocated) will be further allocated
between the Class A Holders, Class B Holders 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 (a) the Aggregate
Principal Receivables as of the close of business on the last day of the
prior Monthly Period (or with respect to the first Monthly Period, the
Aggregate Principal Receivables as of the close of business on the day
immediately preceding the Closing Date) and (b) the sum of the numerators
used to calculate the Investor Percentages for allocations with respect to
Principal Receivables for all outstanding Series for such Monthly Period;
provided, that (x) 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); and (y) if one or
more Reset Dates occur in a Monthly Period, the Fixed Investor Percentage
for the portion of the Monthly Period falling after each such Reset Date
(the "subject Reset Date") and prior to the earlier of the last day of the
current Monthly Period and any subsequent Reset Date shall be determined
using a denominator equal to the greater of the amounts specified in clause
(a) and (b) above determined as of the subject Reset Date.
The amounts so allocated will be further allocated between the Class A
Holders, the Class B Holders 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 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, and the denominator of which is equal
to the numerator used in determining the related Fixed Investor Percentage;
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. 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 Collateral Interest as of the close of
business on the last day of the Revolving Period, and the denominator of
which is equal to the Investor Interest as of the close of business on the
last day of the Revolving Period. 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, and the denominator of which is equal to the
numerator used in determining the related Fixed Investor Percentage;
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, designated 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.
"Class A Adjusted Investor Interest," for any date of determination,
means an amount equal to then current Class A Investor Interest, minus the
Principal Funding Account Balance (up to the Class A Invested Amount) on
such date.
"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 Holders
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 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 Holders
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," plus (f) the aggregate amount of Excess Spread allocated to
the Certificates 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 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 to
the Certificates 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.
"Reset Date" means each of (a) any date on which Receivables in
Additional Accounts are conveyed to the Trust, (b) any date on which
Accounts are removed from the Trust and 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 and (c) a date on which there is an increase in the Investor Interest
under any Variable Interest issued by the Trust.
"Variable Interest" means either of (a) any certificate that is
designated as a variable funding certificate in the related Series
Supplement and (b) any Purchased Interest sold as permitted by an
Agreement.
Reallocation of Cash Flows
With respect to each Transfer Date, the Servicer will determine the
amount (the "Class A Required 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 Holders. In such case, the Class A Holders 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 Holders) 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 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), and the Class B Holders 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 will 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
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 First NBC 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 acceptable to the Rating Agencies and (ii) the
Rating Agency Condition shall have been satisfied with respect to reliance
on such letter of credit or other credit enhancement or (b) the certificate
of deposit or unsecured short-term debt obligations of the Transferor are
rated P-1 by Moody's and at least A-1 by Standard & Poor's (and, if rated
by Fitch Investors Service, L.P. ("Fitch"), at least F-1 by Fitch) and
insured by either BIF or SAIF or (c) the Transferor makes other
arrangements satisfactory to each Rating Agency rating any Series then
outstanding, 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.
The Pooling and Servicing Agreement provides, that before the Conversion
Date, the Servicer will make such deposits and payments based on the
assumption that all collections received by the Servicer with respect to
the Receivables in each Billing Cycle are collections of Finance Charge
Receivables up to the amount of Finance Charge Receivables billed with
respect to Receivables in such Billing Cycle (with respect to each Billing
Cycle, the "Billed Finance Charge Receivables") and collections in excess
of the Billed Finance Charge Receivables are collections of Principal
Receivables. The term "Aggregate Principal Receivables" means in the case
of any date of determination which occurs before the Conversion Date, the
aggregate amount of Principal Receivables as of the end of the Billing
Cycles during the Monthly Period immediately preceding such date of
determination or, in the case of any date of determination which occurs on
or after the Conversion Date, the aggregate amount of Principal Receivables
as of the end of the last day of the Monthly Period immediately preceding
such date of determination.
Whether the Servicer is required to make monthly or daily deposits
into the Collection Account, (i) the Servicer will only be required to
deposit Collections into the Collection Account or 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
Holders or to the Collateral Interest Holder and (ii) if at any time prior
to such Distribution Date the amount of Collections deposited in any such
deposit account exceeds the amount required to be deposited pursuant to
clause (i) above, the Servicer will be permitted to withdraw the excess
from such an account.
Payment of Interest, Fees and Other Items. On each Transfer Date, the
Trustee, acting pursuant to 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 manner:
(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 Holders
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 Holders
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 First NBC is no longer 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 Rate for the related Interest Period,
(ii) [the actual number of days in such Interest Period divided by 360]
[one-twelfth, or in the case of the initial Distribution Date, _______] 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 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 Rate for the related Interest Period,
(ii) [the actual number of days in such Interest Period divided by 360]
[one-twelfth, or in the case of the initial Distribution Date, _______] and
(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 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
Reallocated Investor Finance Charge Collections 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. To the extent such amounts are
insufficient to make the distributions required by subparagraphs (a)
through (i) below under "-- Excess Spread," Excess Spread shall also be
deemed to include any Excess Finance Charge Collections allocable to other
Series available to Series 199_-_ in accordance with the Agreement.
Excess Spread. On each Transfer Date, the Trustee, acting pursuant to
the Servicer's instructions, will apply Excess Spread 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, such Excess Spread 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) above under "--
Payment of Interest, Fees and Other Items";
(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 and will 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 Holders (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;
(f) if First NBC or the Trustee 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 Investor
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 all other amounts due under the
Loan Agreement (to the extent payable out of Excess Spread or
Excess Finance Charge Collections) shall be distributed in
accordance with the Loan Agreement; and
(k) the balance, if any, after giving effect to the
payments made pursuant to subparagraphs (a) through (j) above,
will constitute "Excess Finance Charge Collections" to be applied
with respect to other Series in accordance with the Agreement.
"Collateral Monthly Interest" with respect to any Transfer Date will
equal the product of (a) an amount equal to LIBOR plus 1.0% 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; provided, however, with respect to the first Distribution
Date, Collateral Monthly Interest will be equal to the sum of (A) the
product of (x) the Collateral Rate, determined as described herein using
a[n] ____________ __, 1997 LIBOR Determination Date, (y) the actual number
of days during the period from the Closing Date through ___________ __,
1997 divided by 360 and (z) the Collateral Interest as of the Closing Date,
plus (B) the product of (x) the Collateral Rate, determined as described
herein using a[n] __________ __, 1997 LIBOR Determination Date, (y) the
actual number of days during the period from __________ __, 1997 through
__________ __, 1997 divided by 360 and (z) the Collateral Interest as of
the Closing Date.
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 manner:
(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
Principal Collections and applied as described under
"Description of the Certificates -- Shared 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 Holders (during the Rapid
Amortization Period); and
(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 Holders;
(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 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 Principal
Collections and applied as described under "Description of the
Certificates -- Shared 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 or the Rapid Amortization Period,
after 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 Holders and the Class B Holders 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 Holders and the Class B
Holders 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 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 modified as described
above under "-- Postponement of Controlled Accumulation Period," (i) the
Controlled Accumulation Amount for each Transfer Date with respect to the
Controlled Accumulation Period shall mean the amount determined in
accordance with the Agreement on the date on which the Controlled
Accumulation Period has most recently been modified and (ii) the sum of the
Controlled Accumulation Amounts for all Transfer Dates with respect to the
modified Controlled Accumulation Period shall not be less than the Class A
Investor Interest.
Shared Excess Finance Charge Collections
Each Series in Group I, including Series 199_-_, will be an Excess
Allocation Series. To the extent that collections of Finance Charge
Receivables allocated to the Investor Interest (and any other amounts that
are to be treated as collections of Finance Charge Receivables allocated to
the Investor Interest) are not needed to make payment in respect of the
Investor Interest as described above under "-- Application of Collections
- -- Payment of Interest, Fees and Other Items" and "-- Excess Spread," such
Excess Finance Charge Collections will be applied to make payments in
respect of other Series in Group I entitled to share therein in accordance
with the Agreement. In addition, Excess Finance Charge Collections with
respect to certain other Series in Group I, to the extent not required to
make payments in respect of such Series, may be applied to cover shortfalls
in amounts payable from Excess Spread as described above under "--
Application of Collections -- Excess Spread" (as well as shortfalls
experienced by other Series).
Shared Principal Collections
Series 1996_-_ is a Principal Sharing Series. Collections of Principal
Receivables for any Monthly Period allocated to the Investor Interest (and
not allocated as Reallocated Principal Collections) 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 Holders and then under
certain circumstances payments to the Collateral Interest Holder. The
Servicer will determine the amount of collections of Principal Receivables
for any Monthly Period allocated to the Investor Interest remaining after
covering required payments to the Holders and any similar amount remaining
for any other Series ("Shared Principal Collections"). The Servicer will
allocate the Shared Principal Collections to cover any scheduled or
permitted principal distributions to certificateholders and deposits to
principal funding accounts, if any, for any Principal Sharing Series
entitled thereto which have not been covered out of the Collections of
Principal Receivables allocable to such Principal Sharing Series and
certain other amounts for such Series ("Principal Shortfalls"). Shared
Principal Collections will not be used to cover investor charge-offs for
any Series. If Principal Shortfalls exceed Shared Principal Collections for
any Monthly Period, Shared Principal Collections will be allocated pro rata
among the applicable Principal Sharing Series based on the relative amounts
of Principal Shortfalls. To the extent that Shared Principal Collections
exceed Principal Shortfalls, the balance will be paid to the holder of the
Transferor Certificate or, under certain circumstances, deposited into the
Excess Funding Account.
Defeasance
Pursuant to the Agreement, the Transferor may be discharged from its
substantive obligations in respect of the Certificates or in respect of any
or all Series issued by the Trust (in any case, the "Defeased Series") by
depositing with the Trustee, under the terms of an irrevocable trust
agreement satisfactory to the Trustee, from amounts representing or
acquired with collections on the Receivables (allocable to the Defeased
Series and available to purchase additional Receivables) monies or
Permitted Investments sufficient to make all remaining scheduled interest
and principal payments on the Defeased Series on the dates scheduled for
such payments and to pay all amounts owing to the Collateral Interest
Holder or any Credit Enhancement Provider, as the case may be, for the
Defeased Series. To achieve that end, the Transferor has the right to use
collections on Receivables to purchase Permitted Investments rather than
additional Receivables. Prior to its first exercise of its right to
substitute monies or Permitted Investments for Receivables, the Transferor
shall deliver to the Trustee an opinion of counsel that such deposit and
discharge of obligations will not be treated for United States federal
income tax purposes as a sale or exchange by the holders of the Defeased
Series and the Rating Agency Condition shall have been satisfied. In
addition, the Transferor must comply with certain other requirements set
forth in the Agreement, including requirements that the Transferor deliver
to the Trustee an opinion of counsel to the effect that the deposit and
termination of obligations will not require the Trust to register as an
"investment company" within the meaning of the Investment Company Act of
1940, as amended, and that the Transferor deliver to the Trustee and
certain Credit Enhancement Providers a certificate of an authorized officer
stating that, based on the facts known to such officer at the time, in the
reasonable opinion of the Transferor, such deposit and discharge of
obligations will not at the time of its occurrence cause a Pay-Out Event or
an event that, after the giving of notice or the lapse of time, would
constitute a Pay-Out Event, to occur with respect to any Series issued by
the Trust. If the Transferor discharges its substantive obligations in
respect of a Defeased Series, any Enhancement for the affected Series might
no longer be available to make payments with respect thereto.
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, plus 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 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 or will be applied as
Excess Finance Charge Collections. 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 with respect to such Monthly Period (which
shall be calculated on a weighted average basis if a Reset Date occurred
during that Monthly Period) and (b) the Net Default Amount for such Monthly
Period. A portion of the Investor Default Amount will be allocated to the
Class A Holders (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 Holders (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 Investor 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.
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, 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 Holders. 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 Investor 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
Investor 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."
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 Holders (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 Principal
Collections from other Principal Sharing Series, if any, allocated to
Series 199_-_ from the Principal Account to the Principal Funding Account
as described under "-- Application of Collections."
Funds on deposit in the Principal Funding Account will be invested to
the following Transfer Date 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 (the
"Principal Funding Investment Proceeds") will be used to pay interest on
the Class A Certificates in an amount up to, for each Transfer Date, 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 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 "Class A Covered Amount"). If, for any
Transfer Date, the Principal Funding Investment Proceeds are less than the
Class A Covered Amount, the amount of such deficiency (the "Class A
Principal Funding Investment Shortfall") shall be withdrawn, to the extent
available, from the Reserve Account and deposited in the Finance Charge
Account and included in collections of Finance Charge Receivables to be
applied to the payment of Class A Monthly Interest.
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 Holders (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 the Agreement may require. 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, all amounts on deposit in the Reserve Account on any Transfer Date
(after giving effect to any deposits to, or withdrawals from, the Reserve
Account to be made on such Transfer Date) will be invested to the following
Transfer Date by the Trustee at the direction of the Servicer in Permitted
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 Class A 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 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 Holders.
Excess Funding Account
Pursuant to the Agreement, the Trustee will establish and maintain with
a Qualified Institution a segregated trust account held for the benefit
of the Holders (the "Excess Funding Account"). If on any date a Retention
Condition exists, the Servicer will not distribute to the holder of the
Transferor Certificate any collections of Principal Receivables that
otherwise would be distributed to the holder of the Transferor Certificate,
but shall instead deposit such funds in the Excess Funding Account until the
Retention Condition ceases. Funds on deposit in the Excess Funding Account
will be withdrawn and paid to the holder of the Transferor Certificate on
any date provided that a Retention Condition is not in effect, or would
result from such payment, on such date. In addition, if a Controlled
Accumulation Period or Rapid Amortization Period commences with respect to
the Certificates, then an amount of funds on deposit in the Excess Funding
Account (after giving effect to the release of funds to the holder of the
Transferor Certificate as described above) up to the amount, if any, by
which the Transferor Interest would be lesss than zero if there were no
funds on deposit in the Excess Funding Account on such date, will be treated
as Shared Principal Collections to the extent needed to cover principal
payments due to or for the benefit of such Series. "Retention Condition"
means (a) on any day on and after the Conversion Date, either (i) the
Transferor Interest is less than the Minimum Transferor Interest or (ii)
the sum of the Aggregate Principal Receivables and the principal amount on
deposit in the Excess Funding Account is less than the Minimum Aggregate
Principal Receivables (in each case determined after giving effect to any
transfer of Principal Receivables to the Trust on such day); or (b) on any
day prior to the Conversion Date, either (i)(A) the sum of the aggregate
amount of Receivables and the principal amount on deposit in the Excess
Funding Account at the end of the day immediately prior to uch date of
determination, minus the Adjusted Aggregate Investor at the end of such
preceding day is less than (B) [__]% of the aggregate amount of Receivables
at the end of the day immeidately prior to such date of determination, or
(ii)(A) the sum of (1) the product of 0.___ times the aggregate amount of
Receivables plus (2) the principal amount on deposit in the Excess Funding
Account, in each case at the end of the day immediately prior to such date
of determination is less than (B) the Minimum Aggregate Principal Receivables
(in the case of both clauses (i) and (ii) determined after giving to any
transfer of Receivables to the Trust on such day).
Paired Series
Series 199_-_ may be paired with one or more other Series (each a
"Paired Series"). Each Paired Series either will be prefunded with an
initial deposit to a Pre-Funding Account in an amount up to the initial
principal balance of such Paired Series and primarily from the proceeds of
the sale of such Paired Series or will be a Variable Interest. Any such
Pre-Funding Account will be held for the benefit of such Paired Series and
not for the benefit of the Holders. As principal is deposited into the
Principal Funding Account with respect to the Certificates, either (i) in
the case of a prefunded Paired Series, an equal amount of funds on deposit
in the Pre-Funding Account for such prefunded Paired Series will be
released (which funds will be distributed to the Transferor) or (ii) in the
case of a Paired Series which is a Variable Interest, an interest in such
variable Paired Series in an equal or lesser amount may be sold by the
Trust (and the proceeds thereof will be distributed to the Transferor) and,
in either case, the investor interest of such Paired Series will increase
by up to a corresponding amount. Upon payment in full of the Certificates,
assuming that there have been no unreimbursed charge-offs with respect to
any related Paired Series, the aggregate investor interest of such related
Paired Series will have been increased by an amount up to an aggregate
amount equal to the payments of principal of the Certificates since the
issuance of such Paired Series. The issuance of a Paired Series will be
subject to the conditions described under "Description of the Certificates
- -- Exchanges" in the Prospectus. There can be no assurance, however, that
the terms of any Paired Series might not have an impact on the timing or
amount of payments received by a Holder. In particular, the denominator of
the Fixed Allocation Percentage may be reduced 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
Holders and a possible slowdown in the repayment of principal to such
Holders because of such reduction in allocation of collections. See
"Maturity Assumptions" herein.
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
Holders (which determination shall be made without regard to the
existence of the Collateral Interest) and which continues for a
period of 60 days after written notice and continues to materially
and adversely affect the interests of the Holders (which
determination shall be made without regard to the existence 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 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 Holders are materially and adversely affected
(which determination shall be made without regard to the existence
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 (or such longer period as the
Trustee may specify) in accordance with the provisions of the
Agreement;
(c) any reduction of the average of the Portfolio Yields
for any three consecutive Monthly Periods to a rate which is less
than the average of the Base Rates for such period;
(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 Holders;
(f) insufficient moneys in the Distribution Account to
pay the Class A Investor Interest on the Class A Scheduled Payment
Date or the Class B Investor Interest on the Class B Scheduled
Payment Date;
(g) certain events of insolvency, conservatorship or
receivership relating to the Transferor;
(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 Holders and the Collateral Interest Holder evidencing undivided
interests aggregating more than 50% of the Investor Interest, by written
notice to the Transferor and the Servicer (and to the Trustee if given by
the Holders) 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 Holders, 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 Holders 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
earlier than __________, the scheduled commencement of the Controlled
Accumulation Period, Holders will be 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 "Monthly Investor Servicing Fee") shall
be equal to one-twelfth of the product of (a) 2.00% 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 Monthly Investor Servicing Fee shall be equal to $_______. On each
Transfer Date, but only if First NBC or the Trustee is the Servicer,
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 payment of a portion of the
Monthly Investor Servicing Fee with respect to such Monthly Period. The
"Servicer Interchange" for any Monthly Period for which First NBC 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) 1.0%. In the case of any insufficiency of
Servicer Interchange on deposit in the Finance Charge Account, a portion of
the Monthly 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 Holders or the Collateral Interest Holder be liable
for the share of the Servicing Fee to be paid out of Servicer Interchange.
The share of the Monthly Investor Servicing Fee allocable to the Class
A Holders 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) 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 Monthly Investor Servicing Fee allocable to the Class B Holders 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 Monthly Investor
Servicing Fee allocable to the Collateral Interest Holder with respect to
any Transfer Date (the "Collateral Interest 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 "Net Servicing Fee
Rate" shall mean (a) so long as First NBC or Trustee is the Servicer, 0.50%
per annum, and (b) so long as a Person other than First NBC or the Trustee
is the Servicer, 2.00% per annum. 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 Holders 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."
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 Holders
other than federal, state and local income and franchise taxes, if any, of
the Trust.
Reports to Holders
On each Transfer Date, the Trustee will forward to each Holder of
record, a statement prepared by the Servicer setting forth the items
described in "Description of the Certificates -- Reports to Holders" in the
Prospectus. In addition, such statement will include (a) the amount, if
any, withdrawn from the Principal Funding Account for such Transfer Date,
and (b) the Collateral Interest, if any, for such Transfer Date.
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:
Principal Amount of
Class A Underwriters Class A
Certificates
.......................................................... $
..........................................................
Total............................................
Principal Amount of
Class B Underwriters Class B
Certificates
.......................................................... $
..........................................................
Total............................................
In addition, _______________, as selling agent will directly offer
$____________ aggregate principal amount of the Class A Certificates and
$____________ aggregate principal amount of Class B Certificates.
The _____________ has an arrangement with _____________ under which it
may act as selling agent for the Certificates at the same prices,
concessions and discounts to dealers applicable to the Underwriters.
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.
Until the distribution of the Certificates is completed, rules of the
Commission may limit the ability of the Underwriters and certain selling
group members to bid for and purchase the Certificates. As an exception to
these rules, certain persons participating in this offering, on behalf of
the Underwriters, are permitted to engage in over-allotment transactions,
stabilizing transactions, syndicate covering transactions and penalty bids
with respect to the Certificates in accordance with Regulation M under the
Exchange Act.
Over-allotment transactions involve syndicate sales in excess of the
offering size, which create syndicate short positions. Stabilizing
transactions permit bids to purchase the Certificates so long as the
stabilizing bids do not exceed a specified maximum. Syndicate covering
transactions involve purchases of the Certificates in the open market after
the distribution has been completed in order to cover syndicate short
positions. Penalty bids permit reclamation of a selling concession from a
syndicate member when the Certificates originally sold by such syndicate
member are purchased in a syndicate covering transaction.
Such over-allotment transactions, stabilizing transactions, syndicate
covering transactions and penalty bids may cause the prices of the
Certificates to be higher than they would otherwise be in the absence of
such transactions. Neither the Trust, the Transferor, nor any of the
Underwriters make any representation or prediction as to the direction or
magnitude of any effect that the transactions described above may have on
the price of the Certificates. In addition, neither the Trust, the
Transferor nor any of the Underwriters represent that the Underwriters will
engage in any such transactions or that such transactions, once commenced,
will not be discontinued without notice.
Each Underwriter will represent and agree that:
(a) it has complied and will comply with all applicable provisions
of the Financial Services Act 1986 with respect to anything done by it in
relation to the Series 199_-_ Certificates in, from or otherwise involving
the United Kingdom;
(b) it has only issued, distributed or passed on and will only issue,
distribute or pass on in the United Kingdom any document received by it in
connection with the issue of the Series 199_-_ Certificates to a person who
is of a kind described in Article 11(3) of the Financial Services Act 1986
(Investment Advertisements) (Exemptions) Order 1996 or is a person to whom
such document may otherwise lawfully be issued, distributed or passed on;
(c) if it is an authorized person under Chapter III of Part I of the
Financial Services Act 1986, it has only promoted and will only promote (as
that term is defined in Regulation 1.02(2) of the Financial Services
(Promotion of Unregulated Schemes) Regulations 1991) to any person in the
United Kingdom the scheme described in this Prospectus Supplement and the
Prospectus if that person is a kind described either in Section 76(2) of
the Financial Services Act 1986 or in Regulation 1.04 of the Financial
Services (Promotion of Unregulated Schemes) Regulations 1991; and
(d) it is a person of a kind described in Article 11(3) of the
Financial Services Act 1986 (Investment Advertisements) (Exemptions)
Order 1996.
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.
INDEX OF DEFINED TERMS FOR PROSPECTUS SUPPLEMENT
Page
Accounts ..........................................................S-1
Accumulation Period Length.................................................S-31
Additional Interest........................................................S-29
Adjusted Investor Interest..................................................S-7
Aggregate Principal Receivables............................................S-36
Agreement...................................................................S-6
Automatic Additional Accounts..............................................S-21
Available Investor Principal Collections...................................S-31
Available Reserve Account Amount...........................................S-44
Bank........................................................................S-1
Base Rate .................................................................S-26
Billed Finance Charge Receivables..........................................S-36
Certificates ..........................................................S-1, S-5
Class A Additional Interest........ .......................................S-29
Class A Adjusted Investor Interest....................................S-7, S-34
Class A Available Funds....................................................S-29
Class A Certificates...................................................S-1, S-5
Class A Covered Amount...............................................S-10, S-44
Class A Fixed Allocation...................................................S-33
Class A Floating Allocation................................................S-33
Class A Holders ............................................................S-6
Class A Investor Charge-Off..........................................S-13, S-43
Class A Investor Default Amount............................................S-42
Class A Investor Interest.............................................S-6, S-34
Class A Monthly Interest...................................................S-37
Class A Monthly Principal..................................................S-40
Class A Principal Funding Investment Shortfall.......................S-10, S-44
Class A Rate ....................................................S-4, S-5, S-30
Class A Required Amount..............................................S-12, S-34
Class A Scheduled Payment Date.........................................S-4, S-5
Class A Servicing Fee......................................................S-47
Class A Underwriters.......................................................S-47
Class A Underwriting Agreement.............................................S-47
Class B Additional Interest................................................S-29
Class B Available Funds....................................................S-30
Class B Certificates...................................................S-1, S-5
Class B Fixed Allocation...................................................S-33
Class B Floating Allocation................................................S-33
Class B Holders ............................................................S-6
Class B Investor Charge-Off..........................................S-13, S-43
Class B Investor Default Amount............................................S-42
Class B Investor Interest.............................................S-6, S-34
Class B Monthly Interest...................................................S-37
Class B Monthly Principal..................................................S-40
Class B Rate ....................................................S-4, S-5, S-30
Class B Required Amount..............................................S-12, S-35
Class B Scheduled Payment Date.........................................S-4, S-5
Class B Servicing Fee......................................................S-47
Class B Underwriters.......................................................S-47
Class B Underwriting Agreement.............................................S-47
Closing Date .....................................................S-4, S-5
Code .........................................................S-16
Collateral Available Funds.................................................S-38
Collateral Charge-Off......................................................S-43
Collateral Fixed Allocation................................................S-33
Collateral Floating Allocation.............................................S-33
Collateral Interest...................................................S-6, S-34
Collateral Interest Holder..................................................S-6
Collateral Interest Servicing Fee..........................................S-47
Collateral Investor Default Amount.........................................S-42
Collateral Monthly Interest................................................S-39
Collateral Monthly Principal...............................................S-40
Collateral Rate .........................................................S-39
Commission ..........................................................S-1
Controlled Accumulation Amount.............................................S-40
Controlled Accumulation Period..............................................S-9
Controlled Deposit Amount.............................................S-9, S-25
Credit Enhancement..........................................................S-5
Defeased Series .........................................................S-41
Distribution Date ..........................................................S-4
Distribution Dates..........................................................S-5
ERISA .........................................................S-16
Excess Finance Charge Collections..........................................S-39
Excess Spread ...................................................S-12, S-38
First NBC ..........................................................S-1
Fitch .........................................................S-36
Fixed Investor Percentage..................................................S-33
Floating Investor Percentage...............................................S-32
Group I .........................................................S-14
Holders ..........................................................S-6
Initial Collateral Interest................................................S-13
Interest Period .........................................................S-30
Investor Default Amount....................................................S-42
Investor Interest ..........................................................S-6
LIBOR ....................................................S-4, S-30
LIBOR Determination Date...................................................S-30
Loan Agreement .........................................................S-14
Minimum Aggregate Principal Receivables....................................S-21
Minimum Transferor Interest................................................S-21
Monthly Investor Servicing Fee.............................................S-46
Monthly Period ..........................................................S-7
Net Servicing Fee Rate.....................................................S-47
Paired Series ...................................................S-14, S-45
Pay Out Event .........................................................S-45
Portfolio Yield .........................................................S-26
Principal Funding Account.......................................S-9, S-25, S-43
Principal Funding Account Balance..........................................S-25
Principal Funding Investment Proceeds................................S-10, S-44
Principal Shortfalls.......................................................S-41
Rapid Amortization Period..................................................S-11
Rating Agency Condition....................................................S-42
Reallocated Class B Principal Collections..................................S-35
Reallocated Collateral Principal Collections...............................S-36
Reallocated Principal Collections..........................................S-36
Receivables ..........................................................S-1
Record Date .........................................................S-29
Reference Banks .........................................................S-30
Required Amount .........................................................S-12
Required Collateral Interest.........................................S-13, S-42
Required Reserve Account Amount............................................S-44
Reserve Account .........................................................S-44
Reserve Account Funding Date...............................................S-44
Reset Date .........................................................S-34
Revolving Period ..........................................................S-9
Series 199_-_ Supplement....................................................S-6
Series 199_-_ Termination Date..............................................S-7
Servicer Interchange.......................................................S-46
Shared Principal Collections.........................................S-15, S-41
Subject Reset Date........................................................S-32,
Transfer Date .........................................................S-36
Transferor Interest.........................................................S-6
Trust .....................................................S-1, S-5
Trust Portfolio .........................................................S-21
Underwriters .........................................................S-47
Underwriting Agreement.....................................................S-47
Variable Interest .........................................................S-34
ANNEX I
[OTHER SERIES ISSUED
The table below sets forth the principal characteristics of the other
Series previously issued by the the Trust. For more specific information
with respect to any Series, any prospective investor should contact First
NBC at ( ) ______________. First NBC will provide, without charge, to any
prospective purchaser of the Certificates, a copy of the Disclosure
Documents for any previous publicly-issued Series.]
<PAGE>
========================================
No dealer, salesman or other person
has been authorized to give any
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 agent or Underwriter.
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 here-
under 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 thereof 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
Page
----
SUMMARY OF TERMS...................S-4
FIRST NBC'S CREDIT CARD
PORTFOLIO.....................S-17
THE RECEIVABLES...................S-20
MATURITY ASSUMPTIONS..............S-24
RECEIVABLE YIELD CONSIDERATIONS...S-26
<PAGE>
FIRST NBC AND FIRST COMMERCE
CORPORATION..................S-27
DESCRIPTION OF THE CERTIFICATES...S-27
UNDERWRITING......................S-46
INDEX OF DEFINED TERMS FOR
PROSPECTUS SUPPLEMENT.......S-48
Prospectus
Prospectus Supplement
Reports to Certificateholders
Available Information
Incorporation of Certain Documents by
Reference
Prospectus Summary
Risk Factors
The Trust
First NBC's Credit Card Activities
The Receivables
Maturity Assumptions
Use of Proceeds
First NBC and First Commerce
Corporation
Description of the Certificates
Credit Enhancement
Certain Legal Aspects of the Receivables
U.S. Federal Income Tax Consequences
State and Local Taxation
ERISA Considerations
Plan of Distribution
Legal Matters
Index of Terms for Prospectus
Annex 1: Global Clearance, Settlement and
Tax Documentation Prospectus
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 obligaiton of dealers to deliver a
Prospectus Supplement and a Prospectus
when acting as underwriters and with
respect to their unsold allotments or
subscriptions.
========================================
<PAGE>
========================================
First NBC
Credit Card Master Trust
$____________ Class A
[Floating Rate] [___%]
Certificates, Series 199_-_
$____________ Class B
[Floating Rate] [___%]
Certificates, Series 199_-_
First National Bank
of Commerce
Transferor and Servicer
------------------------------
PROSPECTUS SUPPLEMENT
------------------------------
Underwriters of the Class A Certificates
[ ]
[ ]
Underwriters of the Class B Certificates
[ ]
[ ]
========================================
<PAGE>
SUBJECT TO COMPLETION, DATED MAY 29, 1997
PROSPECTUS
First NBC Credit Card Master Trust
Asset Backed Certificates
First National Bank of Commerce
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 to be set forth
in a supplement to this Prospectus (a "Prospectus Supplement").
The Certificates in each Series will represent an undivided
interest in the First NBC Credit Card Master Trust (the "Trust").
The Trust will be formed pursuant to a pooling and servicing
agreement between First National Bank of Commerce ("First NBC" or
the "Bank"), as transferor and servicer, and The First National
Bank of Chicago, as trustee. Certain capitalized terms used in
this Prospectus are defined elsewhere in this Prospectus and in
the accompanying Prospectus Supplement. Please refer to the
"Index of Defined Terms for Prospectus" on page 78 for a
listing of the pages on which such terms are defined.
The property of the Trust will include receivables (the
"Receivables") generated from time to time in a portfolio of
revolving credit accounts, all monies due or to become due in
payment of the Receivables, any collateral securing the
Receivables, all proceeds of the foregoing and proceeds of
credit life insurance policies relating to the Receivables and
all monies on deposit in certain bank accounts of the Trust, as
more fully described herein. Additionally, with respect to any
Series or Class offered hereby, the Trust assets also may include
(i) the right to receive Interchange and Other Account Revenues
and/or (ii) credit enhancement and interest rate protection
arrangements for such Series or Class, as described in the
related Prospectus Supplement. The Bank will initially own the
remaining undivided interest in the Trust not represented by the
Certificates issued by the Trust and will initially 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 types of
Certificates, as specified in the related Prospectus Supplement.
Each Certificate will represent an undivided interest in the
Trust, and the interest of the holders of each Class or Series of
Certificates will include the right to receive a varying
percentage of each month's collections with respect to the
Receivables 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 a cash collateral account or guaranty, a collateral
interest, a letter of credit, a surety bond, an insurance policy
or other form of enhancement as specified in the Prospectus
Supplement relating to that 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 that Series or
another Series, in each case to the extent described in the
related Prospectus Supplement. Each Series of Certificates or
Class 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 will be described in the
related Prospectus Supplement, the terms of such Series will not
be subject to prior review by, or consent of, the
Certificateholders of any previously issued Series.
Potential investors should consider, among other things, the
information set forth in "Risk Factors" commencing on page 23 of
this Prospectus.
THE CERTIFICATES WILL REPRESENT INTERESTS IN THE TRUST ONLY AND
WILL NOT REPRESENT INTERESTS IN OR RECOURSE OBLIGATIONS OF FIRST NBC OR
ANY AFFILIATE THEREOF. A CERTIFICATE IS NOT A DEPOSIT, AND NEITHER THE
CERTIFICATES NOR THE UNDERLYING ACCOUNTS OR RECEIVABLES ARE INSURED OR
GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, OR (EXCEPT FOR
RECEIVABLES ARISING IN PRIVATE LABEL ACCOUNTS) ANY OTHER GOVERNMENTAL AGENCY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION (THE "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 the Bank 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 will be 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 will be set forth in, or may be
calculated from, the related Prospectus Supplement, and the net
proceeds to the Bank 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 the Bank associated with the
issuance and distribution of such Certificates. See "Plan of
Distribution."
<PAGE>
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 ___________ __, 1997.
PROSPECTUS SUPPLEMENT
The Prospectus Supplement relating to a Series to be offered
thereby and hereby will, among other things, set forth with
respect to that Series: (a) the initial aggregate principal
amount of each Class of that Series; (b) the certificate interest
rate (or method for determining it) of each Class of that Series;
(c) certain information concerning the Receivables allocated to
that 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 that Series or any other Series; (f) the identity
of each Class of floating rate Certificates and fixed rate
Certificates included in that 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) additional information with
respect to any Enhancement relating to that Series; and (j) the
plan of distribution of that 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 the registered holder(s) of the related Certificates. Cede &
Co. ("Cede"), as nominee of The Depository Trust Company ("DTC")
is generally expected to be the only registered holder of the
Certificates. The availability of copies of such reports to DTC
participants and ultimately to the owners of beneficial interests
in the Certificates ("Certificate Owners") will be governed by
arrangements among DTC and such parties, subject to any statutory
or regulatory requirements as may be in effect from time to time.
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
Certificate Owners. The Servicer will file with 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.
<PAGE>
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; and the Commission's regional
offices at Citicorp Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661-2511 and 7 World Trade Center, Suite
1300, New York, New York 10048. 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.
Such information may also be accessed electronically by means of
the Commission's home page on the World Wide Web located at
http://www.sec.gov.
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
herein or 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 herein 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). Requests for such
copies should be directed to: Thomas L. Callicutt, Jr.,
Executive Vice President, Controller and Principal Accounting
Officer, First Commerce Corporation, 201 Saint Charles Avenue,
19th Floor, New Orleans, Louisiana 70170, telephone number (504)
623-2913.
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 such terms are defined is found in
the "Index of Defined Terms for Prospectus" on page 78. 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 that Prospectus
Supplement.
Type of Securities. . . . . .Asset Backed Certificates (the
"Certificates") evidencing an
undivided interest in the assets of
the First NBC Credit Card Master
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").
The Trust . . . . . . . . . . The Trust will be formed pursuant
to a pooling and servicing
agreement (the "Agreement") between
First National Bank of Commerce
("First NBC" or the "Bank"), as
transferor and servicer, and The
First National Bank of Chicago, as
trustee (the "Trustee"). Each
Series issued by the Trust will be
issued pursuant to a series
supplement to the Agreement (a
"Series Supplement"; references in
this Prospectus to the Agreement,
as it relates to any Series, shall
include the Series Supplement
entered into in connection with
such Series). Any Series (or class
thereof) may or may not be offered
pursuant to this Prospectus. Each
Prospectus Supplement will identify
all outstanding Series previously
issued by the Trust. Certificate
Owners with respect to any Series
are not required to be notified of
the issuance of any subsequent
Series. However, it is a condition
precedent to the issuance of any
additional Series that each Rating
Agency that has rated any
outstanding Series deliver written
confirmation to the Trustee that
such issuance will not result in
the reduction or withdrawal of its
rating on any such outstanding
Series.
Trust Assets. . . . . . . . . The assets of the Trust will
include receivables (the
"Receivables") arising under
certain revolving credit accounts
(the "Accounts"), initially
comprised of a portion of the
MasterCard(R), VISA(R)*<F1> and private
label credit card accounts included
in the portfolio of MasterCard,
VISA and private label accounts
owned by the Bank (the "Bank
Portfolio"), and all monies
due or to become due in payment of
the Receivables, including certain
fees charged on the Accounts and
included as Finance Charge
Receivables, all proceeds of the
Receivables and proceeds of credit
life insurance policies relating to
the Receivables, and any collateral
securing the Receivables and
proceeds of such collateral and may
include the right to receive
Interchange and Other Account
Revenues, if any, allocable to the
Certificates and all monies on
deposit in certain bank accounts of
the Trust (including any permitted
investments made with such monies
and related investment earnings), and
any Enhancement with respect to any
particular Series or Class, as
described in the related Prospectus
Supplement. The private label
accounts included in the Bank
Portfolio (the "Private Label
Accounts") relate to credit cards
issued to military personnel who
are eligible to participate in one
of the Bank's military affinity
programs but do not meet the credit
standards for issuance of standard
credit cards. Payments due under
Private Label Accounts are charged
back to a non-appropriated funds
instrumentality associated with the
United States Air Force Services at
65-90 days past due. The non-
appropriated funds instrumentality
does not represent a full faith and
credit obligation of the United
States. "Interchange" consists of
certain fees received by the Bank
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.
"Other Account Revenues" consist of
amounts received by the Transferor
(a) from any third party in
consideration of the inclusion of
advertising inserts with monthly
statements relating to accounts in
the Bank Portfolio, (b) from
issuers of credit insurance
policies on account of experience
rebates or similar amounts related
to obligors on accounts included in
the Bank Portfolio and (c) from any
other Person on account of revenues
related to the Accounts, to the
extent (in the case of this clause
(c)) that Transferor in the future
designates such amounts to be
treated as "Other Account
Revenues." The term "Enhancement"
means, with respect to any Series
or Class, any Credit Enhancement or
any derivative product such as a
guaranteed rate agreement, maturity
liquidity facility, interest rate
cap agreement, interest rate swap
agreement or other similar
arrangement for the benefit of the
Certificateholders of that Series
or Class. The term "Credit
Enhancement" means, with respect to
any Series or Class, any cash
collateral guaranty or account,
collateral interest, letter of
credit, surety bond, insurance
policy, spread account, reserve
account or other similar
arrangement for the benefit of the
Certificateholders of that 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.
- -----------------
<F1>* MasterCard(R) and VISA(R) are Federally registered servicemarks
of MasterCard International Inc. and Visa U.S.A., Inc., respectively.
</F1>
At the time of formation of the
Trust, the Bank, as transferor (in
such capacity, the "Transferor"),
will convey to the Trustee, in
trust for the benefit of the
Certificateholders, all Receivables
existing under certain Accounts
selected from the Bank Portfolio
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 the Bank may, from
time to time (subject to certain
limitations and conditions), and in
some circumstances will be
obligated to, designate additional
eligible revolving credit accounts
to be included as Accounts (the
"Additional Accounts"), the
Receivables of which will be
included in the Trust and that in
lieu of Additional Accounts or in
addition thereto, the Bank may
(subject to compliance with
applicable securities laws) include
in the Trust, participations or
trust certificates representing
undivided interests in a pool of
assets primarily consisting of
receivables arising under revolving
credit accounts and collections
thereon ("Participations"). Any
conveyance by the Transferor to the
Trust of Receivables in Additional
Accounts or Participations is
subject to the satisfaction of
several conditions. See "The
Receivables," "Risk
Factors -- Addition of Trust Assets --
Effect on Credit Quality" and
"Description of the Certificates --
Addition of Trust Assets."
To the extent provided in any
Series Supplement, or in an
amendment to the Agreement, all or
a portion of the Receivables or
Participations conveyed to the
Trust and all collections received
with respect thereto may be
allocated to one or more Series as
long as each Rating Agency confirms
that such allocation will not
result in the reduction or
withdrawal of its rating on any
outstanding Class of Certificates,
and the Servicer has delivered an
officer's certificate to the
Trustee to the effect that the
Servicer reasonably believes such
allocation will not adversely
affect in any material respect the
interests of the Certificateholders
of any Series issued and
outstanding.
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, floating or other
type of rate and (ii) principal at
the times and in the circumstances
(if any) described in the related
Prospectus Supplement. Payments of
principal may be made during a
Controlled Amortization Period,
Principal Amortization Period, or,
under certain limited
circumstances, Rapid Amortization
Period (each, an "Amortization
Period") or, under certain limited
circumstances, in connection with a
Partial Amortization; or principal
may be payable 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.
Each Series of Certificates will
consist of one or more Classes, one
or more of which may be senior
("Senior Certificates") or
subordinated ("Subordinated
Certificates") to one or more other
Classes. Each Class of a Series may
evidence the right to receive a
specified portion of each
distribution of principal, 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
and the holder of the Transferor
Certificate. A portion of the
assets of the Trust also will be
allocated to a related Credit
Enhancement Provider which provides
Credit Enhancement in the form of a
Collateral Interest and may be
allocated to a provider of Credit
Enhancement in another form to the
extent draws are made on the Credit
Enhancement to pay the principal of
the Certificates of the related
Series. See "Credit
Enhancement -- General" and "
Collateral Interest." The aggregate
principal amount of the interest of
the Certificateholders of a Series
is called the "Investor Interest"
and is based on the portion of the
Aggregate Principal Receivables
allocated to that Series. If
specified in any Prospectus
Supplement, the term "Investor
Interest" with respect to the
related Series will include the
Collateral Interest with respect to
that Series. The aggregate
principal amount of the interest of
the holder of the Transferor
Certificate is called the
"Transferor Interest," and is based
on the sum of the portion of the
Aggregate Principal Receivables in
the Trust not allocated to the
Certificateholders or any provider
of Credit Enhancement (each a
"Credit Enhancement Provider"),
with respect to the Trust and the
principal amount, if any, on
deposit in the Excess Funding
Account. 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, in
the case of any Series in a
Reallocation Group, to reallocation
as described in "Description of the
Certificates -- Reallocations Among
Different Series within a
Reallocation Group") varying
percentages of the collections of
Finance Charge Receivables and
Principal Receivables for each
month and will be allocated a
varying percentage of the Net
Default Amount or any Net
Recoveries for that month (each
such percentage, an "Investor
Percentage"). The "Net Default
Amount" for any month means the
excess (if any) of the amount of
Receivables in Accounts that were
written off as uncollectible by the
Servicer ("Defaulted Accounts") for
that month over the amounts
received by the Servicer with
respect to Receivables in all
Defaulted Accounts (net of related
expenses and allocated in
accordance with the Servicer's
customary procedures)
(collectively, "Recoveries"). If
the amount of Recoveries received
by the Servicer for a month exceeds
the amount of Receivables in
Accounts that become Defaulted
Accounts in that month, the excess
Recoveries are referred to as "Net
Recoveries."
The related Prospectus Supplement
will specify 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 that Series may be further
allocated among each Class in that
Series as described in the related
Prospectus Supplement. See
"Description of the Certificates --
Allocations."
The Certificates of each Series
will represent interests in the
Trust only and will not represent
interests in or recourse
obligations of the Transferor or
any affiliate thereof. A
Certificate is not a deposit and
neither the Certificates nor the
underlying Accounts or Receivables
are insured or guaranteed by the
Federal Deposit Insurance
Corporation (the "FDIC") or
(except for Receivables arising in
Private Label Accounts) any other
governmental agency.
Receivables . . . . . . . . .The Receivables held in the Trust
will arise in Accounts selected
from the Bank Portfolio based on
criteria provided in the Agreement
and described in the related
Prospectus Supplement as applied
initially on _____________ __, 1997
(the "Cut-Off Date"), and, with
respect to certain Additional
Accounts, if any, on subsequent
dates.
The Receivables will consist of
amounts charged by accountholders
for goods and services, cash
advances and balances transferred
from other credit accounts (the
"Principal Receivables"), plus the
related periodic finance charges
and amounts charged to the Accounts
in respect of certain annual
account fees, cash advance fees,
late fees, overlimit fees, closed
account maintenance charges and
similar fees and charges (including
fees which are not now but from
time to time may be assessed on the
Accounts) (the "Finance Charge
Receivables"). Net Recoveries also
will be treated as collections of
Finance Charge Receivables unless
the related Prospectus Supplement
provides that Net Recoveries shall
not be treated as Finance Charge
Receivables for purposes of the
related Series. In addition, at
the option of the Transferor, 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 (and,
if the Transferor so elects,
Receivables arising in the related
Accounts before 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." Finally, if so specified
in the related Prospectus
Supplement, certain amounts of
Interchange and Other Account
Revenues may be allocated to the
Certificates of a Series or any of
its Classes and treated as
collections of Finance Charge
Receivables for purposes of that
Series or Class or may be applied
in some other manner as described
in the related Prospectus
Supplement. See "First NBC's Credit
Card Activities -- Interchange and
Other Account Revenues."
During the term of the Trust, the
Transferor will automatically
transfer all new Receivables
arising in the Accounts to the
Trust. 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.
Pursuant to the Agreement, the
Transferor will have the right
(subject to certain limitations and
conditions), and, to the extent
necessary to maintain the
Transferor Interest at or above a
specified level (the "Minimum
Transferor Interest") and in
certain other circumstances, will
be obligated, to designate
additional eligible revolving
credit 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 designate
Participations to be included in
the Trust in lieu thereof or in
addition thereto. See "Risk
Factors -- Addition of Trust Assets --
Effect on Credit Quality" and
"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 as "Removed Accounts" and
stop transferring new Receivables
arising in the Removed Accounts to
the Trust. Pre-existing Receivables
in Removed Accounts may either be
conveyed to the Transferor or its
designee or retained by the Trust.
If such pre-existing Receivables
are retained in the Trust, the
Servicer and the Transferor will
agree to allocate principal
collections on the Removed Accounts
on a first-in, first-out basis, so
that such collections will be
allocated to outstanding advances
in the order in which such advances
arose (beginning with the oldest
outstanding advance). Principal
collections allocable to
Receivables retained by the Trust
will be applied as Collections in
accordance with the Agreement.
Upon payment of all amounts owing
in respect of such Receivables, the
Trust will transfer the related
Account to the Transferor. 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 evidences
the Transferor Interest (the
"Transferor Certificate"), which
Transferor Certificate will
initially be held by the
Transferor; and (iii) one or more
supplemental certificates
("Supplemental Certificates"),
evidencing partial interests in the
Transferor Interest. The
Transferor Certificate and any
Supplemental Certificates are not
offered hereby and will be
transferable only as provided in
the Agreement. Any Series of
Certificates 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 of 1933, as amended
(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. To the extent provided
in the related Supplement (and
subject to any applicable
requirements under the Exchange Act
and the rules and regulations
thereunder, including Rule 13e-4),
a new Series may be issued fully or
partially in exchange for
certificates of one or more
existing Series.
A new issuance of a Series of
Certificates (a "New Issuance") may
occur only upon delivery to the
Trustee of the following: (i) a
Series Supplement specifying the
terms of the new Series, (ii) (a)
an opinion of counsel to the effect
that the certificates of that
Series will be characterized as
indebtedness for Federal income tax
purposes, unless the related Series
Supplement indicates that such
opinion will not be provided and
(b) 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) such
issuance will not cause the Trust
to be classified as 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 to this effect with respect
to any action being 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 that Rating
Agency reducing or withdrawing its
rating on any then outstanding
Series rated by it, (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 and
(vii) if applicable, the
Certificates representing the
Series to be exchanged. See
"Description of the Certificates --
New Issuances." The Certificates
resulting from a New Issuance may
either be delivered by the Trustee
to the Bank for sale by the Bank or
sold directly by the Trust.
The Transferor also may from time
to time cause the Trustee to sell
interests (each, a "Purchased
Interest") in the Receivables and
other assets of the Trust to one or
more purchasers. Any Purchased
Interest will represent an interest
in the Trust's assets similar to
the interest of a Series of
Certificates. No Series will be
subordinated to any Purchased
Interest, and no Purchased Interest
will have any interest in the
Series Accounts or Enhancement for
any Series, unless the Prospectus
Supplement relating to that Series
so provides. Any such sale will
take place pursuant to one or more
agreements which will specify terms
for the applicable Purchased
Interests and may grant the
purchasers of such interests notice
and consultation rights with
respect to rights or actions of the
Trustee. Any sale of Purchased
Interests in the assets of the
Trust will be subject to the
satisfaction of the same conditions
(including Rating Agency
confirmations) as for a New
Issuance, as appropriately adjusted
to apply to the relevant Purchased
Interest rather than a New
Issuance. No Purchased Interest is
offered hereby.
Denominations . . . . . . . .Beneficial interests in the
Certificates will be offered for
purchase in the denominations
specified in the related Prospectus
Supplement.
Registration of
Certificates. . . . . . . . .The Certificates of each Series
offered hereby may or may not be
represented by Certificates
registered in the name of Cede, as
the nominee of DTC, as specified in
the related Prospectus Supplement.
If the Certificates of a Series are
so registered, then no Certificate
Owner will be entitled to receive a
definitive certificate representing
its 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. . . . . . . . . .Certificate Owners of each Series
offered hereby may or may not be
permitted to make an election to
hold their Certificates through any
of DTC (in the United States) or
Cedel or Euroclear (in Europe), as
specified in the related Prospectus
Supplement. If such election is
available, then 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."
Transferor and Servicer . . .First National Bank of Commerce
("First NBC" or the "Bank"). The
principal executive offices of the
Bank are located at New Orleans,
Louisiana, telephone number (504)
623-1371. 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, Interchange or other
amounts as specified in the related
Prospectus Supplement. In certain
limited circumstances, the Bank may
resign or be removed as servicer,
in which event the Trustee or a
third party servicer may be
appointed as successor servicer
(the Bank, in this capacity, or any
successor servicer, is called the
"Servicer"). The Bank is a wholly
owned subsidiary of First Commerce
Corporation (the "Corporation").
See "First NBC and First Commerce
Corporation." In addition, if the
Bank elects to sell or otherwise
dispose of the Accounts, then the
new owner of the Accounts may be
substituted for the Bank as
Transferor and Servicer upon the
satisfaction of certain conditions,
including the delivery of a Tax
Opinion and receipt of written
confirmation from each Rating
Agency that such substitution will
not result in such Rating Agency's
reducing or withdrawing its rating
on any then outstanding Series
rated by it.
Collections . . . . . . . . .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 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 further allocated in
accordance with the respective
interests of the Certificateholders
of each Series or Class of
Certificates and the holder of the
Transferor Certificate and, in
certain circumstances, certain
providers of Enhancement. See
"Description of the Certificates --
Allocations."
Interest Payments . . . . . . Interest on each Series of
Certificates or Class for each
applicable 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 on
each Distribution Date will be
funded from collections of Finance
Charge Receivables allocated to the
Investor Interest during the
preceding calender month or months
(each, a "Monthly Period"), as
described in the related 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 "Description of the
Certificates -- Application of
Collections," "-- Shared Excess
Finance Charge Collections,"
"Credit Enhancement" and "Risk
Factors -- Limited Credit
Enhancement."
Revolving Period. . . . . . .Generally, no principal will be
payable to Certificateholders of
any Series or Class until the
Principal Commencement Date or the
Scheduled Payment Date with respect
to that Series or Class, as
described below. However, if
specified in the related Prospectus
Supplement for a Series or Class,
principal may be payable to
Certificateholders of such Series
or Class prior to either such date,
in connection with a Partial
Amortization or otherwise. For the
period beginning on the date of
issuance of a Series (a "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
that Series' Investor Interest
will, subject to certain
limitations, be paid to the holder
of the Transferor Certificate or
deposited in the Excess Funding
Account for the Trust or, under
certain circumstances and if so
specified in the related Prospectus
Supplement, treated as Shared
Principal Collections and paid to
the holders of certificates of
other Principal Sharing Series, 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 or in the related Prospectus
Supplement. See "Description of the
Certificates -- Principal Payments."
Controlled Amortization
Period. . . . . . . . . . . .A Series or any Class thereof may
have a "Controlled Amortization
Period," as specified in the
related Prospectus Supplement, in
order to permit payment of the
principal balance of the applicable
Certificates in fixed installments
over a specified amortization
period. Unless a Rapid Amortization
Period with respect to a Series
that has a Controlled Amortization
Period commences, collections of
Principal Receivables allocable to
that Series' Investor Interest
during each Monthly Period falling
in its Controlled Amortization
Period (and certain other amounts
if so specified in the related
Prospectus Supplement) will be used
on the related 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 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 Controlled Amortization
Amount not paid on 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
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
any related Collateral Interest or
Enhancement Invested Amount and (c)
the related Series Termination
Date.
Principal Amortization
Period. . . . . . . . . . . .A Series or any Class thereof may
have a "Principal Amortization
Period" as specified in the related
Prospectus Supplement, in order to
permit payment of the principal
balance of the applicable
Certificates in installments over a
specified amortization period. Such
installment payments are not
limited by any Controlled
Amortization Amount during a
Principal Amortization Period.
Unless a Rapid Amortization Period
with respect to a Series that has a
Principal Amortization Period
commences, collections of Principal
Receivables allocable to that
Series' Investor Interest during
each Monthly Period falling in its
Principal Amortization Period (and
certain other amounts if so
specified in the related Prospectus
Supplement) will be used on the
related Distribution Date to make
principal distributions to the
Certificateholders of that Series
or any Class of that Series then
scheduled to receive such
distributions. If a Series has more
than one Class of Certificates, the
related Prospectus Supplement may
describe certain priorities among
those 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 any related
Collateral Interest or Enhancement
Invested Amount and (c) the related
Series Termination Date.
Controlled Accumulation
Period. . . . . . . . . . . .A Series or any Class thereof may
have a "Controlled Accumulation
Period," as specified in the
related Prospectus Supplement, in
order to allow for the accumulation
of principal collections in a trust
account established for the benefit
of the Certificateholders of that
Series or Class (a "Principal
Funding Account") in anticipation
of a balloon payment on the
Scheduled Payment Date. During the
Controlled Accumulation Period,
principal collections in excess of
a fixed amount will not be so set
aside in the Principal Funding
Account, which permits the
Transferor to continue to have
access to collections which are not
then required to be set aside for
payment of the Certificates. Unless
a Rapid Amortization Period or, if
so specified in the related
Prospectus Supplement, a Rapid
Accumulation Period with respect to
a Series that has a Controlled
Accumulation Period commences,
collections of Principal
Receivables allocable to that
Series' Investor Interest during
each Monthly Period falling in its
Controlled Accumulation Period (and
certain other amounts if so
specified in the related Prospectus
Supplement) will be deposited on
the business day immediately prior
to the related Distribution Date or
other business day specified in the
related Prospectus Supplement (each
a "Transfer Date") in the Principal
Funding Account for that Series or
Class and used to make
distributions of principal to the
Certificateholders of that Series
or Class on the Scheduled Payment
Date. 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
Controlled Accumulation Amount not
deposited on prior Transfer 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 that Series or
Class and, if so specified in the
related Prospectus Supplement, any
related Collateral Interest or
Enhancement Invested Amount and (c)
the related Series Termination
Date.
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, that Series or any of
its Classes may be subject to a
principal payment guaranty or other
similar arrangement.
Rapid Accumulation Period . .A Series or any Class thereof
having a Controlled Accumulation
Period may require the commencement
of a "Rapid Accumulation Period"
upon the occurrence of a Pay Out
Event in order to halt the
Transferor's access to principal
collections allocable to the
Investor Interest of such Series
and require that all such principal
collections be set aside pending
the balloon payment on the related
Scheduled Payment Date. A Rapid
Accumulation Period, if used, would
commence on the day on which a Pay
Out Event has occurred and end on
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
and, if so specified in the related
Prospectus Supplement, of the
Collateral Interest or the
Enhancement Invested Amount, if
any, with respect to such Series
and (c) the related Series
Termination Date. During the Rapid
Accumulation Period for a Series,
collections of Principal
Receivables allocable to the
Investor Interest of the specified
Series during each Monthly Period
(and certain other amounts if so
specified in the related Prospectus
Supplement) will be deposited on
the related Transfer Date in the
Principal Funding Account and used
to make distributions of principal
to the Certificateholders of such
Series or any Class thereof 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.
The term "Pay Out Event" with
respect to a Series of Certificates
means any of the events identified
as such in the related Prospectus
Supplement and any of the
following: (a) certain events of
insolvency or receivership relating
to the Transferor, (b) the
Transferor being unable for any
reason to transfer Receivables to
the Trust in accordance with the
provisions of the Agreement or (c)
the Trust becoming an "investment
company" within the meaning of the
Investment Company Act of 1940, as
amended. See "Description of the
Certificates -- Pay Out Events."
Providing for a Rapid Accumulation
Period instead of a Rapid
Amortization Period in certain
circumstances would reduce the
number of events that could cause
Certificateholders to be repaid
their principal investment prior to
their Scheduled Payment Date.
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 or any
Class thereof may be subject to a
principal payment guaranty or other
similar arrangement.
Rapid Amortization Period . .Each Series will be subject to
early payment following the
occurrence of a Pay Out Event (or a
date following the occurrence of a
Pay Out Event in the case of a
Series subject to a Rapid
Accumulation Period, as specified
in the related Prospectus
Supplement) through the monthly
application of such Series'
allocable share of principal
collections. 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
Collateral Interest or the
Enhancement Invested Amount, 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. If a Rapid Amortization
Period commences, then such of the
Revolving Period, Controlled
Amortization Period, Principal
Amortization Period, Controlled
Accumulation Period or Rapid
Accumulation Period which is then
in effect with respect to the
applicable Series will terminate,
and no portion of such Series'
allocable share of principal
collections will be paid to the
Transferor or the Holders of any
other outstanding Series or
retained in the Excess Funding
Account. Rather, the entire amount
of such Series' share of principal
collections will be distributed to
the Certificateholders of such
Series on each Distribution Date
during the Rapid Amortization
Period.
During the Rapid Amortization
Period with respect to a Series,
distributions of principal will not
be limited by 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
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.
Partial Amortization. . . . .If so specified in the Prospectus
Supplement relating to a Series,
one or more Classes of Certificates
in that Series may be subject to a
partial early amortization (a
"Partial Amortization") in the
circumstances described below. In
the event that the Transferor is
required to add the Receivables of
Additional Accounts pursuant to the
Agreement and the Transferor is
unable to designate sufficient
Eligible Accounts for such purpose,
then the Transferor may elect to
avoid a Pay Out Event based on such
inability by commencing a Partial
Amortization for the applicable
Series. During a Partial
Amortization for any Series or
Class, a portion (as specified in
the related Prospectus Supplement)
of collections of Principal
Receivables which otherwise would
be treated as Shared Principal
Collections will be payable to the
Certificateholders of such Series
or Class, commencing on a specified
Distribution Date following the
commencement of such Partial
Amortization until the Transferor
is no longer required to add
Receivables of Additional Accounts
to the Trust.
Allocations Among Series. . .Pursuant to the Agreement, during
each Monthly Period, the Servicer
is required to first allocate to
each Series collections of
Principal Receivables and Finance
Charge Receivables and the Net
Default Amount or Net Recoveries
with respect to such Monthly Period
based on the Investor Percentage
for such Series. See "Description
of the Certificates -- Allocations."
Subject to reallocation among
Series in a Reallocation Group,
such amounts allocated to each
Series are then further allocated
within each Series to the
Certificateholders, any Series
Enhancement and the holders of the
Transferor Certificates pursuant to
the terms of the related Series
Supplement.
Shared Excess Finance Charge
Collections . . . . . . . . If so specified in the related
Prospectus Supplement, any Series
offered hereby may be designated as
a Series that shares with other
Series similarly designated
collections of Finance Charge
Receivables which are in excess of
the amounts then required by such
Series (an "Excess Allocation
Series"). The receiving Series may
then use such excess to cover any
shortfalls with respect to amounts
payable from collections of Finance
Charge Receivables allocable to
such Series. By so sharing such
excess collections of Finance
Charge Receivables, the Transferor
can more efficiently use available
investor funds to cover required
payments on all Series. The sharing
of excess collections of Finance
Charge Receivables will, however,
be discontinued if at any time the
Transferor delivers to the Trustee
an officer's certificate to the
effect that, in the reasonable
belief of the Transferor, the
continuation of such sharing would
have adverse regulatory
implications for Transferor. See
"Description of the Certificates --
Application of Collections," "--
Shared Excess Finance Charge
Collections," "-- Defaulted
Receivables; Incentive Payments and
Fraudulent Charges; Investor
Charge-Offs" and "Credit
Enhancement."
Shared Principal
Collections . . . . . . . .If any Series is designated as a
"Principal Sharing Series" in the
related Prospectus Supplement, to
the extent that collections of
Principal Receivables that are
allocated to the Investor Interest
of such Series are not needed to
make payments or deposits with
respect to such Series, such
collections ("Shared Principal
Collections") will be applied to
cover principal payments due to or
for the benefit of
Certificateholders of other
Principal Sharing Series and, if
not needed for that purpose, will
generally be distributed to the
Transferor. Any such reallocation
will not result in a reduction in
the Investor Interest of the Series
to which such collections were
initially allocated.
Reallocations Among Series
in a Reallocation Group. . . If so specified in the related
Prospectus Supplement, the
Certificates of a Series may be
included in a group of Series that
will be subject to reallocations of
collections of Finance Charge
Receivables and other amounts among
the Series in such group (a
"Reallocation Group"). Collections
of Finance Charge Receivables
allocable to each Series in a
Reallocation Group will be
aggregated and made available for
certain required payments for all
Series in such Reallocation Group.
By including a Series in a
Reallocation Group, the Transferor
may enable that Series to obtain
the benefit of excess collections
of Finance Charge Receivables
allocated on the basis of the
amounts required for payments with
respect to such Series relative to
the aggregate amount of such
required amounts for all Series
in the Reallocation Group.
Consequently, the issuance of new
Series in such Reallocation Group
may have the effect of reducing or
increasing the amount of
collections of Finance Charge
Receivables allocable to the
Certificates of other Series in
such Reallocation Group. See "Risk
Factors -- Issuance of New Series;
Groups."
Paired Series . . . . . . . .If so specified in the Prospectus
Supplement relating to a Series,
such Series may be paired with all
or a portion of one or more Series
(each, a "Paired Series"), such
that a reduction in the Investor
Interest or the Adjusted Investor
Interest of one such Series results
in an increase in the Investor
Interest of the other such Series.
The effect of a Paired Series is to
provide for continuous investment
in the Receivables by
Certificateholders, thereby
reducing the potential increase in
the Transferor Interest as the
first of the Paired Series'
interest in the Trust is reduced
through the amortization or
accumulation of principal. If a Pay
Out Event occurs with respect to a
Series having a Paired Series or
with respect to the Paired Series
when such Series is in a Controlled
Amortization Period or Controlled
Accumulation Period, the Investor
Percentage for collections of
Principal Receivables for the
Series and for its Paired Series
may be reset as specified in the
related Prospectus Supplements. See
"Description of the Certificates --
Paired Series."
Excess Funding Account. . . . If on any date a Retention
Condition exists, the Servicer will
not distribute to the holder of the
Transferor Certificate any Shared
Principal Collections that
otherwise would be so distributed,
but will instead deposit such funds
in an account required to be
established for such purpose by the
Agreement (the "Excess Funding
Account"), until the Retention
Condition ceases. Funds on deposit
in the Excess Funding Account will
be withdrawn and paid to the holder
of the Transferor Certificate on
any date provided that no Retention
Condition is in effect, or would
result from such payment, on such
date. As more fully described
herein, a Retention Condition
exists if certain tests concerning
the minimum level of Receivables in
the Trust are not met. In
addition, if a Controlled
Accumulation Period, Controlled
Amortization Period, Principal
Amortization Period, Rapid
Amortization Period or Rapid
Accumulation Period commences with
respect to any Series entitled to
the benefits of Shared Principal
Collections, an amount of funds on
deposit in the Excess Funding
Account (after giving effect to the
release of funds to the holder of
the Transferor Certificate as
described above) up to the amount,
if any, by which the Transferor
Interest would be less than zero if
there were no funds on deposit in
the Excess Funding Account on such
date, will be treated as Shared
Principal Collections to the extent
needed to cover principal payments
due to or for the benefit of such
Series, if so provided by the
related Series Supplement. See
"Description of the Certificates --
Excess Funding Account."
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
will be less than a year, the
Aggregate 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
Certificateholders 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 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 added to the Trust
or as the Investor Interests of
other Series of the Trust are
reduced.
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 or
its assigns 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.
If so specified in the related
Prospectus Supplement, funds on
deposit in the Pre-Funding Account
may be invested in Permitted
Investments or 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.
Credit Enhancement. . . . . .Credit Enhancement with respect to
a Series or any Class thereof may
be provided in the form or forms of
subordination, a cash collateral
account or guaranty, a collateral
interest, a letter of credit, 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 Enhancement 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, will be
described in the related Prospectus
Supplement. See "Credit
Enhancement" and "Risk Factors --
Limitations of Certificate Rating."
Optional Repurchase . . . . . With respect to each Series of
Certificates offered hereby, 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 lesser
amount specified in the related
Prospectus Supplement, if certain
conditions set forth in the
Agreement are met. The repurchase
price will be as specified in the
related Prospectus Supplement. See
"Description of the Certificates --
Final Payment of Principal;
Termination."
Tax Status. . . . . . . . . .Special Tax Counsel will render an
opinion that the Offered
Certificates of such Series will be
characterized as indebtedness for
Federal income tax purposes and
that the issuance of the Offered
Certificates will not cause the
Trust to be treated as an
association (or publicly traded
partnership) taxable as a
corporation. The Certificate Owners
will agree to treat the Offered
Certificates as debt for Federal
income tax purposes. See "U.S.
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 particular
Series will be "publicly-offered
securities", and therefore eligible
for an ERISA exemption, will be 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 (each such rating
organization selected by the
Transferor to rate any Series, a
"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 -- Limitations 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.
Risk Factors. . . . . . . . . Potential investors should note
that there are material risks
associated with an investment in
the Certificates and should
consider, among other things, the
information set forth in "Risk
Factors" on page [22].
<PAGE>
RISK FACTORS
Potential investors should consider, among other things, the
following considerations 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, 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.
Consistent with general practice for securities like the
Certificates, it is not generally expected that any Series of
Certificates will be listed on any securities exchange, except
that certain Series may be listed on the Luxembourg Stock
Exchange (in which case such expected listing will be disclosed
in the related Prospectus Supplement).
Potential Priority of Certain Liens. 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 the grant to the Trustee of a security interest in such
Receivables. The Transferor will take actions required to perfect the
Trust's security interest in the Receivables and will warrant that if the
transfer to the Trust is deemed to be a grant of a security interest in the
related Receivables, the Trustee will have a first priority perfected
security interest therein, except for any liens for local taxes that are
not yet due and payable or are being contested. Nevertheless, if the
transfer of Receivables to the Trust is deemed to create a security
interest therein, certain nonconsensual liens on property of the Transferor
arising before Receivables come into existence (including Federal or local
tax liens and liens arising under ERISA) may have priority over the Trust's
interest in such Receivables, and if the FDIC were appointed receiver or
conservator of the Transferor, the FDIC'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 result in
possible delay or reductions in the amount of payments on the Certificates.
See "Certain Legal Aspects of the Receivables -- Transfer of Receivables."
Commingling. In addition, while the Transferor is the
Servicer, cash collections held by the Transferor may, subject to
certain conditions described below in "Description of
Certificates -- Application of Collections," be commingled and
used for the benefit of the Transferor prior to the date on which
such collections are required to be deposited in the Finance
Charge Account and Principal Account. As a result of any such
commingling, the Trust may not have a perfected interest in such
collections, which could, in the event of a conservatorship or
receivership of the Transferor, cause the Trust to suffer a loss
of all or part of such collections, which may result in a loss to
Certificateholders.
Receivership of Transferor. To the extent that the Transferor
has granted or will grant a security interest in Receivables to
the Trust and that security interest is validly perfected before
the Transferor's insolvency (and was not or 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), the Federal Deposit Insurance Act ("FDIA"), as
amended by the Financial Institutions Reform, Recovery and
Enforcement Act of 1989, as amended ("FIRREA"), provides that
such security interest should not be subject to avoidance by the
FDIC, as receiver for the Transferor. Positions taken by the FDIC
staff prior to the passage of FIRREA suggest that the FDIC, as
receiver for the Transferor, would not interfere with the timely
transfer to the Trust of payments collected on the related
Receivables. If, however, the FDIC were to assert a contrary
position, such as requiring the Trustee to establish its right to
those payments by submitting to and completing the administrative
claims procedure under the FDIA, or the conservator or receiver
were to request a stay of proceedings with respect to the
Transferor as provided under the FDIA, delays in payments on the
related Series of Certificates and possible reductions in the
amount of those payments could occur. In addition, the FDIC, if
appointed as the conservator or receiver for the Transferor has
the power under the FDIA to repudiate contracts, including
secured contracts of the Transferor. The FDIA provides that a
claim for damages arising from the repudiation of a contract is
limited to "actual direct compensatory damages." In the event
the FDIC were to be appointed as conservator or receiver of the
Transferor and were to repudiate the Agreement, then the amount
payable out of available collections to the Certificateholders
could be lower than the outstanding principal and accrued
interest on the Certificates.
If a conservator or receiver were appointed for the
Transferor, then a Pay Out Event could occur with respect to all
Series then outstanding and, pursuant to the Agreement, new
Principal Receivables would not be transferred to the Trust. If a
Pay Out Event occurs involving either the insolvency of the
Transferor or the appointment of a conservator or receiver for
the Transferor, the conservator or receiver may have the power to
prevent 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, and may be
able to require that new Principal Receivables be transferred to
the Trust. Such action could cause delays or shortfalls in the
amounts ultimately paid to Certificateholders. A conservator or
receiver 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 or receivership of the
Servicer, if no Servicer Default other than such conservatorship
or receivership 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."
Effects of Applicable Law
Limitations Imposed by Consumer Protection Laws. Federal and
state consumer protection laws, such as the Louisiana Consumer
Credit Law, Louisiana Collection Agency Regulation Act and
Louisiana Equal Credit Opportunity Law impose requirements on the
making and enforcement of consumer loans and extensions of credit
to consumers. In addition, the Soldiers' and Sailors' Civil
Relief Act of 1940 (the "SSCRA") provides for a stay of court
proceedings against military personnel (including Air Force
personnel) on active duty if the ability of such person to defend
against a suit would be materially affected by reason of military
service and limits to 6% per year the interest chargeable to
military personnel (including Air Force personnel) on active duty
on obligations incurred by such person prior to entrance into
such service unless the obligee obtains a court order allowing a
higher rate to be charged. The SSCRA could adversely affect the
Servicer's ability to collect on Receivables generated under
First NBC's USAF Club Card program and other military programs,
which make up a significant portion of the Trust Portfolio. See
"First NBC's Credit Card Activities -- General." In its
experience to date with the military programs, First NBC does not
believe that the SSCRA has had a material impact on its
collection efforts, but there can be no assurance that the SSCRA
would not have an adverse effect in the future.
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 could 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. See "Description of the Certificates -- Pay
Out Events." If the resulting reduction in the Portfolio Yield
were significant enough, there could be reductions in payments to
Certificateholders of an affected Series.
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. See "Description of the Certificates -- Representations
and Warranties" and "Certain Legal Aspects of the Receivables --
Consumer Protection Laws."
Application of Bankruptcy Law. 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; Incentive Payments and
Fraudulent Charges; Investor Charge-Offs."
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 is unable to designate
Additional Accounts, a Partial Amortization for one or more
Series could occur or a Pay Out Event could occur with respect to
each Series, 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 of an affected Series might then
receive principal payments earlier than expected.
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 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 Partial
Amortization for one or more Series or 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. If a Pay Out
Event occurs and the Rapid Amortization Period commences, or if a
Partial Amortization occurs, the average life to maturity of the
affected Series of Certificates could be significantly reduced.
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 Trust Portfolio. There
can be no assurance that future events will be consistent with
such historical data. In particular, 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.
Further, the amount of collections of Receivables may vary
from month to month due to seasonal variations, general economic
conditions, changes in periodic finance charges and payment
habits of individual cardholders. A significant decrease in such
monthly payment rate could slow the return or accumulation of
principal 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, or on the Scheduled Payment Date, as applicable.
Further, there can be no assurance that collections of Principal
Receivables, 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. Also, any decision by
the Transferor to designate (or increase) a Discount Percentage
will result in an increase in the amount of collections of
Finance Charge Receivables and a reduction in the balance of
Principal Receivables outstanding and a reduction in the
Transferor Amount. See "Description of the Certificates --
Discount Option."
Effect of Social, Legal and Economic Factors on Credit Card
Usage. Changes in use of credit and payment patterns by
customers may result from a variety of social, legal and economic
factors. Economic factors include the rate of inflation,
seasonal buying patterns, unemployment levels and relative
interest rates. Social factors also include unemployment rates
as well as changes in consumer confidence levels and attitudes
toward incurring debt. Legal factors include the application of
usury and consumer protection laws. Social, legal and economic
factors in the State of Louisiana and surrounding states may have
a disproportionate effect on the Trust because of the relatively
large percentage of Accounts in such States. See "The
Receivables" in the related Prospectus Supplement. The
Transferor, however, is unable to determine and has no basis to
predict whether, or to what extent, social, legal or economic
factors will affect future use of credit or repayment patterns.
Affinity Programs. Some of the Accounts, the Receivables of
which will be conveyed to the Trust, were originated by First NBC
under various affinity agreements, including the agreements
relating to First NBC's United States Air Force Club program and
other military programs. In the future, Additional Accounts
originated under these or other affinity programs may be
designated to the Trust (as may other Additional Accounts not
originated under affinity programs). Changes in the terms of such
programs or in First NBC's participation in the programs may
affect the rate at which new Receivables are generated in the
related Accounts.
Prepayment Resulting from 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.
Transferor's Ability to Adversely 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 or vice versa. A
decrease in the periodic finance charge or a reduction in credit
card or other fees would decrease the effective yield on the
Accounts and could result in the occurrence of a Pay Out Event
with respect to each Series 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. Certificateholders of an affected Series might then
receive principal payments earlier than expected. If the
resulting reduction reduced the Portfolio Yield significantly,
there could be reductions in amounts available to cover the
portions of defaulted Receivables allocated to a Series, and in
amounts available to make required deposits to various Trust
Accounts, all of which may (if any available Credit Enhancement
is exhausted) result in losses to Certificateholders. 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 revolving credit 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 or the 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 Transferor from time to time may offer
special rates (generally of limited duration) which may be less
than the annual percentage rates applicable to other Receivables.
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 Accounts or its servicing policies and procedures
(including changes that could reduce the required minimum monthly
payment and change 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
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 this or other Account terms or
that such changes would not be adverse to the interests of
Certificateholders. See "Receivable Yield Considerations" in the
Prospectus Supplement.
Incentive Programs. First NBC has established incentive
programs applicable to certain accounts in the Bank Portfolio.
These programs permit a qualifying cardholder participating in
the program to earn rights to obtain airline tickets paid for by
First NBC based upon use of the account. The Trust will not
assume the obligation to purchase airline tickets or provide
other benefits earned under this or any other incentive program
that may be adopted in the future. However, if accounts subject
to this or any similar incentive program are included in the
Trust Portfolio, a cardholder entitled to receive an incentive
payment from First NBC might assert that he or she could reduce
the amount he or she was required to pay on a Receivable if First
NBC failed to provide a ticket or other benefit that had been
earned under the program. See "Description of the Certificates --
Defaulted Receivables; Incentive Payments and Fraudulent Charges;
Investor Charge-Offs."
Basis Risk. If so specified in the related Prospectus
Supplement, a portion of the Accounts will have finance charges
set at a variable rate above a designated prime rate or other
designated index. A Series of Certificates may bear interest at a
fixed rate or at a floating rate based on an index other than
such prime rate or other designated index. If there is a decline
in such prime rate or other designated index, the amount of
collections of Finance Charge Receivables on such Accounts may be
reduced, whereas the amounts payable as 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. Conversely, to the extent
that Accounts bear interest at a fixed rate and there is an
increase in such prime rate or other designated index, amounts
payable as 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 be increased,
whereas the amount of collections of Finance Charge Receivables
on such Accounts may not be similarly increased.
Issuance of New Series; Groups. The Trust, as a master trust,
may issue Series and sell Purchased Interests from time to time.
While the 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. Similarly, the terms of any
Purchased Interest will not be subject to the prior review by, or
consent of, holders of the Certificates of any previously issued
Series. The terms of any Series may include methods for
determining applicable investor percentages and allocating
collections, provisions creating different or additional
security, 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.
The terms of any Purchased Interest may also cover all of the
above-mentioned matters. It is a condition precedent to the
issuance of any additional Series, or sale of a Purchased
Interest, that each Rating Agency that has rated any outstanding
Series deliver written confirmation to the Trustee that such
issuance or sale will not result in such Rating Agency reducing
or withdrawing its rating on any such outstanding Series. See
"Description of the Certificates -- New Issuances." There can be
no assurance, however, that the terms of any other Series,
including any Series issued from time to time hereafter, or the
terms of any Purchased Interest might not have an impact on the
timing and amount of payments received by a Certificateholder of
any other Series.
In addition, the Series Supplements relating to Series which
are part of a Reallocation Group as described herein may provide
that collections of Receivables allocable to such Series will be
reallocated among all Series in the Reallocation Group.
Consequently, the issuance of new Series in a Reallocation Group
may have the effect of reducing the amount of collections of
Receivables which are reallocated to the Certificates of existing
Series in such Reallocation Group. For example, an additional
Series which is issued with a larger claim with respect to
monthly interest than that of previously issued Series in such
Reallocation Group (due to a higher certificate rate) will
receive a proportionately larger reallocation of collections of
Finance Charge Receivables. Such issuance will reduce the amount
of collections of Finance Charge Receivables which are
reallocated to the existing Series in such Reallocation Group.
Furthermore, there can be no assurance that, for any Series in a
Reallocation Group, the Trust will issue any other Series in such
Reallocation Group. Accordingly, the anticipated benefits of
reallocation of collections of Receivables may not be realized.
See "Description of the Certificates -- Allocations" and
"Reallocations Among Certificates of Different Series within a
Reallocation Group."
Addition of Trust Assets -- Effect 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. In addition, the Agreement provides that
the 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." Additional Accounts may include accounts originated
using criteria different from those which were applied to the
Accounts designated on the Cut-Off Date 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. The varying
quality of Trust assets could affect the payment patterns and
default experience of such portfolio. If such effect on payment
patterns is significant, a Partial Amortization for one or more
Series could occur or a Pay Out Event could occur with respect to
each Series, 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 of an affected Series might then
receive principal payments earlier than expected. In addition,
if a decline in the credit quality of the portfolio were
significant enough, it could result in reductions in payments to
Certificateholders in an affected Series.
Limited Certificateholder Control of Action under Agreement.
The Certificateholders will generally have limited control over
the administration of the Trust. Subject to certain exceptions,
the Certificateholders of each Series may take certain actions,
or direct certain actions to be taken, under the Agreement or
Series Supplement. However, the Agreement or 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. Certificateholders of other
Series may have interests which do not coincide in any way with
the interests of Certificateholders of the subject Series. In
addition, Certificateholders of different Classes of the same
Series may have interests which do not coincide. In such
instances, it may be difficult for the Certificateholders of such
Series to achieve the results from the vote that they desire.
Limitations 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 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 specifically so provided in the related
Prospectus Supplement with respect to any Class or Series offered
hereby, address the likelihood that the principal of 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, the financial condition or creditworthiness
of the Transferor 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 lowered
or withdrawn entirely by a Rating Agency if in such Rating
Agency's judgment circumstances so warrant. The Transferor will
request a rating of the Certificates of each Series offered
hereby 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. 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 of its
Classes, the amount available will generally be limited and
subject to certain reductions. If the amount available under any
Credit Enhancement is reduced to zero, Certificateholders of the
Series or Class 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 on their investment in the Certificates. See "Credit
Enhancement."
Certificateholders' Direct Exercise of Rights Limited by Book-Entry
Registration. The Certificates of Series offered hereby
initially will, if so specified in the related Prospectus
Supplement, 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
such 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."
Risks of Swaps. The Trustee, on behalf of the Trust, may enter
into interest rate swaps and related caps, floors and collars to
reduce 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
various 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.
Allocations. To the extent provided in any Series Supplement,
or any amendment to the Agreement, portions of the Receivables or
Participations conveyed to the Trust and all collections received
with respect thereto may be allocated to one or more Series as
long as the Rating Agency Condition shall have been satisfied
with respect to such allocation and the Servicer shall have
delivered an officer's certificate to the Trustee to the effect
that the Servicer reasonably believes such allocation will not
adversely affect in any material respect the interests of the
Certificateholders of any Series issued and outstanding.
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
be permitted to engage in any business activity other than
acquiring and holding Receivables, issuing Series of Certificates
and the related Transferor Certificate, making payments thereon
and engaging in related activities (including, with respect to
any Series, obtaining any Enhancement and entering into a related
Enhancement agreement).
FIRST NBC'S CREDIT CARD ACTIVITIES
General
First Bankcard Center ("First Bankcard"), a division of First
NBC, was one of the earliest BankAmericard issuers, entering the
credit card business in 1968. From that time through the early
1990's, First Bankcard relied primarily on the branch networks of
First NBC and its affiliated banks, a network of correspondent
banks ("agent banks"), affinity groups and portfolio acquisitions
to generate new accounts. In 1989 First Bankcard began its
relationship with the military sector and was awarded the
management contract for the Air Force Logistics Command's Club
Card Program. Beginning in 1994, First Bankcard's new account
strategy has also included pre-approved campaigns focused on the
cross-selling of bankcard products to customers and prospects of
First NBC and its affiliated banks, agent banks and affinity
groups. In addition, these campaigns have been augmented with a
few regionally specific pre-approved prospect campaigns. In
December, 1994, the Club Card Program was expanded with United
States Air Force Services ("USAF") to include Club Card Program
services at all United States Air Force bases in the United
States, including Alaska and Hawaii. The USAF Club Card Program
was again expanded in 1996 to provide U.S. dollar-denominated
Club Card Program services to military personnel in bases outside
the United States.
First Bankcard provides cardholder and/or merchant services to
its network of 202 agent banks, which have not chosen to become
Class A members of the VISA or MasterCard Associations. First
Bankcard's 30 affinity groups benefit from the value-added
services provided by First Bankcard, as well as from sharing in
the on-going earnings generated by group members through use of
their cards. The USAF Club Card Program includes centralized
dues and account billing for both officers and enlisted clubs,
providing a diverse population for new account and account
balance growth. Certain data processing and administrative
functions associated with the servicing of the Bank Portfolio are
performed by First Commerce Service Corporation. See "The Trust --
Description of First Commerce Service Corporation."
With respect to each Series of Certificates, the Receivables
conveyed or to be conveyed to the Trust by the Bank pursuant to
the Agreement have been or will be generated from transactions
made by holders of selected MasterCard, VISA and private label
credit accounts, including premium accounts and standard
accounts, within the Bank Portfolio. Generally, both premium and
standard accounts undergo the same credit analysis, but premium
accounts carry higher credit limits and offer a wider variety of
services to the cardholders. The private label accounts included
in the Bank Portfolio (the "Private Label Accounts") relate to
credit cards issued to military personnel who do not meet the
credit standards for issuance of standard credit cards. Payments
due under Private Label Accounts are charged back to a non-appropriated
funds instrumentality associated with the United States Air Force
Services at 65-90 days past due. The non-appropriated funds
instrumentality does not represent a full faith and credit obligation
of the United States. The Bank currently services the Bank Portfolio
in the manner described in the related Prospectus Supplement. Other
than the Private Label Accounts, all of the credit card accounts
currently owned by the Bank (including accounts in the Bank's
affinity programs) are MasterCard or VISA accounts. See "Risk
Factors -- Transferor's Ability to Adversely Change Terms of the
Receivables" for a discussion of the effect of the Bank's ability
to modify terms of the Receivables after the initial issuance of
any Series.
The VISA and MasterCard credit accounts may be used for four
types of transactions: credit card purchases, cash advances,
balance transfers and convenience checks. Purchases occur when
cardholders use credit cards to buy goods and/or services. A
cash advance is made when a credit card is used to obtain cash
from a financial institution, an automated teller machine or in a
cash equivalent transaction. Cardholders (or accountholders) may
also use convenience checks to (i) transfer balances from other
credit card accounts to their First Bankcard accounts and (ii)
draw against their VISA and MasterCard credit card accounts at
any time. Amounts due with respect to purchases, cash advances
and convenience checks are included in the Receivables. Private
Label Accounts may be used only for purchases at officer and
enlisted clubs.
In addition, MasterCard and VISA cardholders (or
accountholders) in certain states are able to purchase insurance
against the inability to repay all or a portion of their account
balances for reasons such as involuntary unemployment, death,
disability or accidental death/dismemberment. Premiums for this
insurance are charged to the account for each monthly billing
cycle (each a "Billing Cycle"). Such insurance premiums are
included in the Receivables transferred to the Trust and are
treated as Principal Receivables.
Each cardholder (or accountholder) is subject to an agreement
with First Bankcard governing the terms and conditions of the
related MasterCard, VISA or private label credit card account.
Pursuant to each such agreement, except as described herein or in
any related Prospectus Supplement, First Bankcard reserves the
right, subject to notice as may be required by law or such
agreement, to add to, change or terminate any terms, conditions,
services or features of its MasterCard, VISA or private label
credit card accounts at any time, including increasing or
decreasing the periodic finance charges, other charges or the
minimum monthly payment requirements. The agreement with each
cardholder (or accountholder) provides that First Bankcard may
apply such changes, when applicable, to current outstanding
balances as well as to future transactions. The foregoing
notwithstanding, certain affinity agreements provide that the
terms and conditions of the agreement between First Bankcard and
the cardholder (or accountholder) may be changed only at the end
of the contract period of such affinity agreement.
Acquisition and Use of Credit Card Accounts
New credit card account marketing and solicitation is handled
by the First Bankcard Marketing Department. New credit card
accounts are originated through both customer inquiry and direct
mail solicitation programs. Customer inquiry originations are
generally initiated by applicants who pick up applications at a
branch of the Bank, a First NBC affiliated bank or an agent bank,
from an affinity group or at any Club Card Program location, or
call First Bankcard and ask that an application be sent to them.
Direct mail solicitations are generally followed up by
telemarketing efforts.
First Bankcard believes that its network of affiliated banks,
agent banks, affinity groups and military relationships, for
which First Bankcard has the exclusive right to market credit
cards bearing the name of the related financial institution or
organization, represents significant opportunities for growth in
the cardholder base. First Bankcard believes that these
relationships generally provide better credit quality and lower
attrition than non-relationship-based accounts. These
relationships are generally governed by agency or affinity
agreements between First Bankcard and an agent bank, affiliate
bank or sponsoring institution, which are periodically subject to
renewal, renegotiation or cancellation by one or both parties (in
some cases as often as annually). Any changes in the terms of one
of these programs or in First NBC's participation in such program
could affect the rate at which new Receivables are generated in
the related Accounts.
Credit applications are processed through an automated
application processing system that uses credit scorecards. A
"score" is calculated for each applicant, using information from
the application and a credit bureau report obtained through an
independent credit reporting agency. The credit scorecards are
based upon credit scoring models developed with Fair, Isaac and
Company, Inc. Those applications that are flagged for further
review (i.e., those that are neither accepted nor rejected) by
the automated application processing system are reviewed by a
First Bankcard credit analyst who makes a credit and limit
assignment decision based on a review of (i) the score generated
by the credit scorecard, (ii) information contained in the
application, (iii) the independent credit report referred to
above and (iv) an analysis of the applicant's capacity to repay.
The primary factors considered in the non-military credit scoring
model include (a) the presence or absence of existing credit
references and checking and savings account references, (b) the
number of recently reported installment loans reflected in the
credit file, (c) revolving utilization reflected in the credit
file and (d) the number of inquiries. The primary factors
considered in the military credit scoring model include (a)
occupation, (b) high credit card utilization reflected in the
credit file, (c) the number of major derogatory ratings reflected
in the credit file and (d) the number of inquiries by other
credit providers.
First Bankcard also uses a prescreening process as a method of
acquiring new accounts. First Bankcard primarily identifies
potential prospects for pre-approved solicitations through lists
obtained from (i) First NBC and its affiliated banks, (ii) agent
banks and (iii) affinity groups. First Bankcard submits to the
credit bureaus its credit criteria and cutoff scores for those
criteria to screen prospects. Lists of individuals who meet the
criteria are returned to the mailing list vendor, and a
pre-approved offer for a credit card is made to those
individuals. An offeree's response to the solicitation is
reviewed and confirmed, and a credit card is issued. Where an
individual's creditworthiness undergoes rapid and substantial
change following the initial prescreening, First Bankcard may
refuse to extend any credit to that individual despite the
pre-approved offer. The primary factors considered in First
Bankcard's credit criteria are (a) the length and depth of the
individual's credit experience, (b) recency and severity of the
delinquencies reflected in the file, (c) the presence of
derogatory public record information and (d) the use of a generic
credit bureau score model developed by Fair, Isaac and Company,
Inc.
If First Bankcard acquires credit card accounts originally
opened by another institution, those accounts may have been
opened using criteria different from those used by First Bankcard
and may not have been subject to the same level of credit review
as accounts originally established by First Bankcard. Portfolios
of revolving credit accounts purchased by First Bankcard from
other credit card issuers may be added to the Trust from time to
time.
Description of First Commerce Service Corporation
Credit card processing services performed by First Commerce
Service Corporation ("FCSC"), a wholly owned subsidiary of the
Corporation, include statement rendering, payment processing,
data processing, embossing, research, accounting, purchasing,
legal, audit, human resources and network services and systems
development. FCSC's data network provides an interface to
MasterCard International Incorporated and VISA USA, Inc. for
performing authorizations and funds transfers. Data processing
and network functions are performed in FCSC's facility in
Harahan, Louisiana.
Interchange and Other Account Revenues
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. Each
Prospectus Supplement will specify whether or not the Transferor will
be required to transfer to the Trust for the benefit of the
related Series a percentage of Interchange and the basis on which
any such percentage will be determined.
First NBC also currently earns additional revenues in
connection with the Bank Portfolio in the form of payments from
advertisers for the inclusion of advertising inserts with
monthly statements relating to accounts in the Bank Portfolio,
and rebates or similar payments from issuers of credit insurance
policies on account of claims experience related to the Bank
Portfolio. Each Prospectus Supplement will also specify whether or
not the Transferor will be required to transfer to the Trust for the
benefit of the related Series a percentage of these "Other
Account Revenues" reasonably determined by the Transferor to be
attributable to that Series interest in the Receivables.
If so required to be transferred, Interchange and Other
Account Revenues arising under the Accounts will be allocated to
the related Certificates of any Series in the manner provided in
the related Prospectus Supplement, and, in each case, will be (a)
treated as collections of Finance Charge Receivables and used to
pay required monthly payments including interest on the related
Series of Certificates, (b) used to pay all or a portion of the
Servicing Fee to the Servicer, or (c) both, as specified in the
related Prospectus Supplement.
THE RECEIVABLES
The Receivables conveyed to the Trust will arise in Accounts
selected from the Bank Portfolio 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"). 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 in such Additional Accounts, whether
such Receivables are then existing or thereafter created, or to
transfer 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
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. 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 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
Following the Revolving Period for each Series, collections of
Principal Receivables are expected to be distributed to the
Certificateholders of that 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
that Series or any specified Class thereof during an Accumulation
Period and distributed on a Scheduled Payment Date. However, 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.
Further, if a Partial Amortization occurs, certain funds
available in the Excess Funding Account may be paid to
Certificateholders in the manner described herein and in the
related Prospectus Supplement. The related Prospectus Supplement
will specify 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 collections on
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. See "Risk Factors -- Payment Other than at Expected
Maturity."
USE OF PROCEEDS
The net proceeds from the sale of each Series of Certificates
offered hereby will be paid to the Transferor as consideration
for the transfer of the Receivables to the Trust. The Transferor
will use such proceeds for its general corporate purposes.
FIRST NBC AND FIRST COMMERCE CORPORATION
First NBC is a national banking association and a wholly owned
subsidiary of First Commerce Corporation (the "Corporation").
The Bank's main office is located at 210 Baronne Street, New
Orleans, Louisiana 70112, telephone (504) 623-1371. The New
Orleans metropolitan area is the primary market served by the
Bank. The Bank and its subsidiaries offer a full range of
banking and related financial services to commercial and consumer
customers. First NBC issues credit cards both directly and as
agent for other banks.
The Corporation is a Louisiana corporation and a bank holding
company under the Bank Holding Company Act of 1956, as amended
(the "BHC Act"), and maintains its headquarters in New Orleans,
Louisiana. The Corporation has six wholly owned bank
subsidiaries, each in Louisiana: the Bank, City National Bank of
Baton Rouge, Central Bank (Monroe), The First National Bank of
Lafayette, Rapides Bank & Trust Company in Alexandria and The
First National Bank of Lake Charles. The Prospectus Supplement
for each Series of Certificates will provide additional
information, including limited financial information, relating to
the Bank's credit card activities and the Corporation.
DESCRIPTION OF THE CERTIFICATES
The Certificates will be issued in Series. Each Series will
represent an interest in the 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 a Series Supplement. The Prospectus Supplement
for each Series will describe any provisions of the Agreement
relating to such Series which may differ materially from the
Agreement filed as an exhibit to the Registration Statement. 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.
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 payments on the
Receivables in the Trust. The Investor Interest for each Series
of Certificates on any date will generally 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 Invested Amount of any pre-funded Series may
increase upon the transfer of additional Principal Receivables to
the 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 or
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.
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 payments from the
Receivables in the Trust. The Transferor Certificate may be
transferred in whole or in part subject to the limitations and
conditions described therein. See "-- Certain Matters Regarding
the Transferor and the Servicer."
During the Revolving Period with respect to each Series of
Certificates offered hereby, the amount of the Investor Interest
for that Series will remain constant except as described in "--
Defaulted Receivables; Incentive Payments and Fraudulent Charges;
Investor Charge-Offs" (which describes circumstances in which the
Investor Interest will be reduced during the Revolving Period)
and "-- Funding Period" (which describes circumstances in which
the Investor Interest will be increased during a Funding Period
which would coincide with the Revolving Period for the affected
Series). 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, to reflect the changes in the
amount of the Principal Receivables in the Trust (and amounts, if
any, on deposit in the Excess Funding Account). 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 Issuances."
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. See
"-- Definitive Certificates." With respect to each Series of
Certificates, beneficial interests in the Certificates will be
available for purchase in minimum denominations as specified in
the related Prospectus Supplement (or, if not so specified, in
minimum denominations of $1,000 and integral multiples thereof).
As to any Series of Certificates issued in book-entry form, the
Transferor has been informed by DTC that DTC's nominee will be
Cede. Accordingly, Cede is expected to be the holder of record of
each such Series of Certificates. No Certificate Owner acquiring
an interest in such 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 DTC
Participants, 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
With respect to each Series of Certificates issued in book-entry form,
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 depositories
(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 New
York Banking Law, a "banking organization" within the meaning of
the New York Banking Law, 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 holds securities for its Participants ("DTC Participants")
and facilitates the clearance and settlement among DTC
Participants of securities transactions, such as transfers and
pledges, in deposited securities through electronic book-entry
changes in DTC Participants' accounts, thereby eliminating the
need for physical movement of securities certificates. DTC
Participants include securities brokers and dealers, banks, trust
companies, clearing corporations and certain other organizations.
Indirect access to the DTC system is also available to others
such as securities brokers and dealers, banks, and trust
companies that clear through or maintain a custodial relationship
with a DTC Participant, either directly or indirectly ("Indirect
Participants"). The rules applicable to DTC and DTC Participants
are on file with the Commission.
Transfers between DTC 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 DTC
Participant will be made during the subsequent securities
settlement processing, dated the business day 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.
Purchases of Certificates under the DTC system must be made by
or through DTC Participants, which will receive a credit for the
Certificates on DTC's records. The ownership interest of each
actual Certificate Owner is in turn to be recorded on the DTC
Participants' and Indirect Participants' records. Certificate
Owners will not receive written confirmation from DTC of their
purchase, but Certificate Owners are expected to receive written
confirmations providing details of the transaction, as well as
periodic statements of their holdings, from the DTC Participant
or Indirect Participant through which the Certificate Owner
entered into the transaction. Transfers of ownership interests in
the Certificates are to be accomplished by entries made on the
books of DTC Participants acting on behalf of Certificate Owners.
Certificate Owners will not receive certificates representing
their ownership interest in Certificates, except in the event
that use of the book-entry system for the Certificates is
discontinued.
To facilitate subsequent transfers, all Certificates deposited
by DTC Participants with DTC are registered in the name of DTC's
nominee, Cede & Co. The deposit of Certificates with DTC and
their registration in the name of Cede & Co. effects no change in
beneficial ownership. DTC has no knowledge of the actual
Certificate Owners of the Certificates; DTC's records reflect
only the identity of the DTC Participants to whose accounts such
Certificates are credited, which may or may not be the
Certificate Owners. The DTC Participants will remain responsible
for keeping account of their holdings on behalf of their
customers.
Conveyance of notices and other communications by DTC to DTC
Participants, by DTC Participants to Indirect Participants, and
by DTC Participants and Indirect Participants to Certificate
Owners will be governed by arrangements among them, subject to
any statutory or regulatory requirements as may be in effect from
time to time.
Neither DTC nor Cede & Co. will consent or vote with respect
to Certificates. Under its usual procedures, DTC mails an omnibus
proxy to the issuer as soon as possible after the record date,
which assigns Cede & Co.'s consenting or voting rights to those
DTC Participants to whose accounts the Certificates are credited
on the record date (identified in a listing attached thereto).
Principal and interest payments on the Certificates will be
made to DTC. DTC's practice is to credit Participants' accounts
on the applicable Distribution Date in accordance with their
respective holdings shown on DTC's records unless DTC has reason
to believe that it will not receive payment on such Distribution
Date. Payments by DTC Participants to Certificate Owners will be
governed by standing instructions and customary practices, as is
the case with securities held for the accounts of customers in
bearer form or registered in "street name" and will be the
responsibility of such DTC Participant and not of DTC, the
Trustee or the Transferor, subject to any statutory or regulatory
requirements as may be in effect from time to time. Payment of
principal and interest to DTC is the responsibility of the
Trustee, disbursement of such payments to DTC Participants shall
be the responsibility of DTC, and disbursement of such payments
to Certificate Owners shall be the responsibility of DTC
Participants and Indirect Participants.
DTC may discontinue providing its services as securities
depository with respect to the Certificates at any time by giving
reasonable notice to the Transferor or the Trustee. Under such
circumstances, in the event that a successor securities
depository is not obtained, Definitive Certificates are required
to be printed and delivered. The Transferor may decide to
discontinue use of the system of book-entry transfers through DTC
(or a successor securities depository). In that event, Definitive
Certificates will be delivered to Certificateholders. See " --
Definitive Certificates."
The information in this section concerning DTC and DTC's
book-entry system has been obtained from sources that the Transferor
believes to be reliable, but the Transferor takes no
responsibility for the accuracy thereof.
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 32
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 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 32 currencies, including United States
dollars. The Euroclear System includes various other services,
including securities lending and borrowing and interfaces with
domestic markets in 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 "U.S. 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.
Definitive Certificates
If so specified in the related Prospectus Supplement, the
Certificates of each Series will be initially issued as
Definitive Certificates in fully registered, certificated form to
Certificate Owners or their nominees rather than to DTC or its
nominee. If the related Prospectus Supplement states that a
Series will be issued in book-entry form, then Definitive
Certificates will be issued to Certificate Owners or their
nominees 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 the Trustee and DTC through DTC 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
DTC Participants of the availability through DTC of Definitive
Certificates. Upon surrender by DTC of the definitive certificate
representing the Certificates and instructions for
reregistration, the Trustee will issue the Certificates as
Definitive Certificates, and thereafter the Trustee will
recognize the holders of such Definitive Certificates as
Certificateholders under the Agreement.
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. The final payment
on any Certificate (whether Definitive Certificates or the
Certificates registered in the name of Cede representing the
Certificates), 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.
Interest Payments
For each Series of Certificates and Class thereof, interest
will accrue from the date specified in the applicable Prospectus
Supplement 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 will describe the amounts and sources
of interest payments to be made; the Certificate Rate for each
Class thereof; for a Series or Class thereof bearing interest at
a floating Certificate Rate, the initial 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; and any limitations on any such
Certificate Rate.
Principal Payments
Generally, during the Revolving Period for each Series of
Certificates (which begins on the related Closing Date 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, although principal payments
may be made to Certificateholders of a Series during the
Revolving Period, in connection with a Partial Amortization or
otherwise, if so specified in the related Prospectus Supplement.
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 Prospectus
Supplement, following 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, in certain
circumstances from amounts on deposit in the Excess Funding
Account 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 will describe 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 payment guaranty or other
similar arrangement specified in the related Prospectus
Supplement.
Transfer and Assignment of Receivables
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.
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 computer files or
microfiche lists containing a true and complete list of the
related Accounts, 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 --
Transfer of Receivables" and "Certain Legal Aspects of the
Receivables -- Transfer of Receivables."
New Issuances
The Agreement will authorize 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, which evidences the Transferor
Interest and which will initially be held by the Transferor and
will be transferable only as provided in the Agreement; and (iii)
one or more Supplemental Certificates, evidencing partial
interests in the Transferor Interest, which are not offered
hereby and which will be transferable only as provided in the
Agreement. Pursuant to the Agreement, the Transferor may define,
with respect to any newly issued Series, the 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 (nor do they 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 Transferor 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. To the extent provided in
the related Supplement (and subject to any applicable
requirements under the Exchange Act and the rules and regulations
thereunder, including Rule 13e-4), a new Series may be issued
fully or partially in exchange for certificates of one or more
existing Series.
The holder of the Transferor Certificate may execute New
Issuances such that each Series 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 to
which it relates. The holder of the Transferor Certificate may
deliver a different form of Credit Enhancement agreement with
respect to any Series. 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. 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 execute a New Issuance
by notifying the Trustee at least three days in advance of the
date upon which the New Issuance is to occur stating the Series
to be issued on the date of the New Issuance and, with respect to
each such Series (and, if applicable, each Class thereof): (1)
its initial principal amount (or method for calculating such
amount), (2) its certificate rate (or method of calculating such
rate) and (3) 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 at
least the following: (i) a Series Supplement specifying the terms
of such Series; (ii) (a) an opinion of counsel to the effect that
the certificates of such Series will be characterized as
indebtedness for Federal income tax purposes, unless the related
Series Supplement indicates that such opinion will not be
provided, and (b) 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 executed by the Transferor and the
Credit Enhancement Provider; (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; (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; and
(vii) the existing Transferor Certificate and, if applicable, the
certificates representing the Series to be exchanged. Upon
satisfaction of such conditions, the Trustee will cancel the
existing Transferor Certificate and the certificates of the
exchanged Series, if applicable, and authenticate the new Series
and a new Transferor Certificate. The Certificates resulting from
a New Issuance may either be delivered by the Trustee to the Bank
for sale by the Bank or sold directly by the Trust.
The Transferor also may from time to time cause the Trustee to
sell Purchased Interests to one or more purchasers. Any
Purchased Interest will represent an interest in the Trust's
assets similar to the interest of a Series of Certificates. No
Series will be subordinated to any Purchased Interest, and no
Purchased Interest will have any interest in the Enhancement or
series accounts specified for any Series, except as specified in
the Prospectus Supplement relating to that Series. Any such
sale will take place pursuant to one or more agreements which
will specify terms for the applicable Purchased Interests and may
grant the purchasers of such interests notice and consultation
rights with respect to rights or actions of the Trustee. Any sale
of Purchased Interests in the assets of the Trust will be subject
to the satisfaction of the same conditions (including Rating
Agency confirmations) as for a New Issuance as appropriately
adjusted to apply to the relevant Purchased Interest rather than
a New Issuance.
Additional Transferors
The Transferor may designate other persons to be included as a
"Transferor" ("Additional Transferors") under the Agreement (by
means of an amendment to the Agreement that will not require the
consent of any Certificateholder, see "-- Amendments" but will be
subject to satisfaction of certain conditions, including
confirmation that such designation will not result in the
withdrawal or downgrade of the credit rating of any outstanding
Series. In connection with the designation of an Additional
Transferor, the Transferor will 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. Following
the inclusion of an Additional Transferor, the Additional
Transferor will be treated in the same manner as the initial
Transferor and each Additional Transferor generally will have the
same obligations and rights as a Transferor described herein.
Representations and Warranties
In connection with the issuance of any Series of Certificates,
the Transferor will represent and warrant in the Agreement to the
effect that (a) as of the Closing Date, the Transferor was duly
incorporated and in good standing and that it has the authority
to consummate the transactions contemplated by the Agreement and
(b) as of the Cut-Off Date (or as of the date of the designation
of Additional Accounts), each Account was an Eligible Account. 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 more 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 more 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 also represent and warrant in the
Agreement to the effect that (a) as of the Closing Date of the
initial Series of Certificates, each of the related Receivables
then existing is an Eligible Receivable (as defined below) 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
described 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 will accept reassignment of
each Principal Receivable as to which such breach relates (an
"Ineligible Receivable") on the terms and conditions set forth
below. No such reassignment will be required to be made with
respect to an 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
that Ineligible Receivable are true and correct in all material
respects. The Transferor will accept reassignment of Ineligible
Receivables by directing the Servicer to deduct the amount of
each Ineligible Receivable from the Aggregate Principal
Receivables used to calculate the Transferor Interest. If the
exclusion of an Ineligible Receivable from the calculation of the
Transferor Interest would cause the Transferor Interest to be
less than the Minimum Transferor Interest, on the date of
reassignment of such Ineligible Receivable the Transferor will
make a deposit in the Excess Funding Account in immediately
available funds in an amount equal to the amount by which the
Transferor Interest would be reduced below the Minimum Transferor
Interest. 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.
The Transferor will also represent and warrant in the
Agreement to the effect that as of the Closing Date of the
initial Series of Certificates (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 which has a material
adverse effect on the interest of the Certificateholders in the
Receivables, either the Trustee or the Holders of Certificates
evidencing undivided interests in the Trust aggregating more than
50% of the aggregate Investor Interest of all Series outstanding
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 are true and correct in all material respects. The
deposit amount for such reassignment will equal the Investor
Interest and Enhancement Invested Amount, if any, plus accrued
and unpaid interest for each Series outstanding 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 and interest to
such Certificateholders or such holders of the Enhancement
Invested Amount or the Collateral Interest, if any, 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. 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 Certificateholders.
With respect to each Series of Certificates, an "Eligible
Account" means, as of the 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 Transferor (a)
which was in existence and maintained with the 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 or a military address (except that up to 3% of the
aggregate number of all Accounts as of the Cut-Off Date or any
date on which Additional Accounts are designated for inclusion in
the Trust may have customers with billing addresses that do not
satisfy this requirement), (d) which has not been classified by
the Transferor as canceled, counterfeit, fraudulent, stolen or
lost (except that Eligible Accounts may include Accounts
identified by the applicable customers as having balances
incurred as a result of fraudulent use or as to which the credit
cards have been identified as lost or stolen if (1) the
Transferor appropriately reflects the balance of the applicable
Receivables on its books and records in accordance with its
customary practices and (2) charging privileges have been
canceled and are not reinstated), (e) which has either been
originated by the Transferor or acquired by the Transferor from
other institutions, (f) which has not been charged off by the
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 and (g) which satisfies any additional
requirements specified in the related Prospectus Supplement.
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) 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.
With respect to each Series of Certificates, an "Eligible
Receivable" means 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, and pursuant to an account agreement which complied
in all material respects with all requirements of law applicable
to the 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 the
Transferor in connection with the creation of such Receivable, or
the execution, delivery, creation and performance by the
Transferor of the related account 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, the Transferor or the Trust had good and
marketable title free and clear of all liens and security
interests arising under or through the Transferor (other than
certain tax liens for taxes not then due or which the Transferor
is contesting and any other lien that is released or terminated
at or before the time that the receivable is transferred to the
Trust), (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), (f) which constitutes an
"account," "chattel paper" or a "general intangible" under
Article 9 of the Uniform Commercial Code as then in effect in the
State of Louisiana and (g) which satisfies any additional
requirements specified in the related Prospectus Supplement.
The Trustee will not 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. The
Servicer, however, will 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. In addition, the Transferor will be required to
designate Additional Accounts (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 the sum of (i) the Aggregate Principal Receivables and
(ii) the principal amount on deposit in the Excess Funding
Account equal to or greater than the Minimum Aggregate Principal
Receivables. "Minimum Transferor Interest" means __% of the
aggregate Principal Receivables at the end of the day immediately
prior to the date of determination. "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 issued by the Trust then outstanding. However, the
percentage used to calculate the Minimum Transfer Interest, the
Minimum Aggregate Principal Receivables or both may be increased
or reduced at any time if each Rating Agency confirms that such
action will not result in a withdrawal or downgrade of its rating
of any outstanding Series as to which it is a Rating Agency. The
Transferor's designation of Additional Accounts generally will be
subject to the satisfaction of the conditions described below.
However, the Transferor may from time to time designate to the
Trust certain accounts ("Automatic Additional Accounts")
generated in the ordinary course of business of the Transferor,
subject to fewer conditions (but the remaining conditions include
limitations on the amount of Automatic Additional Accounts that
may be designated for the Trust during a period of time). The
Transferor will convey to the Trust its interest in all
Receivables in Additional Accounts, whether such Receivables are
then existing or thereafter created.
Each Additional Account (including Automatic Additional
Accounts) must be 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.
In addition to or in lieu of Additional Accounts, the
Transferor under the Agreement will be permitted (subject to
compliance with applicable securities laws) to add to the Trust
participations or trust certificates representing undivided
interests in a pool of assets primarily consisting of receivables
arising under revolving credit accounts 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. 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: (i) except in the case of Automatic
Additional Accounts, 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 or Participations; (iii) the
Transferor shall represent and warrant that (a) 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, (b) no selection procedures
believed by the Transferor to be materially adverse to the
interests of the Certificateholders were utilized in selecting
the Additional Accounts from the available Eligible Accounts from
the Bank Portfolio and (c) as of the Addition Date, the
Transferor is not insolvent; (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 (but not in the case of Automatic Additional
Accounts), and in all cases with respect to Participations, the
addition of such Additional Accounts or Participations will not
result in a withdrawal or reduction of the rating of any
outstanding Series 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
The Transferor may, but shall not be obligated to, designate
from time to time certain Accounts to be Removed Accounts and
stop transferring new Receivables arising in the Removed Accounts
to the Trust. Pre-existing Receivables in Removed Accounts may
either be conveyed to the Transferor or its designee or retained
by the Trust. If such pre-existing Receivables are retained in
the Trust, the Servicer and the Transferor will agree to allocate
principal collections on the Removed Accounts on a first-in,
first-out basis, so that such collections will be allocated to
outstanding advances in the order in which such advances arose
(beginning with the oldest outstanding advance). Principal
collections allocable to Receivables retained by the Trust will
be applied as Collections in accordance with the Agreement. Upon
payment of all amounts owing in respect of such Receivables, the
Trust will transfer the related Account to the Transferor.
The Transferor will, however, be permitted to designate
Removed Accounts only if: (i) such designation will 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 as of the end
of the Billing Cycle immediately preceding the date of removal;
(iii) the Transferor represents and warrants that no selection
procedures believed by the Transferor to be materially adverse to
the interests of the holders of any Series of Certificates
outstanding were used in selecting the Removed Accounts to be
removed from the Trust; (iv) 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; (v) such other conditions as are specified in any
Prospectus Supplement or adopted by the Transferor to enable the
Transferor to derecognize Receivables transferred to the Trust in
accordance with applicable accounting principles; and (vi) the
Transferor shall have delivered to the Trustee an officer's
certificate confirming the items set forth in clauses (i) through
(v) 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 comparable to the Receivables.
The Servicer will be required to maintain fidelity bond coverage
insuring against losses through wrongdoing of its officers and
employees who are involved in the servicing of credit card
receivables covering such actions and in such amounts as the
Servicer believes to be reasonable from time to time.
Discount Option
The Transferor may at any time designate a specified fixed or
variable percentage as specified in the related Prospectus
Supplement (the "Discount Percentage") of the amount of
Receivables arising in the Accounts on and after the date such
option is exercised (and if the Transferor so elects, Receivables
arising in the Accounts before 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, if the Discount Percentage
would be greater than 3% after such designation, confirmation by
each Rating Agency that such designation will not result in a
withdrawal or downgrade of its rating of any 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 (and if the Transferor so elects, Receivables
arising in the related Accounts before 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. The Transferor may also elect to increase,
decrease or terminate the Discount Percentage.
By designating (or increasing) a Discount Percentage, the
Transferor would in effect increase the amount of collections of
Finance Charge Receivables that are allocated to outstanding
Series and available to cover interest on the Certificates in
that Series, defaults allocated to that Series and other amounts,
but conversely may reduce the effective principal payment rate
with respect to the Receivables (which could slow the payment of
principal to Certificateholders). The Transferor is not obligated
under any circumstances to designate (or increase) a Discount
Percentage.
Trust Accounts
With respect to the Trust, the Trustee will establish and
maintain in the name of the Trust, a "Finance Charge Account" and
an "Excess Funding Account," as segregated trust accounts or with
a Qualified Institution, for the benefit of the
Certificateholders of all related Series, including any Series
offered pursuant to this Prospectus. The Agreement will also
permit the Trustee to establish accounts for particular Series,
including an Interest Funding Account, a Principal Funding
Account, a Pre-Funding Account or any other account specified in
the related Series Supplement. Each series account will be an
asset of the Trust held for the benefit of the Certificateholders
of the related Series and for the purposes set forth in the
related Prospectus Supplement. The other accounts referred to in
this paragraph will be assets of the Trust held for the benefit
of all Certificateholders. The Trustee will also establish a
segregated demand deposit account to serve as the "Distribution
Account" for the Trust. 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, a
non-interest bearing segregated account to serve as the
Collection Account for the Trust. The Distribution Account and
Collection Account will each be established as a segregated trust
account 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 certificate of
deposit, short-term deposit or commercial paper rating of P-1 by
Moody's Investors Service, Inc. ("Moody's") and of at least A-1
by Standard & Poor's Ratings Services, a division of The McGraw
Hill Companies, Inc. ("Standard & Poor's") or long-term unsecured
debt obligation (other than such obligation the rating of which
is based on collateral or on the credit of a person other than
such institution or trust company) rating of at least Aa3 by
Moody's and AA- by Standard & Poor's and deposit insurance
provided by either the Bank Insurance Fund ("BIF") or the Savings
Association Insurance Fund ("SAIF"), each administered by the
FDIC, or a depository institution, which may include the Trustee,
which is acceptable to each Rating Agency. Funds in the Excess
Funding Account, the Finance Charge Account, the Principal
Funding Account, the Distribution Account and any series account
for the Trust will be invested, at the direction of the Servicer,
in (i) obligations 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 of which have the highest rating from
Moody's and Standard & Poor's, (iii) commercial paper 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, (v) money market funds which have
the highest rating from, or have otherwise been approved in
writing by, Moody's and Standard & Poor's (so long as such
investment will not require the Trust to register as an
investment company under the Investment Company Act of 1940, as
amended), (vi) repurchase obligations with respect to any
security described in clause (i) above or with respect to any
other security issued or guaranteed by an agency or
instrumentality of the United States of America, in either case
entered into with a depository institution or trust company
described in clause (ii) above and (vii) any other investment if
each Rating Agency confirms in writing that such investment will
not adversely affect its then current rating or ratings of the
Investor Certificates and making such investment will not require
the Trust to register as an investment company under the
Investment Company Act of 1940, as amended (such investments,
"Permitted Investments"). Any earnings (net of losses and
investment expenses) on funds in the Finance Charge Account, the
Excess Funding Account or the Distribution Account will be
treated as collections of Finance Charge Receivables. 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
Excess Funding Account for the purpose of carrying out the
Servicer's duties under the Agreement. Each Prospectus Supplement
will identify a paying agent which will have the revocable power
to withdraw funds from the Distribution Account for the purpose
of making distributions to the Certificateholders (or, if no such
entity is designated, the Trustee shall act as paying agent).
Funding Period
For any Series of Certificates, the related Prospectus
Supplement may specify that during a Funding Period, all or a
portion of the principal amount of such Series (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 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 added to the Trust or
as the Investor Interests of other Series of the Trust are
reduced. 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 Interest 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 -- 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. It
is not expected or required that the Trustee or any other Person
(except for the Transferor) will make any initial examination of
Receivables added to the Trust during a Funding Period for the
purpose of establishing the presence or absence of defects,
compliance with the Transferor's representations and warranties
or for any other purpose.
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 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.
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.
Allocations
The Servicer will allocate between the Investor Interest of
each Series issued by the Trust (and between each 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 Net
Default Amounts and Net Recoveries. 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 providers of
Enhancement (the "Credit Enhancement Percentage") with respect to
such Series. The Prospectus Supplement relating to a Series will
specify 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 Net Default
Amounts and Net Recoveries 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 will specify 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 First NBC 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
acceptable to the Rating Agencies and (ii) the Rating Agency
Condition shall have been satisfied with respect to reliance on
such letter of credit or other credit enhancement or (b) the
certificate of deposit or unsecured short-term debt obligations
of the Transferor are rated P-1 by Moody's and at least A-1 by
Standard & Poor's and insured by either BIF or SAIF or (c) the
Transferor makes other arrangements satisfactory to each Rating
Agency rating any Series then outstanding, then the Servicer may
make deposits to the Collection Account and such other 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.
The Pooling and Servicing Agreement provides, that until the
date on which First NBC notifies the Trustee that First NBC is
able, and elects, to calculate the aggregate amount of Finance
Charge Receivables and Principal Receivables on a daily basis
rather than on a Billing Cycle basis (the "Conversion Date")
references herein to deposits and payments of collections
received during a particular month shall instead refer to
collections received during Billing Cycles ending during such
month. See "Description of Certificates -- Application of
Collections." The Servicer will make such deposits and payments
based on the assumption that all collections received by the
Servicer with respect to the Receivables in each Billing Cycle
are collections of Finance Charge Receivables up to the amount of
Finance Charge Receivables billed with respect to Receivables in
such Billing Cycle (with respect to each Billing Cycle, the
"Billed Finance Charge Receivables") and collections in excess of
the Billed Finance Charge Receivables are collections of
Principal Receivables, subject to a monthly reconciliation
procedure. The term "Aggregate Principal Receivables" means in
the case of any date of determination which occurs before the
Conversion Date, the aggregate amount of Principal Receivables as
of the end of the Billing Cycles during the Monthly Period
immediately preceding such date of determination or, in the case
of any date of determination which occurs on or after the
Conversion Date, the aggregate amount of Principal Receivables as
of the end of the day on such date of determination.
Whether the Servicer is required to make monthly or daily
deposits to the Collection 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 Excess Funding Account or such related series
account up to the required amount to be deposited into any such
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 from the
Collection Account for application as indicated:
(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 (or, in certain limited circumstances, deposited
in the Excess Funding Account);
(b) subject to reallocations among a Reallocation Group
(see "-- Reallocations Among Certificates of Different Series
within a Reallocation Group"), 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, in the case
of a Principal Sharing Series, be made available for principal
payments or accumulation on other Series of Certificates and
otherwise (or to the extent not needed for such principal
payments or accumulation), 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 less than the Minimum
Transferor Interest, the excess will be deposited in the
Excess Funding Account and will be used as described in the
related Prospectus Supplement;
(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, specified in the related
Prospectus Supplement will be deposited in the Principal
Funding Account or related series account identified for such
purpose, as applicable, for allocation and distribution to
Certificateholders as described in the related Prospectus
Supplement, except that, if collections of Principal
Receivables exceed the principal payments which may be
allocated or distributed to Certificateholders, then the
amount of such excess will be paid to the holder of the
Transferor Certificate until the Transferor Interest is
reduced to the Minimum Transferor Interest, and thereafter
will be deposited in the Excess Funding 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
related series account identified for such purpose 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.
Reallocations Among Different Series within a Reallocation Group
Group Investor Finance Charge Collections. Any Series offered
hereby may, if so specified in the related Prospectus Supplement,
be included in a Reallocation Group. Other Series issued in the
future may also be included in such Group.
The Servicer will calculate for each Monthly Period the Group
Investor Finance Charge Collections for a particular Reallocation
Group, and on the following Distribution Date will allocate such
amount among the Investor Interests (including any Enhancement
Invested Amounts) for all Series in such Reallocation Group in
the following priority:
(i) Group Investor Monthly Interest;
(ii) Group Investor Monthly Fees;
(iii) Group Investor Default Amounts;
(iv) Group Investor Charge-Offs; and
(v) the balance pro rata among each Series in such
Reallocation Group based on the current Investor
Interest (including any Enhancement Invested Amount) of
each such Series.
In the case of clauses (i), (ii), (iii) and (iv), if the
amount of Group Investor Finance Charge Collections is not
sufficient to cover each such amount in full, the amount
available will be allocated among the Series in such Reallocation
Group pro rata, based on the claim that each Series has under the
applicable clause. This means, for example, that if the amount
of Group Investor Finance Charge Collections is not sufficient to
cover Group Investor Monthly Interest, each Series in such
Reallocation Group will share such amount pro rata, and any
Series in such Reallocation Group with a claim with respect to
monthly interest, overdue monthly interest and interest on such
overdue monthly interest, if applicable, which is larger than the
claim for such amounts for any other Series in such Reallocation
Group (due to a higher certificate rate) will receive a
proportionately larger allocation than such other Series.
The amount of Group Investor Finance Charge Collections
allocated to the Investor Interest (including any Enhancement
Invested Amount) for a particular Series offered hereby as
described above is referred to herein as "Reallocated Investor
Finance Charge Collections."
"Group Investor Charge-Offs" means, for any Reallocation Group
on any Distribution Date, the sum of the Investor Charge-Offs for
all Series in such Reallocation Group for the related Monthly
Period.
"Group Investor Default Amounts" means, for any Reallocation
Group on any Distribution Date, the sum of the Investor Default
Amounts for all Series in such Reallocation Group for the related
Monthly Period.
"Group Investor Finance Charge Collections" means, for any
Reallocation Group on any Distribution Date, the sum of the
Investor Finance Charge Collections for all Series in such
Reallocation Group for such Monthly Period.
"Group Investor Monthly Fees" means, for any Reallocation
Group on any Distribution Date, the aggregate amount of Investor
Monthly Fees for all Series in such Reallocation Group for such
Distribution Date.
"Group Investor Monthly Interest" means, for any Reallocation
Group on any Distribution Date, the aggregate amount of monthly
interest, overdue monthly interest and interest on such overdue
monthly interest, if applicable, for all Series in such
Reallocation Group for such Distribution Date.
"Investor Finance Charge Collections" means, for any Series,
the amount of collections of Finance Charge Receivables allocable
to the Investor Interest (including any Enhancement Invested
Amount) of that Series for the related Monthly Period, which is
determined by multiplying by the applicable Investor Percentage
the aggregate amount of such collections for that Monthly Period.
"Investor Monthly Fees" means, for any Series on any
Distribution Date, the sum of the Servicing Fee for that Series
for the related Monthly Period, and any fees in respect of Credit
Enhancement or similar fees which are paid out of Reallocated
Investor Finance Charge Collections for such Series pursuant to
the applicable Series Supplement.
The chart below demonstrates the manner in which collections
of Finance Charge Receivables are allocated and reallocated among
Series in a Reallocation Group. The chart assumes that the Trust
has issued three Series (Series 1, 2 and 3), and that each such
Series is in its Revolving Period.
In Step 1, total collections of Finance Charge Receivables are
allocated among the three Series and the Transferor Interest
based on the Investor Percentage for each Series and the
Transferor Percentage. The amounts allocated to each Series
pursuant to Step 1 are referred to as "Investor Finance Charge
Collections."
Group Investor Finance Charge Collections for all Series in a
particular Reallocation Group are pooled as shown above in Step 2
for reallocation to each such Series as shown in Step 3. In Step
3 Group Investor Finance Charge Collections are reallocated to
each Series in such Reallocation Group as described above based
on the Series' respective claim with respect to interest payable
on the Certificates or Enhancement Invested Amount (if any) of
such Series, the Servicing Fee and the Investor Default Amount
allocable to such Series and certain other amounts in respect to
such Series. The excess is allocated pro rata among the Series
in such Group based on their respective Investor Interests
(including any Enhancement Invested Amounts).
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
FIRST NBC CREDIT CARD MASTER TRUST FINANCE CHARGE COLLECTIONS
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
-------------------- --------------------- --------------------- ----------------------
Step 1 Series 1 Series 2 Series 3 Transferor's Finance
Investor Finance Investor Finance Investor Finance Charge Collections
Charge Collections Charge Collections Charge Collections (based upon the
(based upon the (based upon the (based upon the Transferor
Investor Percentage) Investor Percentage) Investor Percentage) Percentage)
------|------------- -----------|---------- -----------|--------- ----------------------
| | |
------|----------------------------|-----------------------------|---------
<CAPTION>
Step 2 Group
Investor Finance Collections
-----------------------------------|---------------------------------------
|
-----------------------------------|---------------------------------------
CAPTION>
<S> <C> <C> <C>
Step 3 Series 1 Series 2 Series 3
Monthly Interest Monthly Interest Monthly Interest
-----------------------------------|---------------------------------------
|
-----------------------------------|---------------------------------------
Series 1 Series 2 Series 3
Investor Monthly Fees Investor Monthly Fees Investor Monthly Fees
-----------------------------------|---------------------------------------
|
-----------------------------------|---------------------------------------
Series 1 Series 2 Series 3
Investor Default Amount Investor Default Amount Investor Default Amount
-----------------------------------|---------------------------------------
|
-----------------------------------|---------------------------------------
Series 1 Series 2 Series 3
Investor Charge-Offs Investor Charge-Offs Investor Charge-Offs
-----------------------------------|--------------------------------|------
|
-----------------------------------|---------------------------------------
Series 1 Series 2 Series 3
Balance based upon Balance based upon Balance based upon
Investor Interest Investor Interest Investor Interest
(including any (including any (including any
Enhancement Enhancement Enhancement
Invested Amount) Invested Amount) Invested Amount)
--------------------------------------------------------------------------
</TABLE>
<PAGE>
Shared Excess Finance Charge Collections
The Prospectus Supplement relating to a Series will specify
whether such Series will be an Excess Allocation Series and will
identify any previously issued Excess Allocation Series. The
Certificateholders of an Excess Allocation Series may be entitled
to receive all or a portion of Excess Finance Charge Collections
with respect to other Excess Allocation Series to cover any
shortfalls with respect to amounts payable from collections of
Finance Charge Receivables allocable to such Series. While any
Series offered hereby may be designated as an Excess Allocation
Series, there can be no assurance that (a) any other Series will
be designated as an Excess Allocation Series, (b) there will be
any Excess Finance Charge Collections with respect to any such
other Series for any Monthly Period, or (c) any agreement
relating to any Credit Enhancement will not be amended in such a
manner as to increase payments to the providers of Credit
Enhancement and thereby decrease the amount of Excess Finance
Charge Collections available from such Series. See "-- Application
of Collections" and "-- Defaulted Receivables; Incentive Payments
and Fraudulent Charges; Investor Charge-Offs."
Excess Funding Account
If on any date a Retention Condition exists, the Servicer will not
distribute to the holder of the Transferor Certificate any collections of
Principal Receivables that otherwise would be distributed to the holder of
the Transferor Certificate, but shall instead deposit such funds in a
segregated account established and maintained by the Trustee, in the name
of the Trust, for the benefit of Certificateholders of all Series, as a
trust account or with the Servicer or with a Qualified Institution (the
"Excess Funding Account") until the Retention Condition ceases. Funds on
deposit in the Excess Funding Account will be withdrawn and paid to the
holder of the Transferor Certificate on any date provided that a Retention
Condition is not in effect, or would result from such payment, on such
date. In addition, if a Controlled Accumulation Period, Controlled
Amortization Period, Principal Amortization Period, Rapid Amortization
Period or Rapid Accumulation Period commences with respect to any Series
entitled to the benefits of Shared Principal Collections, then an amount of
funds on deposit in the Excess Funding Account (after giving effect to the
release of funds to the holder of the Transferor Certificate as described
above) up to the amount, if any, by which the Transferor Interest would be
less than zero if there were no funds on deposit in the Excess Funding
Account on such date, will be treated as Shared Principal Collections to
the extent needed to cover principal payments due to or for the benefit of
such Series, if the Series Supplement with respect to such Series so
provides. "Retention Condition" means (a) on any day on and after the
Conversion Date, either (i) the Transferor Interest is less than the
Minimum Transferor Interest or (ii) the sum of the Aggregate Principal
Receivables and the principal amount on deposit in the Excess Finding
Account is less than the Minimum Aggregate Principal Receivables (in
each case determined after giving effect to any transfer of Principal
Receivables to the Trust on such day); or (b) on any day prior to the
Conversion Date, Retention Condition shall have the meaning specified
in the applicable Prospectus Supplement.
Funds on deposit in the Excess Funding Account will be
invested by the Trustee, at the direction of the Servicer, in
Permitted Investments. Any earnings (net of losses and investment
expenses) earned on amounts on deposit in the Excess Funding
Account during any Monthly Period will be withdrawn from the
Excess Funding Account and turned over to or at the direction of
the Servicer.
Shared Principal Collections
If a Series is designated a "Principal Sharing Series" 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 such Series are not needed
to make payments or deposits with respect to such Series, such
collections will constitute Shared Principal Collections and will
be applied to cover principal payments due to or for the benefit
of Certificateholders of other Principal Sharing Series. Any such
reallocation will not result in a reduction in the Investor
Interest of the Series to which such collections were initially
allocated.
Paired Series
If specified in the Prospectus Supplement relating to a
Series, such Series may be paired with another Series (each, a
"Paired Series"), such that a reduction in the Investor Interest
or Adjusted Investor Interest of one such Series results in an
increase in the Investor Interest of the other such Series. A
Paired Series would provide financing for a portion of the
Trust's assets, from which the Collections of Principal
Receivables are dedicated to a pre-existing Series if that
pre-existing Series has, in part, been paid or effectively defeased
with Collections that have been set aside for an eventual
payment. The effect of a Paired Series is to provide for
continuous investment in the Receivables by Certificateholders,
thereby reducing the potential increase in the Transferor
Interest as the first of the Paired Series' interest in the Trust
is reduced through the amortization or accumulation of principal.
If a Pay Out Event occurs with respect to a Series having a
Paired Series or with respect to the Paired Series when such
Series is in a Controlled Amortization Period or Controlled
Accumulation Period, the Investor Percentage for collections of
Principal Receivables for the Series and for its Paired Series
may be reset as specified in the related Prospectus Supplements.
The "Adjusted Investor Interest" for any Series means the
Investor Interest of that Series, adjusted in any manner
described in the related Prospectus Supplement.
Defaulted Receivables; Incentive Payments and Fraudulent Charges;
Investor Charge-Offs
For each Series of Certificates, on the business day preceding
each Transfer Date (the "Determination Date"), the Servicer will
calculate the amount (for each Series, the "Investor Default
Amount") equal to the applicable Investor Percentage of the Net
Default Amount for the related Monthly Period. 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 by paid to the Senior
Certificateholders to make up any Investor Default Amount
allocable to such Senior Certificateholders.
The Investor Interest of each Series will be reduced (an
"Investor Charge-Off") to the extent that the related Investor
Default Amount for any Monthly Period exceeds the amount of
collections in the Finance Charge Account available to cover the
Investor Default Amount and any amounts available under
applicable Credit Enhancement for such purpose. 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 interest, fees and any aggregate
Investor Default Amount payable on such date, resulting in an
increase in the Series' Investor Interest. In the case of a
Series of Certificates having more than one Class, the related
Prospectus Supplement will describe 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
because of transactions or set-offs occurring in respect of an
incentive payment to or for the benefit of a cardholder or
because such Principal Receivable was created in respect of
merchandise which was refused or returned by a cardholder, then
the amount of the Transferor Interest in the Trust will be
reduced by the aggregate 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 to have been created through a
fraudulent or counterfeit charge. Furthermore, in the event that
the exclusion of such Receivables from the calculation of the
Transferor Interest at such time would cause the Transferor
Interest to be less than the Minimum Transferor Interest, the
Transferor will be required to pay an amount equal to such
deficiency into the Excess Funding Account.
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, 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) a Tax Opinion.
Final Payment of Principal; Termination
The Certificates of each Series offered hereby will be subject
to optional repurchase by the Transferor on any Distribution Date
after that Series' Investor Interest and any related Enhancement
Invested Amount is reduced to an amount less than or equal to 5%
of the initial Investor Interest (or such lesser amount as may be
specified in the related Prospectus Supplement), if certain
conditions set forth in the Agreement are met. The repurchase
price will be specified in the related Prospectus Supplement.
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 will specify 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"). Certificates may, however, 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, if specified
in the Prospectus Supplement for any Series, the Enhancement
Invested Amount or Collateral Interest, if any, with respect to
each Series is zero, (b) the Specified Trust Termination Date or
(c) if the Receivables are sold or disposed of, immediately
following such sale or disposition (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. For purposes hereof, the "Specified Trust
Termination Date" means the day which is 21 years less one day
after the death of the officers and the last survivor of all the
lineal descendants of every officer of the Trustee of the Trust
who are living on the date of the Agreement, or such later date
which would not render the rights, privileges or options under
the Trust invalid under applicable law.
Pay Out Events
The Revolving Period will terminate prior to the date
specified in the related Prospectus Supplement if a Pay Out Event
occurs prior to such date. A Pay Out Event occurs with respect to
all Series upon the occurrence of any of the following events:
(a) certain events of insolvency or receivership relating
to the Transferor;
(b) the 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 pursuant to certain provisions of Federal law, the
Transferor voluntarily enters liquidation or a receiver is
appointed for the Transferor, on the day of such event the
Transferor will immediately cease to transfer Principal
Receivables to the Trust and promptly give notice to the Trustee
of such event.
If the only Pay Out Event to occur is either the insolvency of
the Transferor or the appointment of a conservator or receiver
for the 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 -- Certain Matters Relating
to Receivership" 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 will be
compensated for its servicing activities and reimbursed for its
expenses by payment to it of the Servicing Fee at the times and
in the amounts specified in the related Prospectus Supplement.
The Servicing Fee will be funded from collections of Finance
Charge Receivables allocated to the Investor Interest and will be
paid each month (or on any other specified 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 Collateral Interest
or the Enhancement Invested Amount, if any, with respect to such
Series, as described in the related Prospectus Supplement.
Neither the Trust nor the 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 payment of the fees and disbursements of the Trustee
and independent certified public accountants and other fees that
are not expressly stated in the Agreement to be payable by the
Trust or the Certificateholders (but excluding 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 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 another
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 the
Trustee. The Servicer will not, however, 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 liability 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 losses incurred
as a result of defaulted Receivables 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 any
Federal, state, local or foreign 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) required to be paid by the Trust, the
Certificateholders or the Certificate Owners in connection with
the Agreement to any taxing authority.
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, in addition to New Issuances,
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 Tax Opinion.
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.
In addition, if the Bank elects to sell or otherwise dispose
of the Accounts, then the new owner of the Accounts may be
substituted for the Bank as Transferor and Servicer upon the
satisfaction of certain conditions, including the delivery of a
Tax Opinion and receipt of written confirmation from each Rating
Agency that such substitution will not result in such Rating
Agency's reducing or withdrawing its rating on any then
outstanding Series rated by it.
Servicer Default
In the event of any Servicer Default (as defined below),
either the Trustee or Certificateholders representing undivided
interests aggregating more 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 will as promptly as
possible appoint a successor Servicer. If no such 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 will pass to and
be vested in the Trustee. If the Trustee is unable to legally act
as Servicer, the Trustee shall petition a court to appoint a
financial institution with risk-based capital or a net worth of
at least $50,000,000 whose regular business includes servicing
VISA or MasterCard credit card receivables to act as successor
Servicer.
"Servicer Default" under the 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);
(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 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, 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; or
(d) the occurrence of certain insolvency events with
respect to the Servicer.
Notwithstanding the foregoing, a delay in or failure of
performance referred to in clause (a) above for a period of 30
business days (or, in either case, such longer or shorter period
as may be specified in the related Prospectus Supplement), or
referred to under clause (b) or (c) for a period of 60 business
days, will 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 will 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 will
provide the Trustee, any provider of Enhancement, 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.
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
For each Series of Certificates, on each Distribution Date, or
as soon thereafter as is practicable, as specified in the related
Prospectus Supplement, the Trustee will forward to each
Certificateholder of record a statement prepared by the Servicer
setting forth, among other things: (a) the total amount
distributed, (b) the amount of the distribution on such
Distribution Date allocable to principal on the Certificates, (c)
the amount of such distribution allocable to interest on the
Certificates, (d) 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, (e) the Aggregate Principal Receivables, the
Investor Interest and the Investor Interest as a percentage of
the aggregate amount of the 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, (f) the aggregate
outstanding balance of Accounts which are 30-59, 60-89 and 90 or
more days delinquent (or a similar classification of delinquency)
as of the end of the last day of the preceding Monthly Period or
Periods since the last Distribution Date, (g) the aggregate
Investor Default Amount for the preceding Monthly Period or
Periods since the last Distribution Date, (h) 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, (i) the amount of
the Servicing Fee for the preceding Monthly Period or Periods
since the last Distribution Date, (j) the amount available under
any Enhancement and Credit Enhancement, if any, as of the close
of business on such Distribution Date, (k) the aggregate amount
of collections on Finance Charge Receivables processed during the
preceding Monthly Period or Periods since the last Distribution
Date, (l) the Portfolio Yield for the preceding Monthly Period or
Periods since the last Distribution Date, (m) information as to
any Shared Excess Finance Charge Collections, Reallocated
Investor Finance Charge Collections and funds in the Excess
Funding Account, and (n) certain information relating to the
floating or variable Certificate Rates, if applicable, for the
Monthly Period or Periods ending on such Distribution Date. If a
Series of Certificates has more than one Class, the statements
forwarded to Certificateholders will provide information as to
each Class of Certificates.
On or before January 31 of each calendar year or such other
date as specified in the related Prospectus Supplement, the
Trustee 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 commencing after the calendar year during which it
becomes effective (or another date 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 such
servicing was conducted in compliance with the sections of the
Agreement during the period covered by such report (which shall
be the prior 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 commencing after the
calendar year during which it becomes effective, or such other
date as is 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 may be amended by the
Transferor, the Servicer and the Trustee, without the consent of
Certificateholders of any Series then outstanding, provided that
the Transferor has delivered to the Trustee an officer's
certificate to the effect that the Transferor reasonably believes
that such amendment will not adversely affect in any material
respect the interest of such Certificateholders and that the
Rating Agency Condition has been satisfied. Amendments may be
made as described in the foregoing sentence in order (among other
things) to (i) provide additional Credit Enhancement for the
benefit of the Holders of any Series or substitute such Credit
Enhancement, (ii) add one or more Participations to the Trust,
(iii) designate one or more Additional Transferors or substitute
Transferors, (iv) cure any ambiguity or correct or supplement any
provision contained in the Agreement or Series Supplement which
may be defective or inconsistent with any other provisions
thereof, (v) 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 SBJP Act (and, in
connection with any such election, to modify or eliminate
existing provisions of relating to the intended Federal income
tax treatment of the Certificates and the Trust), (vi) enable the
Trust to qualify as a partnership for purposes of any state tax
laws and (vii) enable Receivables transferred to the Trust to be
derecognized by the Transferor (or applicable Additional
Transferor) under applicable accounting principles (including
provisions relating to the removal of Accounts) and the Trust to
not be treated as a member of the Transferor's (or such related
Additional Transferor's) consolidated group under applicable
accounting principles.
Among other amendments that may be made as described under
clause (vi) in the preceding paragraph, the Agreement may be
amended to provide that if pursuant to certain provisions of
Federal law, the Transferor voluntarily enters liquidation or a
receiver is appointed for the Transferor, within 15 days, the
Trustee will publish a notice of the liquidation or the
appointment stating that the Trustee intends to sell, dispose of,
or otherwise liquidate the Receivables in a commercially
reasonable manner. Any such amendment will provide that, unless
otherwise instructed within a specified period by
Certificateholders representing undivided interests aggregating
more than 50% of the Investor Interest of each Series (or if any
Series has more than one Class, of each Class, and any other
Person specified in the Agreement or a Series Supplement) issued
and outstanding, the Trustee will sell, dispose of, or otherwise
liquidate the Receivables in a commercially reasonable manner and
on commercially reasonable terms. The proceeds from the sale,
disposition or liquidation of the Receivables will be treated as
collections of the Receivables and applied as specified above in
"-- Application of Collections" and in the various Prospectus
Supplements.
The Agreement and the related Series Supplement may also be
amended by the Transferor, the Servicer and the Trustee with the
consent of the holders of Certificates evidencing undivided
interests aggregating not less than 66-2/3% (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 any Series, (b) change the definition of or the manner
of calculating the interest of any Certificateholder of any
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 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.
List of Certificateholders
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 a Series' Investor Interest, the
Trustee 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. The Trustee
may, however, refuse to supply such list until it has been
adequately indemnified by such Certificateholders for its costs
and expenses, and will give the Servicer notice that such request
has been made. 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 (except that the Trustee may not hold a Certificate issued
by the Trust for its own account). 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.
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 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 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 are 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 Swaps
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.
CREDIT ENHANCEMENT
General
Credit Enhancement may be provided with respect to one or more
Classes or any Series. Credit Enhancement may be in the form of
the subordination of one or more Classes of the Certificates of
such Series, the establishment of a cash collateral guaranty or
account, a collateral interest, a letter of credit, a surety
bond, an insurance policy, a spread account, a reserve account,
the use of cross-support features or any combination of the
foregoing. Each Prospectus Supplement will specify the Class or
Classes entitled to the benefit of any applicable Credit Enhancement.
Credit Enhancement generally 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, although Credit Enhancement for a particular Class or
Series may provide such protection and guarantee if so specified
in the related Prospectus Supplement. 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 will include 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 and (d) any
material provision of any agreement relating to such Credit
Enhancement. 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, and its stockholders' or policy holders' surplus, if
applicable, and other appropriate financial 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, and the Credit
Enhancement Provider may 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 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 related Senior Certificates. The
rights of the holders of any such Subordinated Certificates to
receive distributions of principal and/or interest on any
Distribution Date will be subordinate in right and priority to
the rights of the holders of Senior Certificates to the extent
set forth in the related Prospectus Supplement. If 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 will also
set forth 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 will specify the manner and conditions for
applying such a cross-support feature.
Cash Collateral Guaranty or Account
If 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
will set forth the circumstances under which payments are made to
beneficiaries of the Cash Collateral Guaranty from the Cash
Collateral Account or from the Cash Collateral Account directly.
Collateral Interest
If specified in the related Prospectus Supplement, support for
a Series or one or more of its Classes 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 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, to apply 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 will set 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 under the Cash Collateral
Account.
Letter of Credit
If specified in the related Prospectus Supplement, support for
a Series or one or more of its Classes 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 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 the issuer of the letter of credit
under a 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.
Surety Bond or Insurance Policy
If specified in the related Prospectus Supplement, insurance
with respect to a Series or one or more of its Classes 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 specified in the related Prospectus Supplement, a surety
bond will be purchased for the benefit of the holders of any
Series or Class or 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 specified in the related Prospectus Supplement, support for
a Series or one or more of its Classes will be provided by the
periodic deposit of certain available excess cash flow from the
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 specified in the related Prospectus Supplement, support for
a Series or one or more of its Classes or any related Enhancement
will be provided by 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,
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 or amounts owing on any related Enhancement as
provided in the related Prospectus Supplement.
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 Trustee of a security
interest in such Receivables. The Transferor also will represent
and warrant in the Agreement that, if the transfer of Receivables
by the Transferor to the Trust is deemed to create a security
interest under Chapter 9 of the Louisiana Commercial Laws, as in
effect in the State of Louisiana (the "UCC"), there will exist a
valid, subsisting and enforceable first priority perfected
security interest in such Receivables created thereafter in favor
of the Trustee 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", "chattel paper" or "general
intangibles" for purposes of the UCC. Both the absolute transfer
and assignment of accounts and the transfer of accounts as
security for an obligation are treated for certain purposes under
Article 9 of the UCC as creating a security interest therein and
are subject to its provisions, and the filing of an appropriate
financing statement is required to perfect the 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.
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 conservator or receiver of the Transferor,
certain administrative expenses of the receiver may also have
priority over the interest of the Trust in such Receivable. If a
conservatorship or receivership proceeding were to be commenced
involving the Transferor and the conservator or receiver of the
Transferor were to take the position that the transfer of the
Receivables from the Transferor to the Trust should be
characterized as the grant of a security interest in such
Receivables, then delays in distributions on the Certificates and
reductions in such distributions could result. In addition,
while the Transferor is the Servicer, cash collections held by
the Transferor may, subject to certain conditions, be commingled
and used for the benefit of the Transferor prior to the date on
which such collections are required to be deposited in the
Finance Charge Account and Principal Account as described under
"Description of Certificates -- Application of Collections." In
the event of the conservatorship or receivership of the
Transferor or, in certain circumstances, the lapse of certain
time periods, the Trust may not have a perfected interest in such
collections and, in such event, the Trust may suffer a loss of
all or part of such collections which may result in a loss to
Certificateholders.
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 FIRREA
suggest that the FDIC, if appointed as conservator or receiver for the
Transferor, would not 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 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, the FDIA provides that such security interest should not
be subject to avoidance by the FDIC. However, such positions are not
binding on the FDIC and if the FDIC were to assert a contrary position,
such as by requiring the Trustee to establish its right to those payments
by submitting to and completing the administrative claims procedure under
the FDIA, or were the conservator or receiver to request a stay of
proceedings with respect to the Transferor as provided under the FDIA,
delays in payments on the related Series of Certificates and possible
reductions in the amount of those payments, resulting in losses to the
Certificateholders, could occur. In addition, the FDIC, if appointed as the
conservator or receiver for the Transferor has the power under the FDIA to
repudiate contracts, including secured contracts of the Transferor. The
FDIA provides that a claim for damages arising from the repudiation of a
contract is limited to "actual direct compensatory damages." In the event
the FDIC were to be appointed as conservator or receiver of the Transferor
and were to repudiate the Agreement, then the amount payable out of
available collections to the Certificateholders could be lower than the
outstanding principal and accrued interest on the Certificates.
Upon the appointment of a conservator or receiver or upon a
voluntary liquidation with respect to the Transferor, 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 voluntary liquidation.
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
insolvency of the Transferor or the appointment of a conservator
or receiver for the Transferor, the conservator or receiver may
have the power to prevent 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, which could reduce the
effective yield to Certificateholders. See "Description of the
Certificates -- Pay Out Events."
Upon the Transferor becoming insolvent, the Transferor also
may be unable (or not required) to perform its obligations with
respect to the repurchase of Ineligible Receivables and dilution
of Receivables resulting from various adjustments to Receivables
or fraudulently created Receivables.
Consumer Protection Laws
The relationships of cardholders, credit card issuers and
lenders are extensively regulated by Federal and state consumer
protection laws. With respect to credit cards issued by the
Transferor, the most significant laws include the Federal
Truth-in-Lending, Equal Credit Opportunity, Fair Credit Reporting,
Fair Debt Collection Practice and Electronic Funds Transfer Acts,
at the Federal level, and the Louisiana Consumer Credit Law,
Louisiana Collection Agency Regulation Act and Louisiana Equal
Credit Opportunity Law. Certain of these statutes impose
disclosure requirements when a credit card account is advertised,
when it is opened, at the end of Billing Cycles and at year end.
In addition, certain of 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."
In addition, the SSCRA provides for a stay of court
proceedings against military personnel (including Air Force
personnel) on active duty if the ability of such person to defend
against a suit would be materially affected by reason of military
service and limits to 6% per year the interest chargeable to
military personnel (including Air Force personnel) on active duty
on obligations incurred by such person prior to entrance into
such service unless the obligee obtains a court order allowing a
higher rate to be charged. The SSCRA could adversely affect the
Servicer's ability to collect on Receivables generated under
First NBC's USAF Club Card program and other military programs,
which make up a significant portion of the Trust Portfolio. See
"First NBC's Credit Card Activities -- General." In its experience
to date with the military programs, First NBC does not believe
that the SSCRA has had a material impact on its collection
efforts, but there can be no assurance that the SSCRA would not
have an adverse effect in the future.
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."
U.S. FEDERAL INCOME TAX CONSEQUENCES
General
The following discussion, summarizing the material anticipated
Federal income tax consequences of the purchase, ownership and
disposition of the Certificates of a Series, is based upon the
provisions of the Internal Revenue Code of 1986, as amended (the
"Code"), proposed, temporary and final Treasury regulations
thereunder, and published rulings and court decisions in effect
as of the date hereof, all of which are subject to change,
possibly retroactively. To the extent that the following summary
relates to matters of law or legal conclusions with respect
thereto, such summary represents the opinion of Mayer, Brown &
Platt, special federal tax counsel for the Bank subject to the
qualifications set forth herein. Mayer, Brown & Platt have
prepared or reviewed the statements in this Prospectus under the
heading "U.S. Federal Income Tax Consequences," and are of the
opinion that such statements are correct in all material
respects. This discussion does not address every aspect of the
Federal income tax laws that may be relevant to Certificate
Owners of a Series in light of their personal investment
circumstances or to certain types of Certificate Owners of a
Series subject to special treatment under the Federal income tax
laws (for example, banks and life insurance companies).
Accordingly, investors should consult their own tax advisors
regarding Federal, state, local, foreign and any other tax
consequences to them of any investment in the Certificates of a
Series. PROSPECTIVE INVESTORS ARE ADVISED TO CONSULT THEIR OWN
TAX ADVISORS WITH REGARD TO THE FEDERAL TAX CONSEQUENCES OF THE
PURCHASE, OWNERSHIP, OR DISPOSITION OF INTERESTS IN CERTIFICATES,
AS WELL AS THE TAX CONSEQUENCES ARISING UNDER THE LAWS OF ANY
STATE, FOREIGN COUNTRY, OR OTHER TAXING JURISDICTION.
Characterization of the Certificates as Indebtedness
Mayer, Brown & Platt, or such other counsel specified in the
related Prospectus Supplement, will act as special tax counsel to
the Bank ("Special Tax Counsel") and will, upon issuance of a
Series of Certificates, render an opinion to the Bank based on
the assumptions and qualifications set forth therein that the
Certificates of such Series that are offered pursuant to a
Prospectus Supplement (the "Offered Certificates") will be
treated as indebtedness for Federal income tax purposes. A copy
of such opinion will be filed with the Commission with a Report
on Form 8-K following the issuance of a Series of Certificates.
However, opinions of counsel are not binding on the Internal
Revenue Service (the "IRS"), and there can be no assurance that
the IRS could not successfully challenge this conclusion.
The Transferor expresses in the Agreement its intent that for
Federal, state, local and foreign income or franchise tax
purposes, the Offered Certificates of each Series will be
indebtedness secured by the Receivables. The Transferor agrees
and each Certificateholder and Certificate Owner, by acquiring an
interest in an Offered Certificate, agrees or will be deemed to
agree to treat the Offered Certificates of such Series as
indebtedness for Federal, state and local income or franchise tax
purposes. However, because different criteria are used to
determine the non-tax accounting characterization of the
transactions contemplated by the Agreement, the Transferor
expects to treat such transaction, for regulatory and financial
accounting purposes, as a sale of an ownership interest in the
Receivables and not as a debt obligation.
In general, whether for Federal income tax purposes a
transaction constitutes a sale of property or a loan, the
repayment of which is secured by the property, is a question of
fact, the resolution of which is based upon the economic
substance of the transaction rather than its form or the manner
in which it is labeled. While the IRS and the courts have set
forth several factors to be taken into account in determining
whether the substance of a transaction is a sale of property or a
secured indebtedness for Federal income tax purposes, the primary
factor in making this determination is whether the transferee has
assumed the risk of loss or other economic burdens relating to
the property and has obtained the benefits of ownership thereof.
Special Tax Counsel may analyze and rely on several factors in
reaching its opinion that the weight of the benefits and burdens
of ownership of the Receivables has not been transferred to the
Certificate Owners.
In some instances, courts have held that a taxpayer is bound
by a particular form it has chosen for a transaction, even if the
substance of the transaction does not accord with its form. It
is expected that Special Tax Counsel may advise that the
rationale of those cases will not apply to the transaction
evidenced by a Series of Certificates because the form of the
transaction, as reflected in the operative provisions of the
documents, either is not inconsistent with the characterization
of the Offered Certificates of such Series as debt for Federal
income tax purposes or otherwise makes the rationale of those
cases inapplicable to this situation.
Taxation of Interest Income of Certificateholders
As set forth above, Special Tax Counsel will render an opinion
to the Bank that the Offered Certificates will constitute
indebtedness for Federal income tax purposes, and accordingly,
interest thereon generally will be includible in income by
Certificate Owners as ordinary income when received (in the case
of a cash basis taxpayer) or accrued (in the case of an accrual
basis taxpayer) in accordance with their respective methods of
tax accounting. Interest received on the Offered Certificates may
also constitute "investment income" for purposes of certain
limitations of the Code concerning the deductibility of
investment interest expense.
While it is not anticipated that the Offered Certificates will
be issued at a greater than de minimis discount, under Treasury
regulations (the "Regulations") the Offered Certificates may
nevertheless be deemed to have been issued with original issue
discount ("OID"). This could be the case, for example, if
interest payments for a Series are not deemed to be payments of
"qualified stated interest" because (i) Certificate Owners of a
Series do not have default remedies ordinarily available to
holders of debt instruments and (ii) no penalties are imposed on
the Bank or the Trust as a result of any failure to make interest
payments. As a result, if such Regulations were to apply, all of
the taxable income to be recognized with respect to the Offered
Certificates would be includible in income as OID but would not
be includible again when the interest is actually received.
If the Offered Certificates are in fact issued at a greater
than de minimis discount or are treated as having been issued
with OID under the Regulations, the following rules will apply.
The excess of the "stated redemption price at maturity" of an
Offered Certificate over the original issue price (in this case,
the initial offering price at which a substantial amount of the
Offered Certificates are sold to the public) will constitute OID.
A Certificate Owner must include OID in income as interest over
the term of the Offered Certificate under a constant yield
method. In general, OID must be included in income in advance of
the receipt of cash representing that income. Accordingly, cash
basis taxpayers would effectively be treated as being on the
accrual method and therefore be required to include interest into
income prior to the receipt of cash representing that income. In
the case of a debt instrument as to which the repayment of
principal may be accelerated as a result of the prepayment of
other obligations securing the debt instrument, the periodic
accrual of OID is determined by taking into account both the
prepayment assumptions used in pricing the debt instrument and
the prepayment experience. If this provision applies to a Class
of Certificates (which is not clear), the amount of OID which
will accrue in any given "accrual period" may either increase or
decrease depending upon the actual prepayment rate. Accordingly,
each Certificate Owner should consult its own tax adviser
regarding the impact to it of the OID rules if the Offered
Certificates are issued with OID. Under the Regulations, a holder
of a Certificate issued with de minimis OID must include such OID
in income proportionately as principal payments are made on a
Class of Certificates.
A holder who purchases an Offered Certificate at a discount
from its adjusted issue price may be subject to the "market
discount" rules of the Code. These rules provide, in part, for
the treatment of gain attributable to accrued market discount as
ordinary income upon the receipt of partial principal payments or
on the sale or other disposition of the Offered Certificate, and
for the deferral of interest deductions with respect to debt
incurred to acquire or carry the market discount Offered
Certificate.
A subsequent holder who purchases an Offered Certificate at a
premium may elect to amortize and deduct this premium over the
remaining term of the Offered Certificate in accordance with
rules set forth in Section 171 of the Code.
Sale of a Certificate
In general, a Certificate Owner will recognize gain or loss
upon the sale, exchange, redemption, or other taxable disposition
of an Offered Certificate measured by the difference between (i)
the amount of cash and the fair market value of any property
received (other than amounts attributable to, and taxable as,
accrued interest) and (ii) the Certificate Owner's tax basis in
the Offered Certificate (as increased by any OID or market
discount previously included in income by the holder and
decreased by any deductions previously allowed for amortizable
bond premium and by any payments reflecting principal or OID
received with respect to such Certificate). Subject to the market
discount rules discussed above and to the one-year holding
requirement for long-term capital gain treatment, any such gain
or loss generally will be long-term capital gain or loss,
provided that the Offered Certificate was held as a capital
asset. The maximum ordinary income rate for individuals, estates,
and trusts exceeds the maximum long-term capital gains rate for
such taxpayers. In addition, any capital losses realized
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.
Tax Classification of Trust
The Agreement permits the issuance of Classes of Certificates
that are treated for Federal income tax purposes either as
indebtedness or as an interest in a partnership. Accordingly, the
Trust could be characterized either as (i) a security device to
hold Receivables securing the repayment of the Certificates of
all Series or (ii) a partnership in which the Transferor and
certain classes of Certificateholders are partners, and which has
issued debt represented by other classes of Certificates of the
Trust (including the Offered Certificates). In connection with
the issuance of Certificates of any Series, Special Tax Counsel
will render an opinion to the Bank, based on the assumptions and
qualifications set forth therein, that under then current law,
the issuance of the Certificates of such Series will not cause
the Trust to be classified for Federal income tax purposes as an
association (or publicly traded partnership) taxable as a
corporation. A copy of such opinion will be filed with the
Commission with a Report on Form 8-K following the issuance of a
Series of Certificates.
FASIT Legislation
In August, 1996, the United States Congress passed and
President Clinton signed into law the "Small Business Job
Protection Act of 1996," H.R. 3448 (the "SBJP Act"). The SBJP
Act creates a new type of entity for federal income tax purposes
called a "financial asset securitization investment trust" or
"FASIT." The effective date of the FASIT provisions of the SBJP
Act is September 1, 1997. The SBJP Act enables certain
arrangements similar to the Trust to elect to be treated as a
FASIT. Under the FASIT provisions of the SBJP Act 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. If so specified in the related Prospectus Supplement,
the Trust may make an election to be treated as a FASIT. The
Agreement may contain any such terms and provide for the issuance
of Certificates on such terms and conditions as are permitted to
a FASIT and described in the related Prospectus Supplement. In
addition, upon satisfying certain conditions set forth in the
Agreement, the Transferor, Servicer and the Trustee will be
permitted to amend the Agreement 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 as may be permitted by reason of
the making of such an election. See "Description of Certificates --
Amendments." However, there 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 in
connection with any election. In addition, if such an election
is made, it may cause a Certificateholder to recognize gain (but
not loss) with respect to any Certificates held by it, even
though Special Tax Counsel will deliver its 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 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.
Possible Classification of the Transaction as a Partnership or as
an Association Taxable as a Corporation
The opinion of Special Tax Counsel with respect to Offered
Certificates will not be binding on the courts or the IRS. It is
possible that the IRS could assert that, for purposes of the
Code, the transaction contemplated by this Prospectus and a
related Prospectus Supplement constitutes a sale of the
Receivables (or an interest therein) to the Certificate Owners of
one or more Series or Classes and that the proper classification
of the legal relationship between the Bank and some or all of the
Certificate Owners or Certificateholders of one or more Series
resulting from the transaction is that of a partnership
(including a publicly traded partnership), a publicly traded
partnership taxable as a corporation, or an association taxable
as a corporation. The Transferor currently does not intend to
comply with the Federal income tax reporting requirements that
would apply if any Classes of Certificates were treated as
interests in a partnership or corporation (unless, as is
permitted by the Agreement, an interest in a Trust is issued or
sold that is intended to be classified as an interest in a
partnership).
If a transaction were treated as creating a partnership
between the Transferor and the Certificate Owners or
Certificateholders of one or more Series, the partnership itself
would not be subject to Federal income tax (unless it were to be
characterized as a publicly traded partnership taxable as a
corporation); rather, the partners of such partnership, including
the Certificate Owners or Certificateholders of such Series,
would be taxed individually on their respective distributive
shares of the partnership's income, gain, loss, deductions and
credits. The amount and timing of items of income and deductions
of a Certificate Owner could differ if the Offered Certificates
were held to constitute partnership interests, rather than
indebtedness. Moreover, unless the partnership were treated as
engaged in a trade or business, an individual's share of expenses
of the partnership would be miscellaneous itemized deductions
that, in the aggregate, are allowed as deductions only to the
extent they exceed two percent of the individual's adjusted gross
income, and would be subject to reduction under Section 68 of the
Code if the individual's adjusted gross income exceeded certain
limits. As a result, the individual might be taxed on a greater
amount of income than the stated rate on the Offered
Certificates. Finally, assuming a transaction were treated as
creating a partnership, all or a portion of any taxable income
allocated to a Certificate Owner that is a pension, profit-sharing
or employee benefit plan or other tax-exempt entity
(including an individual retirement account) may, under certain
circumstances, constitute "unrelated business taxable income"
which generally would be taxable to the holder under the Code.
If it were determined that a transaction created an entity
classified as an association or as a publicly traded partnership
taxable as a corporation, the Trust would be subject to Federal
income tax at corporate income tax rates on the income it derives
from the Receivables, which would reduce the amounts available
for distribution to the Certificate Owners, possibly including
Certificate Owners of a Class that is treated as indebtedness.
Such classification may also have adverse state and local tax
consequences that would reduce amounts available for distribution
to Certificate Owners. Cash distributions to the Certificate
Owners (except any Class not recharacterized as an equity
interest in an association) generally would be treated as
dividends for tax purposes to the extent of such deemed
corporation's earnings and profits.
Foreign Investors
As set forth above, Special Tax Counsel will render an
opinion, upon issuance, that the Offered Certificates will be
treated as debt for U.S. Federal income tax purposes. The
following information describes the U.S. Federal income tax
treatment of investors that are not U.S. persons ("Foreign
Investors") if the Offered Certificates are treated as debt. The
term "Foreign Investor" means any person other than (i) a citizen
or resident of the United States, (ii) a corporation, partnership
or other entity 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 U.S.
Federal income tax purposes, regardless of its source.
Interest, including OID, paid to a Foreign Investor will be
subject to U.S. withholding taxes at a rate of 30% unless (i) the
income is "effectively connected" with the conduct by such
Foreign Investor of a trade or business in the United States or
(ii) the Foreign Investor and each securities clearing
organization, bank, or other financial institution that holds the
Offered Certificates on behalf of the customer in the ordinary
course of its trade or business, in the chain between the
Certificate Owner and the U.S. person otherwise required to
withhold the U.S. tax, complies with applicable identification
requirements and the Certificate Owner does not actually or
constructively own 10% or more of the voting stock of the Bank
(or, upon the issuance of an interest in the Trust that is
treated as a partnership interest, any holder of such interest)
and is not a controlled foreign corporation with respect to the
Bank (or the holder of such an interest). Applicable
identification requirements generally will be satisfied if there
is delivered to a securities clearing organization (i) IRS Form
W-8 signed under penalties of perjury by the Certificate Owner,
stating that the Certificate Owner is not a U.S. person and
providing such Certificate Owner's name and address, (ii) IRS
Form 1001, signed by the Certificate Owner or such Certificate
Owner's agent, claiming exemption from withholding under an
applicable tax treaty, or (iii) IRS Form 4224 signed by the
Certificate Owner or such owner's agent, claiming exemption from
withholding of tax on income effectively connected with the
conduct of a trade or business in the United States; provided
that in any such case (x) the applicable form is delivered
pursuant to applicable procedures and is properly transmitted to
the United States entity otherwise required to withhold tax and
(y) none of the entities receiving the form has actual knowledge
that the Certificate Owner is a U.S. person.
A Certificate Owner that is a nonresident alien or foreign
corporation will not be subject to U.S. Federal income tax on
gain realized upon the sale, exchange, or redemption of an
Offered Certificate, provided that (i) such gain is not
effectively connected with the conduct of a trade or business in
the United States, (ii) 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 sale, exchange, or redemption occurs, and (iii) in the
case of gain representing accrued interest, the conditions
described in the immediately preceding paragraph are satisfied.
If the interests of the Certificate Owners of a Series were
reclassified as interests in a partnership (not taxable as a
corporation), such recharacterization could cause a Foreign
Investor to be treated as engaged in a trade or business in the
United States. In such event the Certificate Owner of such Series
would be required to file a Federal income tax return and, in
general, would be subject to Federal income tax, including branch
profits tax in the case of a Certificateholder that is a
corporation, on its net income from the partnership. Further, the
partnership would be required, on a quarterly basis, to pay
withholding tax equal to the sum, for each foreign partner, of
such foreign partner's distributive share of "effectively
connected" income of the partnership multiplied by the highest
rate of tax applicable to that foreign partner. The tax withheld
from each foreign partner would be credited against such foreign
partner's U.S. income tax liability.
If the Trust were taxable as a corporation, distributions to
foreign persons, to the extent treated as dividends, would
generally be subject to withholding at the rate of 30%, unless
such rate were reduced by an applicable tax treaty.
STATE AND LOCAL TAXATION
The discussion above does not address the tax treatment of the
Trust, the Certificates of any Series, or the Certificate Owners
of any Series under state and local tax laws. Prospective
investors are urged to consult their own tax advisors regarding
state and local tax treatment of the Trust and the Certificates
of any Series, and the consequences of purchase, ownership or
disposition of the Certificates of any Series under any state or
local tax law.
ERISA CONSIDERATIONS
Section 406 of ERISA and Section 4975 of the Code prohibit a
pension, profit sharing or other employee benefit plan 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.
ERISA also imposes certain duties on persons who are fiduciaries
of plans subject to ERISA and prohibits certain transactions
between a plan and parties in interest with respect to such
plans. Under ERISA, any person who exercises any authority or
control respecting the management or disposition of the assets of
a plan is considered to be a fiduciary of such plan (subject to
certain exceptions not here relevant). A violation of these
"prohibited transaction" rules may generate excise tax and other
liabilities under ERISA and the Code for such persons.
Plan fiduciaries must determine whether the acquisition and
holding of the Certificates of a Series and the operations of the
Trust would result in direct or indirect prohibited transactions
under ERISA and the Code. The operations of the Trust could
result in prohibited transactions if Benefit Plans (as defined
below) that purchase the Certificates of a Series are deemed to
own an interest in the underlying assets of the Trust. There may
also be an improper delegation of the responsibility to manage
Benefit Plan assets if Benefit Plans that purchase the
Certificates are deemed to own an interest in the underlying
assets of the Trust.
Pursuant to a final regulation (the "Final Regulation") issued
by the Department of Labor ("DOL") concerning the definition of
what constitutes the "plan assets" of an employee benefit plan
subject to ERISA or the Code, or an individual retirement account
("IRA") (collectively referred to as "Benefit Plans"), the assets
and properties of certain entities in which a Benefit Plan makes
an equity investment could be deemed to be assets of the Benefit
Plan in certain circumstances. Accordingly, if Benefit Plans
purchase Certificates of a Series, the Trust could be deemed to
hold plan assets unless one of the exceptions under the Final
Regulation is applicable to the Trust.
The Final Regulation only applies to the purchase by a Benefit
Plan of an "equity interest" in an entity. Assuming that
interests in Certificates of a Series are equity interests, the
Final Regulation contains an exception that provides that if a
Benefit Plan acquires a "publicly-offered security," the issuer
of the security is not deemed to hold plan assets. A publicly-offered
security is a security that is (i) freely transferable,
(ii) part of a class of securities that is owned by 100 or more
investors independent of the issuer and of one another and (iii)
either is (A) part of a class of securities registered under
Section 12(b) or 12(g) of the Exchange Act or (B) sold to the
plan as part of an offering of securities to the public pursuant
to an effective registration statement under the 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. In addition, the Final
Regulation provides that if at all times more than 75% of the
value of all classes of equity interests in Certificates of a
Series are held by investors other than benefit plan investors
(which is defined as including plans subject to ERISA, government
plans and IRAs), the investing plan's assets will not include any
of the underlying assets of the Trust.
There are no restrictions imposed on the transfer of the
Certificates offered hereby, and the Certificates offered hereby
will be sold as part of an offering pursuant to an effective
registration statement under the Securities Act. At or before the
conclusion of the offering, the underwriters will notify the
Transferor and the Trustee as to whether or not the Certificates
of any Series (or if there is more than one Class in a Series
each Class) will be expected to be held by at least 100
separately named persons at the conclusion of the offering. The
Transferor will not, however, determine whether there will, in
fact, be at least 100 separately named persons or whether the
100-investor requirement of the exception for publicly offered
securities is satisfied as to the Certificates of such Series (or
Class). If the Certificates of any Series (or if there is more
than one Class in a Series in any Class) are expected to be held
by at least 100 separately named persons at the conclusion of the
offering, those Certificates will be timely registered under the
Exchange Act.
If interests in the Certificates of a Series fail to meet the
criteria of publicly-offered securities and the Trust's assets
are deemed to include assets of Benefit Plans that are
Certificateholders, transactions involving the Trust and "parties
in interest" or "disqualified persons" with respect to such plans
might be prohibited under Section 406 of ERISA and Section 4975
of the Code unless an exemption is applicable. Thus, for example,
if a participant in any Benefit Plan is a cardholder of one of
the Accounts, under DOL interpretations the purchase of interests
in Certificates by such plan could constitute a prohibited
transaction. In addition, the Transferor, Servicer, Trustee or
any underwriter of such Series may be considered to be a party in
interest, disqualified person or fiduciary with respect to an
investing Benefit Plan. Accordingly, an investment by a Benefit
Plan in Certificates may be a prohibited transaction under ERISA
and the Code unless such investment is subject to a statutory or
administrative exemption. Four class exemptions issued by the DOL
that could apply in such event are DOL Prohibited Transaction
Exemption ("PTE") 84-14 (Class Exemption for Plan Asset
Transactions Determined by Independent Qualified Professional
Asset Managers), PTE 91-38 (Class Exemption for Certain
Transactions Involving Bank Collective Investment Funds), PTE 90-1 (Class
Exemption for Certain Transactions Involving Insurance
Company Pooled Separate Accounts) and PTE 95-60 (Class Exemption
for Certain Transactions Involving Insurance Company General
Accounts). There is no assurance that these exemptions, even if
all of the conditions specified therein are satisfied, or any
other exemption will apply to all transactions involving the
Trust's assets.
IN LIGHT OF THE FOREGOING, FIDUCIARIES OF A BENEFIT PLAN
CONSIDERING THE PURCHASE OF INTERESTS IN CERTIFICATES OF ANY
SERIES SHOULD CONSULT THEIR OWN COUNSEL AS TO WHETHER THE ASSETS
OF THE TRUST WHICH ARE REPRESENTED BY SUCH INTERESTS WOULD BE
CONSIDERED PLAN ASSETS, AND WHETHER, UNDER THE GENERAL FIDUCIARY
STANDARDS OF INVESTMENT PRUDENCE AND DIVERSIFICATION, AN
INVESTMENT IN CERTIFICATES OF ANY SERIES IS APPROPRIATE FOR THE
BENEFIT PLAN TAKING INTO ACCOUNT THE OVERALL INVESTMENT POLICY OF
THE BENEFIT PLAN AND THE COMPOSITION OF THE BENEFIT PLAN'S
INVESTMENT PORTFOLIO. In addition, fiduciaries should consider
the consequences that would apply if the Trust's assets were
considered plan assets, the applicability of exemptive relief
from the prohibited transaction rules, and, whether all
conditions for such exemptive relief would be satisfied.
In particular, insurance companies considering the purchase of
Certificates of any Series should consult their own benefits or
other appropriate counsel with respect to the United States
Supreme Court's decision in John Hancock Mutual Life Insurance
Co. v. Harris Trust & Savings Bank, 114 S. Ct. 517 (1993) ("John
Hancock") and the applicability of PTE 95-60. In John Hancock,
the Supreme Court held that assets held in an insurance company's
general account may be deemed to be "plan assets" under certain
circumstances; however, PTE 95-60 may exempt some or all of the
transactions that could occur as the result of the acquisition
and holding of the Certificates of a Series by an insurance
company general account from the penalties normally associated
with prohibited transactions. Accordingly, investors should
analyze whether John Hancock and PTE 95-60 or any other exemption
may have an impact with respect to their purchase of the
Certificates of any Series.
PLAN OF DISTRIBUTION
The Transferor may sell or cause Certificates to be sold (i)
through underwriters or dealers; (ii) directly to one or more
purchasers; or (iii) through agents. In addition, the Transferor
or its affiliates may act as selling agent for the Certificates,
if so specified in the related Prospectus Supplement. The
related Prospectus Supplement in respect of a Series offered
hereby will set forth the terms of the offering of such
Certificates, including the name or names of any underwriters,
the purchase price of such Certificates and the proceeds to the
Transferor from such sale, any underwriting discounts and other
items constituting underwriters' compensation, any initial
offering price and any discounts or concessions allowed or
reallowed or paid to dealers and the extent, if any, to which any
or all of such underwriters may engage in stabilizing
transactions and syndicate covering transactions with respect to
the related Certificates. Only underwriters so named in such
Prospectus Supplement shall be deemed to be underwriters in
connection with the Certificates offered thereby.
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
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).
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 Underwriting Agreement will provide that the Transferor
will indemnify the related underwriters against liabilities
relating to the adequacy of disclosure to investors, including
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 Mayer,
Brown & Platt, Chicago, Illinois. Certain legal matters relating
to the Federal tax consequences of the issuance of the
Certificates will be passed upon for the Transferor by Mayer,
Brown & Platt. Certain legal matters relating to the issuance of
the Certificates will be passed upon for the Underwriters by
Orrick, Herrington & Sutcliffe LLP, New York, New York.
<PAGE>
INDEX OF DEFINED TERMS FOR PROSPECTUS
Term Page
Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . 5, 6
Accumulation Period. . . . . . . . . . . . . . . . . . . . . . .7
Additional Accounts. . . . . . . . . . . . . . . . . . . . . . .6
Additional Transferors . . . . . . . . . . . . . . . . . . . . 41
Adjusted Investor Interest . . . . . . . . . . . . . . . . . . 54
Agent Banks. . . . . . . . . . . . . . . . . . . . . . . . . . 29
Aggregate Principal Receivables. . . . . . . . . . . . . . . . 49
Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . . .5
Amortization Period. . . . . . . . . . . . . . . . . . . . . . .7
Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Automatic Additional Accounts. . . . . . . . . . . . . . . . . 44
Bank . . . . . . . . . . . . . . . . . . . . . . . . . . 1, 5, 11
Bank Portfolio . . . . . . . . . . . . . . . . . . . . . . . . .5
Base Rate. . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Benefit Plans. . . . . . . . . . . . . . . . . . . . . . . . . 72
BHC Act. . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
BIF. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Billed Finance Charge Receivables. . . . . . . . . . . . . . . 49
Billing Cycle. . . . . . . . . . . . . . . . . . . . . . . . . 30
Cash Collateral Account. . . . . . . . . . . . . . . . . . . . 63
Cash Collateral Guaranty . . . . . . . . . . . . . . . . . . . 63
Cede . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
Cedel. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Cedel Participants . . . . . . . . . . . . . . . . . . . . . . 37
Certificate Owners . . . . . . . . . . . . . . . . . . . . . . .3
Certificate Rate . . . . . . . . . . . . . . . . . . . . . . . .7
Certificateholders . . . . . . . . . . . . . . . . . . . . . . .3
Certificates . . . . . . . . . . . . . . . . . . . . . . . . 1, 5
Class. . . . . . . . . . . . . . . . . . . . . . . . . . . . 1, 5
Closing Date . . . . . . . . . . . . . . . . . . . . . . . . . 13
Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
Collateral Interest. . . . . . . . . . . . . . . . . . . . . . 63
Collection Account . . . . . . . . . . . . . . . . . . . . . . 12
COMMISSION . . . . . . . . . . . . . . . . . . . . . . . . . . .1
Controlled Accumulation Amount . . . . . . . . . . . . . . . . 15
Controlled Accumulation Period . . . . . . . . . . . . . . . . 14
Controlled Amortization Amount . . . . . . . . . . . . . . . . 13
Controlled Amortization Period . . . . . . . . . . . . . . . . 13
Controlled Deposit Amount. . . . . . . . . . . . . . . . . . . 15
Controlled Distribution Amount . . . . . . . . . . . . . . . . 13
Conversion Date. . . . . . . . . . . . . . . . . . . . . . . . 48
Cooperative. . . . . . . . . . . . . . . . . . . . . . . . . . 37
Corporation. . . . . . . . . . . . . . . . . . . . . . . . 12, 33
Counterparties . . . . . . . . . . . . . . . . . . . . . . . . 61
Credit Enhancement . . . . . . . . . . . . . . . . . . . . . . .6
Credit Enhancement Percentage. . . . . . . . . . . . . . . . . 48
Credit Enhancement Provider. . . . . . . . . . . . . . . . . . .8
Cut-Off Date . . . . . . . . . . . . . . . . . . . . . . . . . .8
Defaulted Accounts . . . . . . . . . . . . . . . . . . . . . . .8
Definitive Certificates. . . . . . . . . . . . . . . . . . . . 11
Depositaries . . . . . . . . . . . . . . . . . . . . . . . . . 35
Depository . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Determination Date . . . . . . . . . . . . . . . . . . . . . . 54
Disclosure Document. . . . . . . . . . . . . . . . . . . . . . 10
Discount Percentage. . . . . . . . . . . . . . . . . . . . . . 46
Distribution Account . . . . . . . . . . . . . . . . . . . . . 46
Distribution Date. . . . . . . . . . . . . . . . . . . . . . . 12
DOL. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
DTC. . . . . . . . . . . . . . . . . . . . . . . . . . . . 3, A-1
DTC Participants . . . . . . . . . . . . . . . . . . . . . . . 35
Eligible Account . . . . . . . . . . . . . . . . . . . . . . . 43
Eligible Receivable. . . . . . . . . . . . . . . . . . . . . . 43
Enhancement. . . . . . . . . . . . . . . . . . . . . . . . . . .6
Enhancement Invested Amount. . . . . . . . . . . . . . . . . . 62
ERISA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Euroclear. . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Euroclear Operator . . . . . . . . . . . . . . . . . . . . . . 37
Euroclear Participants . . . . . . . . . . . . . . . . . . . . 37
Excess Allocation Series . . . . . . . . . . . . . . . . . . . 17
Excess Funding Account . . . . . . . . . . . . . . . . 19, 46, 53
Exchange Act . . . . . . . . . . . . . . . . . . . . . . . . . .3
FASIT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
FCSC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
FDIA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
FDIC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8
Final Regulation . . . . . . . . . . . . . . . . . . . . . . . 72
Finance Charge Account . . . . . . . . . . . . . . . . . . . . 46
Finance Charge Receivables . . . . . . . . . . . . . . . . . . .9
FIRREA . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
First Bankcard . . . . . . . . . . . . . . . . . . . . . . . . 29
First NBC. . . . . . . . . . . . . . . . . . . . . . . . 1, 5, 11
Foreign Investor . . . . . . . . . . . . . . . . . . . . . . . 70
Foreign Investors. . . . . . . . . . . . . . . . . . . . . . . 70
Full Investor Interest . . . . . . . . . . . . . . . . . . . . 19
Funding Period . . . . . . . . . . . . . . . . . . . . . . . . 19
GAAP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Global Securities. . . . . . . . . . . . . . . . . . . . . . .A-1
Group Investor Charge-Offs . . . . . . . . . . . . . . . . . . 50
Group Investor Default Amounts . . . . . . . . . . . . . . . . 50
Group Investor Finance Charge Collections. . . . . . . . . . . 50
Group Investor Monthly Interest. . . . . . . . . . . . . . . . 51
Holders. . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Indirect Participants. . . . . . . . . . . . . . . . . . . . . 35
Ineligible Receivable. . . . . . . . . . . . . . . . . . . . . 42
Interchange. . . . . . . . . . . . . . . . . . . . . . . . . . .6
Interest Funding Account . . . . . . . . . . . . . . . . . . . 39
Interest Period. . . . . . . . . . . . . . . . . . . . . . . . 12
Investor Charge-Off. . . . . . . . . . . . . . . . . . . . . . 54
Investor Default Amount. . . . . . . . . . . . . . . . . . . . 54
Investor Finance Charge Collections. . . . . . . . . . . . . . 51
Investor Interest. . . . . . . . . . . . . . . . . . . . . . . .7
Investor Monthly Fees. . . . . . . . . . . . . . . . . . . . . 51
Investor Percentage. . . . . . . . . . . . . . . . . . . . . . .8
IRA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
IRS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
John Hancock . . . . . . . . . . . . . . . . . . . . . . . . . 73
LIBOR. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
Minimum Aggregate Principal Receivables. . . . . . . . . . . . 44
Minimum Transferor Interest. . . . . . . . . . . . . . . . .9, 44
Monthly Period . . . . . . . . . . . . . . . . . . . . . . . . 12
Moody's. . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Net Default Amount . . . . . . . . . . . . . . . . . . . . . . .8
Net Recoveries . . . . . . . . . . . . . . . . . . . . . . . . .8
New Issuance . . . . . . . . . . . . . . . . . . . . . . . . . 10
Offered Certificates . . . . . . . . . . . . . . . . . . . . . 67
OID. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
Other Account Revenues . . . . . . . . . . . . . . . . . . . . .6
Paired Series. . . . . . . . . . . . . . . . . . . . . . . 18, 54
Partial Amortization . . . . . . . . . . . . . . . . . . . . . 17
Participation Agreement. . . . . . . . . . . . . . . . . . . . 44
Participations . . . . . . . . . . . . . . . . . . . . . . .6, 44
Pay Out Event. . . . . . . . . . . . . . . . . . . . . . . . . 16
Permitted Investments. . . . . . . . . . . . . . . . . . . . . 47
Portfolio Yield. . . . . . . . . . . . . . . . . . . . . . . . 26
Pre-Funding Account. . . . . . . . . . . . . . . . . . . . . . 19
Pre-Funding Amount . . . . . . . . . . . . . . . . . . . . 19, 47
Principal Amortization Period. . . . . . . . . . . . . . . . . 14
Principal Commencement Date. . . . . . . . . . . . . . . . . . 13
Principal Funding Account. . . . . . . . . . . . . . . . . 14, 15
Principal Receivables. . . . . . . . . . . . . . . . . . . . . .9
Principal Sharing Series . . . . . . . . . . . . . . . . . 18, 54
Private Label Accounts . . . . . . . . . . . . . . . . . . . . .6
Prospectus Supplement. . . . . . . . . . . . . . . . . . . . . .1
PTE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
Purchased Interest . . . . . . . . . . . . . . . . . . . . . . 11
Qualified Institution. . . . . . . . . . . . . . . . . . . . . 46
Rapid Accumulation Period. . . . . . . . . . . . . . . . . . . 15
Rapid Amortization Period. . . . . . . . . . . . . . . . . . . 16
Rating Agency. . . . . . . . . . . . . . . . . . . . . . . . . 21
Reallocated Investor Finance Charge Collections. . . . . . . . 50
Reallocation Group . . . . . . . . . . . . . . . . . . . . . . 18
Receivables. . . . . . . . . . . . . . . . . . . . . . . . . 1, 5
Record Date. . . . . . . . . . . . . . . . . . . . . . . . . . 34
Recoveries . . . . . . . . . . . . . . . . . . . . . . . . . . .8
Regulations. . . . . . . . . . . . . . . . . . . . . . . . . . 68
Removed Accounts . . . . . . . . . . . . . . . . . . . . . . . .9
Reserve Account. . . . . . . . . . . . . . . . . . . . . . . . 64
Retention Condition. . . . . . . . . . . . . . . . . . . . . . 53
Revolving Period . . . . . . . . . . . . . . . . . . . . . . . 13
SAIF . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
SBJP Act . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
Scheduled Payment Date . . . . . . . . . . . . . . . . . . . . 13
Securities Act . . . . . . . . . . . . . . . . . . . . . . . . 10
Senior Certificates. . . . . . . . . . . . . . . . . . . . . . .7
Series . . . . . . . . . . . . . . . . . . . . . . . . .1, 5, A-1
Series Supplement. . . . . . . . . . . . . . . . . . . . . . . .5
Series Termination Date. . . . . . . . . . . . . . . . . . . . 55
Service Transfer . . . . . . . . . . . . . . . . . . . . . . . 58
Servicer . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Servicer Default . . . . . . . . . . . . . . . . . . . . . . . 58
Servicing Fee. . . . . . . . . . . . . . . . . . . . . . . . . 11
Shared Principal Collections . . . . . . . . . . . . . . . . . 18
Special Tax Counsel. . . . . . . . . . . . . . . . . . . . . . 67
Specified Trust Termination Date . . . . . . . . . . . . . . . 55
Spread Account . . . . . . . . . . . . . . . . . . . . . . . . 64
SSCRA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Standard & Poor's. . . . . . . . . . . . . . . . . . . . . . . 46
Subordinated Certificates. . . . . . . . . . . . . . . . . . . .7
Supplemental Certificates. . . . . . . . . . . . . . . . . . . 10
Swaps. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
Tax Opinion. . . . . . . . . . . . . . . . . . . . . . . . . . 10
Terms and Conditions . . . . . . . . . . . . . . . . . . . . . 38
Transfer Date. . . . . . . . . . . . . . . . . . . . . . . 15, 48
Transferor . . . . . . . . . . . . . . . . . . . . . . . . . . .6
Transferor Certificate . . . . . . . . . . . . . . . . . . . . 10
Transferor Interest. . . . . . . . . . . . . . . . . . . . . . .8
Transferor Percentage. . . . . . . . . . . . . . . . . . . . . 34
Trust. . . . . . . . . . . . . . . . . . . . . . . . . . . . 1, 5
Trust Portfolio. . . . . . . . . . . . . . . . . . . . . . . . 32
Trust Termination Date . . . . . . . . . . . . . . . . . . . . 55
Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . . .5
U.S. Person. . . . . . . . . . . . . . . . . . . . . . . . . .A-3
UCC. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
Underwriting Agreement . . . . . . . . . . . . . . . . . . . . 73
USAF . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
<PAGE>
ANNEX I
GLOBAL CLEARANCE, SETTLEMENT AND TAX DOCUMENTATION PROCEDURES
Except in certain limited circumstances, the globally offered
First NBC Credit Card Master 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 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 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 form 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 advisers for specific tax
advice concerning their holding and disposing of the Global
Securities.
<PAGE>
[Alternate Pages - Prospectus]
SUBJECT TO COMPLETION, DATED MAY ___, 1997
PROSPECTUS
First NBC Credit Card Master Trust
Asset Backed Certificates
First National Bank of Commerce
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 to be set forth in a supplement to this Prospectus (a
"Prospectus Supplement"). The Certificates in each Series will represent an
undivided interest in the First NBC Credit Card Master Trust (the "Trust").
The Trust will be formed pursuant to a pooling and servicing agreement
between First National Bank of Commerce ("First NBC" or the "Bank"), as
transferor and servicer, and The First National Bank of Chicago, as
trustee. Certain capitalized terms used in this Prospectus are defined
elsewhere in this Prospectus and in the accompanying Prospectus Supplement.
Please refer to the "Index of Defined Terms for Prospectus" on page 78 for
a listing of the pages on which all such terms are defined.
The property of the Trust will include receivables (the "Receivables")
generated from time to time in a portfolio of revolving credit accounts,
all monies due or to become due in payment of the Receivables, any
collateral securing the Receivables, all proceeds of the foregoing and
proceeds of credit life insurance policies relating to the Receivables and
all monies on deposit in certain bank accounts of the Trust, as more fully
described herein. Additionally, with respect to any Series or Class offered
hereby, the Trust assets also may include (i) the right to receive other
revenues and/or (ii) credit enhancement and interest rate protection
arrangements for such Series or Class, as described in the related
Prospectus Supplement. The Bank will initially own the remaining undivided
interest in the Trust not represented by the Certificates issued by the
Trust and will initially 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 types of Certificates, as specified in the
related Prospectus Supplement. Each Certificate will represent an undivided
interest in the Trust, and the interest of the holders of each Class or
Series of Certificates will include the right to receive a varying
percentage of each month's collections with respect to the Receivables 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 a
cash collateral account or guaranty, a collateral interest, a letter of
credit, a surety bond, an insurance policy or other form of enhancement as
specified in the Prospectus Supplement relating to that 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 that Series or another Series, in
each case to the extent described in the related Prospectus Supplement.
Each Series of Certificates or Class 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 will be described in the related Prospectus
Supplement, the terms of such Series will not be subject to prior review
by, or consent of, the Certificateholders of any previously issued Series.
Potential investors should consider, among other
things, the information set forth in "Risk
Factors" commencing on page 23 of this
Prospectus.
THE CERTIFICATES WILL REPRESENT INTERESTS IN THE TRUST ONLY AND WILL NOT
REPRESENT INTERESTS IN OR RECOURSE OBLIGATIONS OF FIRST NBC OR ANY AFFILIATE
THEREOF. A CERTIFICATE IS NOT A DEPOSIT, AND NEITHER THE CERTIFICATES NOR THE
UNDERLYING ACCOUNTS OR RECEIVABLES ARE INSURED OR GUARANTEED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION OR (EXCEPT FOR RECEIVABLES ARISING IN PRIVATE
LABEL ACCOUNTS) ANY OTHER GOVERNMENTAL AGENCY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION (THE "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 the Bank 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 will be 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 will be set forth in, or may be calculated from, the related
Prospectus Supplement, and the net proceeds to the Bank 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
<PAGE>
the applicability of PTE 95-60. In John Hancock, the Supreme Court
held that assets held in an insurance company's general account may be
deemed to be "plan assets" under certain circumstances; however, PTE 95-60
may exempt some or all of the transactions that could occur as the result
of the acquisition and holding of the Certificates of a Series by an
insurance company general account from the penalties normally associated
with prohibited transactions. Accordingly, investors should analyze whether
John Hancock and PTE 95-60 or any other exemption may have an impact with
respect to their purchase of the Certificates of any Series.
PLAN OF DISTRIBUTION
This Prospectus is to be used by First NBC in connection with offers
and sales related to market-making transactions in the Certificates in
which it acts as principal. First NBC may also act as agent in such
transactions. Sales will be made at prices related to the prevailing prices
at the time of sale. The net proceeds of such sales will be used by First
NBC for its general corporate purposes.
LEGAL MATTERS
Certain legal matters relating to the issuance of the Certificates
will be passed upon for the Transferor by Mayer, Brown & Platt, Chicago,
Illinois. Certain legal matters relating to the Federal tax consequences of
the issuance of the Certificates will be passed upon for the Transferor by
Mayer, Brown & Platt. Certain legal matters relating to the issuance of the
Certificates will be passed upon for the Underwriters by Orrick, Herrington
& Sutcliffe LLP, New York, New York.
<PAGE>
<PAGE>
[Alternate Pages - form of Prospectus Supplement]
SUBJECT TO COMPLETION, DATED _________, 199_
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED __________ ___, 199_
$
FIRST NBC CREDIT CARD MASTER TRUST
$ Class A [Floating Rate] [__%] Asset
Backed Certificates, Series 199_-_
$ Class B [Floating Rate] [__%] Asset
Backed Certificates, Series 199_-_
First National Bank of Commerce
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") will represent the right to receive
certain payments from the First NBC Credit Card Master Trust, created
pursuant to a Pooling and Servicing Agreement between First National Bank
of Commerce ("First NBC" or the "Bank"), as transferor and servicer, and
The First National Bank of Chicago, as trustee. Certain capitalized terms
used in this Prospectus Supplement are defined elsewhere in this Prospectus
Supplement and the accompanying Prospectus. Please refer to the "Index of
Defined Terms for Prospectus Supplement" on page S-51 and the "Index of
Defined Terms for Prospectus" on page 78 for a listing of the pages on
which such terms are defined.
The property of the Trust includes receivables (the "Receivables")
generated from time to time in a portfolio of MasterCard(R), VISA(R) and
private label revolving credit card accounts (the "Accounts"), 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, all monies in certain bank accounts of the Trust and certain
other property as described herein. In addition, the Collateral Interest
will be issued in the initial amount of $____________ and will be
subordinated to the Certificates as described herein. First NBC will
initially own the remaining undivided interest in the Trust not represented
by the Certificates, the Collateral Interest and other interests issued by
the Trust from time to time and will initially service the Receivables.
First NBC 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.
(continued on next page)
There currently is no secondary market for the Certificates, and there
is no assurance that one will develop or, if one does, that it will
continue until the Certificates are paid in full. Potential investors
should consider, among other things, the information set forth in "Risk
Factors" commencing on page S-17 herein and page 23 in the Prospectus.
THE CERTIFICATES REPRESENT INTERESTS IN THE TRUST ONLY AND DO NOT
REPRESENT INTERESTS IN OR OBLIGATIONS OF FIRST NBC OR ANY AFFILIATE
THEREOF. A CERTIFICATE IS NOT A DEPOSIT AND NEITHER THE CERTIFICATES NOR
THE UNDERLYING ACCOUNTS OR RECEIVABLES ARE INSURED OR GUARANTEED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION OR (EXCEPT FOR RECEIVABLES ARISING
IN PRIVATE LABEL ACCOUNTS) ANY OTHER GOVERNMENTAL AGENCY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION (THE "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.
<PAGE>
<PAGE>
This Prospectus Supplement and the Prospectus Supplement may be used
by First NBC in connection with market-making transactions in the
Certificates. First NBC may act as principal or agent in such transactions.
Such transactions will be at prices related to prevailing market prices at
the time of sale.
FIRST NATIONAL BANK OF COMMERCE
The Date of this Prospectus Supplement is _______________ _____, 199_
<PAGE>
<PAGE>
not be paid. In no event shall the Trust, the Trustee, the Holders 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."
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 Holders
other than federal, state and local income and franchise taxes, if any, of
the Trust.
Reports to Holders
On each Transfer Date, the Trustee will forward to each Holder of
record, a statement prepared by the Servicer setting forth the items
described in "Description of the Certificates -- Reports to Holders" in the
Prospectus. In addition, such statement will include (a) the amount, if
any, withdrawn from the Principal Funding Account for such Transfer Date,
and (b) the Collateral Interest, if any, for such Transfer Date.
UNDERWRITING
This Prospectus Supplement and the related Prospectus may be used by
First NBC in connection with offers and sales related to market-making
transactions in the Certificates in which it acts as principal. Sales will
be made at prices related to the prevailing prices at the time of sale.
First NBC does not have an obligation to make a market in the Certificates,
and it may discontinue any such market-making activities at any time
without notice, in its sole discretion.
S-48
<PAGE>
<PAGE>
==========================================
No dealer, salesman 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
agent or Underwriter. 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 thereof or that the
information contained or incorporated by
reference herein or therein is correct
as of any time subsequent to its date.
<PAGE>
TABLE OF CONTENTS
Prospectus Supplement
Page
SUMMARY OF TERMS......................S-4
RISK FACTORS.........................S-17
FIRST NBC'S CREDIT CARD
PORTFOLIO.................. ......S-17
THE RECEIVABLES......................S-21
MATURITY ASSUMPTIONS.................S-25
RECEIVABLE YIELD CONSIDERATIONS......S-27
FIRST NBC AND FIRST COMMERCE
CORPORATION..........................S-28
DESCRIPTION OF THE CERTIFICATES......S-28
UNDERWRITING.........................S-48
INDEX OF DEFINED TERMS FOR
PROSPECTUS SUPPLEMENT............S-51
Prospectus
Prospectus Supplement.... ..............3
Reports to Certificateholders...........3
Available Information...................4
Incorporation of Certain
Documents by Reference...............4
Prospectus Summary .....................5
Risk Factors...........................22
The Trust..............................29
First NBC's Credit Card
Activities..........................29
The Receivables........................32
Maturity Assumptions...................33
Use of Proceeds........................33
First NBC and First Commerce
Corporation.........................33
Description of the Certificates........34
Credit Enhancement.....................61
Certain Legal Aspects of
the Receivables.....................64
U.S. Federal Income Tax
Consequences........................66
State and Local Taxation....... .......71
ERISA Considerations...................71
Plan of Distribution...................73
Legal Matters..........................73
Index of Terms for Prospectus..........74
Annex 1: Global Clearance, Settlement
and Tax Documentation Procedures..A-1
<PAGE>
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.
=========================================
<PAGE>
=========================================
First NBC
Credit Card Master Trust
$____________ Class A
[Floating Rate] [___%]
Asset Backed
Certificates, Series 199_-_
$____________ Class B
[Floating Rate] [___%]
Asset Backed
Certificates, Series 199_-_
First National Bank
of Commerce
Transferor and Servicer
---------------------
Prospectus Supplement
---------------------
First National Bank of Commerce
=========================================
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.
Registration Fee. . . . . . . . . . . . . . $227,272.73
Printing and Engraving. . . . . . . . . . . 40,000.00
Trustee's Fees. . . . . . . . . . . . . . . 10,000.00
Legal Fees and Expenses . . . . . . . . . . 250,000.00
Blue Sky Fees and Expenses. . . . . . . . . 8,000.00
Accountants' Fees and Expenses. . . . . . . 50,000.00
Rating Agency Fees. . . . . . . . . . . . . 170,000.00
Miscellaneous Fees. . . . . . . . . . . . .
----------
Total . . . . . . . . . . . . . . . . . . . $ 755,272.73
==========
______________
ITEM 15. Indemnification of Directors and Officers
The Registrant maintains directors' and officers' liability
insurance. Articles V and VI of the Registrant's Articles of
Association provide as follows:
ARTICLE V
Limitation of Liability of Directors and Officers
A. No director or officer of the Association shall be
liable to the Association or to its shareholder for monetary
damages for breach of his fiduciary duty as a director or
officer, provided that the foregoing provision shall not
eliminate or limit the liability of a director or officer for (a)
any breach of his duty of loyalty to the Association or its
shareholder; (b) acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law; (c)
liability for unlawful distributions of the association's assets
to, or redemption or repurchase of the Association's shares from,
the shareholder of the Association; or (d) any transaction from
which he derived an improper personal benefit.
B. The Board of Directors may, with the approval of the
shareholder, (a) cause the Association to enter into contracts
with directors and officers providing for the limitation of
liability set forth in this Article V and for indemnification to
the fullest extent permitted by law.
C. Any amendment or repeal of this Article V shall not
adversely affect any elimination or limitation of liability of a
director or officer of the Association under this Article V with
respect to any action or inaction occurring prior to the time of
such amendment or repeal.
ARTICLE VI
Indemnification
Section 1. Definitions. As used in this Article the
following terms shall have the meanings set out below:
a. "Board" - the Board of Directors of the Association.
b. "Claim" - any threatened or pending or completed
claim, action, suit, or proceeding, whether civil, criminal,
administrative or investigative and whether made judicially or
extra-judicially, or any separate issue or matter therein, as the
context requires.
c. "Determining Body" - (i) the shareholder, or (ii)
if a majority of the members of the board of directors of the
shareholder are parties to the Claim, or the shareholder so
directs, independent legal counsel, which may be the regular
outside counsel of the Association.
d. "Disbursing Officer" - the Chief Executive Officer
of the Association or, if the Chief Executive Officer is a party
to the Claim for which indemnification is being sought, any
officer not a party to such Claim who is designated by the
shareholder to be the Disbursing Officer with respect to
indemnification requests related to the Claim, which designation
shall be made promptly after receipt of the initial request for
indemnification with respect to such Claim.
e. "Expenses" - any expenses or costs (including,
without limitation, attorney's fees, judgments, punitive or
exemplary damages, fines and amounts paid in settlement).
f. "Indemnitee" - each person who is or was a
director or officer of the Association, but such term shall not
include any person who was a director or officer of any
institution absorbed by the Association by way of merger,
consolidation, transfer of assets or otherwise, provided that
nothing herein shall prevent the Association from providing
indemnification to such persons under circumstances which the
Association determines in its discretion to be appropriate and in
accordance with law.
Section 2. Indemnity.
a. To the extent such Expenses exceed the sum of
amounts paid or due under or pursuant to (i) policies of
liability insurance maintained by the Association, (ii) policies
of liability insurance maintained by or on behalf of Indemnitee
and (iii) provisions for indemnification in the by-laws,
resolutions or other instruments of any entity other than the
Association or its shareholder, the Association shall indemnify
Indemnitee against any Expenses actually and reasonably incurred
by him (as they are incurred) in connection with any Claim either
against him or as to which he is involved solely as a witness or
person required to give evidence, by reason of his position.
(1) as a director or officer of the Association,
(2) as a director or officer of any subsidiary of the
Association or as fiduciary with respect to any employee benefit
plan of the Association, or
(3) as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other
for profit or not for profit entity or enterprise, if such
position is or was held at the request of the Association,
whether relating to service in such position, before or after the
effective date of this Article, if he (i) is successful in his
defense of the Claim on the merits or otherwise or (ii) has been
found by the Determining Body (acting in good faith) to have met
the Standard of Conduct; provided that (A) the amount otherwise
payable by the Association may be reduced by the Determining Body
to such amount as it deems proper if it determines that the Claim
involved the receipt of a personal benefit by Indemnitee, and (B)
no indemnification shall be made (i) in respect of any Claim as
to which Indemnitee shall have been adjudged by a court of
competent jurisdiction, after exhaustion of all appeals
therefrom, to be liable for willful or intentional misconduct in
the performance of his duty to the Association or to have
obtained an improper personal benefit, or (ii) for expenses,
penalties or other payments incurred in an administrative
proceeding or action instituted by a bank regulatory agency,
which action results in a final order assessing civil monetary
penalties or payments to the Association, unless in each such
case, and only to the extent that, a court shall determine upon
application that, in view of all the circumstances of the case,
Indemnitee is fairly and reasonably entitled to indemnity for
such Expenses as the court deems proper.
b. The Standard of Conduct is met when the conduct by
an Indemnitee with respect to which a Claim is asserted was
conduct that he reasonably believed to be in, or not opposed to,
the best interest of the Association, and, in the case of a
criminal action or proceeding, that he had no reasonable cause to
believe was unlawful. The termination of any Claim by judgment,
order, settlement, conviction, or upon a plea of nolo contendere
or its equivalent, shall not, of itself, create a presumption
that Indemnitee did not meet the Standard of Conduct.
c. Promptly upon becoming aware of the existence of
any Claim as to which he may be indemnified hereunder, Indemnitee
shall notify the Chief Executive Officer of the Association of
the Claim and whether he intends to seek indemnification
hereunder. If such notice indicates that Indemnitee does so
intend, the Chief Executive Officer shall promptly notify the
shareholder, which shall promptly establish the Determining Body.
After the Determining Body has been established the Chief
Executive Officer shall inform Indemnitee thereof and Indemnitee
shall immediately provide the Determining Body with all facts
relevant to the Claim known to him. Within 60 days of the
receipt of such information, together with such additional
information as the Determining Body may request of Indemnitee,
the Determining Body shall determine, and shall advise Indemnitee
of its determination, whether Indemnitee has met the Standard of
Conduct. The Determining Body may extend such sixty-day period by
no more than an additional sixty days.
d. Indemnitee shall promptly inform the Determining
Body upon his becoming aware of any relevant facts not therefore
provided by him to the Determining Body, unless the Determining
Body has obtained such facts by other means. If, after
determining that the Standard of Conduct has been met, the
Determining Body obtains facts of which it was not aware at the
time it made such determination, the Determining Body on its own
motion, after notifying Indemnitee and providing him an
opportunity to be heard, may, on the basis of such facts, revoke
such determination, provided that in the absence of actual fraud
by Indemnitee no such revocation may be made later than thirty
days after final disposition of the Claim.
e. In the case of any Claim not involving a proposed,
threatened or pending criminal proceeding,
(1) If Indemnitee has, in the good faith judgment of
the Determining Body, met the Standard of Conduct, the
Association may, in its sole discretion after notice to
Indemnitee, assume all responsibility for the defense of the
Claim, and, in any event, the Association and Indemnitee each
shall keep the other informed as to the progress of the defense,
including prompt disclosure of any proposals for settlement;
provided that if the Association or the shareholder is a party to
the Claim and Indemnitee reasonably determines that there is a
conflict between the positions of the Association or the
shareholder and Indemnitee with respect to the Claim, then
Indemnitee shall be entitled to conduct his defense, with counsel
of his choice; and provided further that Indemnitee shall in any
event be entitled at his expense to employ counsel chosen by him
to participate in the defense of the Claim; and
(2) The Association shall fairly consider any
proposals by Indemnitee for settlement of the Claim. If the
Association (A) proposes a settlement acceptable to the person
asserting the Claim, or (B) believes a settlement proposed by the
person asserting the Claim should be accepted, it shall inform
Indemnitee of the terms thereof and shall fix a reasonable date
by which Indemnitee shall respond. If Indemnitee agrees to such
terms, he shall execute such documents as shall be necessary to
effect the settlement. If he does not agree he may proceed with
the defense of the Claim in any manner he chooses, but if he is
not successful on the merits or otherwise, the Association's
obligation to indemnify him for any Expenses incurred following
his disagreement shall be limited to the lesser of (A) the total
Expenses incurred by him following his decision not to agree to
such proposed settlement or (B) the amount the Association would
have paid pursuant to the terms of the proposed settlement. If,
however, the proposed settlement would impose upon Indemnitee any
requirement to act or refrain from acting that would materially
interfere with the conduct of his affairs, Indemnitee may refuse
such settlement and proceed with the defense of the Claim, if he
so desires, at the Association's expense without regard to the
limitations imposed by the preceding sentence. In no event,
however, shall the Association be obligated to indemnify
Indemnitee for any amount paid in a settlement that the
Association has not approved.
f. In the case of a Claim involving a proposed,
threatened or pending criminal proceeding, Indemnitee shall be
entitled to conduct the defense of the Claim, and to make all
decisions with respect thereto, with counsel of his choice;
provided that the Association shall not be obligated to indemnify
Indemnitee for an amount paid in settlement that the Association
has not approved.
g. After notifying the Association of the existence
of a Claim, Indemnitee may from time to time request the
Association to pay the Expenses (other than judgments, fines,
penalties or amounts paid in settlement) that he incurs in
pursuing a defense of the Claim prior to the time that the
Determining Body determines whether the Standard of Conduct has
been met. If the Disbursing Officer believes the amount requested
to be reasonable, he shall pay to Indemnitee the amount requested
(regardless of Indemnitee's apparent ability to repay such
amount) upon receipt of an undertaking by or on behalf of
Indemnitee to repay such amount if it shall ultimately be
determined that he is not entitled to be indemnified by the
Association under the circumstances. If the Disbursing Officer
does not believe such amount to be reasonable, the Association
shall pay the amount deemed by him to be reasonable, and
Indemnitee may apply directly to the Determining Body for the
remainder of the amount requested.
h. After it has been determined that the Standard of
Conduct was met, for so long as and to the extent that the
Association is required to indemnify Indemnitee under this
Article, the provisions of Paragraph (g) shall continue to apply
with respect to Expenses incurred after such time except that (i)
no undertaking shall be required of Indemnitee and (ii) the
Disbursing Officer shall pay to Indemnitee such amount of any
fines, penalties or judgments against him which have become final
and as to which the Association is obligated to indemnify him.
i. Any determination by the Association with respect
to settlements of a Claim shall be made by the Determining Body.
j. The Association and Indemnitee shall keep
confidential, to the extent permitted by law and their fiduciary
obligations, all facts and determinations provided or made
pursuant to or arising out of the operation of this Agreement,
and the Association and Indemnitee shall instruct it or his
agents and employees to do likewise.
Section 3. Enforcement.
a. The rights provided by this Article shall be
enforceable by Indemnitee in any court of competent jurisdiction.
b. If Indemnitee seeks a judicial adjudication of his
rights under this Article Indemnitee shall be entitled to recover
from the Association, and shall be indemnified by the Association
against, any and all Expenses actually and reasonably incurred by
him in connection with such proceeding but only if he prevails
therein. If it shall be determined that Indemnitee is entitled to
receive part but not all of the relief sought, then Indemnitee
shall be entitled to be reimbursed for all Expenses incurred by
him in connection with such judicial adjudication if the amount
to which he is determined to be entitled exceeds 50% of the
amount of his claim. Otherwise, the Expenses incurred by
Indemnitee in connection with such judicial adjudication shall be
appropriately prorated.
c. In any judicial proceeding described in this
subsection, the Association shall bear the burden of proving that
Indemnitee is not entitled to any Expenses sought with respect to
any Claim.
Section 4. Saving Clause. If any provision of this Article
is determined by a court having jurisdiction over the matter to
require the Association to do or refrain from doing any act that
is in violation of applicable law, the court shall be empowered
to modify or reform such provision so that, as modified or
reformed, such provision provides the maximum indemnification
permitted by law, and such provision, as so modified or reformed,
and the balance of this Article, shall be applied in accordance
with their terms. Without limiting the generality of the
foregoing, if any portion of this Article shall be invalidated on
any ground, the Association shall nevertheless indemnify an
Indemnitee to the full extent permitted by any applicable portion
of this Article that shall not have been invalidated and to the
full extent permitted by law with respect to that portion that
has been invalidated.
Section 5. Non-Exclusivity.
a. The indemnification and advancement of Expenses
provided by or granted pursuant to this Article shall not be
deemed exclusive of any other rights to which Indemnitee is or
may become entitled under any statute, article of association or
incorporation, by-law, authorization of shareholders or
directors, agreement, or otherwise, provided that unless required
by law any indemnification payment made otherwise than pursuant
to this Article must be approved by the shareholder.
b. It is the intent of the Association by this
Article to indemnify and hold harmless Indemnitee to the fullest
extent permitted by law, so that if applicable law would permit
the Association to provide broader indemnification rights than
are currently permitted, the Association shall indemnify and hold
harmless Indemnitee to the fullest extent permitted by applicable
law notwithstanding that the other terms of this Article would
provide for lesser indemnification, provided that unless
otherwise required by law or the express terms of this Article,
no indemnification payment may be made unless it is approved by
the shareholder.
Section 6. Successors and Assigns. This Article shall inure
to the benefit of Indemnitee's heirs, personal representatives,
and assigns and to the benefit of the Association, its successors
and assigns.
Section 7. Indemnification of Other Persons.
The Association may indemnify any person not covered
by Sections 1 through 6 of this Article to the extent provided in
a resolution of the shareholder or a separate provision of these
Articles.
Section 8. Restrictions on Indemnification By Law and
Regulation.
Notwithstanding any provision of this Article to the
contrary, no indemnification or advancement of expenses may be
made if, in the good faith opinion of the shareholder, such
indemnification or advancement of expenses could violate any
applicable law or regulation, unless the Association has received
evidence satisfactory to it that no such violation would occur.
<TABLE>
<CAPTION>
ITEM 16. Exhibits and Financial Statements
<S> <C> <C>
(a) Exhibits
1.1 Form of Underwriting Agreement. **
3.1 Articles of Association.*
3.2 By-Laws.*
4.1 Form of Pooling and Servicing Agreement.**
4.2 Form of Series Supplement (including form of
Certificate).**
5.1 Opinion of Mayer, Brown & Platt with respect to
legality.**
8.1 Opinion of Mayer, Brown & Platt with respect to
tax matters.**
23.1 Consent of Mayer, Brown & Platt (to be included
in opinion filed as Exhibit 5.1).
24.1 Powers of Attorney.*
___________________________________
* Previously filed.
** Filed herewith
</TABLE>
(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 the aggregate, represent
a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed
that which was registered) and any deviation from the low or
high end of the estimated maximum offering rate may be
reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20
percent change in the maximum aggregate offering price set
forth in the "Calculation of Registration Fee" table in the
effective 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 to 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 thereof.
(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.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
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. 1 to Registration
Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of New Orleans, State of
Louisiana, on May 30, 1997.
FIRST NATIONAL BANK OF COMMERCE
as originator of the Trust and registrant
By: /s/ Michael J. Fowler
-----------------------------
Name: Michael J. Fowler
Title: Executive Vice President
Senior ALCO Officer
Pursuant to the requirements of the Securities Act of 1933,
Amendment No. 1 to the Registration Statement has been signed
below by the following persons in the capacities and on the dates
indicated.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
* President and Chief May 30, 1997
- ------------------------ Executive Officer and
Ashton J. Ryan, Jr. Director (Principal
Executive Officer)
* Chairman of the Board May 30, 1997
- ------------------------
Howard C. Gaines
* Secretary (Principal May 30, 1997
- ------------------------ Financial Officer)
Michael A. Flick
* Controller (Principal May 30, 1997
- ------------------------ Accounting Officer)
Jane B. Truett
* Director May 30, 1997
- ------------------------
Margaret Moss Allums
* Director May 30, 1997
- ------------------------
Ian Arnof
* Director May 30, 1997
- ------------------------
William G. Barry
* Director May 30, 1997
- ------------------------
Sydney J. Besthoff III
* Director May 30, 1997
- ------------------------
John D. Charbonnet
* Director May 30, 1997
Laurance Eustis, Jr.
* Director May 30, 1997
- ------------------------
Norman C. Francis
* Director May 30, 1997
- ------------------------
John J. Gelpi, Jr.
* Director May 30, 1997
- ------------------------
Erik F. Johnsen
* Director May 30, 1997
- ------------------------
J. Merrick Jones, Jr.
* Director May 30, 1997
- ------------------------
Harry Merritt Lane III
* Director May 30, 1997
- ------------------------
Edwin Lupberger
* Director May 30, 1997
- ------------------------
Robert W. Merrick
* Director May 30, 1997
- ------------------------
G. Frank Purvis, Jr.
* Director May 30, 1997
- ------------------------
Edward M. Simmons
* Director May 30, 1997
- ------------------------
Charles C. Teamer
* Signature by Thomas L. Callicutt, Jr., as Attorney-in-Fact under Power of Attorney
/s/ Thomas L. Callicutt, Jr.
</TABLE>
<PAGE>
EXHIBITS INDEX
Sequential
Exhibit No. Description of Exhibit Page Number
- ----------- ---------------------- -----------
1.1 Form of Underwriting Agreement. **
3.1 Articles of Association.*
3.2 By-Laws.*
4.1 Form of Pooling and Servicing Agreement.**
4.2 Form of Series Supplement (including form of
Certificate).**
5.1 Opinion of Mayer, Brown & Platt with respect
to legality.**
8.1 Opinion of Mayer, Brown & Platt with respect
to tax matters.**
23.1 Consent of Mayer, Brown & Platt (to be included
in opinion filed as Exhibit 5.1).
24.1 Powers of Attorney.*
_________________________________________
* Previously filed.
** Filed herewith.
FIRST NATIONAL BANK OF COMMERCE
First NBC Credit Card Master Trust
$___________ [Floating Rate] [_____%] Class A
Asset Backed Certificates - Series 199[_-_]
$___________ [Floating Rate] [_____%] Class B
Asset Backed Certificates - Series 199[_-_]
FORM UNDERWRITING AGREEMENT
[___________ __], 199[__]
[Name and Address of Representatives]
Dear Sirs:
First National Bank of Commerce ("First NBC" or the "Transferor") [has
conveyed and] proposes to [further] convey, from time to time, the
receivables (the "Receivables") that are generated in a portfolio of
revolving credit card accounts and other rights to the First NBC Credit
Card Master Trust (the "Trust"), and the Transferor proposes to cause the
Trust to sell to you and the underwriters named in Schedule I hereto (the
"Underwriters") for whom you are acting as representatives (the
"Representatives") $____________ [Floating Rate] [____%] Class A Asset
Backed Certificates, Series 199[_-_] (the "Class A Certificates") and
$____________ [Floating Rate] [____%] Class B Asset Backed Certificates,
Series 199[_-_] (the "Class B Certificates" and, together with the Class A
Certificates, the "Certificates") representing beneficial interests in the
Trust. The Receivables will from time to time be conveyed by the Transferor
to the Trust, and the Certificates will be issued, pursuant to the Pooling
and Servicing Agreement, dated as of [________] __, 1997 (the "Pooling and
Servicing Agreement"), between First NBC, as Transferor and Servicer, and
The First National Bank of Chicago, as trustee (the "Trustee"), and the
Series 199_-_ Supplement to the Pooling and Servicing Agreement, dated as
of [________] __, 1997 (the "Supplement"), between First NBC, as Transferor
and Servicer, and the Trustee.
The Certificates will be sold pursuant to this Underwriting Agreement
(this "Agreement") and will represent undivided interests in certain assets
of the Trust (as hereinafter described).
Capitalized terms used herein without definition shall have the
meanings set forth in the Pooling and Servicing Agreement and the
Supplement.
Section 1. Representations and Warranties of the Transferor.
------------------------------------------------
(a) The Transferor represents and warrants to, and agrees with,
each Underwriter as set forth in this Section 1(a). Certain terms used
in this Section 1(a) are defined in the second paragraph of subsection
1(a)(i) below.
(i) The Transferor meets the requirements for use of Form S-3
under the Securities Act of 1933, as amended (the "Act"), and has
filed with the Securities and Exchange Commission (the "Commission") a
registration statement (Registration No. 333-24023), including a
related preliminary prospectus, on such Form S-3 for the registration
under the Act of the Certificates. The Transferor may have filed one
or more amendments thereto, including the related preliminary
prospectus, each of which has previously been furnished to you. The
Transferor will next file with the Commission (A) prior to the
effectiveness of such registration statement, a further amendment
thereto (including the form of final prospectus), (B) after
effectiveness of such registration statement, a final prospectus in
accordance with Rules 430A and 424(b) or (C) after effectiveness of
such registration statement, a final prospectus relating to the
Certificates in accordance with Rules 415 and 424(b) under the Act. In
the case of clause (B), the Transferor has included in such
registration statement, as amended at the Effective Date, all
information (other than Rule 430A Information) required by the Act and
the rules thereunder to be included in the prospectuses with respect
to the Certificates and the offering thereof. As filed, such amendment
and form of final prospectus, or such final prospectus, shall include
all Rule 430A Information and, except to the extent the Underwriters
shall agree in writing to a modification, shall be in all substantive
respects in the form furnished to you prior to the Execution Time or,
to the extent not completed at the Execution Time, shall contain only
such specific additional information and other changes (beyond that
contained in the latest Preliminary Prospectus which has previously
been furnished to you) as the Transferor has advised you, prior to the
Execution Time, will be included or made therein.
The terms which follow, when used in this Agreement, shall have the
meanings indicated. The term "Effective Date" shall mean each date that the
Registration Statement and any post-effective amendment or amendments
thereto became or become effective under the Act. "Exchange Act" means the
Securities and Exchange Act of 1934, as amended. "Execution Time" shall
mean the date and time that this Agreement is executed and delivered by the
parties hereto. "Preliminary Prospectus" shall mean any preliminary
prospectus relating to the Certificates referred to in the preceding
paragraph and, if clause (B) above is applicable, any preliminary
prospectus included in the Registration Statement which, as of the
Effective Date, omits Rule 430A Information. "Prospectus" shall mean the
prospectus relating to the Certificates that is first filed with the
Commission pursuant to Rule 424(b) and any prospectuses subsequently filed
pursuant to Rule 424 or, if no filing pursuant to Rule 424(b) is required,
shall mean the form of final prospectus included in the Registration
Statement at the Effective Date. "Registration Statement" shall mean the
registration statement referred to in the preceding paragraph and any
registration statement required to be filed under the Act or rules
thereunder, including amendments, all documents incorporated or deemed to
be incorporated by reference therein, exhibits and financial statements, in
the form in which it has or shall become effective and, in the event that
any post-effective amendment thereto becomes effective prior to the Closing
Date (as hereinafter defined), shall also mean such registration statement
as amended or supplemented pursuant to the Act or rules thereunder or the
Exchange Act or rules thereunder. Such term shall include Rule 430A
Information deemed to be included therein at the Effective Date as provided
by Rule 430A. "Rule 424" and "Rule 430A" refer to such rules under the Act.
"Rule 430A Information" means information with respect to the Certificates
and the offering thereof permitted to be omitted from the Registration
Statement when it becomes effective pursuant to Rule 430A. All references
in this Agreement to financial statements and schedules and other
information which is "contained," "included" or "stated" in the
Registration Statement or the Prospectus (and all other references of like
import) shall be deemed to mean and include all such financial statements
and schedules and other information which is or is deemed to be
incorporated by reference in the Registration Statement or the Prospectus,
as the case may be; and all references in this Agreement to amendments or
supplements to the Registration Statement or the Prospectus shall be deemed
to mean and include the filing of any document under the Exchange Act which
is or is deemed to be incorporated by reference in the Registration
Statement or the Prospectus, as the case may be.
(ii) On the Effective Date, the Registration Statement did or
will comply in all material respects with the applicable requirements
of the Act and the rules thereunder; on the Effective Date and when
the Prospectus is first filed (if required) in accordance with Rule
424(b) and on the Closing Date, the Prospectus (and any supplements
thereto) will comply in all material respects with the applicable
requirements of the Act and the rules thereunder; on the Effective
Date, the Registration Statement did not or will not contain any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the
statements therein not misleading; and, on the Effective Date, the
Prospectus, if not filed pursuant to Rule 424(b), did not or will not,
and on the date of any filing pursuant to Rule 424(b) and on the
Closing Date, the Prospectus (together with any supplement thereto)
will not, include any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading; provided, however, that the Transferor makes no
representations or warranties as to the information contained in or
omitted from the Registration Statement or the Prospectus (or any
supplements thereto) in reliance upon and in conformity with
information furnished in writing to the Transferor by or on behalf of
any Underwriter specifically for use in connection with the
preparation of the Registration Statement or the Prospectus (or any
supplements thereto). The documents incorporated or deemed to be
incorporated by reference in the Prospectus, at the time they were or
hereafter are filed with the Commission, complied and will comply in
all material respects with the requirements of the Exchange Act and
the rules and regulations of the Commission under the Exchange Act,
and, when read together with the other information in the Prospectus,
at the time the Registration Statement and any amendments thereto
become effective and at the Closing Date, will not contain an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not
misleading.
(iii) The Transferor is duly organized, validly existing and in
good standing as a national banking association under the laws of the
United States. The Transferor has all requisite power and authority to
own its properties and conduct its business as presently conducted and
is duly qualified as a foreign corporation to transact business and is
in good standing in each jurisdiction which requires such
qualification, except where failure to have such requisite power and
authority or to be so qualified would not have a material adverse
effect on the business or consolidated financial condition of the
Transferor.
(iv) The Transferor is not in violation of its charter or in
default in the performance or observance of any material obligation,
agreement, covenant or condition contained in any contract, indenture,
mortgage, loan agreement, note, lease or other instrument to which it
is a party or by which it may be bound, or to which any of the
property or assets of the Transferor is subject, except where any such
violation or default would not have a material adverse effect on the
transactions contemplated by this Agreement.
(v) The execution, delivery and performance by the Transferor of
each of this Agreement, the Pooling and Servicing Agreement, the
Supplement, the Loan Agreement, and the Depository Agreement, the
issuance of the Certificates and the consummation of the transactions
contemplated hereby and thereby have been duly and validly authorized
by all necessary action or proceeding and will not conflict with or
constitute a breach of, or default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or
assets of the Transferor pursuant to, any contract, indenture,
mortgage, loan agreement, note, lease or other instrument to which the
Transferor is a party or by which it may be bound, or to which any of
the property or assets of the Transferor is subject, nor will such
action result in any violation of the provisions of the charter or
by-laws of the Transferor or any applicable law, administrative
regulation or administrative or court decree, except where any such
conflict, breach, default, encumbrance or violation would not have a
material adverse effect on the transactions contemplated by this
Agreement.
(vi) This Agreement has been and the Pooling and Servicing
Agreement, the Supplement and the Loan Agreement when executed and
delivered as contemplated hereby and thereby will have been, duly
executed and delivered by the Transferor; and this Agreement
constitutes, and the Pooling and Servicing Agreement, the Supplement
and the Loan Agreement when executed and delivered as contemplated
herein will constitute, legal, valid and binding instruments
enforceable against the Transferor in accordance with their respective
terms, subject as to enforceability (A) to applicable bankruptcy,
reorganization, insolvency, moratorium or other similar laws affecting
creditors' rights generally and the rights and remedies of creditors
of thrifts, savings institutions or national banking associations, (B)
to general principles of equity (regardless of whether enforcement is
sought in a proceeding in equity or at law) and (C) with respect to
rights of indemnity under this Agreement or the Loan Agreement, to
limitations of public policy under applicable securities laws.
(vii) The Transferor has authorized the conveyance of the
Receivables to the Trust; and the Transferor has directed the Trust to
issue and sell the Certificates.
(viii) The Transferor will provide to the Representatives
complete and correct copies of publicly available portions of the
Consolidated Reports of Condition and Income of the Transferor for the
years ended December 31, 199[_] and 199[_] as submitted to the
Comptroller of the Currency. Except as set forth or contemplated in
the Registration Statement and the Prospectus, there has been no
material adverse change in the condition (financial or otherwise) of
the Transferor since the date of the last such publicly available
portion of Consolidated Reports of Condition and Income.
(ix) Any taxes, fees and other governmental charges in connection
with the execution, delivery and performance of this Agreement, the
Pooling and Servicing Agreement, the Supplement, the Loan Agreement
and the Certificates shall have been paid or will be paid by the
Transferor at or prior to the Closing Date.
(x) The Certificates have been duly and validly authorized, and,
when validly executed, authenticated, issued and delivered in
accordance with the Pooling and Servicing Agreement and the Supplement
and as provided herein will conform in all material respects to the
description thereof contained in the Prospectus and will be validly
issued and outstanding and entitled to the benefits of the Pooling and
Servicing Agreement and the Supplement.
(xi) There are no legal or governmental proceedings pending, or
to the knowledge of the Transferor threatened, to which the Transferor
is a party or of which any of its property is the subject, other than
proceedings which are not reasonably expected, individually or in the
aggregate, to have a material adverse effect on the shareholder's
equity or consolidated financial position of such person and its
subsidiaries taken as a whole, or which would have a material adverse
effect upon the consummation of this Agreement.
(xii) Arthur Andersen LLP is an independent public accountant
with respect to the Transferor.
(xiii) No consent, approval, authorization, order, registration,
filing, qualification, license or permit of or with any court or
governmental agency or body of the United States is required for the
issue and sale of the Certificates, or the consummation by the
Transferor of the other transactions contemplated by this Agreement,
the Pooling and Servicing Agreement, the Supplement, the Loan
Agreement, or the Depository Agreement, except for (A) the
registration under the Act of the Certificates, (B) such consents,
approvals, authorizations, orders, registrations, qualifications,
licenses or permits as have been obtained or as may be required under
State securities or Blue Sky laws, or the laws of any foreign
jurisdiction, in connection with the purchase of the Certificates and
the subsequent distribution of the Certificates by the Underwriters or
(C) where the failure to obtain such consents, approvals,
authorizations, orders, registrations, filings, qualifications,
licenses or permits would not have a material adverse effect on the
business or consolidated financial condition of the Transferor and its
subsidiaries taken as a whole or the Transferor or the transactions
contemplated by such agreements.
(xiv) The Transferor will not conduct its operations while any of
the Certificates are outstanding in a manner that would require the
Transferor or the Trust to be registered as an "investment company"
under the Investment Company Act of 1940, as amended (the "1940 Act")
as in effect on the date hereof.
(b) Any certificate signed by an officer on behalf of the
Transferor and delivered to the Underwriters or counsel for the
Underwriters in connection with an offering of the Certificates shall
be deemed a representation and warranty as to the matters covered
thereby to each person to whom the representations and warranties in
this Section 1 are made.
Section 2. Purchase and Sale.
-----------------
(a) Subject to the terms and conditions and in reliance upon the
covenants, representations and warranties herein set forth, the
Transferor agrees to sell to each of the Underwriters, and each of the
Underwriters agrees to purchase from the Transferor, the Principal
Amount of Class A Certificates set forth opposite such Underwriter's
name in Schedule I pursuant to the terms of this Agreement at a
purchase price equal to [______]% of the aggregate Principal Amount
represented by the Class A Certificates.
(b) Subject to the terms and conditions and in reliance upon the
covenants, representations and warranties herein set forth, the
Transferor agrees to sell to each of the Underwriters, and each of the
Underwriters agrees to purchase from the Transferor, the aggregate
Principal Amount of Class B Certificates set forth opposite such
Underwriter's name in Schedule I pursuant to the terms of this
Agreement at a purchase price equal to [______]% of the aggregate
Principal Amount represented by the Class B Certificates.
Section 3. Delivery and Payment.
--------------------
(a) Delivery of and payment for the Certificates to be purchased
by the Underwriter in accordance with this Agreement shall be made at
the offices of [_________________________] which date, time or place
may be postponed or changed by agreement between the Representatives
and the Transferor (such date and time of delivery and payment for the
Certificates being herein referred to as the "Closing Date"). Delivery
of one or more global certificates representing the Certificates shall
be made to the account of the Underwriters against payment by the
several Underwriters of the purchase price therefor, to or upon the
order of the Transferor by one or more wire transfers in immediately
available funds. The global certificates to be so delivered shall be
registered in the name of Cede & Co., as nominee for The Depository
Trust Company ("DTC"). The interests of beneficial owners of the
Certificates will be represented by book entries on the records of DTC
and participating members thereof. Definitive Certificates
representing the Certificates will be available only under limited
circumstances as described in the Pooling and Servicing Agreement.
The Transferor agrees to have copies of the global certificates
or the Definitive Certificates available for inspection, checking and
packaging by the Representatives in [________, ____________], not
later than 1:00 p.m., New York City time, on the business day prior to
the Closing Date.
Section 4. Offering by the Underwriters.
----------------------------
(a) It is understood that the Underwriters propose to offer the
Certificates for sale to the public as set forth in the Prospectus.
(b) Each Underwriter severally represents and agrees that (i) it
has not offered or sold and, prior to the expiry of six months from
the Closing Date, 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 purpose of their
businesses or otherwise in circumstances which have not resulted and
will not result in an offer to the public in the United Kingdom within
the meaning of the Public Offers of Securities Regulations 1996; (ii)
it has complied and will comply with all applicable provisions of the
Financial Services Act 1986 with respect to anything done by it in
relation to the Certificates in, from or otherwise involving the
United Kingdom; and (iii) it has only issued or passed on, and will
only issue or pass on, in the United Kingdom any document received by
it in connection with the issue of the Certificates, to a person who
is of a kind described in Article 11(3) of the Financial Services Act
1986 (Investment Advertisements) (Exemptions) Order 1996 or to a
person to whom such document may otherwise lawfully be issued,
distributed or passed on.
(c) Each Underwriter, severally, represents and warrants to the
Transferor that it has not and will not use any information that
constitutes "Computational Materials", as defined in the Commission's
No-Action Letter, dated May 20, 1994, addressed to Kidder, Peabody
Acceptance Corporation I, Kidder, Peabody & Co. Incorporated and
Kidder Structured Asset Corporation (as made generally applicable to
registrants, issuers and underwriters by the Commission's response to
the request of the Public Securities Association dated May 27, 1994),
with respect to the offering of the Certificates without the prior
written consent of the Transferor to such use.
(d) Each Underwriter, severally, represents and warrants to the
Transferor that it has not and will not use any information that
constitutes "ABS Term Sheets", as defined in the commission's
No-Action Letter, dated February 17, 1995, addressed to the Public
Securities Association, with respect to the offering of the
Certificates without the prior written consent of the Transferor to
such use.
(e) Each Underwriter, severally, represents that, without the
prior written consent of the Transferor, it will not, at any time that
such Underwriter is acting as an "underwriter" (as defined in Section
2(11) of the Act) with respect to the initial offering of the
Certificates, transfer, deposit or otherwise convey any Certificates
into a trust or other type of special purpose vehicle that issues
securities or other instruments backed in whole or in part by, or that
represents interest in, such Certificates.
Section 5. Agreements. The Transferor covenants and agrees with
the several Underwriters that:
(a) The Transferor will use its best efforts to cause the
Registration Statement, and any amendment thereto, if not effective at
the Execution Time, to become effective. If the Registration Statement
has become or becomes effective pursuant to Rule 430A, or filing of
the Prospectus is otherwise required under Rule 424(b), the Transferor
will file the Prospectus, properly completed, pursuant to Rule 424(b)
within the time period prescribed and will provide evidence
satisfactory to the Representatives of such timely filing. The
Transferor will promptly advise the Representatives (i) when the
Registration Statement shall have become effective, (ii) when any
amendment thereof shall have become effective, (iii) of any request by
the Commission for any amendment or supplement of the Registration
Statement or the Prospectus or for any additional information, (iv) of
the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the institution or
threatening of any proceeding for that purpose, and (v) of the receipt
by the Transferor of any notification with respect to the suspension
of the qualification of the Certificates for sale in any jurisdiction
or the initiation or threatening of any proceeding for such purpose.
The Transferor will not file any amendment of the Registration
Statement or supplement to the Prospectus to which the Representatives
reasonably object. The Transferor will use its best efforts to prevent
the issuance of any such stop order and, if issued, to obtain as soon
as possible the withdrawal thereof.
(b) If, at any time when a Prospectus relating to the
Certificates is required to be delivered under the Act, any event
occurs as a result of which the Prospectus as then supplemented would
include any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein in the light of
the circumstances under which they were made not misleading, or if it
shall be necessary to supplement such Prospectus to comply with the
Act or the rules thereunder, the Transferor shall be required to
notify the Representatives and upon the Representatives' request to
prepare and furnish without charge to each Underwriter as many copies
as such Underwriter may from time to time reasonably request of an
amended Prospectus or a supplement to the Prospectus which shall
correct such statement or omission or effect such compliance.
(c) As soon as practicable, the Transferor will make generally
available to Certificateholders and to the Representatives an earnings
statement or statements of the Trust which will satisfy the provisions
of Section 11(a) of the Act and Rule 158 under the Act.
(d) The Transferor will furnish to the Representatives and
counsel for the Underwriters, without charge, signed copies of the
Registration Statement (including exhibits thereto) and, so long as
delivery of a prospectus by an Underwriter or dealer may be required
by the Act, as many copies of each Preliminary Prospectus relating to
the Certificates and the Prospectus and any supplement thereto as the
Underwriters may reasonably request.
(e) The Transferor agrees to pay all expenses incidental to the
performance of its obligations under this Agreement, including without
limitation (i) expenses of preparing, printing and reproducing the
Registration Statement, the Prospectus, this Agreement, the Pooling
and Servicing Agreement, the Supplement, the Loan Agreement, the
Depository Agreement and the Certificates, (ii) any fees charged by
any rating agency for the rating of the Certificates, (iii) any
expenses (including reasonable fees and disbursements of counsel not
to exceed $[________]) incurred by the Underwriters in connection with
qualification of the Certificates for sale under the laws of such
jurisdictions as the Representatives designate, (iv) the fees and
expenses of (A) Mayer, Brown & Platt as special counsel for the
Transferor, (B) Arthur Andersen LLP and (C) [___________________]
counsel to the Collateral Interest Holder, (v) the fees and expenses
of the Trustee and any agent of the Trustee and the fees and
disbursements of counsel for the Trustee in connection with the
Pooling and Servicing Agreement and the Certificates, and (vi) fees of
DTC in connection with the book-entry registration of the Certificates
(it being understood that, except as provided in this paragraph (e)
and in Sections 7 and 8 hereof, each of the Underwriters will pay its
own expenses, including the expense of preparing, printing and
reproducing this Agreement, the fees and expenses of counsel for the
Underwriters, any transfer taxes on resale of any of the Certificates
by it and advertising expenses connected with any offers that the
Underwriters may make).
(f) The Transferor will take all reasonable actions requested by
the Underwriters to arrange for the qualification of the Certificates
for sale under the laws of such jurisdictions within the United States
or as necessary to qualify for the Euroclear System or Cedel Bank,
societe anonyme and as the Representatives may designate prior to the
Execution Time, will maintain such qualifications in effect so long as
required for the distribution of the Certificates and will arrange for
the determination of the legality of the Certificates for purchase by
institutional investors.
(g) For so long as the Certificates are outstanding, the
Transferor (i) shall deliver to the Representatives by first-class
mail and as soon as practicable a copy of all reports and notices
delivered to the Trustee or the Certificateholders under the Pooling
and Servicing Agreement or the Supplement or to the Collateral
Interest Holder under the Loan Agreement, and (ii) as promptly as
available but in no event later than each Record Date, shall give
notice by facsimile, to the Representatives of the Class A Pool Factor
and Class B Pool Factor for such Record Date.
(h) For so long as the Certificates are outstanding, the
Transferor will furnish to the Representatives (i) as soon as
practicable after the end of each fiscal year, all documents required
to be distributed to Certificateholders and (ii) as soon as
practicable after filing, any other information concerning the
Transferor filed with any government or regulatory authority which is
otherwise publicly available, as the Representatives may reasonably
request.
(i) To the extent, if any, that any rating provided with respect
to the Certificates set forth in subsections 6(j) and (k) hereof is
conditional upon the furnishing of documents reasonably available to
the Transferor, the Transferor shall furnish such documents.
(j) The Transferor, during the period when the Prospectus is
required to be delivered under the Act or the Exchange Act, will file
all documents required to be filed with the Commission pursuant to
Section 13, 14 or 15 of the Exchange Act within the time periods
required by the Act and the rules thereunder.
Section 6. Conditions of Closing; Termination of Rights Under
Section 2. The obligations of the Underwriters to purchase and pay for the
Certificates on the Closing Date shall be subject to the accuracy of the
representations and warranties of the Transferor contained herein as of the
Execution Time and as of the Closing Date, to the accuracy of the
statements of the Transferor made in any certificates delivered pursuant to
the provisions hereof, to the performance by the Transferor of their
obligations hereunder and to the following additional conditions:
(a) If the Registration Statement has not become effective prior
to the Execution Time, unless the Representatives agree in writing to
a later time, the Registration Statement shall have become effective
not later than 12:00 Noon New York City time on the business day
following the day on which the public offering price was determined;
if filing of the Prospectus, or any supplement thereto, is required
pursuant to Rule 424(b), the Prospectus shall have been filed in the
manner and within the time period required by Rule 424(b); and no stop
order suspending the effectiveness of the Registration Statement shall
have been issued and no proceedings for that purpose shall have been
instituted or threatened.
(b) The Transferor shall have delivered a certificate, dated the
Closing Date, signed by its President and Chief Executive Officer, its
Secretary or its Chief ALCO Officer to the effect that the signers of
such certificate, on behalf of the Transferor, has carefully examined
this Agreement, the Pooling and Servicing Agreement, the Supplement,
the Loan Agreement, the Prospectus (and any supplements thereto) and
the Registration Statement, stating that:
(i) the representations and warranties of the Transferor in
this Agreement are true and correct at and as of the date of such
certificate as if made on and as of such date (except to the extent
they expressly relate to an earlier date);
(ii) the Transferor has complied, in all material respects,
with all the agreements and satisfied all the conditions on its part to
be performed or satisfied at or prior to the date of such certificate;
(iii) nothing has come to the attention of the Transferor that
would lead it to believe that the Registration Statement contains any
untrue statement of a material fact or omits to state any material
fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading; and
(iv) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that
purpose have been instituted or, to the knowledge of the signor,
threatened.
(c) Correro, Fishman & Casteix, L.L.P., the Transferor, shall
have delivered a favorable opinion with respect to clauses (i), (ii),
(v), (vi) and (viii) of this paragraph (c), and Mayer, Brown & Platt,
special counsel to the Transferor, shall have delivered a favorable
opinion with respect to clauses (iii), (iv), (vii) and (ix) through
(xv) of this paragraph (c) (except that, portions of the opinions
provided for in clauses (xiii) through (xv) concerning the UCC or tax
laws of the State of Louisiana shall be provided for by Jones, Walker,
Waechter, Poitevent, Carrere & Denegre, L.L.P.) each opinion shall be
dated the Closing Date and satisfactory in form and substance to the
Representatives and counsel for the Underwriters, to the effect that:
(i) the Transferor has been duly chartered as a national
banking association and is validly existing and in good standing under
the laws of the United States, is duly qualified to do business and is
in good standing under the laws of each jurisdiction which requires
such qualification wherein it owns or leases material properties or
conducts material business, and has full power and authority to own
its properties, and to enter into and perform its obligations under
the Underwriting Agreement, the Loan Agreement, the Depository
Agreement, the Pooling and Servicing Agreement and the Supplement and
to consummate the transactions contemplated hereby and thereby, except
where failure to have such power and authority or to be so qualified
will not have a material adverse effect on the business or
consolidated financial condition of the Transferor and its
subsidiaries taken as a whole;
(ii) the Underwriting Agreement, the Pooling and Servicing
Agreement, the Supplement, the Loan Agreement and the Depository
Agreement have been duly authorized, executed and delivered by the
Transferor;
(iii) each such agreement when executed by the Trustee
and the Collateral Interest Holder, when required, constitutes
the legal, valid and binding agreement of the Transferor enforceable
in accordance with its terms subject, as to enforceability (A) to
applicable bankruptcy, reorganization, insolvency, moratorium or other
similar laws affecting creditors' rights generally and the rights and
remedies of creditors of thrifts, savings institutions or national
banking associations, (B) to general principles of equity (regardless
of whether enforcement is sought in a proceedings in equity or at law)
and (C) with respect to rights of indemnity under the Underwriting
Agreement or the Loan Agreement, to limitations of public policy under
applicable securities laws;
(iv) the Certificates have been duly created and,
when executed and authenticated in accordance with the terms of
the Pooling and Servicing Agreement and the Supplement and delivered
to and paid for by the Underwriters pursuant to this Agreement, will
be validly issued and outstanding, enforceable in accordance with
their terms subject, as to enforceability (A) to applicable
bankruptcy, reorganization, insolvency, moratorium or other similar
laws affecting creditors' rights generally and the rights and remedies
of creditors of thrifts, savings institutions or national banking
associations and (B) to general principles of equity (regardless of
whether enforcement is sought in a proceeding in equity or at law);
(v) neither the execution nor the delivery of the Underwriting
Agreement, the Loan Agreement, the Depository Agreement, the Pooling
and Servicing Agreement or the Supplement nor the issuance or delivery
of the Certificates, nor the consummation of any of the transactions
contemplated herein or therein, nor the fulfillment of the terms of
the Certificates, the Underwriting Agreement, the Loan Agreement, the
Depository Agreement, the Pooling and Servicing Agreement or the
Supplement will conflict with or violate any term or provision of the
charter or by-laws of the Transferor, or result in a breach or
violation of, or default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or
assets of the Transferor pursuant to, any material statute currently
applicable to the Transferor or any order or regulation known to such
counsel to be currently applicable to the Transferor or any court,
regulatory body, administrative agency or governmental body having
jurisdiction over the Transferor, or the terms of any indenture or
other agreement or instrument known to such counsel to which the
Transferor is a party or by which it or any of its properties are
bound, except where any such conflict, breach, violation, default or
encumbrance would not have a material adverse effect on the
transactions contemplated by this Agreement;
(vi) to the best knowledge of such counsel, there is no
pending or threatened action, suit or proceeding before any court or
governmental agency, authority or body or any arbitrator with respect
to the Underwriting Agreement, the Trust, the Certificates, the Loan
Agreement, the Depository Agreement, the Pooling and Servicing
Agreement or the Supplement or any of the transactions contemplated
herein or therein or with respect to the Transferor which, in the case
of any such action, suit or proceeding with respect to the Transferor
would have a material adverse effect on the Certificateholders or the
Trust or upon the ability of the Transferor to perform its obligations
under any of such agreements, and there is no material contract,
franchise or document relating to the Trust or property conveyed to
the Trust which is not disclosed in the Registration Statement or
Prospectus; and the statements included in the Registration Statement,
Preliminary Prospectus and Prospectus describing statutes (other than
those relating to tax and ERISA matters), legal proceedings, contracts
and other documents fairly summarize the matters therein described;
(vii) the Registration Statement has become effective under the
Act; any required filing of the Prospectus or any supplement thereto
pursuant to Rule 424 has been made in the manner and within the time
period required by Rule 424; to the best knowledge of such counsel, no
stop order suspending the effectiveness of the Registration Statement
has been issued, no proceedings for that purpose have been instituted
or threatened; the Registration Statement and the Prospectus (and any
supplements thereto) (other than financial and statistical information
contained therein as to which such counsel need express no opinion)
comply as to form in all material respects with the applicable
requirements of the Act and the rules thereunder;
(viii) no consent, approval, authorization, order, registration,
filing, qualification, license or permit of or with any court, federal
or state governmental agency or regulatory body is required for the
Transferor to consummate the transactions contemplated in the
Underwriting Agreement, the Loan Agreement, the Depository Agreement,
the Pooling and Servicing Agreement or the Supplement, except (A) such
consents, approvals, authorizations, orders, registrations, filings,
qualifications, licenses or permits as have been made or obtained or
as may be required under the State securities or blue sky laws of any
jurisdiction in connection with the purchase of the Certificates by
the Underwriters and the subsequent distribution of the Certificates
by the Underwriters or (B) where the failure to have such consents,
approvals, authorizations, orders, registrations, filings,
qualifications, licenses or permits would not have a material adverse
effect on the Trust's interests in the Receivables or the transactions
contemplated by such agreements;
(ix) the Certificates, the Underwriting Agreement, the Loan
Agreement, the Pooling and Servicing Agreement and the Supplement
conform in all material respects to the descriptions thereof contained
in the Registration Statement and the Prospectus;
(x) neither the Pooling and Servicing Agreement nor the
Supplement will be required to be qualified under the Trust Indenture
Act of 1939;
(xi) the statements in the Registration Statement under the
heading "Certain Legal Aspects of the Receivables" to the extent that
they constitute statements of matters of law or legal conclusions with
respect thereto, have been prepared or reviewed by such counsel or
attorneys under the control of such counsel and are correct in all
material respects;
(xii) the Trust is not required to be registered as an
"investment company" under the 1940 Act;
(xiii) the assignment of the Receivables, all documents and
instruments relating thereto and all proceeds thereof to the
Transferor pursuant to the Pooling and Servicing Agreement, either (A)
vests in the Trustee all right, title and interest of the Transferor
in and to the Receivables, free and clear of any liens, security
interests or encumbrances that have been perfected or are known to
such counsel except as specifically permitted pursuant to the Pooling
and Servicing Agreement and the Supplement or (B) in the event that a
court were to conclude that such assignment was not a sale pursuant to
the Pooling and Servicing Agreement and the Supplement, as the case
may be, the transactions provided for by the Pooling and Servicing
Agreement and the Supplement, as the case may be, would constitute a
grant of a valid security interest and, together with the filing of
the financing statements in the State of Louisiana, create a first
priority perfected security interest within the meaning of Article 9
of the Uniform Commercial Code in the Receivables and all proceeds
thereof (in rendering such opinion, counsel may take such exceptions
as are appropriate and reasonably acceptable under the circumstances);
(xiv) No other filings or other actions, with respect to the
Trustee's interest in the Receivables, are necessary to perfect the
interest of the Trustee in the Receivables, and proceeds thereof,
against third parties, except that appropriate continuation statements
must be filed in accordance with the applicable state's requirements,
which is presently at least every five years; and
(xv) the statements in the Registration Statement and Prospectus
under the heading "Tax Matters" accurately describe the material
Federal, state and local income tax consequences to holders of the
Certificates and the statements under the heading "ERISA
Considerations", to the extent that they constitute statements of
matters of law or legal conclusions with respect thereto, have been
prepared or reviewed by such counsel and accurately describe the
material consequences to holders of the Certificates under ERISA.
In rendering such opinion, counsel may rely (A) as to matters
involving the application of the law of any jurisdiction other than the
State of New York and the United States Federal laws, to the extent deemed
proper and stated in such opinion, upon the opinion of other counsel of
good standing believed by such counsel to be reliable and acceptable to you
and your counsel, and (B) as to matters of fact, to the extent deemed
proper and as stated therein, on certificates of responsible officers of
the Trust, the Transferor and public officials. References to the
Prospectus in this paragraph (c) include any supplements thereto.
The opinion of Mayer, Brown & Platt shall also contain a statement
(which may be subject to customary qualifications) to the effect that such
firm has no reason to believe that at the Effective Date the Registration
Statement contained any untrue statement of a material fact or omitted to
state any material fact required to be stated therein or necessary to make
the statements therein not misleading or that the Prospectus (and any
supplements thereto) includes any untrue statement of a material fact or
omits to state a material fact necessary to make the statements therein in
light of the circumstances under which they were made, not misleading (in
each case, other than financial and statistical information contained
therein as to which such counsel need express no view).
(d) Orrick, Herrington & Sutcliffe LLP, counsel for the
Underwriters, shall have delivered a favorable opinion dated the
Closing Date with respect to the validity of the Certificates, the
Underwriting Agreement, the Pooling and Servicing Agreement, the
Supplement, the Registration Statement, the Prospectus and such other
related matters as the Representatives may reasonably require and the
Transferor shall have furnished to such counsel such documents as they
reasonably request for the purpose of enabling them to pass on such
matters. In giving their opinion, Orrick, Herrington & Sutcliffe LLP
may rely (i) as to matters of Louisiana law upon the opinions of
counsel delivered pursuant to subsection (c) above, (ii) as to matters
involving the application of laws of any jurisdiction other than the
State of New York and the United States Federal laws, to the extent
deemed proper and specified in such opinion, upon the opinion of other
counsel of good standing believed to be reliable, and (iii) as to
matters of fact, to the extent deemed proper and as stated therein on
certificates of responsible officers of the Trust, the Transferor and
public officials.
(e) The Loan Agreement shall have been duly authorized, executed
and delivered by the Collateral Interest Holder; all fees then due and
payable to the Collateral Interest Holder shall have been paid in full
at or prior to the Closing Date, as the case may be; and the Loan
Agreement shall conform in all material respects to the respective
descriptions thereof in the Registration Statement and the Prospectus.
(f) Counsel to the Collateral Interest Holder shall have
delivered a favorable opinion, dated the Closing Date, and
satisfactory in form and substance to the Representatives, counsel for
the Underwriters, the Transferor and their counsel.
(g) At the Execution Time and at the Closing Date, Arthur
Andersen LLP shall have furnished to the Representatives a letter or
letters, dated respectively as of the date of this Agreement and the
date of the Closing Date, in form and substance satisfactory to the
Representatives and counsel for the Underwriters, confirming that (i)
they are independent public accountants within the meaning of the Act,
the Exchange Act and the rules and regulations promulgated thereunder
and stating in effect that they have performed certain specified
procedures as a result of which they determined that certain
information of an accounting, financial or statistical nature (which
is limited to accounting, financial or statistical information derived
from the general accounting records of the Transferor) set forth in
the Registration Statement and the Prospectus (and any supplements
thereto), agrees with the accounting records of the Transferor,
excluding any questions of legal interpretation, and (ii) they have
performed certain specified procedures with respect to the computer
programs used to select the Eligible Accounts and to generate
information with respect to the Accounts set forth in the Registration
Statement and the Prospectus (and any supplements thereto).
(h) The Representatives shall receive evidence satisfactory to it
that, on or before the Closing Date, UCC-1 financing statements are
being filed in the offices of the Secretary of State of the State of
Louisiana reflecting the interest of the Trust in the Receivables and
the proceeds thereof.
(i) Counsel to the Trustee shall have delivered a favorable
opinion, dated the Closing Date, and satisfactory in form and
substance to the Representatives and counsel for the Underwriters, the
Transferor and their counsel, to the effect that:
(i) the Trustee has been duly incorporated and is validly
existing and in good standing as a national banking association under
the laws of the United States, is duly qualified to do business in all
jurisdictions where the nature of its operations as contemplated by
the Pooling and Servicing Agreement, the Supplement and the Loan
Agreement requires such qualifications, and has the power and
authority (corporate and other) to issue, and to take all action
required of it under, the Pooling and Servicing Agreement, the
Supplement and the Loan Agreement;
(ii) the execution, delivery and performance by the Trustee
of the Pooling and Servicing Agreement, the Supplement and the Loan
Agreement and the issuance of the Certificates by the Trustee have
been duly authorized by all necessary corporate action on the part of
the Trustee, and under present laws do not and will not contravene any
law or governmental regulation or order presently binding on the
Trustee or the charter or the by-laws of the Trustee or contravene any
provision of or constitute a default under any indenture, contract or
other instrument to which the Trustee is a party or by which the
Trustee is bound;
(iii) the execution, delivery and performance by the Trustee
of the Pooling and Servicing Agreement, the Supplement and the Loan
Agreement and the issuance of the Certificates by the Trustee do not
require the consent or approval of, the giving of notice to, the
registration with, or the taking of any other action in respect of any
Federal, state or other governmental agency or authority which has not
previously been effected;
(iv) each of the Certificates has been duly authenticated and
delivered by the Trustee and each of the Certificates and the Pooling
and Servicing Agreement, the Supplement and the Loan Agreement
constitute legal, valid and binding agreements of the Trustee,
enforceable against the Trustee in accordance with its terms (subject
to applicable bankruptcy, insolvency and similar laws affecting
creditors' rights generally); and
(v) no approval, authorization or other action by, or filing
with, any governmental authority of the United States of America or
the State of Illinois having jurisdiction over the banking or trust
powers of the Trustee is required in connection with its execution and
delivery of the Pooling and Servicing Agreement, the Supplement and
the Loan Agreement or the performance by the Trustee of the terms of
the Pooling and Servicing Agreement, the Supplement and the Loan
Agreement.
(j) The Class A Certificates shall be given the highest
investment grade rating by both Moody's Investors Service, Inc.
("Moody's"), and Standard & Poor's Corporation ("S&P") and neither
Moody's nor S&P shall have placed the Class A Certificates under
review with possible negative implications.
(k) The Class B Certificates shall be rated at least "A" or its
equivalent by both Moody's and S&P and neither Moody's nor S&P shall
have placed the Class B Certificates under review with possible
negative implications.
(l) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, there shall
not have been any change, or any development involving a prospective
change, in or affecting the business or properties of the Trust or the
Transferor, the effect of which, in any case referred to above, is, in
the judgment of the Representatives, so material and adverse as to
make it impractical or inadvisable to proceed with the offering or the
delivery of the Certificates as contemplated by the Registration
Statement and the Prospectus.
(m) All proceedings in connection with the transactions
contemplated by this Agreement and all documents incident hereto shall
be reasonably satisfactory in form and substance to the
Representatives and counsel for the Underwriters, and the
Representatives and counsel for the Underwriters shall have received
such information, certificates and documents as the Representatives or
counsel for the Underwriters may reasonably request.
If any of the conditions specified in this Section 6 shall not
have been fulfilled in all material respects when and as provided in this
Agreement, or if any of the opinions and certificates mentioned above or
elsewhere in this Agreement shall not be in all material respects
reasonably satisfactory in form and substance to the Representatives and
counsel for the Underwriters, this Agreement and all obligations of the
Representatives and the Underwriters hereunder may be canceled at, or at
any time prior to, the Closing Date by the Representatives. Notice of such
cancellation shall be given to the Trustee and the Transferor in writing or
by telephone or facsimile confirmed in writing.
Section 7. Reimbursement of Expenses. If the sale of the Certi-
ficates provided for herein is not consummated because any condition to the
Representatives' obligations set forth in Section 6 hereof is not
satisfied, because of any termination pursuant to Section 10 hereof or
because of any refusal, inability or failure on the part of the Trustee or
the Transferor to perform any agreement herein or comply with any provision
hereof other than by reason of a default by the Representatives or the
Underwriters, the Transferor will reimburse the Underwriters severally upon
demand for all reasonable out-of-pocket expenses (including reasonable fees
and disbursements of counsel) that shall have been incurred by it in
connection with the proposed purchase and sale of the Certificates.
Section 8. Indemnification and Contribution.
--------------------------------
(a) Indemnification of Underwriters. The Transferor
agrees to indemnify and hold harmless each Underwriter and each person, if
any, who controls any Underwriter within the meaning of Section 15 of the
Act or Section 20 of the Exchange Act as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement
or alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereof), including the Rule
430A Information or the omission or alleged omission therefrom of a
material fact required to be stated therein or necessary to make the
statements therein not misleading or arising out of any untrue
statement or alleged untrue statement of a material fact contained in
the Preliminary Prospectus or the Prospectus (or any supplement
thereto), or the omission or alleged omission therefrom of a material
fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or
threatened, or of any claim whatsoever based upon such untrue
statement or omission, or any such alleged untrue statement or
omission; provided that (subject to Section 8(d) below) (A) any such
settlement is effected with the written consent of the Transferor and
(B) it is understood that any such amounts paid in settlement are
covered only by this clause (ii) and not by clause (i) or clause
(iii); and
(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by the
Representatives), reasonably incurred in investigating, preparing or
defending against any litigation, or any investigation or proceeding
by any governmental body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission, to the extent that any such
expense is not paid under (i) or (ii) above;
provided, however, that (x) this indemnity agreement shall not apply to any
loss, liability, claim, damage or expense to the extent arising out of any
untrue statement or omission or alleged untrue statement or omission made
in reliance upon and in conformity with written information furnished to
the Transferor by any Underwriter through the Representatives expressly for
use in the Registration Statement (or any amendment thereto), including the
Rule 430A Information or any preliminary prospectus or the Prospectus (or
any amendment or supplement thereto) and (y) such indemnity with respect to
any untrue statement or omission in the Preliminary Prospectus or the
Prospectus shall not inure to the benefit of any Underwriter (or any person
controlling such Underwriter) from whom the person asserting any such loss,
claim, damage or liability purchased the Certificates which are the subject
thereof if such person was not sent a copy of the Prospectus (or the
Prospectus as supplemented) at or prior to the confirmation of the sale of
such Certificates to such person in any case where such delivery is
required by the Act and the untrue statement or omission of a material fact
contained in any Preliminary Prospectus was corrected in the Prospectus (or
the Prospectus as supplemented).
(b) Indemnification of Transferor, Directors and Officers. Each
Underwriter severally agrees to indemnify and hold harmless the Transferor,
its directors, each of its officers who signed the Registration Statement,
and each person, if any, who controls the Transferor within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act against any and all
loss, liability, claim, damage and expense described in the indemnity
contained in subsection (a) of this Section, as incurred, but only with
respect to untrue statements or omissions, or alleged untrue statements or
omissions, made in the Registration Statement (or any amendment thereto),
including the Rule 430A Information or any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto) in reliance upon and in
conformity with written information furnished to the Transferor by such
Underwriter through the Representatives expressly for use in the
Registration Statement (or any amendment thereto) or such preliminary
prospectus or the Prospectus (or any amendment or supplement thereto).
(c) Actions Against Parties; Notification. Each indemnified party
shall give notice as promptly as reasonably practicable to each
indemnifying party of any action commenced against it in respect of which
indemnity may be sought hereunder, but failure to so notify an indemnifying
party shall not relieve such indemnifying party from any liability
hereunder to the extent it is not materially prejudiced as a result thereof
and in any event shall not relieve it from any liability which it may have
otherwise than on account of this indemnity agreement. In any proceeding
hereunder any indemnified party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense
of such indemnified party unless (i) the indemnifying party and the
indemnified party shall have mutually agreed to the contrary, (ii) the
indemnifying party has failed within a reasonable time to retain counsel
reasonably satisfactory to the indemnified party or (iii) the named parties
in any such proceeding (including any impleaded parties) include both the
indemnifying party and the indemnified party and the indemnified party
shall have reasonably concluded that there may be legal defenses available
to it and/or other indemnified parties which are different from or
additional to those available to the indemnifying party. It is understood
that the indemnifying party shall not, in connection with any proceeding or
related proceeding in the same jurisdiction, be liable for the fees and
expenses of more than one separate firm (in addition to any local counsel)
for all indemnified parties, and that all such fees and expenses shall be
reimbursed as they are incurred. Any such separate firm for the parties
indemnified pursuant to Section 8(a) above shall be designated in writing
by the Representatives, and any such separate firm for the parties
indemnified pursuant to Section 8(b) above shall be designated in writing
by the Transferor. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or
threatened proceeding in respect of which any indemnified party is or could
have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release
of such indemnified party from all liability on claims that are the subject
matter of such proceeding.
(d) Settlement without Consent if Failure to Reimburse. If any time an
indemnified party shall have requested an indemnifying party to reimburse
the indemnified party for fees and expenses of counsel, such indemnifying
party agrees that it shall be liable for any settlement of the nature
contemplated by Section 8(a)(ii) effected without its written consent if
(i) such settlement is entered into more than 45 days after receipt by such
indemnifying party of the aforesaid request, (ii) such indemnifying party
shall have received notice of the terms of such settlement at least 30 days
prior to such settlement being entered into and (iii) such indemnifying
party shall not have reimbursed such indemnified party in accordance with
such request prior to the date of such settlement. Notwithstanding the
immediately preceding sentence, if at any time an indemnified party shall
have requested an indemnifying party to reimburse the indemnified party for
fees and expenses of counsel, an indemnifying party shall not be liable for
any settlement of the nature contemplated by Section 8(a)(ii) effected
without its consent if such indemnifying party (i) reimburses such
indemnified party in accordance with such request to the extent it
considers such request to be reasonable and (ii) provides written notice to
the indemnified party substantiating the unpaid balance as unreasonable, in
each case prior to the date of such settlement.
(e) Contribution. If the indemnification provided for in this Section
8 is unavailable or insufficient to hold harmless an indemnified party
under subsection (a) or (b) above, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a
result of the losses, claims, damages or liabilities referred to in
subsection (a) or (b) above (i) in such proportion as is appropriate to
reflect the relative benefits received by the Transferor on the one hand
and the Underwriters on the other from the offering of the Certificates or
(ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only
the relative benefits referred to in clause (i) above but also the relative
fault of the Transferor on the one hand and the Underwriters on the other
in connection with the statements or omissions which resulted in such
losses, claims, damages or liabilities as well as any other relevant
equitable considerations. The relative benefits received by the Transferor
on the one hand and the Underwriters on the other shall be deemed to be in
the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Transferor bears to the total
underwriting discounts and commissions received by the Underwriters. The
relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to
information supplied by the Transferor or the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to
correct or prevent such untrue statement or omission. The Transferor and
the Underwriters agree that it would not be just and equitable if
contribution pursuant to this subsection (d) were determined by pro rata
allocation or by any other method of allocation which does not take account
of the equitable considerations referred to above in this subsection (d).
The amount paid by an indemnified party as a result of the losses, claims,
damages or liabilities referred to in the first sentence of this subsection
(d) shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or
defending any action or claim which is the subject of this subsection (d).
Notwithstanding the provisions of this subsection (d), no Underwriter shall
be required to contribute any amount in excess of the amount by which the
total price at which the Certificates underwritten by it and distributed to
the public were offered to the public exceeds the amount of any damages
which such Underwriter has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
Section 9. Default by an Underwriter. If any one or more Underwriters
shall fail to purchase and pay for any of the Certificates agreed to be
purchased by such Underwriter or Underwriters hereunder on the Closing Date
and such failure to purchase shall constitute a default in the performance
of its or their obligations under this Agreement, the remaining
Underwriters shall be obligated severally to take up and pay for (in the
respective proportions which the amount of Certificates set forth opposite
their names in Schedule I with respect to the Closing Date hereto bears to
the aggregate amount of Certificates set forth opposite the names of all
the remaining Underwriters) the Certificates which the defaulting
Underwriter or Underwriters agreed but failed to purchase; provided,
however, that in the event that the aggregate amount of Certificates which
the defaulting Underwriter or Underwriters agreed but failed to purchase
shall exceed 10% of the aggregate amount of Certificates set forth in
Schedule I hereto, the remaining Underwriters shall have the right to
purchase all, but shall not be under any obligation to purchase any, of the
Certificates, and if such nondefaulting Underwriters do not purchase all
the Certificates, the obligations will terminate without liability of any
nondefaulting Underwriter, the Trust, or the Transferor. In the event of a
default by any Underwriter as set forth in this Section 9, the Closing Date
shall be postponed for such period, not exceeding seven days, as the
Underwriters shall determine in order that the required changes in the
Registration Statement and the Prospectus or in any other documents or
arrangements may be effected. Nothing contained in this Agreement shall
relieve any defaulting Underwriter of its liability, if any, to the
Transferor and any nondefaulting Underwriter for damages occasioned by its
default hereunder.
Section 10. Termination.
-----------
(a) Termination; General. The Representatives may terminate this
Agreement, by notice to the Transferor, at any time after the execution of
this Agreement and at or prior to Closing Time (i) if there has been any
material adverse change in or affecting particularly the business or
properties of the Transferor which materially impairs the investment
quality of the Certificates or makes it impractical or inadvisable to
market the Certificates on the terms and in the manner contemplated in the
Prospectus, or (ii) if there has occurred any material adverse change in
the financial markets of the United States, any outbreak of hostilities or
escalation thereof or other calamity or crisis or change or development
involving a prospective change in national or international political,
financial or economic conditions, in each case the effect of which is such
as to make it, in the judgment of the Representatives, impracticable to
market the Securities or to enforce contracts for the sale of the
Securities, or (iii) if trading in any securities of the Transferor has
been suspended or materially limited by the Commission, or if trading
generally on the American Stock Exchange or the New York Stock Exchange or
in the NASDAQ Stock Market has been suspended or materially limited, or
minimum or maximum prices for trading have been fixed, or maximum ranges
for prices have been required, by any of said exchanges or by such system
or by order of the Commission, the National Association of Securities
Dealers, Inc. or any other governmental authority, or (iv) if a banking
moratorium has been declared by either Federal or New York authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party to any
other party except as provided in Section 7 hereof, and provided further
that Sections 1, 10 and 11 shall survive such termination and remain in
full force and effect.
Section 11. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements
of the Trust, the Transferor or the officers of each of them and of the
Underwriters set forth in or made pursuant to this Agreement will remain in
full force and effect, regardless of any investigation made by or on behalf
of the Underwriters or the Trust, the Transferor or any of the officers,
directors or controlling persons referred to in Section 8 hereof, and will
survive delivery of and payment for the Certificates. The provisions of
Sections 7 and 8 hereof shall survive the termination or cancellation of
this Agreement.
Section 12. Notices. All communications hereunder shall be in writing
and effective only on receipt, and, if sent to the Underwriters, will be
mailed, delivered or telegraphed and confirmed to the Representatives at
____________________________________________________; if sent to the
Transferor, will be mailed, delivered or telegraphed and confirmed to them
at 201 Saint Charles Avenue, 28th Floor, New Orleans, LA 70170, attention
of Chief Administrative Officer of First Commerce Corporation.
SECTION 13. APPLICABLE LAW. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.
Section 14. Successors. This Agreement will inure to the benefit of
and be binding upon the parties hereto and their respective successors and
the officers, directors and controlling persons referred to in Section 8
hereof, and no other person will have any right or obligation hereunder.
Section 15. Counterparts. This Agreement may be executed by one or
more parties to this Agreement on any number of separate counterparts, and
all of said counterparts taken together shall be deemed to constitute one
and the same instrument.
Section 16. Miscellaneous. This agreement supersedes all prior
agreements and understandings relating to the subject matter hereof.
Neither this Agreement nor any term hereof may be changed, waived,
discharged or terminated orally, but only by an instrument in writing
signed by the party against whom enforcement of the change, waiver,
discharge or termination is sought. The headings in this Agreement are for
purposes of reference only and shall not limit or otherwise affect the
meaning hereof.
If you are in agreement with the foregoing, please sign and return one
to the Transferor whereupon this letter and your acceptance shall become a
binding agreement among the Transferor and the several Underwriters.
Very truly yours,
FIRST NATIONAL BANK OF COMMERCE
By:______________________________________
Name:
Title:
The foregoing Agreement
is hereby confirmed and
accepted as of the date hereof.
[REPRESENTATIVE]
[------------------------]
By: [REPRESENTATIVE]
By:______________________
Name:
Title:
For themselves and the other
Several Underwriters named in
Schedule I to the foregoing Agreement.
Schedule I
CLASS A CERTIFICATES
--------------------
Principal
Amount
---------
[------------------------------] $[------------]
[------------------------------] [------------]
-----------
$[------------]
CLASS B CERTIFICATES
--------------------
Principal
Amount
---------
[-----------------------------] $[-------------]
[-----------------------------] [-------------]
-----------
$[-------------]
MBP DRAFT 5/9/97
=====================================================================
FIRST NATIONAL BANK OF COMMERCE
Transferor and Servicer
and
___________________
Trustee
on behalf of the Holders
of the First NBC Credit Card Master Trust
-------------------
POOLING AND SERVICING AGREEMENT
Dated as of ________________ __, 1997
======================================================================
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS . . . . . . . . . . . . . . . .1
SECTION 1.1 Definitions. . . . . . . . . . . . .1
SECTION 1.2 Other Interpretive Provisions. . . 21
ARTICLE II CONVEYANCE OF RECEIVABLES. . . . . . . . 22
SECTION 2.1 Conveyance of Receivables. . . . . 22
SECTION 2.2 Acceptance by Trustee. . . . . . . 23
SECTION 2.3 Representations and Warranties of
Transferor. . . . . . . . . . . . . . . 24
SECTION 2.4 Representations and Warranties of
Transferor Relating to this
Agreement and the Receivables . 26
SECTION 2.5 Covenants of Transferor. . . . . . 32
SECTION 2.6 Addition of Accounts . . . . . . . 34
SECTION 2.7 Removal of Accounts. . . . . . . . 38
SECTION 2.8 Discount Option. . . . . . . . . . 39
SECTION 2.9 Additional Transferors. . . . . . . 40
ARTICLE III ADMINISTRATION AND SERVICING. . . . . . 40
SECTION 3.1 Acceptance of Appointment and Other
Matters Relating to Servicer . . 40
SECTION 3.2 Servicing Compensation . . . . . . 43
SECTION 3.3 Representations, Warranties and
Covenants of Servicer. . . . . . 43
SECTION 3.4 Reports and Records for Trustee. . 44
SECTION 3.5 Annual Servicer's Certificate. . . 45
SECTION 3.6 Annual Independent Accountants'
Servicing Report. . . . . . . . .45
SECTION 3.7 Tax Treatment. . . . . . . . . . . 46
SECTION 3.8 Notices to Transferor. . . . . . . 47
SECTION 3.9 Reports to the Commission. . . . . 47
ARTICLE IV RIGHTS OF HOLDERS AND ALLOCATION AND
APPLICATION OF COLLECTIONS . . . . . .47
SECTION 4.1 Rights of Holders. . . . . . . . . 47
SECTION 4.2 Establishment of Accounts. . . . . 47
SECTION 4.3 Collections and Allocations. . . . 50
SECTION 4.4 Shared Principal Collections. . . . 53
SECTION 4.5 Excess Finance Charge Collections . 54
SECTION 4.6 Allocation of Trust Assets to
Series or Groups. . . . . . . . . 54
ARTICLE V [ARTICLE V IS RESERVED AND SHALL BE SPECIFIED
IN THE SUPPLEMENT WITH RESPECT TO ANY
SERIES.]. . . . . . . . . . . . . . . . .55
ARTICLE VI THE CERTIFICATES . . . . . . . . . . . . 55
SECTION 6.1 The Certificates . . . . . . . . . 55
SECTION 6.2 Authentication of Certificates . . 56
SECTION 6.3 Registration of Transfer and Exchange
of Certificates . . . . . . . .56
SECTION 6.4 Mutilated, Destroyed, Lost or Stolen
Certificates. . . . . . . . . . . . . . .60
SECTION 6.5 Persons Deemed Owners. . . . . . . 60
SECTION 6.6 Appointment of Paying Agent. . . . 61
SECTION 6.7 Access to List of Holders' Names and
Addresses . . . . . . . . . . . . . . . .62
SECTION 6.8 Authenticating Agent . . . . . . . 62
SECTION 6.9 New Issuances. . . . . . . . . . . 63
SECTION 6.10 Book-Entry Certificates . . . . . 66
SECTION 6.11 Notices to Clearing Agency. . . . 67
SECTION 6.12 Definitive Certificates . . . . . 67
SECTION 6.13 Global Certificate; Euro-Certificate
Exchange Date. . . . . . . . .68
SECTION 6.14 Meetings of Holders . . . . . . . 68
ARTICLE VII OTHER MATTERS RELATING TO TRANSFEROR. . 68
SECTION 7.1 Liability of Transferor. . . . . . 68
SECTION 7.2 Merger or Consolidation of, or
Assumption of the Obligations of,
Transferor. . . . . . . . . . . .68
SECTION 7.3 Limitation on Liability. . . . . . 69
ARTICLE VIII OTHER MATTERS RELATING TO SERVICER . . 70
SECTION 8.1 Liability of Servicer. . . . . . . 70
SECTION 8.2 Merger or Consolidation of, or
Assumption of the Obligations
of, Servicer. . . . . . . . . . .70
SECTION 8.3 Limitation on Liability of Servicer
and Others. . . . . . . . . .. . 71
SECTION 8.4 Servicer Indemnification of the
Trust and Trustee . . . . . .. . 71
SECTION 8.5 Servicer Not to Resign . . . . . . 72
SECTION 8.6 Access to Certain Documentation
and Information Regarding the
Receivables . . . . . . . . . . .72
SECTION 8.7 Delegation of Duties . . . . . . . 73
SECTION 8.8 Examination of Records . . . . . . 73
ARTICLE IX TRUST PAY OUT EVENTS . . . . . . . . . . 73
SECTION 9.1 Trust Pay Out Events . . . . . . . 73
SECTION 9.2 Additional Rights Upon the
Occurrence of Certain Events . . 73
ARTICLE X SERVICER DEFAULTS . . . . . . . . . . . . 74
SECTION 10.1 Servicer Defaults . . . . . . . . 74
SECTION 10.2 Trustee to Act; Appointment of
Successor . . . . . . . . . . . 76
SECTION 10.3 Notification to Holders . . . . . 78
SECTION 10.4 Waiver of Past Defaults . . . . . 78
ARTICLE XI TRUSTEE. . . . . . . . . . . . . . . . . 78
SECTION 11.1 Duties of Trustee . . . . . . . . 78
SECTION 11.2 Certain Matters Affecting
Trustee . . . . . . . . . . . . 80
SECTION 11.3 Trustee Not Liable for Recitals in
Certificates . . . . . . . . . .81
SECTION 11.4 Trustee May Not Own Certificates. 82
SECTION 11.5 Servicer to Pay Trustee's Fees
and Expenses . . . . . . . . . .82
SECTION 11.6 Eligibility Requirements for
Trustee . . . . . . . . . . . . 82
SECTION 11.7 Resignation or Removal of Trustee.83
SECTION 11.8 Successor Trustee . . . . . . . . 83
SECTION 11.9 Merger or Consolidation of
Trustee . . . . . . . . . . . . 84
SECTION 11.10 Appointment of Co-Trustee or
Separate Trustee . . . . .. . .84
SECTION 11.11 Tax Returns. . . . . . . . . . . 85
SECTION 11.12 Trustee May Enforce Claims Without
Possession of Certificate. . . 86
SECTION 11.13 Suits for Enforcement. . . . . . 86
SECTION 11.14 Rights of Holders to Direct
Trustee . . . . . . . . . . . .86
SECTION 11.15 Representations and Warranties
of Trustee . . . . . . . . . . 87
SECTION 11.16 Maintenance of Office or Agency. 87
ARTICLE XII TERMINATION . . . . . . . . . . . . . . 87
SECTION 12.1 Termination of Trust. . . . . . . 87
SECTION 12.2 Optional Purchase . . . . . . . . 88
SECTION 12.3 Final Payment with Respect to
any Series . . . . . . . . . . .89
SECTION 12.4 Termination Rights of Holder of
Transferor Certificate. . . . . 90
SECTION 12.5 Defeasance. . . . . . . . . . . . 90
ARTICLE XIII MISCELLANEOUS PROVISIONS . . . . . . . 92
SECTION 13.1 Amendment . . . . . . . . . . . . 92
SECTION 13.2 Protection of Right, Title and
Interest to Trust.. . . . . . . 93
SECTION 13.3 Limitation on Rights of Holders . 95
SECTION 13.4 GOVERNING LAW . . . . . . . . . . 96
SECTION 13.5 Notices . . . . . . . . . . . . . 96
SECTION 13.6 Severability of Provisions. . . . 96
SECTION 13.7 Assignment. . . . . . . . . . . . 97
SECTION 13.8 Certificates Non-Assessable and
Fully Paid. . . . . . . . . . . 97
SECTION 13.9 Further Assurances. . . . . . . . 97
SECTION 13.10 No Waiver; Cumulative Remedies . 97
SECTION 13.11 Counterparts . . . . . . . . . . 97
SECTION 13.12 Third-Party Beneficiaries. . . . 97
SECTION 13.13 Actions by Holders . . . . . . . 97
SECTION 13.14 Rule 144A Information. . . . . . 98
SECTION 13.15 Merger and Integration . . . . . 98
SECTION 13.16 Headings . . . . . . . . . . . . 98
SECTION 9.2 Additional Rights Upon the
Occurrence of Certain Events. . .I-1
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
Exhibit I Form of Amended Section 9.2
POOLING AND SERVICING AGREEMENT, dated as of ____________
__, 1997, by and between FIRST NATIONAL BANK OF COMMERCE, a
national banking association, as Transferor and Servicer, and
_________________________, a [[_____________] banking
corporation], as Trustee.
In consideration of the mutual agreements herein
contained, each party agrees as follows for the benefit of the
other parties and the Holders:
ARTICLE I DEFINITIONS
SECTION 1.1 Definitions. Whenever used in this
Agreement, the following words and phrases have the meanings
identified below:
"Account" means each VISA(R), MasterCard(R)*<F7> and Private
Label credit card account serviced at the New Orleans area
servicing centers of Transferor, or at such other servicing
center of Transferor as shall be designated by Transferor or
Servicer pursuant to subsection 13.2(c), established pursuant
to an Account Agreement and which is identified in an Account
Schedule delivered to Trustee by Transferor pursuant to
Section 2.1 or 2.6. The term "Account" also (i) includes each
Transferred Account, (ii) includes an Additional Account only
from and after its Addition Date and (iii) includes a Removed
Account only prior to its Removal Date.
- --------------------------------
<F7> * VISA(R) and MasterCard(R) are registered servicemarks of
VISA U.S.A., Inc. and of MasterCard International
Inc., respectively. </F7>
"Account Agreement" means the agreement between any
Obligor and Transferor governing the operation of the
Obligor's Account, as each such agreement may be amended,
modified or otherwise changed from time to time in accordance
with Section 2.5(c).
"Account Guidelines" means Transferor's policies and
procedures relating to the operation of its credit card
business and the Accounts, including policies and procedures
for determining the creditworthiness of Obligors, the
extension of credit to Obligors and the maintenance of credit
card accounts and any other Accounts and collection of credit
card receivables and any other Receivables, as such policies
and procedures may be amended from time to time in accordance
with Section 2.5(c).
"Account Schedule" means a computer file or microfiche
list containing an accurate list of Accounts, identified by
account number and setting forth the Receivable balance as of
(a) the Cut-Off Date (for the Account Schedule delivered on
the Initial Closing Date), (b) the related Addition Cut-Off
Date (for any Account Schedule delivered in connection with
any designation of Additional Accounts) or (c) the end of the
prior Monthly Period (for any Account Schedule relating to
Transferred Accounts).
"Addition Cut-Off Date" means the date as of which any
Additional Accounts or Participations are designated for
inclusion in the Trust, as specified in the related
Assignment.
"Addition Date" means (a) as to Additional Accounts, the
date on which the Receivables in such Additional Accounts are
conveyed to the Trust pursuant to subsection 2.6(a) or (b),
and (b) as to Participations, the date from and after which
such Participations are to be included as Trust Assets
pursuant to subsection 2.6(a) or (b).
"Additional Account" is defined in subsection 2.6(a).
"Adjusted Aggregate Investor Interest" means as of any
date of determination, the sum of the "Adjusted Investor
Interest" (as defined in the related Supplement) of each
Series then issued and outstanding for which an Adjusted
Investor Interest is specified in the related Supplement plus
the sum of the Investor Interests of all other Series then
issued and outstanding.
"Adjusted Investor Interest" with respect to any Series,
has the meaning specified in the related Supplement, or if not
so specified, the Investor Interest of such Series.
"Affiliate" of any Person means any other Person
controlling, controlled by or under common control with such
Person.
"Aggregate Finance Charge Receivables" means, as of any
date of determination, the aggregate amount of the Finance
Charge Receivables, measured for each Account as of the end of
the applicable Billing Cycle ending in the Monthly Period
immediately preceding such date of determination.
"Aggregate Investor Interest" means, as of any date of
determination, the sum of the Investor Interests of all Series
then issued and outstanding.
"Aggregate Investor Percentage" means, as to Principal
Receivables, Finance Charge Receivables and Receivables in
Defaulted Accounts, as the case may be, as of any date of
determination, the sum (not to exceed 100%) of the relevant
Investor Percentages for all Series then issued and
outstanding.
"Aggregate Principal Receivables" means the aggregate
amount of the Principal Receivables, measured (a) for any date
of determination prior to the Conversion Date, for each
Account as of the end of the applicable Billing Cycle ending
in the Monthly Period immediately preceding such date of
determination and (b) for any other date of determination, as
of the end of the day on such date of determination.
"Aggregate Receivables" means, as of any date of
determination, the aggregate amount of the Receivables,
measured for each Account as of the end of the applicable
Billing Cycle ending in the Monthly Period immediately
preceding such date of determination.
"Agreement" means this Pooling and Servicing Agreement,
as amended, supplemented or otherwise modified from time to
time, including by any Supplement.
"Amortization Period" means, as to any Series or Class,
any period specified in the related Supplement during which
principal collections are set aside to repay the principal
investment in that Series or Class (excluding repayments of a
Variable Interest during its revolving period).
"Annual Account Fee" means amounts referred to as "annual
account fees," "annual fees," "annual membership fees" or
"inactivity charges" (or similar terms) in the Account
Agreement applicable to any Account.
"Applicants" is defined in Section 6.7.
"Assignment" is defined in subsection 2.6(d)(ii).
"Authorized Newspaper" means a newspaper of general
circulation in the Borough of Manhattan, The City of New York
printed in the English language and customarily published on
each Business Day, whether or not published on Saturdays,
Sundays and holidays.
"Automatic Additional Account" means Additional Accounts
that are treated as Automatic Additional Accounts pursuant to
subsection 2.6(c).
"Bank Portfolio" means all VISA, MasterCard, Private Label
and other revolving credit accounts owned by Transferor.
"Bearer Certificates" is defined in Section 6.1.
"Bearer Rules" means 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.
"Benefit Plan" is defined in subsection 6.3(e).
"BIF" means the Bank Insurance Fund administered by the
FDIC.
"Billed Finance Charge Receivables" is defined in
subsection 4.3(d).
"Billed Principal Receivables" is defined in subsection
4.3(d).
"Billing Cycle" means, with respect to any Account, the
monthly billing cycle for such Account, determined in
accordance with the Account Guidelines.
"Book-Entry Certificates" means 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.
"Business Day" means any day other than a Saturday, a
Sunday or a day on which banking institutions in New York, New
York, or New Orleans, Louisiana (or, for any Series, any
additional city specified in the related Supplement) are
authorized or obligated by law or executive order to be
closed.
"Cash Advance Fees" means amounts referred to as "cash
advance fees," "cash access / cash advance fees," "cash access
fees," "transaction fees for cash advances," or "cash advance
charges" (or similar terms) in the Account Agreement
applicable to any Account.
"CEDEL" means Cedel Bank, societe anonyme.
"Certificate" means an Investor Certificate, the
Transferor Certificate or any Supplemental Certificate.
"Certificate Owner" means the beneficial owner of a
Book-Entry Certificate, as reflected on the books of the
Clearing Agency or of a Person maintaining an account with the
Clearing Agency (directly or as an indirect participant).
"Certificate Register" is defined in Section 6.3.
"Class" means any class of Investor Certificates of any
Series.
"Clearing Agency" means an organization registered as a
"clearing agency" pursuant to Section 17A of the Securities
Exchange Act of 1934.
"Clearing Agency Participant" means 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" means, for any Series, the date of issuance
of such Series of Certificates, as specified in the related
Supplement.
"Collected Finance Charge Receivables" is defined in
subsection 4.3(d).
"Collected Principal Receivables" is defined in subsection
4.3(d).
"Collection Account" is defined in subsection 4.2(a).
"Collection Recomputation Date" is defined in subsection
4.3(d).
"Collections" means all payments (including Insurance
Proceeds and Recoveries) received by Servicer in respect of
the Receivables, in the form of cash, checks, wire transfers,
ATM transfers or any other form of payment in accordance with
the Account Agreement in effect from time to time on any
Receivables.
"Conversion Date" means the date specified in a notice
from Servicer to Trustee and each Rating Agency as the date
upon which Servicer elects to begin administering this
Agreement on the basis of daily computations of the aggregate
amounts of Principal Receivables and Finance Charge
Receivables, rather than by reference to balances at the end
of each Billing Cycle which ends during each Monthly Period.
Any such notice shall be delivered (or not delivered) at
Servicer's sole option.
"Corporate Trust Office" means the principal office of
Trustee at which at any particular time its corporate trust
business is administered, which office at the date of this
Agreement is located at [_______________________________].
"Coupons" is defined in Section 6.1.
"Credit Adjustment" is defined in subsection 4.3(c).
"Credit Enhancement" means, as to any Series, the
subordination, 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 Holders of
such Series (or Holders of a Class within such Series) as
designated in the applicable Supplement.
"Credit Enhancement Provider" means, as to any Series, any
Person designated as such in the related Supplement.
"Cut-Off Date" means _______________ __, 1997.
"Date of Processing" means, as to any transaction, the
date on which such transaction is first recorded on Servicer's
computer master file of VISA, Mastercard and Private Label
accounts (without regard to the effective date of such
recordation).
"Default Amount" means, as to any Defaulted Account, the
amount of Principal Receivables (other than Ineligible
Receivables) in such Defaulted Account on the day it became a
Defaulted Account.
"Defaulted Account" means each Account as to which, in
accordance with the Account Guidelines or Servicer's customary
and usual servicing procedures for servicing credit card or
other receivables comparable to the Receivables, 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 Servicer's computer master file of VISA,
MasterCard and Private Label 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" is defined in Section 12.4.
"Defeased Series" is defined in Section 12.4.
"Definitive Certificates" is defined in Section 6.10.
"Depository" is defined in Section 6.10.
"Depository Agreement" means, as to each Series (subject
to the related Supplement), the agreement among Transferor,
Trustee and the applicable Clearing Agency or Foreign Clearing
Agency.
"Determination Date" means, unless otherwise specified in
the related Supplement, the third Business Day prior to each
Transfer Date.
"Discount Option Receivables" is defined in Section 2.8.
"Discount Option Receivables Amount" means, on any date
of determination on and after the date on which Transferor's
exercise of its discount option pursuant to Section 2.8 takes
effect, the excess of (a) the aggregate Discount Option
Receivables created on or prior to such date (which amount,
prior to the date on which Transferor's exercise of its
discount option takes effect and with respect to Receivables
generated prior to such date, shall be zero), over (b) any
Discount Option Receivables Collections received on or prior
to such date.
"Discount Option Receivables Collections" means on any
Date of Processing on and after the date on which Transferor's
exercise of its discount option pursuant to Section 2.8 takes
effect, the product of (a) a fraction the numerator of which
is the Discount Option Receivables Amount and the denominator
of which is the sum of the Principal Receivables plus the
Discount Option Receivables Amount, in each case (for both
numerator and denominator) at the end of the prior Monthly
Period, and (b) Collections of Principal Receivables, prior to
any reduction for Discount Option Receivables, received on
such Date of Processing.
"Discount Percentage" is defined in Section 2.8.
"Distribution Account" is defined in subsection 4.2(c).
"Distribution Date" is defined, for each Series, in the
related Supplement.
"Dollars", "$" or "U.S. $" means United States dollars.
"Eligible Account" means, as of the Cut-Off Date (or, as
to Additional Accounts, as of the relevant Addition Date), a
VISA, Mastercard, Private Label or other revolving credit
account in the Bank Portfolio that:
(a) is in existence and maintained with Transferor;
(b) is payable in Dollars;
(c) has as its most recent billing address an
address located in the United States or its territories
or possessions or a Military Address; provided that an
Account having as its most recent billing address an
address which is not located in the United States or its
territories or possessions or at a Military Address shall
not be deemed to be ineligible pursuant to this clause
(c) at any time of determination to the extent that the
aggregate amount of all such Accounts shall be less than
3% of the aggregate amount of all Accounts at such time;
(d) except as provided below, Transferor has not
classified on its electronic records as counterfeit,
fraudulent, stolen or lost; and
(e) Transferor has not charged off in its
customary and usual manner for charging off such
Accounts.
Notwithstanding the foregoing, Eligible Accounts may include
accounts which have been identified by the Obligor as having
been incurred as a result of fraudulent use of credit cards or
with respect to any credit cards which have been reported to
Transferor as lost or stolen, so long as (1) the balance of
all receivables included in such accounts is reflected as zero
on the books and records of Transferor and (2) charging
privileges with respect to all such accounts have been
canceled and are not reinstated.
"Eligible Receivable" means a Receivable:
(a) that has arisen under an Eligible Account;
(b) that was created in compliance, in all
material respects, with (and pursuant to an Account
Agreement that complies, in all material respects, with)
all Requirements of Law applicable to Transferor;
(c) as 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 Transferor in connection with the
creation of such Receivable or the execution, delivery
and performance by Transferor of the Account 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, Transferor or the
Trust had good and marketable title, free and clear of
all Liens arising under or through Transferor or any of
its Affiliates (other than Liens permitted by subsection
2.5(b));
(e) that 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 enforceability may be limited by general principles
of equity (whether considered in a suit at law or in
equity); and
(f) that constitutes an "account," a "general
intangible" or "chattel paper."
"ERISA" means the Employee Retirement Income Security Act
of 1974.
"Euroclear Operator" means Morgan Guaranty Trust Company
of New York, Brussels, Belgium office, as operator of the
Euroclear System.
"Excess Allocation Series" means any series that is
designated as an Excess Allocation Series in the related
Supplement.
"Excess Finance Charge Collections" means, with respect
to any Transfer Date, the aggregate amount for all outstanding
Excess Allocation Series that the related Supplements specify
are to be treated as "Excess Finance Charge Collections" for
such Transfer Date.
"Excess Funding Account" is defined in subsection 4.2(b).
"Extended Trust Termination Date" is defined in subsection
12.1(a).
"FDIC" means the Federal Deposit Insurance Corporation.
"Finance Charge Account" is defined in subsection 4.2(b).
"Finance Charge Receivables" means Receivables created in
respect of the Periodic Finance Charges, Cash Advance Fees,
Annual Account Fees, Late Fees, Overlimit Fees, NSF Fees,
closed account maintenance charges and similar fees and
charges, including charges for Special Fees to the extent such
Special Fees are categorized as Finance Charge Receivables,
and Discount Option Receivables. Except as otherwise
specified in any Supplement, Net Recoveries shall be treated
as Collections of Finance Charge Receivables. Collections of
Finance Charge Receivables with respect to any Monthly Period
shall also include (a) Discount Option Receivables Collections
(if any) with respect to such Monthly Period, (b) the amount
of Interchange (if any), Other Account Revenues (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 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), and (c) all
interest and other investment earnings (net of losses and
investment expenses) accrued on or prior to the related
Transfer Date in connection with the investment of funds on
deposit in the Collection Account, the Distribution Account,
the Excess Funding Account and the Finance Charge Account.
"Finance Charge Shortfalls" is defined, for any Series,
in the related Supplement.
"First NBC" means First National Bank of Commerce, a
national banking association.
"Fitch" means Fitch Investors Service, L.P.
"Foreign Clearing Agency" means CEDEL and the Euroclear
Operator.
"Global Certificate" is defined in Section 6.13.
"Governmental Authority" means 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" means, as to any Series, the group of Series in
which the related Supplement specifies that such Series shall
be included.
"Holder" means 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, and, as to any Series, such other Person deemed to be an
"Investor Holder" or "Holder" in any related Supplement except
as otherwise provided in such Supplement.
"Ineligible Receivable" is defined in subsection
2.4(d)(iii).
"Initial Closing Date" means ____________________ __,
1997.
"Initial Investor Interest" means, as to any Series, the
amount stated in the related Supplement.
"Insolvency Event" is defined in Section 9.2.
"Insurance Proceeds" means any amounts recovered by
Servicer pursuant to any credit insurance policies covering
any Obligor with respect to Receivables under such Obligor's
Account.
"Interchange" means interchange fees payable to
Transferor, in its capacity as credit card issuer, through
VISA U.S.A., Inc. and Mastercard International Inc.
"Internal Revenue Code" means the Internal Revenue Code
of 1986.
"Investment Company Act" means the Investment Company Act
of 1940.
"Investor Account" means each of the Finance Charge
Account, the Excess Funding Account and the Distribution
Account.
"Investor Certificate" means any one of the certificates
(including Bearer Certificates, Registered Certificates and
Global Certificates) executed by Transferor and authenticated
by Trustee substantially in the form (or forms in the case of
a Series with multiple Classes) attached to the related
Supplement and such other interest in the Trust deemed to be
an "Investor Certificate" in any related Supplement except as
otherwise provided in such Supplement.
"Investor Holder" means the holder of record of an
Investor Certificate.
"Investor Interest" is defined, as to any Series, in the
related Supplement.
"Investor Issuance" is defined in subsection 6.9(b).
"Investor Percentage" is defined, as to any Series, in the
related Supplement.
"Investor Servicing Fee" is defined in Section 3.2.
"Issuance" means either of the procedures described under
subsection 6.9(b).
"Issuance Date" is defined in subsection 6.9(b).
"Issuance Notice" is defined in subsection 6.9(b).
"Late Fees" means amounts referred to as "late fees," "late
charges" or "late payment fees" (or similar terms) in the
Account Agreement applicable to any Account.
"Lien" means 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 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 that any assignment pursuant to Section
7.2 shall not be deemed to constitute a Lien.
"Military Address" means any mailing address on any United
States armed forces military base of operations, including but
not limited to APO and FPO addresses.
"Minimum Aggregate Principal Receivables" means, unless
otherwise provided in a Supplement relating to a Paired Series
(with respect to the Paired Series), as of any date of
determination, 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 outstanding on such date.
"Minimum Transferor Interest" means the Minimum Transferor
Percentage of the Aggregate Principal Receivables.
"Minimum Transferor Percentage" means ___%; provided that
Transferor may increase or reduce the Minimum Transferor
Percentage upon (a) 30 days' prior notice to Trustee, each
Rating Agency and any Credit Enhancement Provider entitled to
receive such notice pursuant to the relevant Supplement, (b)
satisfaction of the Rating Agency Condition, and (c) delivery
to Trustee and each such Credit Enhancement Provider of an
Officer's Certificate stating that Transferor reasonably
believes that such increase or 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.
"Monthly Period" means, unless otherwise defined in any
Supplement, each period from and including the first day of a
calendar month to and including the last day of that calendar
month.
"Moody's" means Moody's Investors Service, Inc.
"Net Default Amount" means, for any Monthly Period, the
excess (if any) of (a) the amount of Receivables in Accounts
that became Defaulted Accounts during such Monthly Period over
(b) all Recoveries received during such Monthly Period.
"Net Recoveries" means, for any Monthly Period, the excess
(if any) of (a) all Recoveries received during such Monthly
Period over (b) the amount of Receivables in Accounts that
became Defaulted Accounts during such Monthly Period.
"Notice Date" is defined in subsection 2.6(d)(i).
"NSF Fees" means charges assessed against any Obligor
pursuant to the related Account Agreement on account of the
return of checks for non-sufficient funds.
"Obligor" means, as to any Account, the Person or Persons
obligated to make payments on that Account, including any
guarantor.
"Officer's Certificate" means a certificate signed by any
Vice President or more senior officer of Transferor or
Servicer and delivered to Trustee.
"Other Account Revenues" means amounts received by
Transferor (a) from any third party in consideration of the
inclusion of advertising inserts with monthly statements
relating to accounts in the Bank Portfolio, (b) from issuers
of credit insurance policies on account of experience rebates
or similar amounts related to obligors on accounts included in
the Bank Portfolio and (c) from any other Person on account of
revenues related to the Accounts, to the extent (in the case
of this clause (c)) that Transferor designates such amounts to
be treated as "Other Account Revenues" in an Officer's
Certificate.
"Opinion of Counsel" means 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
Trustee.
"Overlimit Fees" means amounts referred to as "overlimit
fees," "overlimit charges," or "exceeding the credit limit fees"
(or similar terms) in the Account Agreement applicable to any
Account.
"Paired Series" means each Series that has been paired
with another Series (one of which Series may be prefunded or
partially prefunded) such that a reduction of the Adjusted
Investor Interest of one Series results in an increase of the
Investor Interest of the other Series.
"Participations" is defined in subsection 2.6(a).
"Paying Agent" means any paying agent appointed pursuant
to Section 6.6 and shall initially be Trustee.
"Pay Out Event" means each Trust Pay Out Event and, as to
any Series, each other "Pay Out Event," if any, described in
the Supplement for such Series.
"Periodic Finance Charges" means amounts referred to as
"finance charges" (or similar terms) in the Account Agreement
applicable to any Account.
"Permitted Investments" means, 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 depository institution or trust company
incorporated under the laws of the United States of America or
any state thereof or domestic branches of foreign banks and
subject to supervision and examination by Federal or state
banking or depository institution authorities, provided 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 depository institution or trust
company shall have a credit rating from Moody's and Standard
& Poor's of P-1 and A-1+, respectively, (iii) commercial paper
having, at the time of the Trust's investment or contractual
commitment to invest therein, a rating from Moody's and
Standard & Poor's of P-1 and A-1+, respectively, and, if rated
by Fitch, F-1+ by Fitch, (iv) bankers' acceptances issued by
any depository institution or trust company described in
clause (a)(ii), (v) investments in money market funds rated
AAA-m or AAA-mg by Standard & Poor's and P-1 by Moody's and,
if rated by Fitch, AAA by Fitch, if such investment will not
require the Trust to register as an "investment company" under
the Investment Company Act, and (vi) repurchase obligations
with respect to (A) any security described in clause (a)(i) or
(B) any other security issued or guaranteed by an agency or
instrumentality of the United States of America, in either
case entered into with a depository institution or trust
company (acting as principal) described in clause (a)(ii); (b)
demand deposits in the name of the Trust or Trustee in any
depository institution or trust company described in clause
(a)(ii); and (c) any other investment if (i) the Rating Agency
Condition has been satisfied and (ii) purchase of such
investment will not require the Trust to be registered as an
investment company under the Investment Company Act.
"Person" means 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.
"Principal Receivable" means each Receivable other than
(without duplication) (a) Finance Charge Receivables and (b)
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 Transferor is unable to transfer as provided
in subsection 2.5(d)(i) shall not be included in calculating
the aggregate amount of Principal Receivables.
"Principal Sharing Series" means a Series designated
pursuant to the related Supplement as a Principal Sharing
Series which is entitled to receive Shared Principal
Collections.
"Principal Terms" is defined in subsection 6.9(c).
"Private Label" is the generic term used in this Agreement
to refer to revolving credit card accounts opened by
Transferor in connection with any of its military affinity
programs which are not MasterCard or VISA accounts.
"Qualified Institution" is defined in subsection 4.2(a).
"Rating Agency" means, as to each Series, the rating
agency or agencies, if any, specified in the related
Supplement.
"Rating Agency Condition" means, as to any event or
condition, receipt by Transferor from each Rating Agency that
such event or condition will not result in a downgrade or
withdrawal of its then current rating of any outstanding
Series.
"Reassignment" is defined in subsection 2.7(b)(ii).
"Reassignment Date" is defined in subsection 2.4(e).
"Receivable" means any amount owing by the Obligors under
the Account Agreements, including amounts owing for the
purchase of goods and services, cash advances, access checks,
Annual Account Fees, Cash Advance Fees, Periodic Finance
Charges, Late Fees, Overlimit Fees, NSF Fees and credit
insurance premiums and Special Fees, if any.
"Record Date" means, with respect to any Distribution
Date, the last Business Day of the preceding Monthly Period.
"Recoveries" means all amounts, including Insurance
Proceeds, received by Servicer with respect to Receivables in
Defaulted Accounts, less related expenses of outside
collection agencies.
"Registered Certificates" is defined in Section 6.1
"Removal Date" is defined in subsection 2.7(a).
"Removal Notice Date" is defined in subsection 2.7(a).
"Removed Accounts" is defined in subsection 2.7(a).
"Requirements of Law" for any Person means 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
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" means any officer within the
Corporate Trust Office (or any successor group of Trustee),
including any Vice President, any Assistant Secretary or any
other officer of Trustee customarily performing functions
similar to those performed by any person who at the time shall
be an above-designated officer and any particular officer to
whom any corporate trust matter is referred because of such
officer's knowledge of and familiarity with the particular
subject.
"Retention Condition" means:
(a) on any day on and after the Conversion Date,
either (i) the Transferor Interest is less than the
Minimum Transferor Interest or (ii) the sum of Aggregate
Principal Receivables and the principal amount on deposit
in the Excess Funding Account is less than the Minimum
Aggregate Principal Receivables (in each case determined
after giving effect to any transfer of Principal
Receivables to the Trust on such day); or
(b) on any day prior to the Conversion Date,
either (i)(A) the sum of the aggregate amount of
Receivables and the principal amount on deposit in the
Excess Funding Account at the end of the day immediately
prior to such date of determination, minus the Adjusted
Aggregate Investor Interest at the end of such preceding
day, minus the outstanding principal amount of all
Supplemental Certificates (and any purchased interest
sold pursuant to subsection 6.9(d)) at the end of such
preceding day is less than (B) __% [Minimum Transferor
Percentage minus __%] of the aggregate amount of
Receivables at the end of the day immediately prior to
such date of determination, or (ii)(A) the sum of (1) the
product of 0.___ times the aggregate amount of
Receivables plus (2) the principal amount on deposit in
the Excess Funding Account, in each case at the end of
the day immediately prior to such date of determination
is less than (B) the Minimum Aggregate Principal
Receivables (in the case of both clauses (i) and (ii)
determined after giving effect to any transfer of
Receivables to the Trust on such day).
"SAIF" means the Savings Association Insurance Fund
administered by the FDIC.
"Securities Act" means the Securities Act of 1933.
"Series" means any series of Investor Certificates issued
pursuant to a Supplement.
"Series Account" means any account established pursuant
to a Supplement for the benefit of the related Series.
"Series Principal Shortfall" is defined, as to any Series,
in the related Supplement.
"Series Servicing Fee Percentage" is defined, as to any
Series, in the related Supplement.
"Series Termination Date" is defined, as to any Series,
in the related Supplement.
"Servicer" means (a) initially First NBC and (b) after any
Person is appointed as Successor Servicer, such Person as
herein provided to service the Receivables.
"Servicer Default" is defined in Section 10.1.
"Servicer Letter of Credit" is defined in subsection
4.3(a).
"Servicing Fee" is defined in Section 3.2.
"Servicing Officer" means any officer of Servicer involved
in, or responsible for, the administration and servicing of
the Receivables whose name appears on a list of servicing
officers furnished to Trustee by Servicer, as such list may be
amended from time to time.
"Shared Principal Collections" means, with respect to any
Transfer Date, the aggregate amount for all outstanding
Principal Sharing Series that the related Supplements specify
are to be treated as "Shared Principal Collections" for such
Transfer Date.
"Special Fees" means 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, Transferor may designate in an Officer's Certificate
whether such Special Fees shall be treated as Principal
Receivables or Finance Charge Receivables.
"Standard & Poor's" means Standard & Poor's Ratings
Services, a division of The McGraw Hill Companies, Inc.
"Successor Servicer" is defined in subsection 10.2(a).
"Supplement" means, as to any Series or Supplemental
Certificate, a supplement to this Agreement executed in
conjunction with any issuance of that Series or Supplemental
Certificate.
"Supplemental Certificate" is defined in subsection
6.3(b).
"Tax Opinion" means, as 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 with respect to which an Opinion
of Counsel was delivered at the time of their issuance that
such Investor Certificates would be characterized as debt, (b)
such action will not cause the Trust to be classified, for
Federal income tax purposes, as 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 Holder.
"Termination Notice" is defined in Section 10.1.
"Transfer Agent and Registrar" is defined in Section 6.3
and shall initially be Trustee's Corporate Trust Office.
"Transfer Date" means, unless otherwise specified in the
related Supplement, with respect to any Series, the Business
Day immediately prior to each Distribution Date.
"Transferor" means First NBC.
"Transferor Certificate" means the certificate executed
by Transferor and authenticated by Trustee, substantially in
the form of Exhibit A. At any time there shall be only one
Transferor Certificate.
"Transferor Interest" means, on any date of determination,
the result (but not less than zero) of (a) the sum of the
aggregate amount of Principal Receivables and the principal
amount on deposit in the Excess Funding Account at the end of
the day immediately prior to such date of determination, minus
(b) the Adjusted Aggregate Investor Interest at the end of
such preceding day, minus (c) the outstanding principal amount
of any purchased interest sold pursuant to subsection 6.9(d)
at the end of such preceding day.
"Transferor Issuance" is defined in subsection 6.9(b).
"Transferor Percentage" means, 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" is defined in Section 3.2.
"Transferred Account" means (a) an Account with respect
to which a new credit account number has been issued by
Servicer or Transferor under circumstances resulting from a
lost or stolen credit card or from the transfer from one
affinity group to another affinity group and not requiring
standard application and credit evaluation procedures under
the Account Guidelines or (b) an Eligible Account resulting
from the conversion of an Account that was a standard account
to a premium account or from a premium account to a standard
account, and which in either case can be traced or identified
by accessing Transferor's computer files by reference to or by
way of an Account Schedule delivered to Trustee pursuant to
Section 2.1 or 2.6 or pursuant to this definition as an
account into which an Account has been transferred. A
Transferred Account shall not be treated as an Automatic
Additional Account for purposes of this Agreement or any
Supplement.
"Trust" means the trust created by this Agreement, which
shall be known as the First NBC Credit Card Master Trust, and
the corpus of which is the Trust Assets.
"Trust Assets" means the Receivables now existing or
hereafter created and arising in connection with the Accounts,
all monies due or to become due with respect to such
Receivables (including all Finance Charge Receivables and
Recoveries), all proceeds (as defined in Section 9-306 of the
UCC as in effect in the State of Louisiana) of such
Receivables and Insurance Proceeds relating to the
Receivables, and all proceeds (as defined in Section 9-306 of
the UCC as in effect in the State of Louisiana) thereof, 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 Excess Funding Account, the
Distribution Account and any Series Account and the rights to
any Credit Enhancement with respect to any Series.
"Trust Extension" is defined in subsection 12.1(a).
"Trust Pay Out Event" is defined in Section 9.1.
"Trust Termination Date" means the earliest to occur of
(a) unless a Trust Extension shall have occurred, the first
Business Day after the Distribution Date with respect to any
Series following the date on which funds shall have been
deposited in the Distribution Account or the applicable Series
Account for the payment of Investor Holders of each Series
then issued and outstanding sufficient to pay in full such
Certificates, (b) if a Trust Extension shall have occurred,
the Extended Trust Termination Date and (c) a day which is 21
years less one day after the death of the officers and the
last survivor of all the lineal descendants of every officer
of Trustee who are living on the date hereof; provided,
however, that if at any time any rights, privileges or options
under the Trust shall be or become valid under applicable law
for a period subsequent to the 21st anniversary of the death
of such last survivor or without limiting the generality of
the foregoing, if legislation shall become effective providing
for the validity or permitting the effective grant of such
rights, privileges and options for a period in gross,
exceeding the period for which such rights, privileges and
options are stated to extend and be valid pursuant to this
clause (c)), then such rights, privileges or options shall not
terminate as otherwise provided in this clause (c) but,
subject to the occurrence of the Trust Termination Date
pursuant to clause (a) or clause (b) above, shall extend to
and continue in effect, but only if such nontermination and
extension shall then be valid under applicable law, until one
day prior to such time as the same shall, under applicable
law, cease to be valid.
"Trustee" means ___________________, a [[_____________]
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" means the Uniform Commercial Code as in effect in
any specified jurisdiction.
"Undivided Interest" means the undivided interest in the
Trust evidenced by an Investor Certificate.
"Variable Interest" means either of (a) any Investor
Certificate that is designated as a variable funding
certificate in the related Supplement and (b) any purchased
interest sold as permitted by subsection 6.9(d).
"Zero Balance Account" means, as of any date of
determination, an Account with a Receivable balance of zero
and in which there has been no activity for the twelve
calendar months preceding such date of determination.
SECTION 1.2 Other Interpretive Provisions. With respect
to any Series, all terms used and not defined herein are used
as defined in the related Supplement. All terms defined in
this Agreement shall have the defined meanings when used in
any certificate or other document delivered pursuant hereto
unless otherwise defined therein. For purposes of this
Agreement and all such certificates and other documents,
unless the context otherwise requires: (a) accounting terms
not otherwise defined in this Agreement, and accounting terms
partly defined in this Agreement to the extent not defined,
shall have the respective meanings given to them under
generally accepted accounting principles; (b) terms defined in
Article 9 of the UCC as in effect in the State of Louisiana
and not otherwise defined in this Agreement are used as
defined in that Article; (c) any reference to each Rating
Agency shall only apply to any specific rating agency if such
rating agency is then rating any outstanding Series; (d)
references to any amount as on deposit or outstanding on any
particular date means such amount at the close of business on
such day; (e) the words "hereof," "herein" and "hereunder" and
words of similar import refer to this Agreement (or the
certificate or other document in which they are used) as a
whole and not to any particular provision of this Agreement
(or such certificate or document); (f) references to any
Section, Schedule or Exhibit are references to Sections,
Schedules and Exhibits in or to this Agreement (or the
certificate or other document in which the reference is made),
and references to any paragraph, subsection, clause or other
subdivision within any Section or definition refer to such
paragraph, subsection, clause or other subdivision of such
Section or definition; (g) the term "including" means
"including without limitation"; (h) references to any law or
regulation refer to that law or regulation as amended from
time to time and include any successor law or regulation; (i)
references to any Person include that Person's successors and
assigns; and (j) headings are for purposes of reference only
and shall not otherwise affect the meaning or interpretation
of any provision hereof. The agreements, representations and
warranties of First NBC in this Agreement, in its capacities
as Transferor and Servicer, shall be deemed to be its
agreements, representations and warranties only so long as it
remains a party to this Agreement in such capacity. The
monthly Servicer certificate shall be in substantially the
form of Exhibit C, with such changes as Servicer may determine
to be necessary or desirable; provided that no such change
shall serve to exclude information required by this Agreement
or any Supplement. Servicer shall, upon making such
determination, deliver to 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 Trustee, the related Exhibit, as so
changed, shall for all purposes of this Agreement constitute
such Exhibit. Trustee may conclusively rely upon such
Officer's Certificate in determining whether the related
Exhibit, as changed, conforms to the requirements of this
Agreement.
ARTICLE II CONVEYANCE OF RECEIVABLES
SECTION 2.1 Conveyance of Receivables. (a) Transferor
hereby transfers, assigns, sets-over and otherwise conveys to
Trustee, on behalf of the Trust, for the benefit of the
Holders, without recourse, all of its right, title and
interest in, to and under the Receivables now existing and
hereafter created and arising in connection with the Accounts
(other than Receivables in Additional Accounts), all monies
due or to become due with respect to such Receivables
(including all Finance Charge Receivables and Recoveries), any
collateral securing any such Receivables and Insurance
Proceeds relating to such Receivables, and all proceeds of all
of the foregoing.
(b) In connection with such transfer, assignment, set-
over and conveyance, Transferor agrees to record and file, at
its own expense, a financing statement (including any
continuation statements with respect to such financing
statement when applicable) with respect to the Receivables now
existing and hereafter created meeting the requirements of
applicable state law in such manner and in such jurisdictions
as are necessary to perfect the assignment of the Receivables
to the Trust, and to deliver a file-stamped copy of such
financing statement or continuation statement or other
evidence of such filing (which may, for purposes of this
Section 2.1, consist of telephone confirmation of such filing)
to Trustee on or prior to the date of issuance of the
Certificates (and in the case of any continuation statements
filed pursuant to this Section 2.1, as soon as practicable
after receipt thereof by Transferor). The foregoing transfer,
assignment, set-over and conveyance to the Trust shall be made
to Trustee, on behalf of the Trust, and each reference in this
Agreement to such transfer, assignment, set-over and
conveyance shall be construed accordingly.
(c) In connection with such transfer, Transferor agrees,
at its own expense, on or prior to the Initial Closing Date
(i) to indicate in its computer files that the Receivables
created in connection with the Accounts (other than any
Additional Accounts) have been transferred to Trustee, on
behalf of the Trust, pursuant to this Agreement for the
benefit of the Holders by identifying such Accounts as those
that may be accessed on Transferor's computer files through
use of the database code "T" and (ii) to deliver to Trustee an
Account Schedule relating to the initial Accounts, which is
hereby incorporated into and made a part of this Agreement.
Transferor further agrees, at its own expense, with respect to
Automatic Additional Accounts to indicate in its computer
files on or prior to the applicable Addition Date that
Receivables created in connection with each Automatic
Additional Account have been transferred to Trustee, on behalf
of the Trust, pursuant to this Agreement for the benefit of
the Holders by identifying such Accounts as those that may be
accessed on Transferor's computer files through use of the
database code "T". Transferor shall not alter the file
designations referenced in this subsection 2.1(c) with respect
to any Account during the term of this Agreement unless and
until such Account becomes a Removed Account or a Zero Balance
Account. Transferor shall hold the information to be provided
with respect to the Transferred Accounts, prior to delivery to
Trustee, in trust for the benefit of Trustee, on behalf of the
Trust.
(d) The parties intend that if, and to the extent that,
such transfer is not deemed to be a sale, Transferor shall be
deemed hereunder to have granted to Trustee, for the benefit
of the Investor Holders, a first priority perfected security
interest in all of Transferor's right, title and interest in,
to and under the Receivables now existing and hereafter
created and arising in connection with the Accounts (other
than Receivables in Additional Accounts), all monies due or to
become due with respect to such Receivables, any collateral
securing any such Receivables and all Insurance Proceeds
relating to such Receivables (including all Finance Charge
Receivables and Recoveries) and all proceeds of all of the
foregoing, that this Agreement shall constitute such a
security agreement under applicable law, and that the
Transferor Interest shall be deemed to represent Transferor's
equity in the collateral granted.
Pursuant to the request of Transferor, 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 Transferor pursuant to
Section 6.2.
SECTION 2.2 Acceptance by Trustee. (a) Trustee hereby
acknowledges its acceptance, on behalf of the Trust, of all
right, title and interest previously held by Transferor in and
to the Receivables now existing and hereafter created and
arising in connection with the Accounts (other than
Receivables in Additional Accounts), all monies due or to
become due with respect to such Receivables (including all
Finance Charge Receivables and Recoveries), any collateral
securing any such Receivables, Insurance Proceeds relating to
such Receivables and all proceeds of all of the foregoing, and
declares that it shall maintain such right, title and
interest, upon the Trust herein set forth, for the benefit of
all Holders. Trustee further acknowledges that, prior to or
simultaneously with the execution and delivery of this
Agreement, Transferor delivered to Trustee the initial Account
Schedule referred to in subsection 2.1(c).
(b) Trustee agrees not to disclose to any Person any of
the names, addresses, account numbers or other information
contained in the computer files or microfiche lists delivered
to Trustee by Transferor pursuant to Sections 2.1, 2.6 and 2.7
or any other information provided by Transferor to Trustee in
any format whatsoever except as is required in connection with
the performance of its duties hereunder or in enforcing the
rights of the Holders or to a Successor Servicer appointed
pursuant to Section 10.2, as mandated pursuant to any
Requirement of Law applicable to Trustee or as required to
ensure that any security interest in the Receivables is
perfected. Trustee agrees to take such measures as shall be
reasonably requested by Transferor to protect and maintain the
security and confidentiality of such information, and, in
connection therewith, (i) Trustee shall not open the sealed
container in which any Account Schedule is delivered to
Trustee by Transferor except (A) after the appointment of
Trustee or any other Person as Successor Servicer after a
Servicer Default, (B) as necessary to answer any query made to
it in its capacity as a secured party with respect to the
Receivables or any other Trust Assets (and, in the case of
this clause (B), only after Trustee has informed Transferor of
such query and Transferor has consented to such disclosure) or
(C) in connection with any disclosure permitted by the next
sentence, and (ii) Trustee shall allow Transferor to inspect
Trustee's security and confidentiality arrangements, policies
and procedures from time to time during normal business hours.
In the event that Trustee is required by law to disclose any
such information, Trustee shall provide Transferor with prompt
written notice, unless such notice is prohibited by law, of
any such request or requirement so that Transferor may request
a protective order or other appropriate remedy. Trustee shall
make best efforts to provide Transferor with written notice no
later than five days prior to any disclosure pursuant to this
subsection 2.2(b).
(c) Trustee shall have no power to create, assume or
incur indebtedness or other liabilities in the name of the
Trust other than as contemplated in this Agreement.
SECTION 2.3 Representations and Warranties of
Transferor. Transferor hereby represents and warrants to the
Trust as of the Initial Closing Date:
(a) Organization and Good Standing. 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 Trustee the
Certificates pursuant hereto.
(b) Due Qualification. Transferor is duly qualified to do
business and is in good standing (or is exempt from such
requirement) in any state required in order to conduct its
business, and has obtained all necessary licenses and
approvals with respect to Transferor required under Federal
and Louisiana law; provided that no representation or warranty
is made with respect to any qualifications, licenses or
approvals which Trustee would have to obtain to do business in
any state in which Trustee seeks to enforce any Receivable.
(c) Due Authorization. The execution and delivery of this
Agreement and the execution and delivery to Trustee of the
Certificates by Transferor and the consummation of the
transactions provided for in this Agreement have been duly
authorized by Transferor by all necessary corporate action on
its part, and this Agreement will remain, from the time of its
execution, an official record of Transferor.
(d) No Conflict. The execution and delivery of this
Agreement and the Certificates, the performance of the
transactions contemplated by this Agreement and the
fulfillment of the terms hereof by Transferor 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
material indenture, contract, agreement, mortgage, deed of
trust or other instrument to which Transferor is a party or by
which it or any of its properties are bound.
(e) No Violation. The execution and delivery of this
Agreement and the Certificates, the performance of the
transactions contemplated by this Agreement and the
fulfillment of the terms hereof by Transferor will not
conflict with or violate any Requirements of Law applicable to
Transferor.
(f) No Proceedings. There are no proceedings or
investigations pending or, to the best knowledge of
Transferor, threatened against 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 Transferor, would materially and
adversely affect the performance by 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 Holders have been employed by
Transferor in selecting the Accounts from among the Eligible
Accounts in the Bank Portfolio.
(h) Transferor's Deposit Accounts. As of the Initial
Closing Date, deposits in Transferor's deposit accounts were
insured to the limits provided by law by BIF or SAIF.
(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 the Certificates,
the performance of the transactions contemplated by this
Agreement and the fulfillment of the terms hereof by
Transferor, have been obtained.
(j) Insolvency. No Insolvency Event has occurred.
Transferor did not (i) execute this Agreement or the
Certificates, (ii) grant to Trustee the security interests
described in Section 2.1(d), (iii) cause, permit, or suffer
the perfection or attachment of such a security interest, (iv)
otherwise effectuate or consummate any transfer to Trustee
pursuant to this Agreement or (v) acquire its interest in the
Trust, in each case: (A) in contemplation of insolvency; (B)
with a view to preferring one creditor over another or to
preventing the application of its assets in the manner
required by applicable law or regulations; (C) after
committing an act of insolvency; or (D) with any intent to
hinder, delay, or defraud itself or its creditors.
(k) Trustee. Trustee is not an insider or Affiliate of
Transferor.
For the purposes of the representations and warranties
contained in this Section 2.3 and made by Transferor on the
Initial Closing Date, "Certificates" means the Certificates
issued on the Initial Closing Date. The representations and
warranties set forth in this Section 2.3 shall survive the
transfer and assignment of the respective Receivables to the
Trust and any termination of the rights and obligations of
Servicer pursuant to Section 10.1. 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 Transferor set forth in this
Section 2.3 are true and correct as of such date (and for
purposes of such representations and warranties, (x)
"Certificates" means the Certificates issued on the related
Closing Date, (y) references to the Initial Closing Date shall
be deemed to refer to that Closing Date and (z) subsection
2.3(g) shall be deemed to refer to the applicable Addition
Cut-Off Date with respect to any Additional Account). Upon
discovery by Transferor, Servicer or Trustee of a breach of
any of the foregoing representations and warranties, the party
discovering such breach shall give prompt written notice to
the others.
SECTION 2.4 Representations and Warranties of Transferor
Relating to this Agreement and the Receivables.
(a) Binding Obligation; Valid Transfer and Assignment.
Transferor hereby represents and warrants to the Trust that,
as of the Initial Closing Date:
(i) This Agreement constitutes a legal, valid and
binding obligation of Transferor, enforceable against
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 Trustee,
on behalf of the Trust, for the benefit of the Holders,
of all right, title and interest of Transferor in and to
the Receivables now existing and hereafter created and
arising in connection with the Accounts (other than
Receivables in Additional Accounts), all monies due or to
become due with respect to such Receivables (including
all Finance Charge Receivables and Recoveries), and
Insurance Proceeds relating to such Receivables, all of
which property will be held by the Trust free and clear
of any Lien of any Person claiming through or under
Transferor or any of its Affiliates except for (x) Liens
permitted under subsection 2.5(b), and (y) the interest
of Transferor as Holder of the Transferor Certificate, or
(B) a grant of a security interest in such property to
Trustee, for the benefit of the Investor Holders, which
is enforceable with respect to the existing Receivables
(other than Receivables in Additional Accounts), the
proceeds thereof, and Recoveries 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 Trustee in such property, upon the
filing of the financing statement described in Section
2.1 and in the case of the Receivables hereafter created
and proceeds thereof and Recoveries and Insurance
Proceeds relating thereto, upon such creation, Trustee
shall have a first priority perfected security interest
in such property (subject to Section 9-306 of the UCC as
in effect in the State of Louisiana), except for Liens
permitted under subsection 2.5(b). Neither Transferor nor
any Person claiming through or under Transferor shall
have any claim to or interest in the Excess Funding
Account, the Finance Charge Account, the Distribution
Account or any Series Account, and if this Agreement
constitutes the grant of a security interest in such
property, except for the interest of Transferor in such
property as a debtor for purposes of the UCC as in effect
in the State of Louisiana.
(b) Eligibility of Receivables. Transferor hereby
represents and warrants to the Trust as of the Initial Closing
Date and as of each Addition Date, as the case may be, that:
(i) As of the Initial Closing Date, Transferor
represents and warrants that each Receivable was an
Eligible Receivable as of the end of the Cut-Off Date. As
of any Addition Date, Transferor represents and warrants
that each Receivable was an Eligible Receivable (A) as of
the Addition Cut-Off Date, if such Addition Date occurs
prior to the Conversion Date and (B) as of the Addition
Cut-Off Date, if such Addition Date occurs at any later
date.
(ii) Each Receivable then existing has been
conveyed to the Trust free and clear of any Lien of any
Person claiming through or under Transferor or any of its
Affiliates (other than Liens permitted under subsection
2.5(b)) and in compliance, in all material respects, with
all Requirements of Law applicable to Transferor.
(iii) With respect to each Receivable then
existing, all consents, licenses, approvals or
authorizations of or registrations or declarations with
any Governmental Authority required to be obtained,
effected or given by 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) As of the Initial Closing Date or the
applicable Addition Date, the related Account Schedule is
an accurate and complete listing in all material respects
of (A) on the Closing Date, all of the Accounts as of the
Cut-Off Date and (B) on an Addition Date, the related
Additional Accounts. In either case, the information
contained therein with respect to the identity of such
Accounts and the Receivables existing thereunder is
accurate in all material respects as of the Cut-Off Date
or the applicable Addition Date. As of the Cut-Off Date,
the Aggregate Receivables equaled $__________, of which
$__________ consisted of the Aggregate Principal
Receivables and $__________ consisted of the Aggregate
Finance Charge Receivables.
On each day on which any new Receivable is created, Transferor
shall be deemed to represent and warrant to the Trust that (A)
each Receivable created on such day is an Eligible Receivable,
(B) each Receivable created on such day has been conveyed to
the Trust in compliance, in all material respects, with all
Requirements of Law applicable to 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 Transferor in connection with the conveyance of such
Receivable to the Trust have been duly obtained, effected or
given and are in full force and effect and (D) the
representations and warranties set forth in subsection 2.4(a)
are true and correct with respect to each Receivable created
on such day as if made on such day.
(c) Notice of Breach. The representations and warranties
set forth in this Section 2.4 shall survive the transfer and
assignment of the respective Receivables to the Trust. Upon
discovery by Transferor, Servicer or Trustee of a breach of
any of the representations and warranties set forth in this
Section 2.4, the party discovering such breach shall give
prompt written notice to the other parties mentioned above.
Transferor agrees to cooperate with Servicer and Trustee in
attempting to cure any such breach.
(d) Transfer of Ineligible Receivables.
(i) Automatic Removal. In the event of a breach
with respect to a Receivable of any representations and
warranties set forth in subsection 2.4(b)(ii), or in the
event that a Receivable is not an Eligible Receivable as
a result of the failure to satisfy the conditions set
forth in clause (d) of the definition of Eligible
Receivable, and any of the following three conditions is
met: (A) as a result of such breach or event such
Receivable is charged off as uncollectible or the Trust's
rights in, to or under such Receivable or its proceeds
are impaired or the proceeds of such Receivable are not
available for any reason to the Trust free and clear of
any Lien; (B) the Lien upon the subject Receivable (1)
arises in favor of the United States of America or any
State or any agency or instrumentality thereof and
involves taxes or liens arising under Title IV of ERISA
or (2) has been consented to by Transferor; or (C) the
certificate of deposit or unsecured short term debt
rating of Transferor is not 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 Transferor or Servicer or receipt by Transferor of
written notice of such breach or event given by Trustee,
each such Receivable shall be automatically removed from
the Trust on the terms and conditions set forth in
subsection 2.4(d)(iii).
(ii) Removal After Cure Period. In the event of a
breach of any of the representations and warranties set
forth in subsection 2.4(b) other than a breach or event
subject to subsection 2.4 (d)(i), 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 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 Transferor or Servicer, or receipt by
Transferor of written notice of any such event given by
Trustee, each such Receivable shall be removed from the
Trust on the terms and conditions set forth in subsection
2.4(d)(iii); provided that no such removal shall be
required to be made if, on any day within such applicable
period, such representations and warranties with respect
to such Receivable shall then be true and correct in all
material respects as if such Receivable had been created
on such day.
(iii) Procedures for Removal. When the provisions
of subsection 2.4(d)(i) or (ii) require removal of a
Receivable, Transferor shall accept reassignment of such
Receivable (an "Ineligible Receivable") by directing
Servicer to deduct the principal balance of each such
Ineligible Receivable (other than any portion of such
principal balance constituting Discount Option
Receivables) from the Principal Receivables in the Trust
(to the extent previously included therein) 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. If the exclusion of an Ineligible
Receivable from the calculation of the Transferor
Interest would cause the Transferor Interest to be
reduced below zero, Transferor shall promptly, and in no
event later than 10 Business Days after such event, make
a deposit in the Excess Funding Account in immediately
available funds prior to the next succeeding Transfer
Date in an amount equal to the amount by which the
Transferor Interest would be reduced below zero. Upon the
removal of any Ineligible Receivable (and the making of
any deposit required above), the Trust shall
automatically and without further action be deemed to
transfer, assign, set-over and otherwise convey to
Transferor, without recourse, representation or warranty,
all the right, title and interest of the Trust in and to
such Ineligible Receivable, all monies due or to become
due with respect to such Ineligible Receivable and all
proceeds of such Ineligible Receivable and Recoveries 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. Trustee shall execute such documents and
instruments of transfer or assignment and take other
actions as shall reasonably be requested by Transferor to
evidence the conveyance of such Ineligible Receivable
pursuant to this subsection 2.4(d)(iii). The obligation
of Transferor set forth in this subsection 2.4(d)(iii),
or the automatic removal of such Receivable from the
Trust, as the case may be, shall constitute the sole
remedy respecting any breach of the representations and
warranties set forth in the above-referenced subsections
with respect to such Receivable available to Holders or
Trustee on behalf of Holders.
(iv) Proceeds Held by Servicer. For the purposes
of subsections 2.4(d)(i) and (ii) above, proceeds of a
Receivable shall not be deemed to be impaired hereunder
solely because such proceeds are held by Servicer (if
Servicer is Transferor) for more than the applicable
period under Section 9-306(3) of the UCC as in effect in
the State of Louisiana.
(e) Reassignment of Trust Portfolio. If any of the
representations and warranties set forth in subsection 2.4(a)
is not true and correct in any material respect when made and
such breach has a material adverse effect upon the interest of
the Holders in the Receivables, then either 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 Transferor (and
to Trustee and Servicer, if given by the Investor Holders),
may direct Transferor to accept reassignment of all Principal
Receivables and Discount Option Receivables within 60 days of
such notice (or within such longer period as may be specified
in such notice), and Transferor shall accept reassignment of
such Principal Receivables and Discount Option Receivables on
a Distribution Date specified by Transferor (such Distribution
Date, the "Reassignment Date") occurring within such applicable
period on the terms and conditions set forth below; provided
that no such reassignment shall be required to be made if, at
any time during such applicable period, the representations
and warranties contained in subsection 2.4(a) shall then be
true and correct in all material respects. Transferor shall
deposit on the Transfer Date (in New York Clearing House, next
day funds) preceding the Reassignment Date an amount equal to
the reassignment deposit amount for such Receivables in the
Distribution Account or, if provided in the related Supplement
for any Series, a Series Account for such Series, for
distribution to the Investor Holders 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 Holders 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
interest rate through such last day, less the amount, if any,
previously allocated for payment of interest to the Holders of
such Series on the related Distribution Date in the Monthly
Period in which the Reassignment Date occurs. Payment of the
reassignment deposit amount with respect to each Series, and
all other amounts in the Distribution Account or the
applicable Series Account in respect of the preceding Monthly
Period, shall be considered a prepayment in full of the
Receivables represented by the Investor Certificates. On the
Distribution Date following the Transfer Date on which such
amount has been deposited in full into the Distribution
Account or the applicable Series Account, the Receivables and
all monies due or to become due with respect to such
Receivables and any collateral securing any such Receivables
and Recoveries and Insurance Proceeds relating to such
Receivables and Interchange (if any) allocated to the
Receivables pursuant to any Supplement and proceeds of all of
the foregoing shall be released to Transferor after payment of
all amounts otherwise due hereunder on or prior to such dates
and 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 Transferor to vest in Transferor, or
its designee or assignee, all right, title and interest of the
Trust in and to the Receivables, all monies due or to become
due with respect to such Receivables and any collateral
securing any such Receivables and Recoveries and Insurance
Proceeds relating to such Receivables and Interchange (if any)
allocated to the Receivables pursuant to any Supplement, and
proceeds of all of the foregoing. If Trustee or the Investor
Holders give notice directing Transferor to accept
reassignment as provided above, the obligation of Transferor
to accept reassignment of the Receivables and pay the
reassignment deposit amount pursuant to this subsection 2.4(e)
shall constitute the sole remedy respecting a breach of the
representations and warranties contained in subsection 2.4(a)
available to the Investor Holders or Trustee on behalf of the
Investor Holders.
SECTION 2.5 Covenants of Transferor. Transferor hereby
covenants that:
(a) Receivables Not to Be Instruments. Except as the
Servicer may deem appropriate in connection with enforcement
activities, Transferor shall take no action to cause any
Receivable to be evidenced by an instrument.
(b) Security Interests. Except for the conveyances
hereunder, Transferor shall not sell, pledge, assign or
transfer to any other Person, or grant, create, incur, assume
or suffer to exist any Lien on any Receivable, whether now
existing or hereafter created, or any interest therein;
Transferor shall immediately notify Trustee of the existence
of any Lien on any Receivable; and Transferor shall defend the
right, title and interest of the Trust in, to and under the
Receivables, whether now existing or hereafter created,
against all claims of third parties claiming through or under
Transferor; provided that nothing in this subsection 2.5(b)
shall prevent or be deemed to prohibit Transferor from
suffering to exist upon any of the Receivables any Liens for
municipal or other local taxes if such taxes shall not at the
time be due and payable or if 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) Account Agreements and Account Guidelines. Transferor
shall comply with and perform its obligations under the
Account Agreements relating to the Accounts and the Account
Guidelines and all applicable rules and regulations of VISA
U.S.A., Inc. and MasterCard International Inc., as applicable,
except insofar as any failure to comply or perform would not
materially and adversely affect the rights of the Trust or the
Holders hereunder or under the Certificates. Transferor may
change the terms and provisions of the Account Agreements or
the Account Guidelines in any respect (including 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
Transferor, cause a Pay Out Event for any related Series to
occur, and (ii) is made applicable to any comparable segment
of the revolving credit accounts owned and serviced by
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 Transferor and an
unrelated third party or by the terms of the Account
Agreements.
(d) Account Allocations.
(i) If Transferor is unable for any reason to
transfer Receivables to the Trust in accordance with the
provisions of this Agreement (including by reason of the
application of the provisions of Section 9.2 or an order
by any Federal governmental agency having regulatory
authority over Transferor or any court of competent
jurisdiction that Transferor not transfer any additional
Principal Receivables to the Trust) then, in any such
event: (A) Transferor agrees to allocate and pay to the
Trust, after the date of such inability, all Collections
with respect to Principal Receivables, all Discount
Option Receivables Collections, and all amounts which
would have constituted Collections with respect to
Principal Receivables and all Discount Option Receivables
Collections but for Transferor's inability to transfer
such Receivables (up to an aggregate amount equal to the
amount of Principal Receivables and the Discount Option
Receivables Amount in the Trust on such date); (B)
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), 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 Transferor's inability to transfer
Receivables to the Trust) that are charged 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 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
Transferor is unable pursuant to any Requirement of Law
to allocate Collections as described above, 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) If Transferor accepts reassignment of an
Ineligible Receivable pursuant to subsection 2.4(d),
then, in any such event, 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 Transferor or to
the Receivables of such Obligor retained in the Trust,
then Transferor agrees to allocate payments
proportionately based on the total amount of Principal
Receivables of such Obligor retained in the Trust and the
total amount owing by such Obligor on any Ineligible
Receivables reassigned to 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) Delivery of Collections. If at any time Transferor
ceases to act as Servicer, Transferor shall pay to the
Successor Servicer all payments received by Transferor in
respect of the Receivables as soon as practicable after
receipt thereof by Transferor.
(f) Conveyance of Accounts. Transferor shall not convey,
assign, exchange or otherwise transfer the Accounts to any
Person prior to the termination of this Agreement pursuant to
Article XII; provided that Transferor shall not be prohibited
hereby from conveying, assigning, exchanging or otherwise
transferring the Accounts in connection with a transaction
complying with the provisions of Section 7.2.
SECTION 2.6 Addition of Accounts. (a) If during any
period of thirty consecutive days, the Transferor Interest
averaged over that period is less than the Minimum Transferor
Interest for that period, Transferor shall designate
additional Eligible Accounts ("Additional Accounts") from the
Bank Portfolio to be included as Accounts in a sufficient
amount such that the average Transferor Interest for such
thirty-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
thirty-day period, is at least equal to the Minimum Transferor
Interest. In addition, if on any Record Date the sum of the
Aggregate Principal Receivables plus the principal amount on
deposit in the Excess Funding Account is less than the Minimum
Aggregate Principal Receivables, Transferor shall designate
Additional Accounts from the Bank Portfolio to be included as
Accounts in a sufficient amount such that the Aggregate
Principal Receivables plus the principal amount on deposit in
the Excess Funding Account will be equal to or greater than
the Minimum Aggregate Principal Receivables. Receivables from
all 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. In lieu of, or in
addition to, designating Additional Accounts as required
above, Transferor may (subject to compliance with applicable
securities laws), on or before such tenth business day, convey
to the Trust participations or trust certificates representing
undivided legal or beneficial interests in a pool of assets
primarily consisting of receivables arising under revolving
credit card accounts or other revolving credit accounts owned
by Transferor or any of its Affiliates and collections thereon
("Participations"). Any addition of Participations to the Trust
(whether pursuant to this subsection (a) or subsection (b)
below) shall be effected by an amendment hereto, dated the
applicable Addition Date, pursuant to subsection 13.1(a).
(b) In addition to its obligation under subsection
2.6(a), Transferor may, but shall not be obligated to, from
time to time designate Additional Accounts or Participations
to be included as Trust Assets, in either case as of the
applicable Addition Date.
(c) Additional Accounts that Transferor is required to
designate pursuant to subsection 2.6(a), or elects to
designate pursuant to subsection 2.6(b), shall be treated as
Automatic Additional Accounts (with the result that the Rating
Agency Condition will not have to be satisfied with respect to
such designation), so long as (x) such Additional Accounts are
MasterCard, VISA or Private Label accounts originated by
Transferor in the ordinary course of business and (y) the
number of such new Additional Accounts would not exceed an
amount equal to the lesser of:
(i) the excess (if any) of (A) [15]% of the
aggregate number of Accounts determined as of the first
day of the third Monthly Period prior to the applicable
Addition Date (or, if later, as of the Initial Closing
Date) over (B) the aggregate number of Automatic
Additional Accounts the Addition Date for which has
occurred since the first day of such third prior Monthly
Period (or, if later, since the Initial Closing Date);
and
(ii) the excess (if any) of (A) [20]% of the
aggregate number of Accounts determined as of the first
day of the calendar year in which the Addition Date
occurs (or, if later, as of the Initial Closing Date)
over (B) the aggregate number of Automatic Additional
Accounts the Addition Date for which has occurred since
the first day of such calendar year (or, if later, since
the Initial Closing Date).
(d) Transferor agrees that any transfer of Receivables
from Additional Accounts or Participations under subsection
2.6(a) or (b) shall occur only upon satisfaction of the
following conditions (to the extent applicable):
(i) on or before the fifth Business Day prior to
the Addition Date with respect to additions pursuant to
subsection 2.6(a) and on or before the tenth Business Day
prior to the Addition Date with respect to additions
pursuant to subsection 2.6(b) (the "Notice Date"),
Transferor shall give Trustee, each Rating Agency and
Servicer written notice that such Additional Accounts or
Participations will be included, which notice shall
specify the approximate aggregate amount of the
Receivables or Participations to be transferred;
(ii) on or before the Addition Date, Transferor
shall have delivered to Trustee a written assignment
(including an acceptance by Trustee on behalf of the
Trust for the benefit of the Investor Holders) in
substantially the form of Exhibit B (the "Assignment")
and 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 ten Business Days thereafter, Transferor
shall have delivered to Trustee an Account Schedule
relating to the Additional Accounts, which Account
Schedule list shall be deemed automatically, as of the
date of such Assignment, incorporated into and made a
part of such Assignment and this Agreement;
(iii) Transferor shall represent and warrant that
(A) each Additional Account is an Eligible Account, and
each Receivable in such Additional Account is an Eligible
Receivable, in each case as of the Addition Cut-Off Date,
(B) no selection procedures believed by Transferor to be
materially adverse to the interests of the Investor
Holders were utilized in selecting the Additional
Accounts from the available Eligible Accounts from the
Bank Portfolio, (C) as of the Addition Date, Transferor
is not insolvent and (D) in the reasonable belief of
Transferor, the transfer of the Receivables from such
Additional Accounts shall not cause a Pay Out Event to
occur;
(iv) Transferor shall represent and warrant that
(A) as of the Addition Date, the Assignment constitutes
either (x) a valid transfer and assignment to Trustee, on
behalf of the Trust, of all right, title and interest of
Transferor in and to the Receivables then existing and
thereafter created in the Additional Accounts, and all
monies due or to become due with respect to such
Receivables (including all Finance Charge Receivables and
Recoveries), and Insurance Proceeds relating to such
Receivables and all proceeds of all of the foregoing, all
of which will be held by Trustee on behalf of the Trust,
free and clear of any Lien of any Person claiming through
or under Transferor or any of its Affiliates, except for
(i) Liens permitted under subsection 2.5(b), (ii) the
interest of Transferor as Holder of the Transferor
Certificate and (iii) Transferor's right to receive
interest accruing on, and investment earnings in respect
of, the Finance Charge Account, the Excess Funding
Account and any Series Account, as provided in this
Agreement and any related Supplement, or (y) a grant of
a security interest in such property to Trustee, for the
benefit of the Investor Holders, which is enforceable
with respect to then existing Receivables in the
Additional Accounts, the proceeds thereof and any
Insurance Proceeds and Recoveries relating thereto upon
the conveyance of such Receivables to the Trust, and
which will be enforceable with respect to the Receivables
thereafter created in respect of Additional Accounts
conveyed on such Addition Date, the proceeds thereof and
any Insurance Proceeds and Recoveries relating thereto
upon such creation; and (B) if the Assignment constitutes
the grant of a security interest to Trustee in such
property, upon the filing of financing statements as
described in Section 2.1 with respect to such Additional
Accounts and in the case of the Receivables thereafter
created in such Additional Accounts and the proceeds
thereof, and any Insurance Proceeds and Recoveries
relating thereto, upon such creation, Trustee shall have
a first priority perfected security interest in such
property (subject to Section 9-306 of the UCC as in
effect in the State of Louisiana), except for Liens
permitted under subsection 2.5(b);
(v) Transferor shall deliver to Trustee an
Officer's Certificate confirming the items set forth in
clauses (ii) through (iv);
(vi) Transferor shall deliver an Opinion of
Counsel with respect to the Receivables in the Additional
Accounts to Trustee (with a copy to each Rating Agency
for any outstanding Series) substantially in the form of
Exhibit E; and
(vii) the Rating Agency Condition shall have been
satisfied as to the initial transfer of Receivables from
such Additional Accounts (other than Automatic Additional
Accounts) or Participations.
SECTION 2.7 Removal of Accounts. (a) Subject to the
conditions set forth below, Transferor may, but shall not be
obligated to, designate Receivables from Accounts for deletion
and removal ("Removed Accounts") from the Trust; provided that
Transferor shall not make more than one such designation in
any Monthly Period. On or before the fifth Business Day (the
"Removal Notice Date") prior to the date on which the
designated Removed Accounts will be reassigned by Trustee to
Transferor (the "Removal Date"), Transferor shall give Trustee
and Servicer written notice that the Receivables from such
Removed Accounts are to be reassigned to Transferor.
(b) 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 Transferor, (a) cause a Pay Out Event to occur,
provided that for the purposes of this subsection
2.7(b)(i)(a), 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
Percentage 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, Transferor
shall have delivered to Trustee for execution a written
assignment substantially in the form of Exhibit G (the
"Reassignment") and, within five Business Days
thereafter, Transferor shall have delivered to Trustee a
computer file or microfiche list containing an accurate
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) Transferor shall represent and warrant that
no selection procedures believed by Transferor to be
materially adverse to the interests of the Holders were
utilized in selecting the Removed Accounts to be removed
from the Trust;
(iv) on or before the tenth Business Day prior to
the Removal Date, each Rating Agency shall have received
notice of such proposed removal of the Receivables of
such Accounts, and the Rating Agency Condition shall have
been satisfied with respect to the removal; and
(v) Transferor shall have delivered to Trustee an
Officer's Certificate confirming the items set forth in
clauses (i) through (iv).
Upon satisfaction of the above conditions, Trustee shall
execute and deliver the Reassignment to Transferor, and the
Receivables from the Removed Accounts shall no longer
constitute a part of the Trust; provided, that, if Transferor
so elects, Receivables existing in Removed Accounts prior to
the Removal Date may remain in the Trust, in which case (x)
Servicer shall allocate, after the Removal Date and until the
balance of such retained Receivables has been reduced to zero
(in accordance with the following allocation method), payments
on each such Removed Account with respect to the principal
balance of such Account first to the oldest principal balance
of such Account and apply such payments as Collections in
accordance with Article IV, and (y) Finance Charge
Receivables, whenever created, accrued in respect of retained
Principal Receivables in Removed Accounts (the balance of
which shall be determined in accordance with the allocation
rule specified in clause (x)) shall continue to be a part of
the Trust notwithstanding any cessation of the transfer of
additional Principal Receivables from the related Removed
Accounts to the Trust, and Collections with respect thereto
shall continue to be allocated and paid in accordance with
Article IV. Transferor may impose additional conditions upon
the designation of Removed Accounts that it determines are
necessary for Transferor to derecognize the Receivables under
applicable accounting principles.
(c) Transferor may, but shall not be obligated to,
designate at any time Zero Balance Accounts, any future
receivables of which will no longer be part of the Trust, and
to remove from its computer records the designation of
Receivables arising in such Accounts as having been
transferred to the Trust.
SECTION 2.8 Discount Option. Transferor may at any time,
upon at least 30 days' prior written notice to Servicer,
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
"Discount Percentage"), of the amount of Principal Receivables
(determined before subtracting Discount Option Receivables)
arising in all of the Accounts on and after such designation
(and, if so elected by Transferor, Principal Receivables then
existing), or for the period specified, to be treated as
Discount Option Receivables (collectively, "Discount Option
Receivables"), and Transferor may from time to time increase,
reduce or eliminate the Discount Percentage for Discount
Option Receivables arising in the Accounts on and after the
date of such change; provided that no such designation or
changes to the Discount Percentage shall become effective
unless the following conditions have been satisfied:
(i) the designation of Discount Option Receivables
(or increase, reduction or elimination of the Discount
Percentage) shall not, in the reasonable belief of
Transferor, cause a Pay Out Event to occur or cause an
event which with notice or the lapse of time or both
would constitute a Pay Out Event;
(ii) on or before the date specified in the
written notice, Transferor shall have notified each
Rating Agency of the exercise of Transferor's rights
under this Section 2.8 and the Rating Agency Condition
shall have been satisfied; and
(iii) Transferor shall have delivered to Trustee
an Officer's Certificate confirming the items set forth
in clauses (i) and (ii). 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.
SECTION 2.9 Additional Transferors. Transferor may
designate additional or substitute Persons to be included as
Transferors under this Agreement by an amendment to this
Agreement (which amendment shall be subject to Section 13.1
and to any applicable restrictions in the Supplement for any
outstanding Series) and, in connection with such designation,
the initial Transferor shall surrender the Transferor
Certificate to Trustee in exchange for a newly issued
Transferor Certificate reflecting such additional Transferor's
interest in the Transferor Interest; provided that prior to
any such designation and issuance the conditions set forth in
Section 6.3(b) shall have been satisfied.
ARTICLE III ADMINISTRATION AND SERVICING
SECTION 3.1 Acceptance of Appointment and Other Matters
Relating to Servicer. (a) Transferor agrees to act as Servicer
under this Agreement. The Investor Holders of each Series by
their acceptance of the related Certificates consent to
Transferor acting as Servicer.
(b) 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 or other receivables comparable to
the Receivables and in accordance with the Account Guidelines
and shall have full power and authority, acting alone or
through any party properly designated by it hereunder, to do
any and all things in connection with such servicing and
administration which it may deem necessary or desirable.
Without limiting the generality of the foregoing and subject
to Section 10.1, 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 Trustee on account of the occurrence of a
Servicer Default pursuant to Section 10.1, to instruct Trustee
to make withdrawals and payments from the Finance Charge
Account, the Excess Funding Account and any Series Account, in
accordance with such instructions as set forth in this
Agreement, (iii) unless such power and authority is revoked by
Trustee on account of the occurrence of a Servicer Default
pursuant to Section 10.1, to instruct Trustee in writing, as
set forth in this Agreement, (iv) to execute and deliver, on
behalf of the Trust for the benefit of the Holders, 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 filing, 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. Trustee agrees
that it shall promptly follow the instructions of Servicer to
withdraw funds from the Excess Funding Account, the Finance
Charge Account or any Series Account and to take any action
required under any Credit Enhancement, in each case at such
time or times as required under this Agreement. Trustee shall
execute at Servicer's written request such documents prepared
by Transferor and acceptable to Trustee as may be necessary or
appropriate to enable Servicer to carry out its servicing and
administrative duties hereunder.
(c) If Transferor is unable for any reason to transfer
Receivables to the Trust in accordance with the provisions of
this Agreement (including by reason of the application of the
provisions of Section 9.2 or the order of any Federal
governmental agency having regulatory authority over
Transferor or any court of competent jurisdiction that
Transferor not transfer any additional Principal Receivables
to the Trust) then, in any such event, (A) Servicer agrees to
allocate, after such date, all Collections with respect to
Principal Receivables, all Discount Option Receivables
Collections and all amounts which would have constituted
Collections with respect to Principal Receivables and all
Discount Option Receivables Collections but for Transferor's
inability to transfer such Receivables (up to an aggregate
amount equal to the aggregate amount of Principal Receivables
and the Discount Option Receivables Amount in the Trust as of
such date) in accordance with subsection 2.5(d); (B) 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 Transferor's inability to transfer Receivables to
the Trust) that are charged 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 or Discount Option
Receivables, as the case may be, but for Transferor's
inability to transfer Receivables to the Trust shall be deemed
to be Principal Receivables for the purpose of calculating (i)
the applicable Investor Percentage with respect to any Series
and (ii) the Aggregate Investor Percentage thereunder. If
Servicer is unable pursuant to any Requirement of Law to
allocate payments on the Accounts as described above, 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 be deemed 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 resect
thereto shall continue to be allocated and paid in accordance
with Article IV.
(d) If Transferor accepts reassignment of an Ineligible
Receivable pursuant to subsection 2.4(d) then, in any such
event, 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 Transferor
or to Receivables of such Obligor retained in the Trust, then
Servicer agrees to allocate payments proportionately based on
the total amount of Principal Receivables of such Obligor
retained in the Trust and the total amount owing by such
Obligor on any Ineligible Receivables purchased by 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) 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 Servicer in connection with
servicing other credit card receivables.
(f) 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
Servicer believes to be reasonable from time to time.
SECTION 3.2 Servicing Compensation. As compensation for
its servicing activities hereunder and reimbursement for its
expenses as set forth in the immediately following paragraph,
the Servicer shall be entitled to receive a servicing fee (the
"Servicing Fee") prior to the termination of the Trust pursuant
to Section 12.1. The Servicing Fee shall be payable, with
respect to each Series, at the times and in the amounts set
forth in the related Supplement. The Servicing Fee shall be
allocated between the Investor Certificates (the "Investor
Servicing Fee") and the Holder of the Transferor Certificate
(the "Transferor Servicing Fee").
Servicer's expenses include the amounts due to Trustee
pursuant to Section 11.5 and the reasonable fees and
disbursements of independent public accountants and all other
expenses incurred by Servicer in connection with its
activities hereunder; provided that Servicer shall not be
liable for any liabilities, costs or expenses of the Trust,
the Investor Holders or the Certificate Owners arising under
any tax law, including 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). 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 3.3 Representations, Warranties and Covenants of
Servicer. First NBC, as initial Servicer, hereby makes, and
any Successor Servicer by acceptance of its appointment
hereunder shall make, the following representations and
warranties on which 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. 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. 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
Louisiana law. If 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
Servicer by all necessary corporate action on the part of
Servicer and this Agreement will remain, from the time of its
execution, an official record of Servicer.
(d) Binding Obligation. This Agreement constitutes a
legal, valid and binding obligation of Servicer, enforceable
in accordance with its terms, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereinafter in effect,
affecting the enforcement of creditors' rights in general 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).
(e) No Violation. The execution and delivery of this
Agreement by Servicer and the performance of the transactions
contemplated by this Agreement by Servicer, and the
fulfillment of the terms hereof applicable to 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 Servicer or any material
indenture, contract, agreement, mortgage, deed of trust or
other instrument to which 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 Servicer,
threatened against 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 Servicer, would
materially and adversely affect the performance by 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. 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 Holders or any Credit Enhancement
Provider.
SECTION 3.4 Reports and Records for Trustee. (a) Daily
Reports. On each Business Day, Servicer, with prior notice,
shall prepare and make available at the office of Servicer for
inspection by Trustee a record setting forth (i) the aggregate
amount of Collections processed by Servicer on the preceding
Business Day and (ii) the aggregate amount of Receivables as
of the close of business on the preceding Business Day;
provided that (x) Servicer shall be required to so report the
information provided in clause (i) only at such times as
Servicer is required to make deposits, payments and
withdrawals on a daily basis, rather than on each Transfer
Date, as permitted in Section 4.3(a), and (y) Servicer shall
be required to so report the information provided in clause
(ii) on any day in any Monthly Period only if the Aggregate
Principal Receivables as of the end of the prior Monthly
Period, minus the sum of the Adjusted Aggregate Investor
Interest and the outstanding principal amount of any purchased
interest sold pursuant to subsection 6.9(d) is less than 20%
of the Aggregate Principal Receivables as of the end of such
prior Monthly Period.
(b) Monthly Servicer's Certificate. Unless otherwise
stated in the related Supplement with respect to any Series,
on each Determination Date Servicer shall forward, as provided
in Section 13.5, to 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) as
to such matters as are set forth in Exhibit C.
SECTION 3.5 Annual Servicer's Certificate. On or before
March 31 of each calendar year, beginning with March 31, 1998,
Servicer will deliver, as provided in Section 13.5, to
Trustee, any Credit Enhancement Provider and each Rating
Agency, an Officer's Certificate substantially in the form of
Exhibit D stating that (a) a review of the activities of
Servicer during the twelve-month period ending on December 31
of the immediately prior calendar year, or for the initial
period, from the Closing Date until December 31, 1997, 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,
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 Holder by a request in writing to Trustee
addressed to the Corporate Trust Office.
SECTION 3.6 Annual Independent Accountants' Servicing
Report. (a) On or before March 31 of each calendar year,
beginning with March 31, 1998, Servicer shall cause a firm of
nationally recognized independent certified public accountants
(who may also render other services to Servicer or Transferor)
to furnish, as provided in Section 13.5, a report to Trustee,
any Credit Enhancement Provider and each Rating Agency, to the
effect that such firm has applied certain agreed upon
procedures with Servicer and such firm has examined certain
documents and records relating to the servicing of Accounts
under this Agreement and each Supplement, compared the
information contained in Servicer's certificates delivered
pursuant to this Agreement during the period covered by such
report with such documents and records, and that, on the basis
of such agreed upon procedures, such firm is of the opinion
(assuming the accuracy of any reports generated by Servicer's
third party agents) that such servicing was conducted in
compliance with this Agreement during the period covered by
such report (which shall be the prior calendar year, or the
portion thereof falling after the Initial Closing Date),
except for such exceptions, errors or irregularities as such
firm shall believe to be immaterial to the financial
statements of 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 Holder by a request in writing to Trustee addressed
to the Corporate Trust Office.
(b) On or before March 31 of each calendar year,
beginning with March 31, 1998, Servicer shall cause a firm of
nationally recognized independent certified public accountants
(who may also render other services to Servicer or Transferor)
to furnish, as provided in Section 13.5, a report, prepared
using generally accepted auditing standards, to Trustee and
each Rating Agency to the effect that they have compared the
mathematical calculations of each amount set forth in the
monthly certificates forwarded by Servicer pursuant to
subsection 3.4(b) during the period covered by such report
(which shall be the prior calendar year, or the portion
thereof falling after the Initial Closing Date), with
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 Servicer and such other exceptions as
shall be set forth in such report. A copy of such report may
be obtained by any Investor Holder by a request in writing to
Trustee addressed to the Corporate Trust Office.
SECTION 3.7 Tax Treatment. Transferor has structured
this Agreement and the Investor Certificates with the
intention that the Investor Certificates will qualify under
applicable Federal, state, local and foreign tax law as
indebtedness. Transferor, Servicer, the Holder of the
Transferor Certificate, each Investor Holder, and each
Certificate Owner, agree to treat and to take no action
inconsistent with the treatment of the Investor Certificates
(or beneficial interest therein) as indebtedness for purposes
of Federal, state, local and foreign income or franchise taxes
and any other tax imposed on or measured by income. Each
Investor Holder and the Holder of the Transferor Certificate,
by acceptance of its Certificate and each Certificate Owner,
by acquisition of a beneficial interest in a Certificate,
agree to be bound by the provisions of this Section 3.7.
Notwithstanding the foregoing or any other provision of this
Agreement Transferor may, at its option, make any election
that may in the future be available to it under the Internal
Revenue Code to have the Trust or any Series treated as a
"financial asset securitization investment trust" (or similar
entity), so long as prior to that election taking effect
Transferor delivers to Trustee an Opinion of Counsel to the
effect that the election (a) will not cause the Trust to be
classified, for Federal income tax purposes, as an association
(or publicly traded partnership) taxable as a corporation and
(b) will not cause or constitute an event in which gain or
loss would be recognized by any Investor Holder.
SECTION 3.8 Notices to Transferor. If Transferor is no
longer acting as Servicer, any Successor Servicer pursuant to
Section 10.2 shall deliver or make available to Transferor
each certificate and report required to be prepared, forwarded
or delivered thereafter pursuant to Sections 3.4, 3.5 and 3.6.
SECTION 3.9 Reports to the Commission. 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. Transferor, if Transferor is
not Servicer, shall, at the expense of Servicer, cooperate in
any reasonable request of Servicer in connection with such
filings.
ARTICLE IV RIGHTS OF HOLDERS AND ALLOCATION AND
APPLICATION OF COLLECTIONS
SECTION 4.1 Rights of Holders. 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 Holders of
such Series. The aggregate interest represented by such
Certificates in the Principal Receivables at any time shall
not exceed an amount equal to the Investor Interest at such
time. The Transferor Certificate shall represent the remaining
undivided interest in the Trust, including the right to
receive the Collections and other amounts at the times and in
the amounts specified in this Article IV to be paid to the
Holder of the Transferor Certificate. The aggregate interest
represented by the Transferor Certificate in the Principal
Receivables at any time 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. If this Agreement is
deemed to constitute a grant to Trustee, for the benefit of
the Investor Holders, of a security interest in the
Receivables and other Trust Assets, then the Transferor
Certificate shall be deemed to represent Transferor's equity
in the collateral granted.
SECTION 4.2 Establishment of Accounts. (a) The
Collection Account. Servicer, for the benefit of the Holders,
shall establish and maintain in the name of 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 Holders, or shall cause such Collection Account
to be established and maintained, with an office branch of (i)
a depository institution or trust company (which may include
Trustee, Servicer or an Affiliate of Servicer) organized under
the laws of the United States of America or any one of the
states thereof or the District of Columbia and with deposit
insurance provided by BIF or SAIF; provided that at all times
the certificates of deposit, short-term deposits or commercial
paper or the long-term unsecured debt obligations (other than
such obligation whose rating is based on collateral or on the
credit of a Person other than such institution or trust
company) of such depository institution or trust company shall
have a credit rating from Moody's and Standard & Poor's of at
least P-1 and A-1, respectively, and, if rated by Fitch, a
credit rating from Fitch of at least F-1, in the case of the
certificates of deposit, short-term deposits or commercial
paper, or a rating from Moody's of at least Aa3 and from
Standard & Poor's of at least AA-, and, if rated by Fitch,
from Fitch of at least AA-, in the case of the long-term
unsecured debt obligations, or (ii) a depository institution,
which may include Trustee, which is acceptable to each Rating
Agency (any of the foregoing being a "Qualified Institution");
provided further, that upon the insolvency of Servicer, the
Collection Account shall not be permitted to be maintained
with Servicer. Pursuant to authority granted to it pursuant to
subsection 3.1(b), 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 Excess Funding Accounts.
Trustee, for the benefit of the Investor Holders, shall
establish and maintain with Trustee in the name of the Trust
two segregated trust accounts (the "Finance Charge Account" and
the "Excess Funding Account," respectively) bearing a
designation clearly indicating that the funds therein are held
for the benefit of the Investor Holders, or shall cause such
Finance Charge Account or Excess Funding Account to be
established and maintained with an office or branch of a
Qualified Institution. Trustee shall possess all right, title
and interest in all funds on deposit from time to time in the
Finance Charge Account and the Excess Funding Account and in
all proceeds thereof. The Finance Charge Account and the
Excess Funding Account shall be under the sole dominion and
control of Trustee for the benefit of the Investor Holders.
Pursuant to authority granted to it hereunder, Servicer shall
have the revocable power to instruct Trustee to withdraw funds
from the Finance Charge Account and the Excess Funding Account
for the purpose of carrying out Servicer's duties hereunder.
Trustee at all times shall maintain accurate records
reflecting each transaction in the Finance Charge Account and
the Excess Funding Account, and that funds held therein shall
at all times be held in trust for the benefit of the Investor
Holders.
(c) The Distribution Account. Trustee, for the benefit of
the Investor Holders, shall cause to be established and
maintained in the name of the Trust, a segregated demand
deposit trust account (the "Distribution Account") bearing a
designation clearly indicating that the funds deposited
therein are held in trust for the benefit of the Investor
Holders, or shall cause such Distribution Account to be
established and maintained, with an office or branch of a
Qualified Institution (other than Transferor). 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 Trustee for the benefit of the
Investor Holders.
(d) Series Accounts. If so provided in the related
Supplement, Trustee, for the benefit of the Investor Holders,
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 Holders 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.
(e) Administration of the Finance Charge Account, Excess
Funding Account and Distribution Account. Funds on deposit in
the Excess Funding Account, the Finance Charge Account and the
Distribution Account shall at all times be invested by Trustee
at the written direction of Servicer in Permitted Investments.
Any such investment in the Finance Charge Account or the
Excess Funding Account 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 are
processed for collection, or if so specified in the related
Supplement, immediately preceding a Distribution Date. Funds
on deposit in the Distribution Account on any Transfer Date
shall be invested in such Permitted Investments that will
mature so that all such funds will be available for withdrawal
on the related Distribution Date. Trustee shall maintain for
the benefit of the Investor Holders possession of the
negotiable instruments or securities evidencing the Permitted
Investments described in clause (a) and, as applicable, (c) 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. On each
Transfer Date, all interest and other investment earnings (net
of losses and investment expenses) accrued on or prior to that
Transfer Date in connection with the investment of funds on
deposit in the Collection Account, the Excess Funding Account,
the Finance Charge Account, and the Distribution Account since
the prior Transfer Date shall be deemed to constitute, and for
all purposes hereof shall be treated as, Collections of
Finance Charge Receivables with respect to the prior Monthly
Period, except as otherwise specified in the related
Supplement. Subject to the restrictions set forth above,
Transferor, or a Person designated in writing by Transferor,
of which Trustee shall have received written notification
thereof, shall have the authority to instruct Trustee with
respect to the investment of funds on deposit in the Excess
Funding Account, the Finance Charge Account and the
Distribution Account. For purposes of determining the
availability of funds or the balances in the Finance Charge
Account, the Excess Funding Account and the Distribution
Account for any reason under this Agreement, all investment
earnings on such funds shall be deemed not to be available or
on deposit.
(f) Withdrawals from Excess Funding Account. Servicer
shall instruct Trustee that funds on deposit in the Excess
Funding Account shall be withdrawn and paid to the Holder of
the Transferor Certificate on any date to the extent that the
Transferor Interest is greater than the Minimum Transferor
Interest (after giving effect to any addition of Principal
Receivables to the Trust on such date). In addition, on any
Distribution Date on which one or more Series that is a
Principal Sharing Series is in an Amortization Period,
Servicer shall determine the aggregate amounts of Series
Principal Shortfalls, if any, with respect to each such Series
(after giving effect to all allocation and payment provisions
in the Supplement with respect to each such Series), and
Servicer shall instruct Trustee to withdraw such amount from
the Excess Funding Account (up to an amount equal to the
lesser of (x) the amount on deposit in the Excess Funding
Account after application of all transfers to the Excess
Funding Account on that day and (y) the amount, if any, by
which the Transferor Interest would be less than zero if there
were no funds on deposit in the Excess Funding Account on that
day) on such Distribution Date and allocate such amount among
each such Series as specified in each related Supplement.
SECTION 4.3 Collections and Allocations. (a)
Collections. Except as provided below, 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
Servicer, then, immediately upon the occurrence of such event
and thereafter, Servicer shall deposit all Collections into
the Collection Account which may no longer be established and
maintained with Servicer in accordance with subsection 4.2(a),
and in no such event shall Servicer deposit any Collections
thereafter into any account established, held or maintained
with Servicer. For purposes of this Agreement, Servicer may
allocate Recoveries, fee reversals and miscellaneous fees
between the Accounts and other accounts in the Bank Portfolio
on any reasonable basis.
Servicer shall allocate such amounts to each Series of
Investor Certificates and to the Holder of the Transferor
Certificate in accordance with this Article IV and shall
withdraw the required amounts from the Collection Account or
pay such amounts to the Holder of the Transferor Certificate
in accordance with this Article IV, in both cases as modified
by any Supplement. 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, Transferor
shall remain Servicer hereunder, and (a)(i) Servicer provides
to Trustee a letter of credit covering collection risk of
Servicer (the "Servicer Letter of Credit") or makes other
arrangements to cover Servicer's collection risk, and (ii) the
Rating Agency Condition shall have been satisfied with respect
to the Servicer Letter of Credit or such other arrangements,
or (b) Transferor shall have and maintain a certificate of
deposit or unsecured short-term debt rating of P-1 by Moody's
and of at least A-1 by Standard & Poor's and, if rated by
Fitch, at least F-1 by Fitch, and deposit insurance provided
by BIF or SAIF, Servicer need not deposit Collections into the
Collection Account or from the Collection Account into the
Excess Funding 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
each Transfer Date, but may make such deposits, payments and
withdrawals on each Transfer Date, in an amount equal to the
net amount of such deposits, payments and withdrawals which
would have been made but for the provisions of this paragraph.
Notwithstanding anything else in this Agreement to the
contrary, with respect to any Monthly Period, whether Servicer
is required to make monthly or daily deposits from the
Collection Account into the Finance Charge Account, the Excess
Funding Account or any Series Account, as provided in any
Supplement, (i) Servicer will only be required to deposit
Collections from the Collection Account into the Finance
Charge Account, the Excess Funding 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 Holders
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), Servicer may withdraw the excess from the
Collection Account.
(b) Allocations for Transferor Certificate. Throughout
the existence of the Trust, unless otherwise stated in any
Supplement, Servicer shall allocate to the Holder of the
Transferor Certificate an amount equal to the product of (A)
the applicable Transferor Percentage and (B) the aggregate
amount of Collections allocated to Principal Receivables and
Finance Charge Receivables in respect of each Monthly Period.
Notwithstanding anything in this Agreement to the contrary,
unless otherwise stated in any Supplement, 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. Servicer shall reduce (a "Credit Adjustment") on a net
basis not later than the Determination Date following each
Monthly Period the aggregate amount of Principal Receivables
used to calculate the Transferor Interest 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 successfully asserted
a counterclaim or defense, (ii) which is reduced by Servicer
by the amount of any rebate, refund, charge-back or
adjustment (including Servicer errors) or (iii) which was
created as a result of a fraudulent or counterfeit charge.
If a Credit Adjustment would cause the Transferor
Interest to be an amount less than zero, Transferor shall make
a deposit, no later than the Business Day following the Date
of Processing of such Credit Adjustment, in the Excess Funding
Account in immediately available funds in an amount equal to
the amount by which the Transferor Interest would be less than
zero after giving effect to such Credit Adjustment on such
Date of Processing.
(d) Estimation of Allocations. Until the Conversion Date:
(i) For the purposes of making the allocations
described in Article IV, all Collections received by
Servicer with respect to Receivables in each Billing
Cycle shall be deemed, on each Date of Processing, to be
Collections of Finance Charge Receivables up to the
amount of Finance Charge Receivables billed as of the
opening of such Billing Cycle with respect to Accounts in
such Billing Cycle (with respect to each such Billing
Cycle, the "Billed Finance Charge Receivables").
Collections received by Servicer with respect to
Receivables in each Billing Cycle in excess of the
related Billed Finance Charge Receivables shall be
deemed, on each Date of Processing, to be Collections of
Principal Receivables ("Billed Principal Receivables").
(ii) On a Business Day not later than the
Determination Date in the Monthly Period following the
Monthly Period in which a Billing Cycle ends (the
"Collection Recomputation Date"), Servicer shall
determine the amount of Collections of Finance Charge
Receivables and the Collections of Principal Receivables
received by Servicer on each Date of Processing during
such Billing Cycle (the "Collected Finance Charge
Receivables" and the "Collected Principal Receivables,"
respectively). Servicer shall recompute the allocations
made on each Date of Processing during each such Billing
Cycle pursuant to subsection 4.6(e)(i) based on the
amount of Collected Finance Charge Receivables and
Collected Principal Receivables and, based upon such
recomputation, (x) Servicer shall pay to the Holder of
the Transferor Certificate from monies in the Collection
Account or, any Series Account as provided in each
Supplement any underpayment to such Holder which such
recomputation discloses, or (y) the Holder of the
Transferor Certificate shall pay to the Servicer any
overpayment of such Holder which such recomputation
discloses, for deposit in the Collection Account or any
Series Account as provided in each Supplement for the
Monthly Period preceding such Determination Date for
allocation pursuant to Article IV. Deposits and
withdrawals with respect to the Collection Account and
any Series Account shall be allocated to each Series
based on the applicable Investor Percentage with respect
to such Series as provided in the related Supplement.
(iii) All references in this Agreement (including
any Supplement) to Default Amounts, Net Default Amounts,
Recoveries and Net Recoveries with reference to any
Monthly Period shall be deemed to refer to such amounts
calculated with respect to Accounts in each Billing Cycle
for the Billing Cycles ending in such Monthly Period and
then aggregated.
SECTION 4.4 Shared Principal Collections. On each
Business Day, Shared Principal Collections may, at the option
of Transferor, be applied (or held in the Collection Account
for later application) as principal with respect to any
Variable Interest or, so long as either no Principal Sharing
Series is in an Amortization Period or no Principal Sharing
Series that is in an Amortization Period will have a Series
Principal Shortfall on the related Transfer Date (assuming no
Pay Out Event occurs), be withdrawn from the Collection
Account and paid to the Holder of the Transferor Certificate;
and on each Distribution Date, (a) Servicer shall allocate
Shared Principal Collections not previously so applied or paid
to each applicable Principal Sharing Series, pro rata, in
proportion to the Series Principal Shortfalls, if any, with
respect to each such Series, and any remainder may, at the
option of Transferor, be applied as principal with respect to
any Variable Interest and (b) Servicer shall withdraw from the
Collection Account or applicable Series Account and pay to the
Holder of the Transferor Certificate any amounts representing
Shared Principal Collections remaining after the allocations
and applications referred to in clause (a); provided that, if,
on any day a Retention Condition exists, Servicer shall not
distribute to the Holder of the Transferor Certificate any
Shared Principal Collections that otherwise would be
distributed to the Holder of the Transferor Certificate, but
shall deposit such funds in the Excess Funding Account to the
extent required so that the Retention Condition no longer
exists.
SECTION 4.5 Excess Finance Charge Collections. On each
Distribution Date, (a) Servicer shall apply the aggregate
amount for all outstanding Excess Allocation Series of the
amounts which the related Supplements specify are to be
treated as "Excess Finance Charge Collections" for the related
Transfer Date to other Excess Allocation Series, pro rata, in
proportion to the Finance Charge Shortfalls, if any, with
respect to each such Series, and (b) Servicer shall withdraw
(or shall instruct Trustee to withdraw) from the Collection
Account and pay to the Holder of the Transferor Certificate an
amount equal to the excess, if any, of (x) the aggregate
amount for all outstanding Excess Allocation Series of the
amounts which the related Supplements specify are to be
treated as "Excess Finance Charge Collections" for such
Distribution Date over (y) the aggregate amount for all
outstanding Excess Allocation Series which the related
Supplements specify are "Finance Charge Shortfalls", for such
Distribution Date; provided that the sharing of Excess Finance
Charge Collections among Excess Allocation Series will
continue only until such time, if any, as Transferor shall
deliver to Trustee an Officer's Certificate to the effect
that, in the reasonable belief of Transferor, the continued
sharing of Excess Finance Charge Collections among Excess
Allocation Series would have adverse regulatory implications
with respect to Transferor. Following the delivery by
Transferor of such an Officer's Certificate to Trustee, there
will not be any further sharing of Excess Finance Charge
Collections among Excess Allocation Series.
SECTION 4.6 Allocation of Trust Assets to Series or
Groups. To the extent so provided in the Supplement for any
Series or in an amendment to this Agreement executed pursuant
to Section 13.1(a), Receivables and Participations conveyed to
the Trust and all Collections received with respect to thereto
may be allocated or applied in whole or in part to one or more
Series or Groups as may be provided in such Supplement or
amendment; provided that any such allocation and application
shall be effective only upon satisfaction of the following
conditions:
(i) on or before the fifth Business Day immediately
preceding such allocation, the Servicer shall have given
Trustee and each Rating Agency written notice of such
allocation;
(ii) the Rating Agency Condition shall have been
satisfied with respect to such allocation; and
(iii) the Servicer shall have delivered to Trustee
an Officer's Certificate, dated the date of such
allocation, to the effect that the Servicer reasonably
believes that such allocation will not materially
adversely affect the interests of the Holders of any
Series issued and outstanding.
Any such Supplement or amendment may provide that (i)
such allocation to one or more particular Series or Groups may
terminate upon the occurrence of certain events specified
therein and (ii) upon the occurrence of any such event, such
assets and any Collections with respect thereto shall be
reallocated to other Series or Groups or to all Series, all as
shall be provided in such Supplement or amendment.
[THE REMAINDER OF ARTICLE IV IS RESERVED AND
SHALL BE SPECIFIED IN ANY SUPPLEMENT WITH
RESPECT TO ANY SERIES.]
ARTICLE V [ARTICLE V IS RESERVED AND SHALL BE SPECIFIED
IN THE SUPPLEMENT WITH RESPECT TO ANY SERIES.]
ARTICLE VI THE CERTIFICATES
SECTION 6.1 The Certificates. Subject to Sections 6.10
and 6.13, the Investor Certificates of each Series and any
Class thereof may be issued in bearer form (the "Bearer
Certificates") with attached interest coupons and a special
coupon (collectively, the "Coupons") or in fully registered
form (the "Registered Certificates"), and shall be
substantially in the form of the exhibits with respect thereto
attached to the related Supplement. The Transferor
Certificate shall be substantially in the form of Exhibit A.
The Investor Certificates and the Transferor Certificate
shall, upon issue pursuant hereto or to Section 6.9 or Section
6.10, be executed and delivered by Transferor to Trustee for
authentication and redelivery as provided in Sections 6.1 and
6.2. Any Investor Certificate shall be issuable in a minimum
denomination of $1,000 Undivided Interest and integral
multiples thereof, unless otherwise specified in any
Supplement. The Transferor Certificate shall also be issued
as a single Certificate. Each Certificate shall be executed
by manual or facsimile signature on behalf of Transferor by
its President or any Vice President. Certificates bearing the
manual or facsimile signature of the individual who was, at
the time when such signature was affixed, authorized to sign
on behalf of Transferor or Trustee shall not be rendered
invalid, notwithstanding that such individual has ceased to be
so authorized prior to the authentication and delivery of such
Certificates or does not hold such office at the date of such
Certificates. No Certificate shall be entitled to any benefit
under this Agreement, or be valid for any purpose, unless
there appears on such Certificate a certificate of
authentication substantially in the form provided for herein,
executed by or on behalf of Trustee by the manual signature of
a duly authorized signatory, and such certificate upon any
Certificate shall be conclusive evidence, and the only
evidence, that such Certificate has been duly authenticated
and delivered hereunder. All Certificates shall be dated the
date of their authentication except Bearer Certificates which
shall be dated the applicable Issuance Date as provided in the
related Supplement.
SECTION 6.2 Authentication of Certificates. On the
Initial Closing Date, Trustee shall authenticate and deliver
the initial Series of Investor Certificates, to or upon the
written order of Transferor against payment to Transferor or
its designee of the Initial Investor Interest (net of any
purchase or underwriting discount). Upon the receipt of such
payment and the issuance of the Investor Certificates, such
Investor Certificates shall be fully paid and non-assessable.
Trustee shall authenticate and deliver the Transferor
Certificate to Transferor simultaneously with its delivery to
Transferor of the initial Series of Investor Certificates.
Upon an Issuance as provided in Section 6.9 and the
satisfaction of certain other conditions specified therein,
Trustee shall authenticate and deliver the Investor
Certificates of additional Series (with the designation
provided in the related Supplement), upon the order of
Transferor, to the Persons designated in such Supplement. Upon
the order of Transferor, the Certificates of any Series shall
be duly authenticated by or on behalf of Trustee, in
authorized denominations. If specified in the related
Supplement for any Series, Trustee shall authenticate and
deliver outside the United States the Global Certificate that
is issued upon original issuance thereof, upon the written
order of Transferor, to the Depository against payment of the
purchase price therefor. If specified in the related
Supplement for any Series, Trustee shall authenticate
Book-Entry Certificates that are issued upon original issuance
thereof, upon the written order of Transferor, to a Clearing
Agency or its nominee as provided in Section 6.10 against
payment of the purchase price thereof.
SECTION 6.3 Registration of Transfer and Exchange of
Certificates. (a) 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. Trustee is the initial
Transfer Agent and Registrar. If any Investor Certificate is
issued as a Global Certificate, 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,
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. Trustee shall be permitted to resign as
Transfer Agent and Registrar upon 30 days' written notice to
Servicer. In the event that Trustee shall no longer be the
Transfer Agent and Registrar, Trustee shall appoint a
successor Transfer Agent and Registrar.
Upon surrender for registration of transfer of any
Certificate at any office or agency of the Transfer Agent and
Registrar, subject to the provisions of subsection 6.3(c),
Transferor shall execute, and 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 Holder, 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 Holder of a
Bearer Certificate, subject to applicable laws and regulations
(including the Bearer Rules), Bearer Certificates may be
exchanged for other Bearer Certificates or Registered
Certificates of the same Series in authorized denominations of
like aggregate Undivided Interests in the Trust, in the manner
specified in the Supplement for such Series, upon surrender of
the Bearer Certificates to be exchanged at an office or agency
of the Transfer Agent and Registrar located outside the United
States. Each Bearer Certificate surrendered pursuant to this
Section 6.3 shall have attached thereto (or be accompanied by)
all unmatured Coupons, 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, Transferor shall execute, and
Trustee shall authenticate and (unless the Transfer Agent and
Registrar is different than Trustee, in which case the
Transfer Agent and Registrar shall) deliver, the Investor
Certificates of such Series which the Holder 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 Trustee and the Transfer
Agent and Registrar duly executed by the Holder thereof or his
attorney-in-fact duly authorized in writing.
The preceding provisions of this Section 6.3
notwithstanding, Trustee or the Transfer Agent and Registrar,
as the case may be, shall not be required to register the
transfer of or exchange any Investor Certificate of any Series
for a period of 15 days preceding the due date for any payment
with respect to the Investor Certificates of such Series.
Unless otherwise provided in the related Supplement, no
service charge shall be made for any registration of transfer
or exchange of Certificates, but the Transfer Agent and
Registrar may require payment of a sum sufficient to cover any
tax or governmental charge that may be imposed in connection
with any transfer or exchange of Certificates.
All Investor Certificates (together with any Coupons
attached to Bearer Certificates) surrendered for registration
of transfer and exchange shall be canceled by the Transfer
Agent and Registrar and disposed of in a manner satisfactory
to Trustee. Trustee shall cancel and destroy the Global
Certificates upon its exchange in full for Definitive
Certificates and shall deliver a certificate of destruction to
Transferor. Such certificate shall also state that a
certificate or certificates of each Foreign Clearing Agency to
the effect referred to in Section 6.13 was received with
respect to each portion of the Global Certificate exchanged
for Definitive Certificates.
Transferor shall execute and deliver to 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 Trustee to fulfill
its responsibilities under this Agreement and the
Certificates.
(b) Except as provided in Section 2.9, 6.9 or 7.2 or this
subsection 6.3(b), Transferor shall not transfer the
Transferor Certificate or any interest therein. Transferor may
surrender the Transferor Certificate to Trustee in exchange
for a newly issued Transferor Certificate and one or more
additional certificates (each a "Supplemental Certificate"),
the terms of which shall be defined in a Supplement (which
Supplement shall be subject to Section 13.1(a) to the extent
that it amends any of the terms of this Agreement), to be
delivered to or upon the order of Transferor (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) Trustee shall have received an Officer's
Certificate of Transferor certifying that the Transferor
Interest shall not be less than the Minimum Transferor
Interest, in each case as of the date of, and after
giving effect to, such exchange;
(ii) the Rating Agency Condition shall have been
satisfied with respect to such exchange (or transfer or
exchange as provided below); and
(iii) Transferor shall have delivered to Trustee and
each Rating Agency a Tax Opinion, dated the date of such
exchange (or transfer or exchange as provided below),
with respect thereto.
Any Supplemental Certificate may be transferred or exchanged
only upon satisfaction of the conditions set forth in clauses
(ii) and (iii).
(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 Servicer regarding such transfer. The Transfer Agent and
Registrar and 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. Servicer shall indemnify the
Transfer Agent and Registrar and Trustee and hold each of them
harmless against any loss, liability or expense incurred
without negligence or bad faith on their part arising out of
or in connection with actions taken or omitted by them in
reliance on any such written instructions furnished pursuant
to this subsection 6.3(c).
(d) The Transfer Agent and Registrar will maintain at its
expense in New York, New York (and subject to this Section
6.3, if specified in the related Supplement for any Series,
any other city designated in such Supplement) an office or
offices or any agency or agencies where Investor Certificates
of such Series may be surrendered for registration of transfer
or exchange.
(e) The Certificates of any Series (or if there is more
than one Class in a Series, each Class) may not be acquired
with the plan assets of (i) any "employee benefit plan" as
defined in Section 3(3) of ERISA, which is subject to Title I
of ERISA, or (ii) any "plan" as defined in Section 4975 of the
Internal Revenue Code (each a "Benefit Plan"), unless such
Series (or Class) has been registered under Section 12(b) or
Section 12(g) of the Securities Exchange Act of 1934, and the
underwriter or underwriters for such Series (or Class)
notifies Transferor and Trustee that as of the date
immediately following the conclusion of the offering, the
Certificates of such Series (or Class) have been sold to at
least 100 separately named persons. If the Certificates of
any Series (or Class) may not be acquired with plan assets
because the foregoing requirements are not satisfied, then
each purchaser and each transferee of such Certificates will
be deemed to represent and warrant that it is not purchasing
such Certificates with plan assets of a Benefit Plan.
SECTION 6.4 Mutilated, Destroyed, Lost or Stolen
Certificates. If (a) any mutilated Certificate (together, in
the case of Bearer Certificates, with all unmatured Coupons,
if any, appertaining thereto) is surrendered to the Transfer
Agent and Registrar, or the Transfer Agent and Registrar
receives evidence to its satisfaction of the destruction, loss
or theft of any Certificate and (b) there is delivered to the
Transfer Agent and Registrar and Trustee such security or
indemnity as may be required by them to save each of them
harmless, then, in the absence of notice to Trustee that such
Certificate has been acquired by a bona fide purchaser,
Transferor shall execute and Trustee shall authenticate and
(unless the Transfer Agent and Registrar is different from
Trustee, in which case the Transfer Agent and Registrar shall)
deliver (in compliance with applicable law), in exchange for
or in lieu of any such mutilated, destroyed, lost or stolen
Certificate, a new Certificate of like tenor and aggregate
Undivided Interest. In connection with the issuance of any new
Certificate under this Section 6.4, 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 Trustee and the Transfer
Agent and Registrar) connected therewith. Any duplicate
Certificate issued pursuant to this Section 6.4 shall
constitute complete and indefeasible evidence of ownership in
the Trust, as if originally issued, whether or not the lost,
stolen or destroyed Certificate shall be found at any time.
SECTION 6.5 Persons Deemed Owners. Prior to due
presentation of a Certificate for registration of transfer,
Trustee, the Paying Agent, the Transfer Agent and Registrar
and any agent of any of them may treat the Person in whose
name any Certificate is registered as the owner of such
Certificate for the purpose of receiving distributions
pursuant to Article V (as described in any Supplement) and for
all other purposes whatsoever, and neither 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 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
Transferor, Servicer or any Affiliate thereof shall be
disregarded and deemed not to be outstanding, except that, in
determining whether Trustee shall be protected in relying upon
any such request, demand, authorization, direction, notice,
consent or waiver, only Investor Certificates which a
Responsible Officer 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 Trustee the
pledgee's right so to act with respect to such Investor
Certificates and that the pledgee is not Transferor, Servicer
or an Affiliate thereof.
In the case of a Bearer Certificate, Trustee, the Paying
Agent, the Transfer Agent and Registrar and any agent of any
of them may treat the bearer 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
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.
SECTION 6.6 Appointment of Paying Agent. (a) The Paying
Agent shall make distributions to Investor Holders from the
appropriate account or accounts maintained for the benefit of
Holders as specified in this Agreement or the related
Supplement for any Series pursuant to Articles IV and V. 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. Trustee (or Servicer
if Trustee is the Paying Agent) may revoke such power and
remove the Paying Agent, if Trustee (or Servicer if 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. Trustee (or Servicer if Trustee is the Paying Agent)
shall notify the Rating Agencies of the removal of any Paying
Agent. The Paying Agent, unless the Supplement with respect to
any Series states otherwise, shall initially be 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, Trustee shall appoint a co-
paying agent in Luxembourg or another European city. Trustee
shall be permitted to resign as Paying Agent upon 30 days'
written notice to Servicer. In the event that Trustee shall no
longer be the Paying Agent, Trustee shall appoint a successor
to act as Paying Agent (which shall be a bank or trust
company). The provisions of Sections 11.1, 11.2 and 11.3 shall
apply to Trustee also in its role as Paying Agent, for so long
as 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, Transferor shall maintain a co-paying agent in
New York City (for Registered Certificates only) or any other
city designated in such Supplement which, if and so long as
any Series of Investor Certificates is listed on the
Luxembourg Stock Exchange or other stock exchange and such
exchange so requires, shall be in Luxembourg or the location
required by such other stock exchange.
(b) Trustee shall cause the Paying Agent (other than
itself) to execute and deliver to Trustee an instrument in
which such Paying Agent shall agree with Trustee that such
Paying Agent will hold all sums, if any, held by it for
payment to the Holders in trust for the benefit of the Holders
entitled thereto until such sums shall be paid to such Holders
and shall agree, and if Trustee is the Paying Agent it hereby
agrees, that it shall comply with all requirements of the
Internal Revenue Code regarding the withholding by Trustee of
payments in respect of Federal income taxes due from
Certificate Owners.
SECTION 6.7 Access to List of Holders' Names and
Addresses. Trustee shall furnish or cause to be furnished by
the Transfer Agent and Registrar to Servicer or the Paying
Agent, within five Business Days after receipt by Trustee of
a request therefor from Servicer or the Paying Agent,
respectively, in writing, a list in such form as Servicer or
the Paying Agent may reasonably require, of the names and
addresses of the Investor Holders as of the most recent Record
Date for payment of distributions to Investor Holders. Unless
otherwise provided in the related Supplement, Holders of the
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 Trustee, and if such application states
that the Applicants desire to communicate with other Investor
Holders 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 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 Holders held by
Trustee and shall give 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 Holder, by receiving and holding a Certificate, agrees
with Trustee that neither 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 Holders
hereunder, regardless of the source from which such
information was obtained.
SECTION 6.8 Authenticating Agent. (a) Trustee may
appoint one or more authenticating agents with respect to the
Certificates which shall be authorized to act on behalf of
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
Trustee or Trustee's certificate of authentication, such
reference shall be deemed to include authentication on behalf
of Trustee by an authenticating agent and a certificate of
authentication executed on behalf of Trustee by an
authenticating agent. Each authenticating agent must be
acceptable to Transferor.
(b) Any institution succeeding to the corporate agency
business of an authenticating agent shall continue to be an
authenticating agent without the execution or filing of any
paper or any further act on the part of Trustee or such
authenticating agent.
(c) An authenticating agent may at any time resign by
giving written notice of resignation to Trustee and to
Transferor. Trustee may at any time terminate the agency of an
authenticating agent by giving notice of termination to such
authenticating agent and to Transferor. Upon receiving such a
notice of resignation or upon such a termination, or in case
at any time an authenticating agent shall cease to be
acceptable to Trustee or Transferor, 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
Trustee and Transferor.
(d) Trustee agrees to pay each authenticating agent from
time to time reasonable compensation for its services under
this Section 6.8, and Trustee shall be entitled to be
reimbursed and Servicer shall reimburse Trustee for such
reasonable payments actually made, subject to the provisions
of Section 11.5.
(e) The provisions of Sections 11.1, 11.2 and 11.3 shall
be applicable to any authenticating agent.
(f) Pursuant to an appointment made under this Section
6.8, the Certificates may have endorsed thereon, in lieu of
Trustee's certificate of authentication, an alternate
certificate of authentication in substantially the following
form:
"This is one of the certificates described in the
Pooling and Servicing Agreement.
_______________________________________
as Authenticating Agent for Trustee,
By:____________________________________
Authorized Officer"
SECTION 6.9 New Issuances. (a) Upon request by
Transferor from time to time, Trustee shall issue to
Transferor under Section 6.1, for execution and redelivery to
Trustee for authentication under Section 6.2, one or more new
Series of Investor Certificates. Any such Series 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 Transferor. 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) Transferor may require Trustee to issue to Transferor
under Section 6.1, for execution and redelivery to Trustee for
authentication under Section 6.2, one or more newly issued
Series of Investor Certificates or in connection with a Paired
Series, interests in such Series, in exchange for a reduction
in the Transferor Interest (any such transaction, a
"Transferor Issuance"). In addition, to the extent permitted
for any Series of Investor Certificates as specified in the
related Supplement (and subject to any applicable requirements
under the Securities Exchange Act of 1934 and the rules and
regulations thereunder, including Rule 13e-4), the Investor
Holders of such Series may tender their Investor Certificates
to Trustee pursuant to the terms and conditions set forth in
such Supplement in exchange for one or more newly issued
Series of Investor Certificates (an "Investor Issuance").
Transferor may initiate an Issuance by notifying Trustee, in
writing at least three days in advance (an "Issuance Notice")
of the date upon which the Issuance is to occur (an "Issuance
Date"). Any Issuance Notice shall state the designation of any
Series (and Class thereof, if applicable) to be issued on the
Issuance Date and, with respect to each such Series, its
Initial Investor Interest (or the method for calculating such
Initial Investor Interest), the applicable interest rate (or
the method for allocating interest payments or other cash
flows to such Series), if any, and the Credit Enhancement
Provider, if any, with respect to such Series. On the Issuance
Date, Trustee shall authenticate and deliver any such Series
of Investor Certificates only upon delivery to it of the
following: (1) a Supplement satisfying the criteria set forth
in subsection 6.9(c) executed by Transferor and specifying the
Principal Terms of such Series, (2) the applicable Credit
Enhancement, if any, (3) the agreement, if any, pursuant to
which the Credit Enhancement Provider agrees to provide the
Credit Enhancement, if any, (4) a Tax Opinion, (5) evidence
that the Rating Agency Condition has been satisfied with
respect to the Issuance, (6) an Officer's Certificate signed
by a Vice President (or any more senior officer) of
Transferor, that on the Issuance Date (i) Transferor, after
giving effect to the Issuance, would not be required to add
Additional Accounts pursuant to subsection 2.6(a) and
(ii) after giving effect to such Issuance, the Transferor
Interest would be at least equal to the Minimum Transferor
Interest, and (7) the existing Investor Certificates, in the
case of an Investor Issuance. Upon satisfaction of such
conditions, Trustee shall issue as provided above, such Series
of Investor Certificates, dated the Issuance Date and, in the
case of an Investor Issuance, cancel the Investor Certificates
tendered in exchange for the new Series. There is no limit to
the number of Issuances that may be performed under this
Agreement.
(c) In conjunction with an 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: (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
applicable interest rate (or formula for its determination),
(v) the Closing Date, (vi) each rating agency rating such
Series, (vii) the name of the Clearing Agency, if any, (viii)
the rights of Transferor that have been transferred to the
Holders of such Series pursuant to such 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 monies therein, (xiv) the Investor
Servicing Fee and the Series Servicing Fee Percentage, (xv)
the Minimum Transferor Interest and the Series Termination
Date, (xvi) the terms of any Credit Enhancement with respect
to such Series, and the Credit Enhancement Provider, if
applicable, (xvii) the base rate applicable to such Series,
(xviii) the terms on which the Certificates of such Series may
be repurchased or remarketed to other investors, (xix) any
deposit into any account provided for such Series, (xx) the
number of Classes of such Series, and if more than one Class,
the rights and priorities of each such Class, (xxi) whether
Interchange or other fees will be included in the funds
available to be paid for such Series, (xxii) the priority of
any Series with respect to any other Series, (xxiii) the
rights, if any, of Transferor that have been transferred to
the holders of such Series, (xxiv) the Minimum Aggregate
Principal Receivables, (xxv) whether such Series will be part
of a Group, (xxvi) whether such Series will be a Principal
Sharing Series, (xxvii) whether such Series will or may be a
Paired Series and the Series with which it will be paired, if
applicable and (xxviii) any other relevant terms of such
Series (including whether or not such Series will be pledged
as collateral for an issuance of any other securities,
including commercial paper) (all such terms, the "Principal
Terms" of such Series). The terms of such Supplement may
modify or amend the terms of this Agreement solely as applied
to such new Series.
(d) Upon satisfaction of the above conditions (mutatis
mutandis), Transferor may also cause Trustee to enter into one
or more agreements pursuant to which Trustee shall sell
purchased interests in the Receivables and other Trust Assets
to one or more purchasers. Such agreement(s) shall specify
terms similar to Principal Terms for any such purchased
interests and may grant the purchaser(s) of such interests, or
an agent or other representative of such purchaser(s), notice
and consultation rights with respect to any rights or actions
of Trustee.
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") for the Clearing Agency or
Foreign Clearing Agency for 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) Transferor, Servicer, the Paying Agent, the
Transfer Agent and Registrar and Trustee may deal with
the Clearing Agency and the Clearing Agency Participants
for all purposes (including the making of distributions
on the Investor Certificates of each such Series) as the
authorized representatives of the Certificate Owners;
(iii) to the extent that the provisions of this
Section 6.10 conflict with any other provisions of this
Agreement, the provisions of this Section 6.10 shall
control with respect to each such Series; and
(iv) the rights of Certificate Owners of each such
Series shall be exercised only through the Clearing
Agency or Foreign Clearing Agency and the applicable
Clearing Agency Participants and shall be limited to
those established by law and agreements between such
Certificate Owners and the Clearing Agency or Foreign
Clearing Agency and/or the Clearing Agency Participants.
Pursuant to the Depository Agreement applicable to a
Series, unless and until Definitive Certificates of such
Series are issued pursuant to Section 6.12, the initial
Clearing Agency will make book-entry transfers among the
Clearing Agency Participants and receive and transmit
distributions of principal and interest on the Investor
Certificates to such Clearing Agency Participants.
SECTION 6.11 Notices to Clearing Agency. Whenever notice
or other communication to the Holders is required under this
Agreement, unless and until Definitive Certificates shall have
been issued to Certificate Owners pursuant to Section 6.12,
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)
Transferor advises 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) Trustee or Transferor is unable
to locate a qualified successor, (ii) Transferor, at its
option, advises 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 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, Trustee shall notify all Certificate
Owners or, with respect to clauses (ii) and (iii), Certificate
Owners of the applicable Series, through the applicable
Clearing Agency Participants, of the occurrence of any such
event and of the availability of Definitive Certificates to
all Certificate Owners or, as the case may be, Certificate
Owners of such series, in each case requesting the same. Upon
surrender to Trustee of all Investor Certificates or 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, Trustee shall
issue the applicable Definitive Certificates. Neither
Transferor nor Trustee shall be liable for any delay in
delivery of such instructions and may conclusively rely on,
and shall be protected in relying on, such instructions. Upon
the issuance of Definitive Certificates of any 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 Trustee, to the extent applicable with respect to
such Definitive Certificates, and Trustee shall recognize the
Holders of the Definitive Certificates of such Series as
Holders 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
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 Holders. To the extent provided
by the Supplement for any Series issued in whole or in part in
Bearer Certificates, Servicer or Trustee may at any time call
a meeting of the Holders of such Series, to be held at such
time and at such place as Servicer or Trustee, as the case may
be, shall determine, for the purpose of approving a
modification of or amendment to, or obtaining a waiver of, any
covenant or condition set forth in this Agreement with respect
to such Series or in the Certificates of such Series, subject
to Section 13.1.
ARTICLE VII OTHER MATTERS RELATING TO TRANSFEROR
SECTION 7.1 Liability of Transferor. Transferor shall be
liable in accordance herewith only to the extent of the
obligations specifically undertaken by Transferor.
SECTION 7.2 Merger or Consolidation of, or Assumption of
the Obligations of, Transferor. (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 Transferor is merged or the Person which acquires
by conveyance or transfer the properties and assets of
Transferor substantially as an entirety shall be, if
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 Trustee, in form satisfactory to Trustee,
the performance of every covenant and obligation of
Transferor, as applicable hereunder, and shall benefit
from all the rights granted to Transferor, as applicable
hereunder. To the extent that any right, covenant or
obligation of Transferor, as applicable hereunder, is
inapplicable to the successor entity, such successor
entity shall be subject to such covenant or obligation,
or benefit from such right, as would apply, to the extent
practicable, to such successor entity. In furtherance
hereof, in applying this Section 7.2 to a successor
entity, Section 9.2 shall be applied by reference to
events of involuntary liquidation, receivership or
conservatorship applicable to such successor entity as
shall be set forth in the officer's certificate described
in subsection 7.2(a)(ii);
(ii) Transferor shall have delivered to Trustee an
Officer's Certificate signed by a Vice President (or any
more senior officer) of Transferor stating that such
consolidation, merger, conveyance or transfer and such
supplemental agreement comply with this Section 7.2 and
that all conditions precedent herein provided for
relating to such transaction have been complied with and
an Opinion of Counsel that such supplemental agreement is
legal, valid and binding; and
(iii) Transferor shall have delivered notice to each
Rating Agency of such consolidation, merger, conveyance
or transfer.
(b) Upon satisfaction of the following conditions
Transferor may sell or otherwise dispose of all Trust Assets
to any other Person, which Person shall thereafter be
Transferor and, if so agreed, Servicer for all purposes of
this Agreement:
(i) Transferor delivers an Opinion of Counsel to
Trustee; and
(ii) the Rating Agency Condition is satisfied.
In connection with such designation, the old Transferor
shall surrender the Transferor Certificate to Trustee in
exchange for a Transferor Certificate issued to the new
Transferor.
(c) The obligations of Transferor hereunder shall not be
assignable nor shall any Person succeed to the obligations of
Transferor hereunder except as described in subsection (a) and
(b) above and in Section 2.9.
SECTION 7.3 Limitation on Liability. Transferor and its
directors, officers, employees and agents shall not be under
any liability to the Trust, Trustee, the Holders, 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 that this provision
shall not protect Transferor or its officers, directors,
employees, or agents 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, or under any Supplement.
ARTICLE VIII OTHER MATTERS RELATING TO SERVICER
SECTION 8.1 Liability of Servicer. Servicer shall be
liable in accordance herewith only to the extent of the
obligations specifically undertaken by Servicer in such
capacity herein.
SECTION 8.2 Merger or Consolidation of, or Assumption of
the Obligations of, Servicer. 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 Servicer is merged or the Person which acquires by
conveyance or transfer the properties and assets of
Servicer substantially as an entirety shall be a Person
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, if Servicer is not the surviving entity,
shall expressly assume, by an agreement supplemental
hereto, executed and delivered to Trustee in form
satisfactory to Trustee, the performance of every
covenant and obligation of Servicer hereunder (and to the
extent that any right, covenant or obligation of
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) Servicer shall have delivered to Trustee an
Officer's Certificate that such consolidation, merger,
conveyance or transfer and such supplemental agreement
comply with this Section 8.2 and that all conditions
precedent herein provided for relating to such
transaction have been complied with and an Opinion of
Counsel that such supplemental agreement is legal, valid
and binding with respect to Servicer; and
(iii) Servicer shall have delivered notice to the
Rating Agency of such consolidation, merger, conveyance
or transfer.
SECTION 8.3 Limitation on Liability of Servicer and
Others. The directors, officers, employees or agents of
Servicer shall not be under any liability to the Trust,
Trustee, the Holders, 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
that this provision shall not protect the directors, officers,
employees and agents of 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 8.4 with respect to
the Trust and Trustee, its officers, directors, employees and
agents, Servicer shall not be under any liability to the
Trust, Trustee, its officers, directors, employees and agents,
the Holders 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 that this provision shall not protect 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. 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. 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 8.4 Servicer Indemnification of the Trust and
Trustee. Servicer shall indemnify and hold harmless the Trust
and 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 Servicer with
respect to activities of the Trust or 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 that (a) Servicer shall not indemnify Trustee
if such acts, omissions or alleged acts or omissions
constitute or are caused by fraud, negligence, or willful
misconduct by Trustee, (b) Servicer shall not indemnify the
Trust, the Investor Holders or the Certificate Owners for any
liabilities, costs or expenses of the Trust with respect to
any action taken by Trustee at the request of the Investor
Holders, (c) Servicer shall not indemnify the Trust, the
Investor Holders or the Certificate Owners as to any losses,
claims or damages incurred by any of them in their capacities
as investors, including losses incurred as a result of
Defaulted Accounts or Receivables which are charged off as
uncollectible and (d) that Servicer shall not indemnify the
Trust, the Investor Holders or the Certificate Owners for any
liabilities, costs or expenses of the Trust, the Investor
Holders or the Certificate Owners arising under any tax law,
including 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 Holders 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 termination of this
Agreement and the resignation or removal of Trustee.
SECTION 8.5 Servicer Not to Resign. Except as provided
in subsection 7.2(b), 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 Servicer could take to make the
performance of its duties hereunder permissible under
applicable law. Any such determination permitting the
resignation of Servicer shall be evidenced as to clause (i) by
an Opinion of Counsel to such effect delivered to Trustee. No
such resignation shall become effective until Trustee or a
Successor Servicer shall have assumed the responsibilities and
obligations of Servicer in accordance with Section 10.2. If
Trustee is unable within 120 days of the date of such
determination to appoint a Successor Servicer, Trustee shall
serve as Successor Servicer hereunder until such time as
Trustee shall appoint a Successor Servicer and such Successor
Servicer shall have assumed the responsibilities and
obligations of Servicer in accordance with Section 10.2.
SECTION 8.6 Access to Certain Documentation and
Information Regarding the Receivables. Servicer shall provide
Trustee access to the documentation regarding the Accounts and
the Receivables when Trustee is required in connection with
the enforcement of the rights of the Investor Holders, or by
applicable law, to review such documentation, such access
being afforded without charge but only upon reasonable
request, during normal business hours, subject to Servicer's
normal security and confidentiality procedures and at offices
designated by Servicer. Nothing in this Section 8.6 shall
derogate from the obligation of Transferor, Trustee or
Servicer to observe any applicable law prohibiting disclosure
of information regarding the Obligors, and the failure of
Servicer to provide access as provided in this Section 8.6 as
a result of such obligations shall not constitute a breach of
this Section 8.6.
SECTION 8.7 Delegation of Duties. In the ordinary course
of business, Servicer may at any time delegate any duties
hereunder to any Person who agrees to conduct such duties in
accordance with the Account Guidelines. Any such delegations
shall not relieve Servicer of its liability and responsibility
with respect to such duties, and shall not constitute a
resignation within the meaning of Section 8.5 hereof. If any
such delegation is to a party other than an Affiliate of
Transferor, notification thereof shall be given to each Rating
Agency.
SECTION 8.8 Examination of Records. Servicer shall
clearly and unambiguously identify each Account (including any
Additional Account designated pursuant to Section 2.6) in its
computer or other records to reflect that the Receivables
arising in such Account have been conveyed to the Trust
pursuant to this Agreement. 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.
ARTICLE IX TRUST PAY OUT EVENTS
SECTION 9.1 Trust Pay Out Events. Each of the following
events (each, a "Trust Pay Out Event") shall constitute a Pay
Out Event with respect to all Series of Certificates,
immediately upon the occurrence of such event, and without any
notice or other action on the part of Trustee or the Investor
Holders:
(a) Transferor shall consent to the appointment of a
conservator or receiver or liquidator in any insolvency,
readjustment of debt, marshaling of assets and liabilities or
similar proceedings of or relating to all or substantially all
of its property, or a decree or order of a court or agency or
supervisory authority having jurisdiction in the premises for
the appointment of a conservator or receiver or liquidator in
any insolvency, readjustment of debt, marshaling of assets and
liabilities or similar proceedings, or for the winding-up or
liquidation of its affairs, shall have been entered against
Transferor; or Transferor shall admit in writing its inability
to pay its debts generally as they become due, file a petition
to take advantage of any applicable insolvency or
reorganization statute, make an assignment for the benefit of
its creditors or voluntarily suspend payment of its
obligations; or Transferor shall become unable for any reason
to transfer Receivables to the Trust in accordance with the
provisions of this Agreement; or
(b) the Trust shall become an "investment company" within
the meaning of the Investment Company Act.
SECTION 9.2 Additional Rights Upon the Occurrence of
Certain Events. If Transferor shall consent to the appointment
of a conservator or receiver or liquidator for the winding-up
or liquidation of its affairs, 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 for the winding-up or liquidation of its affairs
shall have been entered against Transferor (an "Insolvency
Event"), Transferor shall on the day of such Insolvency Event
immediately cease to transfer Principal Receivables and
Discount Option Receivables to the Trust and shall promptly
give notice to Trustee of such Insolvency Event.
Notwithstanding any cessation of the transfer to the Trust of
additional Principal Receivables and Discount Option
Receivables, Finance Charge Receivables, whenever created,
accrued in respect of Principal Receivables or Discount Option
Receivables which have been transferred to the Trust shall
continue to be a part of the Trust, and Collections with
respect thereto shall continue to be allocated and paid in
accordance with Article IV.
ARTICLE X SERVICER DEFAULTS
SECTION 10.1 Servicer Defaults. If any one of the
following events (a "Servicer Default") shall occur and be
continuing:
(a) any failure by Servicer to make any payment, transfer
or deposit or to give instructions or notice to Trustee
pursuant to Article IV or to instruct Trustee to make any
required drawing, withdrawal, or payment under any Credit
Enhancement on or before the date occurring ten Business Days
after the date such payment, transfer, deposit withdrawal or
drawing or such instruction or notice is required to be made
or given, as the case may be, under the terms of this
Agreement;
(b) failure on the part of Servicer duly to observe or
perform in any respect any other covenants or agreements of
Servicer set forth in this Agreement, which has a material
adverse effect on the Investor Holders 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 Servicer by Trustee, or to
Servicer and Trustee by the Holders of Investor Certificates
evidencing Undivided Interests aggregating not less than 25%
of the Investor Interest of any Series adversely affected
thereby and continue to materially adversely affect such
Investor Holders for such period; or Servicer shall delegate
its duties under this Agreement, except as permitted by
Section 8.7;
(c) any representation, warranty or certification made by
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
Holders 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 Servicer by Trustee, or to
Servicer and Trustee by the Holders of Investor Certificates
evidencing Undivided Interests aggregating not less than 25%
of the Investor Interest of any Series adversely affected
thereby and continues to materially adversely affect such
Investor Holders for such period; or
(d) Servicer shall consent to the appointment of a
conservator or receiver or liquidator in any insolvency,
readjustment of debt, marshaling of assets and liabilities or
similar proceedings of or relating to Servicer or of or
relating to all or substantially all of its property, or a
decree or order of a court or agency or supervisory authority
having jurisdiction in the premises for the appointment of a
conservator or receiver or liquidator in any insolvency,
readjustment of debt, marshaling of assets and liabilities or
similar proceedings, or for the winding-up or liquidating of
its affairs, shall have been entered against Servicer, and
such decree or order shall have remained in force undischarged
or unstayed for a period of 60 days; or 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 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 Servicer (and to
Trustee if given by the Investor Holders) (a "Termination
Notice"), may terminate all of the rights and obligations of
Servicer as Servicer under this Agreement.
After receipt by Servicer of such Termination Notice, and
on the date that a Successor Servicer shall have been
appointed by Trustee pursuant to Section 10.2, all authority
and power of Servicer under this Agreement shall pass to and
be vested in a Successor Servicer; and Trustee is hereby
authorized and empowered (upon the failure of Servicer to
cooperate) to execute and deliver, on behalf of Servicer, as
attorney-in-fact or otherwise, all documents and other
instruments upon the failure of 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
purpose of such transfer of servicing rights and obligations.
Servicer agrees to cooperate with Trustee and such Successor
Servicer in effecting the termination of the responsibilities
and rights of Servicer to conduct servicing hereunder
including the transfer to such Successor Servicer of all
authority of Servicer to service the Receivables provided for
under this Agreement, including all authority over all
Collections which shall on the date of transfer be held by
Servicer for deposit, or which have been deposited by
Servicer, in the Collection Account, the Finance Charge
Account, the Excess Funding Account, and any Series Account,
or which shall thereafter be received with respect to the
Receivables, and in assisting the Successor Servicer and in
enforcing all rights to Insurance Proceeds and Interchange (if
any) applicable to the Trust. Servicer shall promptly transfer
its electronic records or electronic copies thereof relating
to the Receivables to the Successor Servicer in such
electronic form as the Successor Servicer may reasonably
request and shall promptly transfer to the Successor Servicer
all other records, correspondence and documents necessary for
the continued servicing of the Receivables in the manner and
at such times as the Successor Servicer shall reasonably
request. To the extent that compliance with this Section 10.1
shall require Servicer to disclose to the Successor Servicer
information of any kind which Servicer reasonably deems to be
confidential, the Successor Servicer shall be required to
enter into such customary licensing and confidentiality
agreements as Servicer shall deem necessary to protect its
interests. Servicer shall, on the date of any servicing
transfer, transfer all of its rights and obligations under the
Credit Enhancement with respect to any Series to the Successor
Servicer.
Notwithstanding the foregoing, a delay in or failure of
performance referred to in subsection 10.1(a) for a period of
30 Business Days or under subsection 10.1(b) or (c) for a
period of 60 Business Days, shall not constitute a Servicer
Default if such delay or failure could not be prevented by the
exercise of reasonable diligence by 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 Servicer from using its
best efforts to perform its obligations in a timely manner in
accordance with the terms of this Agreement and Servicer shall
provide Trustee, any Credit Enhancement Provider, 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 to so perform its obligations.
SECTION 10.2 Trustee to Act; Appointment of Successor.
(a) On and after the receipt by Servicer of a Termination
Notice pursuant to Section 10.1, Servicer shall continue to
perform all servicing functions under this Agreement until the
date specified in the Termination Notice or otherwise
specified by Trustee in writing or, if no such date is
specified in such Termination Notice or otherwise specified by
Trustee, until a date mutually agreed upon by Servicer and
Trustee. Trustee shall notify each Rating Agency of such
removal of Servicer. 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 Trustee. Trustee may obtain bids from
any potential successor servicer. If a Successor Servicer has
not been appointed and has not accepted its appointment at the
time when Servicer ceases to act as Servicer, Trustee without
further action shall automatically be appointed the Successor
Servicer. Notwithstanding the above, 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 in each case 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 Servicer with respect to
servicing functions under this Agreement and shall be subject
to all the responsibilities, duties and liabilities relating
thereto placed on Servicer by the terms and provisions hereof,
and all references in this Agreement to 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,
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 that no such compensation shall be in
excess of the Servicing Fee permitted to Servicer pursuant to
Section 3.2. Transferor agrees that if Servicer is terminated
hereunder, it will agree to deposit a portion of the
Collections in respect of Finance Charge Receivables that it
is entitled to receive pursuant to Article IV to pay its share
of the compensation of the Successor Servicer.
(d) All authority and power granted to the Successor
Servicer under this Agreement shall automatically cease and
terminate upon termination of the Trust pursuant to Section
12.1 and shall pass to and be vested in Transferor and
Transferor is hereby authorized and empowered to execute and
deliver, on behalf of the Successor Servicer, as attorney-in-
fact or otherwise, all documents and other instruments, and to
do and accomplish all other acts or things necessary or
appropriate to effect the purposes of such transfer of
servicing rights. The Successor Servicer agrees to cooperate
with Transferor in effecting the termination of the
responsibilities and rights of the Successor Servicer to
conduct servicing on the Receivables. The Successor Servicer
shall transfer its electronic records relating to the
Receivables to Transferor in such electronic form as
Transferor may reasonably request and shall transfer all other
records, correspondence and documents to Transferor in the
manner and at such times as Transferor shall reasonably
request. To the extent that compliance with this Section 10.2
shall require the Successor Servicer to disclose to Transferor
information of any kind which the Successor Servicer deems to
be confidential, Transferor shall be required to enter into
such customary licensing and confidentiality agreements as the
Successor Servicer shall deem necessary to protect its
interests.
SECTION 10.3 Notification to Holders. Within two
Business Days after Servicer becomes aware of any Servicer
Default, Servicer shall give prompt written notice thereof to
Trustee and any Credit Enhancement Provider, and Trustee shall
give notice to the Investor Holders at their respective
addresses appearing in the Certificate Register. Upon any
termination or appointment of a Successor Servicer pursuant to
this Article X, Trustee shall give prompt written notice
thereof to Investor Holders at their respective addresses
appearing in the Certificate Register.
SECTION 10.4 Waiver of Past Defaults. The Holders of
Investor Certificates evidencing Undivided Interests
aggregating not less than 66-2/3% of the Investor Interest of
each Series adversely affected by any default by Servicer or
Transferor may, on behalf of all Holders of such Series, waive
any default by Servicer or Transferor in the performance of
its obligations hereunder and its consequences, except a
default in the failure to make any required deposits or
payments of interest or principal relating to such Series
pursuant to Article IV which default does not result from the
failure of the Paying Agent to perform its obligations to make
any required deposits or payments of interest and principal in
accordance with Article IV. Upon any such waiver of a past
default, such default shall cease to exist, and any default
arising therefrom shall be deemed to have been remedied for
every purpose of this Agreement. No such waiver shall extend
to any subsequent or other default or impair any right
consequent thereon except to the extent expressly so waived.
ARTICLE XI TRUSTEE
SECTION 11.1 Duties of Trustee. (a) 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), 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) Trustee, upon receipt of all resolutions,
certificates, statements, opinions, reports, documents, orders
or other instruments furnished to Trustee which are
specifically required to be furnished pursuant to any
provision of this Agreement, shall examine them to determine
whether they substantially conform to the requirements of this
Agreement.
(c) Subject to subsection 11.1(a), no provision of this
Agreement shall be construed to relieve Trustee from liability
for its own negligent action, its own negligent failure to act
or its own misconduct; provided that:
(i) Trustee shall not be personally liable for an
error of judgment made in good faith by a Responsible
Officer or Responsible Officers of Trustee, unless it
shall be proved that Trustee was negligent in
ascertaining the pertinent facts;
(ii) 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 Trustee, or exercising any trust
or power conferred upon Trustee in relation to such
Series, under this Agreement; and
(iii) Trustee shall not be charged with knowledge of
any failure by Servicer referred to in clauses (a), (b)
or (c) of Section 10.1 unless a Responsible Officer of
Trustee obtains actual knowledge of such failure or
Trustee receives written notice of such failure from
Servicer or any Holders of Investor Certificates
evidencing Undivided Interests aggregating not less than
10% of the Investor Interest of any Series adversely
affected thereby.
(d) 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 Trustee to perform, or be
responsible for the manner of performance of, any of the
obligations of Servicer under this Agreement except during
such time, if any, as Trustee shall be the successor to, and
be vested with the rights, duties, powers and privileges of,
Servicer in accordance with the terms of this Agreement.
(e) Except for actions expressly authorized by this
Agreement, Trustee shall take no action reasonably likely to
impair the interests of the Trust in any Receivable now
existing or hereafter created or to impair the value of any
Receivable now existing or hereafter created.
(f) Except as provided in this subsection 11.1(f),
Trustee shall have no power to vary the corpus of the Trust
including the power to (i) accept any substitute obligation
for a Receivable assigned to the Trust under Section 2.1 or
2.6, (ii) add any other investment, obligation or security to
the Trust, except for an addition permitted under Section 2.6,
or (iii) withdraw from the Trust any Receivables, except for
a withdrawal permitted under Sections 2.7, 9.2, 10.2, 12.1 or
12.2 or subsections 2.4(d), 2.4(e) or Article IV.
(g) If the Paying Agent or the Transfer Agent and
Registrar shall fail to perform any obligation, duty or
agreement in the manner or on the day required to be performed
by the Paying Agent or the Transfer Agent and Registrar, as
the case may be, under this Agreement, then, subject to
subsection 11.1(d), Trustee shall be obligated promptly to
perform such obligation, duty or agreement in the manner so
required.
(h) If Transferor has agreed to transfer any of its
credit card receivables (other than the Receivables) to
another Person, upon the written request of Transferor,
Trustee shall 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 Transferor's credit card
receivables; provided that Trustee shall not be required to
enter into any intercreditor agreement which could adversely
affect the interests of the Holders and, upon the request of
Trustee, Transferor will deliver an Opinion of Counsel on any
matters relating to such intercreditor agreement, reasonably
requested by Trustee.
SECTION 11.2 Certain Matters Affecting Trustee. Except
as otherwise provided in Section 11.1:
(a) 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 Trustee, the monthly Holder's statement, any
resolution, Officer's Certificate, certificate of auditors or
any other certificate, statement, instrument, opinion, report,
notice, request, consent, order, appraisal, bond or other
paper or document 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) Trustee may consult with counsel selected by it in
good faith, 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) 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 Holders or any Credit
Enhancement Provider, pursuant to the provisions of this
Agreement, unless such Holders or Credit Enhancement Provider
shall have offered to Trustee reasonable security or indemnity
against the costs, expenses and liabilities which may be
incurred therein or thereby; nothing contained herein shall,
however, relieve 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) 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) Trustee shall not be bound to make any investigation
into the facts of matters stated in any assignment of
Receivables in Accounts as of the Cut-Off Date or any
Additional Accounts, any Reassignment of Removed Accounts, the
initial report, any daily Servicer's report, the monthly
Servicer's certificate, the annual Servicer's certificate, the
monthly payment instructions and notification to Trustee, the
monthly Holder's statement, any resolution, certificate,
statement, instrument, opinion, report, notice, request,
consent, order, approval, bond or other paper or document,
unless requested in writing so to do by Holders of Investor
Certificates evidencing Undivided Interests aggregating more
than 50% of the Investor Interest of any Series which could be
adversely affected if Trustee does not perform such acts;
(f) 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 Trustee
shall not be responsible for any misconduct or negligence on
the part of any such agent, attorney or custodian (including
any Transfer Agent and Registrar or Paying Agent) appointed
with due care by it hereunder; and
(g) Except as may be required by subsection 11.1(a),
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
Transferor with its representations and warranties or for any
other purpose.
SECTION 11.3 Trustee Not Liable for Recitals in
Certificates. Trustee assumes no responsibility for the
correctness of the recitals contained herein and in the
Certificates (other than the certificate of authentication on
the Certificates). Except as set forth in Section 11.15,
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. Trustee shall not be
accountable for the use or application by Transferor of any of
the Certificates or of the proceeds of such Certificates, or
for the use or application of any funds paid to Transferor in
respect of the Receivables or deposited in or withdrawn from
the Collection Account, the Excess Funding Account, or the
Finance Charge Account, or any Series Account by Servicer.
SECTION 11.4 Trustee May Not Own Certificates. Trustee
in its individual capacity shall not, but in a fiduciary or
any other capacity may, become the owner of Investor
Certificates. In connection with such ownership in other than
its individual capacity, Trustee shall have the same rights as
it would have if it were not Trustee.
SECTION 11.5 Servicer to Pay Trustee's Fees and
Expenses. Servicer shall pay to Trustee from time to time, and
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 Trustee, and, subject to
Section 8.4, Servicer will pay or reimburse Trustee (without
reimbursement from any Investor Account, any Series Account or
otherwise) upon its request for all reasonable expenses,
disbursements and advances incurred or made by 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 Trustee is appointed Successor Servicer
pursuant to Section 10.2, the provisions of this Section 11.5
shall not apply to expenses, disbursements and advances made
or incurred by Trustee in its capacity as Successor Servicer.
The obligations of Servicer under this Section 11.5 shall
survive the termination of the Trust and the resignation or
removal of Trustee.
SECTION 11.6 Eligibility Requirements for Trustee.
Trustee hereunder shall at all times be a corporation or
association 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 and, if rated by Fitch, at least
BBB- by Fitch, having, in the case of an entity that is
subject to risk-based capital adequacy requirements, risk-
based capital of at least $50,000,000 or, in the case of an
entity that is not subject to risk-based capital adequacy
requirements, having a combined capital and surplus of at
least $50,000,000 and subject to supervision or examination by
Federal or state authority. If such corporation publishes
reports of condition at least annually, pursuant to law or to
the requirements of the aforesaid supervising or examining
authority, then for the purpose of this Section 11.6, the
combined capital and surplus of such corporation shall be
deemed to be its combined capital and surplus as set forth in
its most recent report of condition so published. In case at
any time Trustee shall cease to be eligible in accordance with
the provisions of this Section 11.6, Trustee shall resign
immediately in the manner and with the effect specified in
Section 11.7.
SECTION 11.7 Resignation or Removal of Trustee. (a)
Trustee may at any time resign and be discharged from the
Trust hereby created by giving written notice thereof to
Servicer. Upon receiving such notice of resignation, 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 Trustee shall cease to be eligible in
accordance with the provisions of Section 11.6 hereof and
shall fail to resign after written request therefor by
Transferor, or if at any time Trustee shall be legally unable
to act, or shall be adjudged a bankrupt or insolvent, or a
receiver of Trustee or of its property shall be appointed, or
any public officer shall take charge or control of Trustee or
of its property or affairs for the purpose of rehabilitation,
conservation or liquidation, then Transferor may, but shall
not be required to, remove Trustee and promptly appoint a
successor trustee by written instrument, in duplicate, one
copy of which instrument shall be delivered to Trustee so
removed and one copy to the successor trustee.
(c) Any resignation or removal of Trustee and appointment
of a successor trustee pursuant to any of the provisions of
this Section 11.7 shall not become effective until acceptance
of appointment by the successor trustee as provided in Section
11.8 hereof and any liability of Trustee arising hereunder
shall survive such appointment of a successor trustee.
SECTION 11.8 Successor Trustee. (a) Any successor
trustee appointed as provided in Section 11.7 hereof shall
execute, acknowledge and deliver to Transferor and to its
predecessor Trustee an instrument accepting such appointment
hereunder, and thereupon the resignation or removal of the
predecessor Trustee shall become effective and such successor
trustee, without any further act, deed or conveyance, shall
become fully vested with all the rights, powers, duties and
obligations of its predecessor hereunder, with the like effect
as if originally named as Trustee herein. The predecessor
Trustee shall deliver to the successor trustee all documents
and statements held by it hereunder, and Transferor and the
predecessor Trustee shall execute and deliver such instruments
and do such other things as may reasonably be required for
fully and certainly vesting and confirming in the successor
trustee all such rights, powers, duties and obligations.
(b) No successor trustee shall accept appointment as
provided in this Section 11.8 unless at the time of such
acceptance such successor trustee shall be eligible under the
provisions of Section 11.6.
(c) Upon acceptance of appointment by a successor trustee
as provided in this Section 11.8, such successor trustee shall
mail notice of such succession hereunder to all Holders at
their addresses as shown in the Certificate Register.
SECTION 11.9 Merger or Consolidation of Trustee. Any
Person into which 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 Trustee shall be
a party, or any Person succeeding to the corporate trust
business of Trustee, shall be the successor of Trustee
hereunder, provided such Person shall be eligible under
Section 11.6, 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, 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 Holders, 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 Trustee may consider
necessary or desirable. No co-trustee or separate trustee
hereunder shall be required to meet the terms of eligibility
as a successor trustee under Section 11.6 and no notice to
Holders of the appointment of any co-trustee or separate
trustee shall be required under Section 11.8 hereof.
(b) Every separate trustee and co-trustee shall, to the
extent permitted by law, be appointed and act subject to the
following provisions and conditions:
(i) all rights, powers, duties and obligations
conferred or imposed upon Trustee shall be conferred or
imposed upon and exercised or performed by 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 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 Servicer hereunder), 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 Trustee;
(ii) no trustee hereunder shall be personally liable
by reason of any act or omission of any other trustee
hereunder; and
(iii) 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 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 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,
Trustee. Every such instrument shall be filed with Trustee and
a copy thereof given to Servicer.
(d) Any separate trustee or co-trustee may at any time
constitute 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 Trustee, to the extent
permitted by law, without the appointment of a new or
successor trustee.
SECTION 11.11 Tax Returns. If the Trust shall be
required to file tax returns, Servicer shall prepare or cause
to be prepared any tax returns required to be filed by the
Trust and shall remit such returns to Trustee for signature
and, to the extent possible, file such returns at least five
days before such returns are due to be filed. Trustee is
hereby authorized to sign any such return on behalf of the
Trust. Servicer shall prepare or shall cause to be prepared
all tax information required by law to be distributed to
Holders and shall deliver such information to Trustee at least
five days prior to the date it is required by law to be
distributed to Holders. Trustee, upon request, shall furnish
Servicer with all such information known to Trustee as may be
reasonably required in connection with the preparation of all
tax returns of the Trust, and shall cause such tax returns to
be signed in the manner required by law. In no event shall
Trustee or Servicer be liable for any liabilities, costs or
expenses of the Trust, the Investor Holders or the Certificate
Owners arising under any tax law, including Federal, state,
local or foreign income or excise taxes or any other tax
imposed on or measured by income (or any interest or penalty
with respect thereto or arising from a failure to comply
therewith).
SECTION 11.12 Trustee May Enforce Claims Without
Possession of Certificates. All rights of action and claims
under this Agreement or any Series of Certificates may be
prosecuted and enforced by Trustee without the possession of
any of the Certificates or the production thereof in any
proceeding relating thereto, and any such proceeding
instituted by 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 Trustee, its agents and counsel,
be for the ratable benefit of any Series of Holders in respect
of which such judgment has been obtained.
SECTION 11.13 Suits for Enforcement. If a Servicer
Default shall occur and be continuing, Trustee, in its
discretion may, subject to the provisions of Section 10.1,
proceed to protect and enforce its rights and the rights of
any Series of Holders 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 Trustee, being
advised by counsel, shall deem most effectual to protect and
enforce any of the rights of Trustee or any Series of Holders.
SECTION 11.14 Rights of Holders 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 Trustee, or exercising
any trust or power conferred on Trustee; provided that (a)
subject to Section 11.1, Trustee shall have the right to
decline to follow any such direction if Trustee being advised
by counsel determines that the action so directed may not
lawfully be taken, or if Trustee in good faith shall, by a
Responsible Officer or Responsible Officers of Trustee,
determine that the proceedings so directed would be illegal or
involve it in personal liability or be unduly prejudicial to
the rights of Holders not parties to such direction and (b)
nothing in this Agreement shall impair the right of Trustee to
take any action deemed proper by Trustee and which is not
inconsistent with such direction of such Holders of Investor
Certificates.
SECTION 11.15 Representations and Warranties of Trustee.
Trustee represents and warrants that:
(i) Trustee is a [[_________] corporation]
organized, existing and authorized to engage in the
business of banking under the laws of [the State of
________________];
(ii) 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 Trustee.
SECTION 11.16 Maintenance of Office or Agency. Trustee
will maintain at its expense in the Borough of Manhattan, the
City of New York an office or offices, or agency or agencies,
where notices and demands to or upon Trustee in respect of the
Certificates and this Agreement may be served. Trustee
initially appoints the Corporate Trust Office as its office
for such purposes in New York. Trustee will give prompt
written notice to Servicer and to Holders in accordance with
Section 13.5 (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.
ARTICLE XII TERMINATION
SECTION 12.1 Termination of Trust. (a) The respective
obligations and responsibilities of Transferor, Servicer and
Trustee created hereby (other than the obligation of Trustee
to make payments to Holders as hereafter set forth) shall
terminate, except with respect to the duties described in
Section 11.5 and subsections 2.4(c) and 12.3(b), on the Trust
Termination Date; provided that the Trust shall not terminate
on the date specified in clause (a) of the definition of
"Trust Termination Date" if each of Servicer and the Holder of
the Transferor Certificate notify Trustee in writing, not
later than five Business Days preceding such date, that they
desire that the Trust not terminate on such date, which notice
(such notice, a "Trust Extension") shall specify the date on
which the Trust shall terminate (such date, the "Extended
Trust Termination Date"); provided that the Extended Trust
Termination Date shall in any event not be later than the day
specified in clause (c) of the definition of "Trust
Termination Date." 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 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), Trustee will sell or cause to be sold,
and pay the proceeds first, to all Holders of such Series pro
rata in final payment of all principal of and accrued interest
on such Series of Certificates, and second, as provided in the
related Supplement, an amount of Principal Receivables and the
related Finance Charge Receivables (or interests therein) up
to 110% of the Investor Interest of such Series at the close
of business on such date (but in no event in excess of the
applicable Investor Percentages of Principal Receivables and
Finance Charge Receivables on such date). 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. Transferor shall be
permitted to purchase such Receivables in such case and shall
have a right of first refusal with respect thereto. Any
proceeds of such sale in excess of such principal and interest
paid shall be paid to the Holder of the Transferor
Certificate. Upon such Series Termination Date with respect
to the applicable Series of Certificates, final payment of all
amounts allocable to any Investor Certificates of such Series
shall be made in the manner provided in Section 12.3.
SECTION 12.2 Optional Purchase. (a) If so provided in
any Supplement, Transferor may, but shall not be obligated to,
cause a final distribution to be made in respect of the
related Series of Certificates on a Distribution Date
specified in such Supplement by depositing into the
Distribution Account or the applicable Series Account, not
later than the Transfer Date preceding such Distribution Date,
for application in accordance with Section 12.3, the amount
specified in such Supplement; provided that if the short term
deposits or long-term unsecured debt obligations of Transferor
are not rated at the time of such purchase of Certificates at
least P-3 or Baa-3, respectively, by Moody's, no such event
shall occur unless Transferor shall deliver an Opinion of
Counsel reasonably acceptable to Trustee that such deposit
into the Distribution Account as provided in the related
Supplement would not constitute a fraudulent conveyance of
Transferor.
(b) The amount deposited pursuant to subsection 12.2(a)
shall be paid to the Investor Holders of the related Series
pursuant to Section 12.3 on the related Distribution Date
following the date of such deposit. All Certificates of a
Series which are purchased by Transferor pursuant to
subsection 12.2(a) shall be delivered by Transferor upon such
purchase to, and be canceled by, the Transfer Agent and
Registrar and be disposed of in a manner satisfactory to
Trustee and Transferor. The Investor Interest of each Series
which is purchased by Transferor pursuant to subsection
12.2(a) shall, for the purposes of the definition of
"Transferor Interest," be deemed to be equal to zero on the
Distribution Date following the making of the deposit, and the
Transferor Interest shall thereupon be deemed to have been
increased by the Investor Interest of such Series.
SECTION 12.3 Final Payment with Respect to any Series.
(a) Written notice of any termination, specifying the
Distribution Date upon which the Investor Holders of any
Series may surrender their Certificates for payment of the
final distribution with respect to such Series and
cancellation, shall be given (subject to at least two Business
Days' prior notice from Servicer to Trustee) by Trustee to
Investor Holders 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 subsection 2.4(e), 9.2(b), or 12.2(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. Servicer's notice to 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.
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 Holders.
(b) Notwithstanding the termination of the Trust pursuant
to subsection 12.1(a) or the occurrence of the Series
Termination Date with respect to any Series, all funds then on
deposit in the Finance Charge Account, the Excess Funding
Account, the Distribution Account or any Series Account
applicable to the related Series shall continue to be held in
trust for the benefit of the Holders of the related Series and
the Paying Agent or Trustee shall pay such funds to the
Holders 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 Holders of any
Series shall not surrender their Certificates for cancellation
within six months after the date specified in the above-
mentioned written notice to Investor Holders, Trustee shall
give a second written notice (or, in the case of Bearer
Certificates, publication notice) to the remaining Investor
Holders 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, Trustee may take appropriate
steps or may appoint an agent to take appropriate steps, to
contact the remaining Investor Holders 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 Holders. Trustee and the Paying Agent shall pay to
Transferor upon request any monies held by them for the
payment of principal or interest which remains unclaimed for
two years. After payment to Transferor, Investor Holders
entitled to the money must look to Transferor for payment as
general creditors unless an applicable abandoned property law
designates another Person.
(c) All Certificates surrendered for payment of the final
distribution with respect to such Certificates and
cancellation shall be canceled by the Transfer Agent and
Registrar and be disposed of in a manner satisfactory to
Trustee and Transferor.
SECTION 12.4 Termination Rights of Holder of Transferor
Certificate. Upon the termination of the Trust pursuant to
Section 12.1, and after payment of all amounts due hereunder
on or prior to such termination and surrender of the
Transferor Certificate, 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 Recoveries) 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, and all proceeds thereof, except
for amounts held by Trustee pursuant to subsection 12.3(b).
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 12.5 Defeasance. Notwithstanding anything to
the contrary in this Agreement:
(a) Transferor may at its option be discharged from its
obligations hereunder with respect to any Series or all
outstanding Series (in any such case, the "Defeased Series")
on the date the applicable conditions set forth in subsection
12.5(c) are satisfied (a "Defeasance"); provided, however, that
the following rights, obligations, powers, duties and
immunities shall survive with respect to the Defeased Series
until otherwise terminated or discharged hereunder: (i) the
rights of Holders of Investor Certificates of the Defeased
Series to receive, solely from the trust fund provided for in
subsection 12.5(c), payments in respect of principal of and
interest on such Investor Certificates when such payments are
due; (ii) the right of any Credit Enhancement Provider to the
repayment of any amount due to it under the applicable Credit
Enhancement and Supplement, including interest thereon; (iii)
Transferor's obligations with respect to such Certificates
under Sections 6.3 and 6.4; (iv) the rights, powers, trusts,
duties and immunities of Trustee, the Paying Agent and the
Transfer Agent and Registrar hereunder; and (v) this Section
12.5.
(b) Subject to subsection 12.5(c),Transferor at its
option may cause Collections allocated to the Defeased Series
and available to purchase Principal Receivables to be applied
to purchase Permitted Investments rather than Principal
Receivables.
(c) The following shall be the conditions to Defeasance
under subsection 12.5(a): (i) Transferor irrevocably shall
have deposited or caused to be deposited with Trustee (such
deposit to be made other than from Transferor's funds), under
the terms of an irrevocable trust agreement in form and
substance satisfactory to Trustee, as trust funds in trust for
making the payments described below, (A) Dollars in an amount,
or (B) Permitted Investments which through the scheduled
payment of principal and interest in respect thereof will
provide, not later than the due date of payment thereon, money
in an amount, or (C) a combination thereof, in each case
sufficient to pay and discharge, and which shall be applied by
Trustee to pay and discharge, all remaining scheduled interest
and principal payments on all outstanding Investor
Certificates of the Defeased Series on the dates scheduled for
such payments in this Agreement and the applicable Supplements
and all amounts owing to the Credit Enhancement Providers, if
any, with respect to the Defeased Series; and (ii) prior to
any exercise of its right pursuant to this Section 12.5 with
respect to a Defeased Series to substitute money or Permitted
Investments for Receivables, (x) Transferor shall have
delivered to Trustee a Tax Opinion with respect to such
deposit and termination of obligations and 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 and (y) Transferor shall have delivered
to Trustee and each Credit Enhancement Provider an Officer's
Certificate stating that Transferor reasonably believes that
such deposit and termination of obligations will not, based on
the facts known to such officer at the time of such
certification, then or thereafter cause a Pay Out Event with
respect to any Series.
ARTICLE XIII MISCELLANEOUS PROVISIONS
SECTION 13.1 Amendment. (a) This Agreement or any
Supplement may be amended in writing from time to time by
Servicer, Transferor and Trustee, without the consent of any
of Holders; provided that such action shall not, in the
reasonable belief of Transferor, as evidenced by an Officer's
Certificate from Transferor addressed and delivered to
Trustee, adversely affect in any material respect the
interests of any Investor Holders; provided, further, that
each Rating Agency shall have notified Transferor, Servicer
and 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
Servicer, Transferor and Trustee, without the consent of any
of the Holders to (i) 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), (ii) add one or more Participations to the
Trust, (iii) to effect the designation of any additional
Transferor or to provide for the addition to the Trust of
Participations, (iv) cure any ambiguity or correct or
supplement any provision contained in the Agreement or Series
Supplement which may be defective or inconsistent with any
other provisions thereof, (v) 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, in
connection with any such election, to modify or eliminate
existing provisions relating to the intended Federal income
tax treatment of the Certificates and the Trust), (vi) enable
the Trust to qualify as a partnership for purposes of any
state tax laws (including by amending Section 9.2 to read in
its entirety substantially as set forth on Exhibit I), and
(vii) enable Receivables transferred to the Trust to be
derecognized by Transferor (or applicable additional
Transferor) under applicable accounting principles and the
Trust to not be treated as a member of Transferor's (or such
related additional Transferor's) consolidated group under
applicable accounting principles.
(b) This Agreement or any Supplement may also be amended
in writing from time to time by Servicer, Transferor and
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 or Class 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
Holders of any Series or Class then issued and outstanding;
provided 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 Holder of such
Series, (ii) change the definition of or the manner of
calculating the Investor Interest or the Investor Percentage
of such Series without the consent of each Investor Holder of
such Series, or (iii) reduce the aforesaid percentage required
to consent to any such amendment, without the consent of each
Investor Holder of all Series adversely affected. Trustee may,
but shall not be obligated to, enter into any such amendment
which affects Trustee's rights, duties or immunities under
this Agreement or otherwise.
(c) Notwithstanding anything in this Section 13.1 to the
contrary, the Supplement with respect to any Series may be
amended on the items and in accordance with the procedures
provided in such Supplement.
(d) Promptly after the execution of any such amendment
(other than an amendment pursuant to subsection (a)), Trustee
shall furnish notification of the substance of such amendment
to each Investor Holder 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
Holders under this Section 13.1 to approve the particular form
of any proposed amendment, but it shall be sufficient if such
consent shall approve the substance thereof. The manner of
obtaining such consents and of evidencing the authorization of
the execution thereof by Investor Holders shall be subject to
such reasonable requirements as Trustee may prescribe.
(f) Any Supplement executed and delivered pursuant to
Section 6.9 and any amendments regarding the addition to or
removal of Receivables from the Trust as provided in Section
2.6 or 2.7, executed in accordance with the provisions hereof,
shall not be considered amendments to this Agreement for the
purpose of subsections 13.1(a) and (b).
(g) In connection with any amendment, Trustee may request
an Opinion of Counsel from Transferor or Servicer to the
effect that the amendment complies with all requirements of
this Agreement.
SECTION 13.2 Protection of Right, Title and Interest to
Trust. (a) Servicer shall cause this Agreement, all amendments
hereto and/or all financing statements and continuation
statements and any other necessary documents covering the
Holders' and 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
Holders or Trustee, as the case may be, hereunder to all
property comprising the Trust. Servicer shall deliver to
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. Transferor shall cooperate fully with Servicer in
connection with the obligations set forth above and will
execute any and all documents reasonably required to fulfill
the intent of this subsection 13.2(a).
(b) Within 30 days after Transferor makes any change in
its name, identity or corporate structure which would make any
financing statement or continuation statement filed in
accordance with subsection (a) seriously misleading within the
meaning of Section 9-402(7) of the UCC as in effect in the
State of Louisiana, Transferor shall give Trustee notice of
any such change and shall file such financing statements or
amendments as may be necessary to continue the perfection of
the Trust's security interest in the Receivables and the
proceeds thereof.
(c) Each of Transferor and Servicer will give Trustee
prompt written notice of any relocation of any office from
which it services Receivables or keeps records concerning the
Receivables or of its principal executive office and whether,
as a result of such relocation, the applicable provisions of
the UCC would require the filing of any amendment of any
previously filed financing or continuation statement or of any
new financing statement and shall file such financing
statements or amendments as may be necessary to continue the
perfection of the Trust's security interest in the Receivables
and the proceeds thereof. Each of Transferor and 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 Trustee: (i) upon each
date that any Additional Accounts are to be included in the
Accounts pursuant to subsection 2.6(a) or (b), an Opinion of
Counsel substantially in the form of Exhibit E; and (ii) on or
before March 31 of each year, beginning with March 31, 1998,
an Opinion of Counsel, substantially in the form of Exhibit F.
(e) Upon not less than 5 Business Days' written notice
from Transferor to Trustee and Servicer that Transferor wishes
to dispose of any receivables arising from any of its VISA,
MasterCard, Private Label or other revolving credit accounts
which are not Accounts but which are included in the Bank
Portfolio, Trustee shall execute and deliver such instruments
of release, in each case without recourse, representation or
warranty, as shall be prepared by and as are reasonably
requested by Transferor to release of record any purported
right, title or interest of the Trust in and to such
receivables, all monies due or to become due with respect to
such receivables and all proceeds of such receivables;
provided that Transferor shall deliver to Trustee and Servicer
a certificate dated the date of such release, certifying that
no property described in such release constitutes Trust
Assets.
SECTION 13.3 Limitation on Rights of Holders. (a) The
death or incapacity of any Holder shall not operate to
terminate this Agreement or the Trust, nor shall such death or
incapacity entitle such Holder's legal representatives or
heirs to claim an accounting or to take any action or commence
any proceeding in any court for a partition or winding up of
the Trust, nor otherwise affect the rights, obligations and
liabilities of the parties hereto or any of them.
(b) No Holder shall have any right to vote (except with
respect to the Investor Holders as provided in Section 13.1
hereof) or in any manner otherwise control the operation and
management of the Trust, or the obligations of the parties
hereto, nor shall anything herein set forth, or contained in
the terms of the Certificates, be construed so as to
constitute the Holders from time to time as partners or
members of an association; nor shall any Holder 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 Holder 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 Holder previously shall have
given written notice to 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
Trustee to institute such action, suit or proceeding in its
own name as Trustee hereunder and shall have offered to
Trustee such reasonable indemnity as it may require against
the costs, expenses and liabilities to be incurred therein or
thereby, and 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 Holder with every other Holder and Trustee,
that no one or more Holders 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 Holders of any other of the Certificates, or
to obtain or seek to obtain priority over or preference to any
other such Holder, or to enforce any right under this
Agreement, except in the manner herein provided and for the
equal, ratable and common benefit of all Holders. For the
protection and enforcement of the provisions of this Section
13.3, each and every Holder and Trustee shall be entitled to
such relief as can be given either at law or in equity.
SECTION 13.4 GOVERNING LAW. THIS AGREEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES
HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 13.5 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 or courier or mailed by registered mail,
return receipt requested, to (a) in the case of Transferor and
Servicer, First National Bank of Commerce, 201 Saint Charles
Avenue, 29th Floor, New Orleans, Louisiana 70170, Attention:
Michael A. Flick, Secretary, (b) in the case of Trustee, the
Corporate Trust Office, (c) in the case of the Credit
Enhancement Provider for a particular Series, the address or
facsimile number, if any, specified in the Supplement relating
to such Series, and (d) in the case of the Rating Agency for
a particular Series, the address or facsimile number, if any,
specified in the Supplement relating to such Series; or, as to
each party, such other address or facsimile number 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 Holder shall be given by first class mail, postage
prepaid, at the address of such Holder 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 Holders 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 Holder receives such notice.
SECTION 13.6 Severability of Provisions. If any one or
more of the covenants, agreements, provisions or terms of this
Agreement shall for any reason whatsoever be held invalid,
then such covenants, agreements, provisions or terms shall be
deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way
affect the validity or enforceability of the other provisions
of this Agreement or of the Certificates or rights of the
Holders thereof.
SECTION 13.7 Assignment. Notwithstanding anything to the
contrary contained herein, except as provided in Section 8.2,
this Agreement may not be assigned by Servicer without the
prior consent of Holders of Investor Certificates evidencing
Undivided Interests aggregating not less than 66-2/3% of the
Investor Interest of each Series on a Series-by-Series basis.
SECTION 13.8 Certificates Non-Assessable and Fully Paid.
It is the intention of the parties to this Agreement that the
Holders 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 Trustee pursuant
to Sections 2.1 and 6.2 are and shall be deemed fully paid.
SECTION 13.9 Further Assurances. Transferor and 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 Trustee more fully to effect the
purposes of this Agreement, including the execution of any
financing statements or continuation statements relating to
the Receivables for filing under the provisions of the UCC of
any applicable jurisdiction.
SECTION 13.10 No Waiver; Cumulative Remedies. No failure
to exercise and no delay in exercising, on the part of
Trustee, any Credit Enhancement Provider or the Investor
Holders, 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 Holders and, to the extent provided in the related
Supplement, to the Credit Enhancement Provider named therein,
and their respective successors and permitted assigns. Except
as otherwise provided in this Article XIII, no other Person
will have any right or obligation hereunder.
SECTION 13.13 Actions by Holders. (a) Wherever in this
Agreement a provision is made that an action may be taken or
a notice, demand or instruction given by Investor Holders,
such action, notice or instruction may be taken or given by
any Investor Holder, unless such provision requires a specific
percentage of Investor Holders.
(b) Any request, demand, authorization, direction,
notice, consent, waiver or other act by a Holder shall bind
such Holder 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 Trustee or Servicer in reliance
thereon, whether or not notation of such action is made upon
such Certificate.
SECTION 13.14 Rule 144A Information. For so long as any
of the Investor Certificates of any Series or any Class are
"restricted securities" within the meaning of Rule 144(a)(3)
under the Securities Act, each of Transferor, Servicer,
Trustee and the Credit Enhancement Provider for such Series
agree to cooperate with each other to provide to any Investor
Holders of such Series or Class and to any prospective
purchaser of Certificates designated by such an Investor
Holder upon the request of such Investor Holder 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.
<PAGE>
IN WITNESS WHEREOF, Transferor, Servicer and Trustee
have caused this Agreement to be duly executed by their respective
officers as of the day and year first above written.
FIRST NATIONAL BANK OF COMMERCE,
Transferor and Servicer
By:____________________________________________
Name:
Title:
_____________________________________________
Trustee
By:__________________________________________
Name:
Title:
<PAGE>
EXHIBIT A
FORM OF TRANSFEROR CERTIFICATE
------------------------------
Unless this Certificate is presented by an authorized
representative of First National Bank of Commerce, a national
banking association ("First NBC"), to ___________________________,
as trustee (the "Trustee") or its agent for exchange, and any
certificate issued is registered in the name of First NBC or in such
other name as requested by an authorized representative of First
NBC, ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE
BY OR TO ANY PERSON IS WRONGFUL.
FIRST NBC CREDIT CARD MASTER TRUST
Transferor Certificate
Evidencing an Undivided Interest in a trust, the corpus of
which consists of a portfolio of revolving credit card
receivables, initially comprised of a portion MasterCard(R)
and VISA(R)**<F8> and Private Label credit card receivables
generated or acquired by First National Bank of Commerce and
other assets and interests constituting the Trust under the
Pooling and Servicing Agreement described below.
(Not an interest in or obligation of
First National Bank of Commerce
or any Affiliate thereof.)
-----------------------------
<F8>
** MasterCard(R) and VISA(R) are federally registered
servicemarks of MasterCard International Inc. and of VISA
U.S.A., Inc., respectively.</F8>
This certifies that FIRST NATIONAL BANK OF COMMERCE (the
"Holder of the Transferor Certificate") 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, VISA and Private Label
credit card accounts (the "Accounts") of First National Bank
of Commerce, 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 and Recoveries), the right to certain amounts
received as Interchange with respect to the Accounts, the
rights to any Credit Enhancement and certain other assets and
interests constituting the Trust pursuant to a Pooling and
Servicing Agreement dated as of ______________ ___, 1997 (the
"Pooling and Servicing Agreement"), by and between First
National Bank of Commerce, as Transferor ("Transferor") and as
Servicer ("Servicer"), and _________________, a [[___________]
banking corporation], as Trustee ("Trustee") as the same may
be supplemented from time to time by a supplement (a
"Supplement"). Any Supplement may issue a Series of Investor
Certificates or a Supplemental Certificate. Each Series of
Investor Certificates will represent Undivided Interests in
the Trust, including the benefits of any Credit Enhancement
issued with respect to such Series. This Transferor
Certificate represents the remaining undivided interest in the
Trust, but does not represent any interest in Investor
Certificates, except as provided in the Pooling and Servicing
Agreement, or the benefits of any Credit Enhancement.
Transferor has structured the Pooling and Servicing
Agreement and the Investor Certificates with the intention
that the Investor Certificates will qualify under applicable
Federal, state, local and foreign tax law as indebtedness, and
each of Transferor, Servicer, the Holder of the Transferor
Certificate and each Holder of an Investor Certificate (or
Certificate Owner) by acceptance of its Certificate (or in the
case of a Certificate Owner, by virtue of such Certificate
Owner's acquisition of a beneficial interest therein), agrees
to treat and to take no action inconsistent with the treatment
of the Investor 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 Holder of an Investor
Certificate agrees that it will cause any Certificate Owner
acquiring an interest in an Investor Certificate through it to
comply with the Pooling and Servicing Agreement and any
applicable Supplement as to treatment of the Investor
Certificates as indebtedness for certain tax purposes.
To the extent not defined herein, capitalized terms used
herein have the respective meanings assigned to them in the
Pooling and Servicing Agreement. This Transferor 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 of the Transferor Certificate by virtue of the
acceptance hereof assents and by which the Holder of the
Transferor Certificate is bound.
Except as provided in the Pooling and Servicing
Agreement, Transferor may not transfer this Transferor
Certificate or any interest herein.
This Transferor Certificate represents an interest in
only the First NBC Credit Card Master Trust. This Transferor
Certificate does not represent an obligation of, or an
interest in, Transferor or 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 Transferor 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.
Unless the certificate of authentication hereon has been
executed by or on behalf of Trustee, by manual signature, this
Transferor Certificate shall not be entitled to any benefit
under the Pooling and Servicing Agreement, or be valid for any
purpose.
<PAGE>
IN WITNESS WHEREOF, FIRST NATIONAL BANK OF COMMERCE
has caused this Transferor Certificate to be duly executed
under its official seal.
By:_______________________________
Authorized Officer
[Seal]
Attested to:
By:___________________
Secretary
Date: _________________
<PAGE>
Form of Trustee's Certificate of Authentication
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is the Transferor Certificate referred to in
the within-mentioned Pooling and Servicing Agreement.
______________________________,
Trustee
By:___________________________
Authorized Signatory
<PAGE>
EXHIBIT B
FORM OF ASSIGNMENT OF RECEIVABLES
---------------------------------
IN ADDITIONAL ACCOUNTS
----------------------
(As required by Section 2.6 of
the Pooling and Servicing Agreement)
ASSIGNMENT No. _______ OF RECEIVABLES IN ADDITIONAL
ACCOUNTS dated as of _____________, ___***<F9> by and
between FIRST NATIONAL BANK OF COMMERCE, a national banking
association, as Transferor ("Transferor") and Servicer
("Servicer"), and __________________, [a [_________] banking
corporation], as Trustee ("Trustee"), pursuant to the Pooling
and Servicing Agreement referred to below.
WITNESSETH:
WHEREAS, Transferor, Servicer and Trustee are parties to
the Pooling and Servicing Agreement dated as of
________________ __, 1997 (as may be amended and supplemented
from time to time, the "Agreement");
WHEREAS, pursuant to the Agreement, Transferor wishes to
designate Additional Accounts 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 such terms are defined in the
Agreement); and
WHEREAS, Trustee is willing to accept such designation
and conveyance subject to the terms and conditions hereof;
NOW, THEREFORE, Transferor, Servicer and Trustee hereby
agree as follows:
1. Defined Terms. All capitalized terms used herein shall
have the meanings ascribed to them in the Agreement unless
otherwise defined herein.
-----------------------------
<F9>
*** To be dated as of the applicable Addition Date.</F9>
"Addition Date" means, with respect to the Additional
Accounts designated hereby, ________, ____.
"Addition Cut Off Date" means, with respect to the
Additional Accounts designated hereby, ________, ____.
2. Designation of Additional Accounts. Within ten
Business Days after the Addition Date, Transferor will deliver
to Trustee an Account Schedule identifying all such Additional
Accounts and specifying for each such Account, as of the
Addition Cut Off Date, its account number, the aggregate
amount outstanding in such Account and the aggregate amount of
Principal Receivables outstanding in such Account, which
Account Schedule shall be immediately incorporated into and
made a part of this Assignment and the Agreement.
3. Conveyance of Receivables. Transferor does hereby
transfer, assign, set over and otherwise convey to Trustee, on
behalf of the Trust, for the benefit of the Holders, without
recourse, all its right, title and interest in, to and under
the Receivables of such Additional Accounts existing at the
close of business on the Addition Date and thereafter created
and arising in connection with the Additional Accounts, all
monies due or to become due with respect to such Receivables
(including all Finance Charge Receivables and Recoveries), all
proceeds of such Receivables and Insurance Proceeds relating
to such Receivables, and all proceeds thereof. The foregoing
does not constitute and is not intended to result in the
creation or assumption by the Trust, Trustee, any Investor
Holder or any Credit Enhancement Provider of any obligation of
Servicer, Transferor or any other Person in connection with
the Accounts, the Receivables or under any agreement or
instrument relating thereto, including any obligation to
Obligors, merchant banks, merchants clearance systems or
insurers.
Transferor agrees to record and file, at its own expense,
financing statements (and continuation statements when
applicable) with respect to the Receivables in the Additional
Accounts, meeting the requirements of applicable state law in
such manner and in such jurisdictions as are necessary to per-
fect, and maintain perfection of, the assignment of such
Receivables to the Trust, and to deliver a file-stamped copy
of each such financing statement or other evidence of such
filing to Trustee on or prior to the Addition Date. The
foregoing transfer, assignment, set-over and conveyance to the
Trust shall be made to Trustee, on behalf of the Trust, and
each reference in this Assignment to such transfer,
assignment, set-over and conveyance shall be construed
accordingly. Trustee shall be under no obligation whatsoever
to file such financing or continuation statements or to make
any other filing under the UCC in connection with such
assignment.
In connection with such assignment, Transferor has
indicated in its computer files that Receivables created in
connection with the Additional Accounts and designated hereby
have been transferred to Trustee, on behalf of the Trust, for
the benefit of the Holders.
The parties intend that if, and to the extent that, such
assignment is not deemed to be a sale, Transferor shall be
deemed hereunder to have granted to Trustee, on behalf of the
Trust, for the benefit of the Investor Holders, a first
priority perfected security interest in all of Transferor's
right, title and interest in, to and under the Receivables now
existing and hereafter created and arising in connection with
the Additional Accounts, all monies due or to become due with
respect to such Receivables (including all Finance Charge
Receivables and Recoveries) and all proceeds thereof, that
this Assignment shall constitute such a security agreement
under applicable law, and that the Transferor Interest shall
be deemed to represent Transferor's equity in the collateral
granted.
4. Acceptance by Trustee. Trustee hereby acknowledges its
acceptance on behalf of the Trust for the benefit of the
Holders of all right, title and interest to the property, now
existing and hereafter created, conveyed to the Trust pursuant
to Section 3 of this Assignment, and declares that it shall
maintain such right, title and interest, upon the trust set
forth in the Agreement for the benefit of all Holders. Trustee
further acknowledges that, within five Business Days after the
execution and delivery of this Assignment, Transferor will
deliver to Trustee the Account Schedule or printed list
described in Section 2 of this Assignment.
5. Representations and Warranties of Transferor.
Transferor hereby represents and warrants to Trustee, on
behalf of the Trust, as of the date of this Assignment and as
of the Addition Date that:
(a) Legal, Valid and Binding Obligation. This
Assignment constitutes a legal, valid and binding
obligation of Transferor enforceable against 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 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 Transferor to be materially adverse to the
interests of the Investor Holders were utilized in
selecting the Additional Accounts from the Bank
Portfolio;
(d) Insolvency. As of the Addition Date, Transferor
is not insolvent.
(e) Pay Out Event. Transferor reasonably believes
that the transfer of the Receivables arising in the
Additional Accounts will not cause a Pay Out Event to
occur with respect to any Series;
(f) Security Interest. This Assignment constitutes
either (x) a valid transfer and assignment to Trustee, on
behalf of the Trust, of all right, title and interest of
Transferor in and to the Receivables existing at the
close of business on the Addition Date and thereafter
created in the Additional Accounts, and all monies due or
to become due with respect to such Receivables (including
all Finance Charge Receivables and Recoveries), all
proceeds of such Receivables and Insurance Proceeds
relating to such Receivables and all proceeds thereof,
all of which will be held by Trustee on behalf of the
Trust, free and clear of any Lien of any Person claiming
through or under Transferor or any of its Affiliates,
except for (i) Liens permitted under subsection 2.5(b),
(ii) the interest of Transferor as Holder of the
Transferor Certificate and (iii) Transferor's right to
receive interest accruing on, and investment earnings in
respect of, the Finance Charge Account and the Excess
Funding Account and any Series Account as provided in the
Agreement and any related Supplement or (y) a grant of a
security interest in such property to Trustee, for the
benefit of the Investor Holders, which is enforceable
with respect to then existing Receivables in the
Additional Accounts, the proceeds thereof and Insurance
Proceeds and Recoveries relating thereto upon the
conveyance of such Receivables to the Trust, and which
will be enforceable with respect to the Receivables
thereafter created in respect of Additional Accounts
conveyed on the Addition Date, the proceeds thereof and
Insurance Proceeds and Recoveries relating thereto upon
such creation; and (z) if the Assignment constitutes the
grant of a security interest to Trustee in such property,
upon the filing of a financing statement as described in
Section 2.1 of the Agreement with respect to the
Additional Accounts and in the case of the Receivables
thereafter created in the Additional Accounts and the
proceeds thereof, and Insurance Proceeds and Recoveries
relating thereto, upon such creation, Trustee shall have
a first priority perfected security interest in such
property (subject to Section 9-306 of the UCC as in
effect in the State of Louisiana), except for Liens
permitted under subsection 2.5(b) of the Agreement;
(g) No Conflict. The execution and delivery by
Transferor of this Assignment, the performance of the
transactions contemplated by this Assignment and the ful-
fillment of the terms hereof applicable to Transferor,
will not conflict with or violate any Requirements of Law
applicable to Transferor or 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 Transferor is a party or by which it or its
properties are bound;
(h) No Proceedings. There are no proceedings or
investigations pending or, to the best knowledge of
Transferor, threatened against Transferor before any
court, regulatory body, administrative agency or other
tribunal or governmental instrumentality (i) asserting
the invalidity of this Assignment, (ii) seeking to
prevent the consummation of any of the transactions
contemplated by this Assignment, (iii) seeking any
determination or ruling that, in the reasonable judgment
of Transferor, would materially and adversely affect the
performance by Transferor of its obligations under this
Assignment, (iv) seeking any determination or ruling that
would materially and adversely affect the validity or
enforceability of this Assignment or (v) seeking to
affect adversely the income tax attributes of the Trust
under the Federal, or applicable state income or
franchise tax systems; and
(i) All Consents. All authorizations, consents,
orders or approvals or other actions of any Person or of
any court or other governmental authority required to be
obtained by Transferor in connection with the execution
and delivery of this Assignment by Transferor and the
performance of the transactions contemplated by this
Assignment by Transferor, have been obtained.
6. Ratification of Agreement. As supplemented by this
Assignment, the Agreement is in all respects ratified and con-
firmed and the Agreement as so supplemented by this Assignment
shall be read, taken and construed as one and the same instru-
ment.
7. 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 shall constitute one and the same instrument.
8. GOVERNING LAW. THIS ASSIGNMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER
SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
<PAGE>
IN WITNESS WHEREOF, Transferor, Servicer and Trustee have
caused this Assignment to be duly executed by their respective
officers as of the day and year first above written.
FIRST NATIONAL BANK OF COMMERCE,
Transferor and Servicer
By:____________________________________
Name:
Title:
_______________________________________,
Trustee
By:____________________________________
Name:
Title:
<PAGE>
EXHIBIT C
FORM OF MONTHLY SERVICER'S CERTIFICATE
--------------------------------------
FIRST NATIONAL BANK OF COMMERCE
__________________________
First NBC Credit Card Master Trust, Series ______
__________________________
For the _____________ Determination Date
For the ___________ Monthly Period
The undersigned, a duly authorized representative of
First National Bank of Commerce, as Servicer pursuant to the
Pooling and Servicing Agreement dated as of ____________ __,
1997 (the "Pooling and Servicing Agreement") by and between
First National Bank of Commerce and _______________________,
as Trustee, does hereby certify as follows:
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 3.4(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, as amended by the
applicable Series Supplement.
2. First National Bank of Commerce is Servicer
under the Pooling and Servicing Agreement.
3. The undersigned is a Servicing Officer.
4. The date of this Certificate is _____________,
199__ which is a Determination Date under the Pooling and
Servicing Agreement.
5. The aggregate amount of Collections processed
during the preceding Monthly Period (equal to 5(a) plus
5(b)) was equal to $________.
(a) The aggregate amount of Collections of
Finance Charge Receivables collected during the
preceding Monthly Period (the "Collections of
Finance Charge Receivables") was equal to
$__________.
(b) The aggregate amount of Collections of
Principal Receivables collected during the
preceding Monthly Period (the "Collections of
Principal Receivables") was equal to $________.
6. The aggregate amount of Receivables as of
the end of the last day of the preceding Monthly Period
was equal to $__________.
7. Attached hereto is an authentic copy of the
statements required to be delivered by the Servicer on
the date of this Certificate to the Paying Agent pursuant
to Article V.
8. To the knowledge of the undersigned, there are
no Liens on any Receivables in the Trust except as
described below:
[If applicable, insert "None".]
9. The amount, if any, by which the sum of the
balance of the Excess Funding Account and the aggregate
Principal Receivables exceeds the Minimum Aggregate
Principal Receivables required to be maintained pursuant
to the Pooling and Servicing Agreement, is equal to
$_________.
10. The amount, if any, of the drawing request
required to be made by Trustee on the Servicer Letter of
Credit pursuant to subsection 4.3(a) of the Pooling and
Servicing Agreement on the related Transfer Date is equal
to $____________.
IN WITNESS WHEREOF, the undersigned has duly executed and
delivered this certificate this _____ day of ____________,
_____.
FIRST NATIONAL BANK OF
COMMERCE, Servicer
By:___________________________
Name:
Title:
<PAGE>
Schedule __ to Monthly
Servicer's Certificate
-----------------------
FIRST NATIONAL BANK OF COMMERCE
__________________________
First NBC Credit Card Master Trust, Series ______
__________________________
For the _____________ Determination Date
For the ___________ Monthly Period
[TO COME]
<PAGE>
EXHIBIT D
FORM OF ANNUAL SERVICER'S CERTIFICATE
-------------------------------------
(To be delivered on or before each
March 31 beginning with March 31, 1998,
pursuant to Section 3.5 of the Pooling and
Servicing Agreement referred to below)
FIRST NATIONAL BANK OF COMMERCE
FIRST NBC CREDIT CARD MASTER TRUST
The undersigned, a duly authorized representative of
First National Bank of Commerce, as Servicer ("First NBC"),
pursuant to the Pooling and Servicing Agreement dated as of
_______________ __, 1997 (as may be amended and supplemented
from time to time, the "Agreement"), among First NBC, as
Transferor and Servicer, and _____________________, as
Trustee, does hereby certify that:
1. First NBC is, as of the date hereof, Servicer under
the Agreement. Capitalized terms used in this Certificate have
their respective meanings as set forth in the Agreement.
2. The undersigned is a Servicing Officer who is duly
authorized pursuant to the Agreement to execute and deliver
this Certificate to Trustee.
3. A review of the activities of Servicer during the
fiscal year ended __________, ____, and of its performance
under the Agreement was conducted under my supervision.
4. Based on such review, Servicer has, to the best of my
knowledge, performed in all material respects its obligations
under the Agreement throughout such year and no default in the
performance of such obligations has occurred or is continuing
except as set forth in paragraph 5.
5. The following is a description of each default in the
performance of Servicer's obligations under the provisions of
the Agreement known to me to have been made by Servicer during
the fiscal year ended ___________, _____, which sets forth in
detail (i) the nature of each such default, (ii) the action
taken by Servicer, if any, to remedy each such default and
(iii) the current status of each such default: [if applicable,
insert "None."]
IN WITNESS WHEREOF, the undersigned has duly executed
this Certificate this ______ day of ____________, 19___.
FIRST NATIONAL BANK OF
COMMERCE, Servicer
By ________________________
Name:
Title:
<PAGE>
EXHIBIT E
FORM OF OPINION OF COUNSEL WITH RESPECT
TO ADDITION OF ADDITIONAL ACCOUNTS
----------------------------------
(Provisions to be included in
Opinion of Counsel to be
delivered pursuant to
Section 2.6(d)(vi) of the
Pooling and Servicing Agreement)
The opinions set forth below may be subject to appropriate
qualifications, assumptions, limitations and exceptions.
1. The Receivables arising in such Additional Accounts
constitute accounts, general intangibles or chattel paper.
2. The Pooling and Servicing Agreement creates in favor
of Trustee, on behalf of the Trust, for the benefit of the
Investor Holders, a security interest in Transferor's rights
in the Receivables in such Additional Accounts and the
proceeds thereof.
3. The security interest described in paragraph 2 is
perfected and of first priority under the UCC.
4. No further filings or actions are required under the
UCC prior to ______________, _______ in order to maintain the
perfection and priority of the security interest created by
the Pooling and Servicing Agreement in favor of Trustee, on
behalf of the Trust, in Transferor's rights in the Receivables
in such Additional Accounts and the proceeds thereof.
<PAGE>
EXHIBIT F
FORM OF ANNUAL OPINION OF COUNSEL
---------------------------------
The opinion set forth below, which is to be delivered
pursuant to subsection 13.2(d)(ii) of the Pooling and
Servicing Agreement, may be subject to certain qualifications,
assumptions, limitations and exceptions taken or made in the
opinion of counsel delivered on the Initial Closing Date with
respect to similar matters.
No filing or other action, other than such filing or
action described in such opinion, is necessary from the date
of such opinion through March 31 of the following year to
continue the perfected status of the interest of Trustee, on
behalf of the Trust, in the collateral described in the
financing statements referred to in such opinion.
<PAGE>
EXHIBIT G
FORM OF REASSIGNMENT OF RECEIVABLES
-----------------------------------
(As required by Section 2.7 of
the Pooling and Servicing Agreement)
REASSIGNMENT No. _______ OF RECEIVABLES dated as of
_________, ____ *<F10> by and among FIRST NATIONAL BANK OF
COMMERCE, a national banking association, as Transferor
("Transferor") and Servicer ("Servicer"), and
___________________, [a [_____________] banking corporation]
("Trustee"), pursuant to the Pooling and Servicing Agreement
referred to below.
WITNESSETH:
WHEREAS, Transferor, Servicer and Trustee are parties to
the Pooling and Servicing Agreement dated as of ______________
__, 1997 (as may be amended and supplemented from time to
time, the "Agreement");
WHEREAS, pursuant to the Agreement, Transferor wishes to
remove from the Trust all Receivables in certain designated
Accounts (the "Removed Accounts") and to cause Trustee to
reconvey the Receivables of such Removed Accounts, whether now
existing or hereafter created, from the Trust to Transferor;
and
WHEREAS, 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, Transferor, Servicer and Trustee hereby
agree as follows:
1. Defined Terms. All terms defined in the Agreement and
used herein shall have such defined meanings when used herein,
unless otherwise defined herein.
"Removal Date" means, with respect to the Removed Accounts
designated hereby, ____________, _____.
-----------------------------
<F10>
* To be dated as of the Removal Date.</F10>
"Removal Notice Date" means, with respect to the Removed
Accounts, ___________, ___.
2. Designation of Removed Accounts. On or before the date
that is ten Business Days after the Removal Date, Transferor
will deliver to Trustee a computer file or microfiche list
containing an accurate 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 part of the Agreement.
3. Conveyance of Receivables. (a) Trustee does hereby
transfer, assign, set over and otherwise convey, without
recourse, to Transferor, on and after the Removal Date, all
right, title and interest of Trustee, on behalf of the Trust,
in, to and under the Receivables existing at the close of
business on the Removal Date and thereafter created from time
to time in the Removed Accounts designated hereby, all monies
due or to become due with respect to such Receivables
(including all Finance Charge Receivables and Recoveries), all
proceeds of such Receivables and Insurance Proceeds relating
to such Receivables, and all proceeds thereof.
(b) In connection with such transfer, Trustee agrees to
execute and deliver to Transferor on or prior to the date this
Reassignment is delivered, applicable termination statements
with respect to the Receivables existing at the close of
business on the Removal Date and thereafter created from time
to time in the Removed Accounts reassigned hereby and the pro-
ceeds thereof evidencing the release by the Trust of its
interest in the Receivables in the Removed Accounts, and
meeting the requirements of applicable state law, in such
manner and such jurisdictions as are necessary to terminate
such interest.
4. Representations and Warranties of Transferor.
Transferor hereby represents and warrants to Trustee, on
behalf of the Trust, as of the Removal Date:
(a) Legal, Valid and Binding Obligation. This
Reassignment constitutes a legal, valid and binding
obligation of Transferor enforceable against 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 except as such
enforceability may be limited by general principles of
equity (whether considered in a suit at law or in
equity);
(b) Pay Out Event, Minimum Transferor Interest,
Minimum Aggregate Principal Receivables, Series Payments.
Transferor reasonably believes that the removal of the
Receivables in the Removed Accounts will not (A) cause a
Pay Out Event to occur with respect to any Series
(provided that for purposes of this subsection 4(b)(A),
the Receivables in the Removed Accounts 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, (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;
(c) Selection Procedure. No selection procedures
believed by Transferor to be materially adverse to the
interests of the Holders of any Series as of the Removal
Date were utilized in selecting the Removed Accounts to
be removed from the Trust;
(d) Rating Agency Notice; Approval. Each Rating
Agency has received notice, on or before the tenth
Business Day prior to the Removal Date, of the proposed
removal of the Receivables from the Removed Accounts, and
the Rating Agency Condition has been satisfied with
respect to the removal; and
(e) Amount of Principal Receivables. As of the
Removal Notice Date, the amount of Principal Receivables
of the Removed Accounts does not equal or exceed 5% of
the aggregate amount of Principal Receivables on the
Removal Date; provided, that if any Series has been paid
in full, the Principal Receivables in the Removed
Accounts can approximate the Initial Investor Interest of
such Series.
5. Ratification of Agreement. As supplemented by this
Reassignment, the Agreement is in all respects ratified and
confirmed and the Agreement as so supplemented by this
Reassignment shall be read, taken and construed as one and the
same instrument.
6. 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 shall constitute one and the same instrument.
7. GOVERNING LAW. THIS REASSIGNMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER
SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
IN WITNESS WHEREOF, Transferor, Servicer and Trustee have
caused this Reassignment to be duly executed by their respective
officers as of the day and year first above written.
FIRST NATIONAL BANK OF COMMERCE,
Transferor and Servicer
By:___________________________________
Name:
Title:
______________________________________,
Trustee
By:___________________________________
Name:
Title:
<PAGE>
EXHIBIT H
FORM OF RECONVEYANCE OF RECEIVABLES
-----------------------------------
RECONVEYANCE of RECEIVABLES, dated as of __________ __,
19__, by and between FIRST NATIONAL BANK OF COMMERCE, a
national banking association (the "Transferor") and
____________________, [a [___________] banking corporation]
(the "Trustee") pursuant to the Pooling and Servicing Agreement
referred to below.
W I T N E S S E T H:
WHEREAS, Transferor and Trustee are parties to the
Pooling and Servicing Agreement dated as of ___________ __,
1997 (hereinafter as such agreement may have been, or may from
time to time be, amended, supplemented or otherwise modified,
the "Pooling and Servicing Agreement") by and among First
National Bank of Commerce, as Transferor and Servicer, and
Trustee;
WHEREAS, pursuant to the Pooling and Servicing Agreement,
Transferor, as Holder of the Transferor Certificate, wishes to
cause Trustee to reconvey all of the Receivables and proceeds
thereof, whether now existing or hereafter created, from the
Trust to the Holder of the Transferor Certificate pursuant to
the terms of Section 12.4 of the Pooling and Servicing
Agreement upon termination of the Trust pursuant to Section
12.1 of the Pooling and Servicing Agreement (as each such term
is defined in the Pooling and Servicing Agreement);
WHEREAS, Trustee is willing to reconvey the Receivables
subject to the terms and conditions hereof;
NOW THEREFORE, Transferor and 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 __________ __, 19__.
2. Return of Lists of Accounts. Trustee shall deliver
to the Holder of the Transferor Certificate, not later than
three Business Days after the Reconveyance Date, each and
every computer file or microfiche list of Accounts delivered
to Trustee pursuant to the terms of the Pooling and Servicing
Agreement.
3. Conveyance of Receivables. (a) Trustee does hereby
reconvey to the Holder of the Transferor Certificate, without
recourse, representation or warranty, 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 accrued interest heretofore
posted as Finance Charge Receivables and Recoveries), 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, if any,
held by Trustee pursuant to subsection 12.3(b) of the Pooling
and Servicing Agreement.
(b) In connection with such transfer, Trustee
agrees to execute and deliver on or prior to the date of this
Reconveyance, such UCC termination statements or other
instruments of transfer and assignment, in each case without
recourse, as the Holder of the Transferor Certificate may
reasonably request to vest in such Holder all right, title and
interest which the Trust had in 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, AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER
SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
<PAGE>
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.
FIRST NATIONAL BANK OF COMMERCE,
Transferor and Servicer
By_____________________________________
Name:
Title:
_______________________________________,
Trustee
By_____________________________________
Name:
Title:
<PAGE>
EXHIBIT I
FORM OF AMENDED SECTION 9.2
---------------------------
SECTION 9.2 Additional Rights Upon the Occurrence of
Certain Events. (a) If Transferor shall consent to the
appointment of a conservator or receiver or liquidator for the
winding-up or liquidation of its affairs, 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 for the winding-up or
liquidation of its affairs shall have been entered against
Transferor (an "Insolvency Event"), Transferor shall on the
day of such Insolvency Event (the "Appointment Day")
immediately cease to transfer Principal Receivables and
Discount Option Receivables to the Trust and shall promptly
give notice to Trustee of such Insolvency Event.
Notwithstanding any cessation of the transfer to the Trust of
additional Principal Receivables and Discount Option
Receivables, Finance Charge Receivables, whenever created,
accrued in respect of Principal Receivables or Discount Option
Receivables which have been transferred to the Trust shall
continue to be a part of the Trust, and Collections with
respect thereto shall continue to be allocated and paid in
accordance with Article IV. Within 15 days of the Appointment
Day, Trustee shall (i) publish a notice in an Authorized
Newspaper that an Insolvency Event has occurred and that
Trustee intends to sell, dispose of or otherwise liquidate the
Receivables in a commercially reasonable manner and (ii) send
written notice to the Investor Holders describing the
provisions of this Section 9.2 and requesting instructions
from such Holders. Unless within 90 days from the day notice
pursuant to clause (i) is first published, Trustee shall have
received written instructions of Holders of Investor
Certificates evidencing more than 50% of the Investor Interest
of each Series issued and outstanding (or, if any such Series
has two or more Classes, each Class) to the effect that such
Holders disapprove of the liquidation of the Receivables and
wish to continue having Principal Receivables and Discount
Option Receivables transferred to the Trust as before such
Insolvency Event, Trustee shall 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. Trustee may obtain a prior
determination for any such conservator, receiver or liquidator
that the terms and manner of any proposed sale, disposition or
liquidation are commercially reasonable. The provisions of
Sections 9.1 and 9.2 shall not be deemed to be mutually
exclusive.
(b) The proceeds from the sale, disposition or
liquidation of the Receivables pursuant to subsection (a)
shall be treated as Collections on the Receivables and shall
be allocated and deposited in accordance with the provisions
of Article IV; provided, that Trustee shall determine
conclusively in its sole discretion the amount of such
proceeds which are allocable to Finance Charge Receivables and
the amount of such proceeds which are allocable to Principal
Receivables. Unless Trustee receives written instructions
from Investor Holders as provided in subsection (a), on the
day following the last Distribution Date in the Monthly Period
during which such proceeds are distributed to the Investor
Holders of each Series, the Trust shall terminate.
(c) Trustee may appoint an agent or agents to assist with
its responsibilities pursuant to this Article IX with respect
to competitive bids.
<PAGE>
FIRST NATIONAL BANK OF COMMERCE
Transferor and Servicer
and
-------------------
Trustee
on behalf of the Series 1997-1 Holders
SERIES 1997-1 SUPPLEMENT
Dated as of ___________ __, 1997
to
POOLING AND SERVICING AGREEMENT
Dated as of ____________ __, 1997
FIRST NBC CREDIT CARD MASTER TRUST
Series 1997-1
<PAGE>
TABLE OF CONTENTS
Page
SECTION 1. Designation...................................................1
SECTION 2. Definitions...................................................2
SECTION 3. Servicing Compensation and Assignment of Interchange and
Other Account Revenues..........................................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; Legends;
Transfer Restrictions and Procedures............................22
SECTION 7. Article IV of Agreement......................................22
SECTION 4.6 Rights of Holders and the Collateral Interest
Holder .........................................................22
SECTION 4.7 Allocations........................................23
SECTION 4.8 Determination of Monthly Interest..................29
SECTION 4.9 Determination of Monthly Principal.................30
SECTION 4.10 Coverage of Required Amount.......................31
SECTION 4.11 Monthly Payments..................................33
SECTION 4.12 Series Investor Charge-Offs.......................37
SECTION 4.13 Excess Spread.....................................39
SECTION 4.14 Reallocated Investor Finance Charge Collections...41
SECTION 4.15 Reallocated Principal Collections.................42
SECTION 4.16 Shared Principal Collections......................43
SECTION 4.17 Principal Account and Principal Funding Account...43
SECTION 4.18 Reserve Account...................................45
SECTION 4.19 Determination of LIBOR............................46
SECTION 4.20 Transferor's or Servicer's Failure to Make a Deposit
or Payment.............................................47
SECTION 8. Article V of the Agreement...................................48
SECTION 5.1 Distributions......................................48
SECTION 5.2 Monthly Series 1997-1 Holders' Statement...........48
SECTION 9. Series 1997-1 Pay Out Events.................................49
SECTION 10. Series 1997-1 Termination...................................50
-i-
<PAGE>
Page
SECTION 11. Periodic Finance Charges and Other Fees.....................51
SECTION 12. Counterparts................................................51
SECTION 13. Governing Law...............................................51
SECTION 14. No Petition.................................................51
SECTION 15. Amendments..................................................51
EXHIBITS
EXHIBIT A-1 Form of Class A Certificate
EXHIBIT A-2 Form of Class B Certificate
EXHIBIT B Form of Monthly Payment Instructions
and Notification to Trustee
EXHIBIT C Form of Monthly Series 1997-1 Holders' Statement
-ii-
<PAGE>
SERIES 1997-1 SUPPLEMENT, dated as of ______________ __, 1997 (this
"Series Supplement"), by and between FIRST NATIONAL BANK OF COMMERCE, a
national banking association ("First NBC"), as Transferor and Servicer, and
__________________________, as Trustee under the Pooling and Servicing
Agreement dated as of ______________ __, 1997 between First NBC and Trustee
(the "Agreement").
Section 6.9 of the Agreement provides, among other things, that
Transferor and Trustee may at any time and from time to time enter into a
supplement to the Agreement for the purpose of authorizing the delivery by
Trustee to Transferor for the execution and redelivery to Trustee for
authentication of one or more Series of Certificates.
Pursuant to this Series Supplement, Transferor and the Trust shall
create a new Series of Investor Certificates and shall specify the
Principal Terms thereof.
SECTION 1. Designation. (a) There is hereby created a Series of
Investor Certificates to be issued in two Classes pursuant to the Agreement
and this Series Supplement and to be known together as the "Series 1997-1
Certificates." The two classes shall be designated the Class A Floating
Rate Asset Backed Certificates, Series 1997-1 (the "Class A Certificates")
and the Class B Floating Rate Asset Backed Certificates, Series 1997-1 (the
"Class B Certificates"). The Class A Certificates and the Class B
Certificates shall be substantially in the form of Exhibits A-1 and A-2,
respectively. In addition, there is hereby created a third Class which
constitutes an uncertificated interest in the Trust, shall be deemed to be
an "Investor Certificate" for all purposes under the Agreement and this
Series Supplement, except as expressly provided herein, and shall be known
as the Collateral Interest, Series 1997-1 and have the rights assigned to
the Collateral Interest in this Series Supplement.
(b) Series 1997-1 shall be included in Group I, which shall be a
Reallocation Group in which all Series shall also be Excess Allocation
Series. Series 1997-1 shall be a Principal Sharing Series. Series 1997-1
shall not be subordinated to any other Series.
(c) The Collateral Interest Holder, as holder of an "Investor
Certificate" under the Agreement, shall be entitled to the benefits of the
Agreement and this Series Supplement upon payment by the Collateral
Interest Holder of amounts owing on the Closing Date pursuant to the Loan
Agreement. Notwithstanding the foregoing, except as expressly provided
herein, the provisions of Article VI and Article XII of the Agreement
relating to the registration, authentication, delivery, presentation,
cancellation and surrender of Registered Certificates shall not be
applicable to the Collateral Interest.
1
<PAGE>
SECTION 2. Definitions. If any term or provision contained herein
shall conflict with or be inconsistent with any provision contained in the
Agreement, the terms and provisions of this Series Supplement shall govern.
References to any Article, Section or subsection are references to
Articles, Sections or subsections of the Agreement, except as otherwise
expressly provided. All capitalized terms not otherwise defined herein are
defined in the Agreement, and the interpretive provisions set out in
Section 1.2 of the Agreement apply to this Series Supplement. Each
capitalized term defined herein relates only to the Investor Certificates
and no other Series of Certificates issued by the Trust.
"Accumulation Shortfall" initially means zero and thereafter means,
with respect to any Monthly Period during the Controlled Accumulation
Period, the excess, if any, of the Controlled Deposit Amount for the
previous Monthly Period over the amount deposited into the Principal
Funding Account pursuant to subsection 4.11(e)(i) with respect to the Class
A Certificates for the previous Monthly Period.
"Actual Allocations" is defined in subsection 4.7(e).
"Adjusted Investor Interest" means, on any date of determination, an
amount equal to the sum of (a) the Class A Adjusted Investor Interest and
(b) the Class B Investor Interest and (c) the Collateral Interest.
"Available Investor Principal Collections" means, as to any Monthly
Period, an amount equal to (a) the Investor Principal Collections for such
Monthly Period, minus (b) the amount of Reallocated Principal Collections
with respect to such Monthly Period that, pursuant to Section 4.15, are
required to fund the Class A Required Amount and the Class B Required
Amount (other than any portions thereof that are applied pursuant to (x)
subsection 4.11(a)(iii) and (y) subsection 4.13(c) (to the extent such
portions pursuant to subsection 4.13(c) are available to pay the Class B
Net Default Amount), which shall, without duplication, be included as
Available Investor Principal Collections), plus (c) the amount of Shared
Principal Collections that are allocated to Series 1997-1 in accordance
with subsection 4.16(b).
"Available Reserve Account Amount" means, as to any Transfer Date, the
lesser of (a) the amount on deposit in the Reserve Account on such date
(after taking into account any interest and earnings retained in the
Reserve Account pursuant to subsection 4.18(b) on such date, but before
giving effect to any deposit made or to be made pursuant to subsection
4.13(i) to the Reserve Account on such date) and (b) the Required Reserve
Account Amount.
"Base Rate" means, as to any Monthly Period, the sum of (a) the
weighted average of the Class A Certificate Rate, the Class B Certificate
Rate,
2
<PAGE>
and the Collateral Rate (each for the related Interest Period) plus (b) the
Series Servicing Fee Percentage.
"Class A Additional Interest" is defined in Section 4.8(a).
"Class A Adjusted Investor Interest" means, on any date of
determination, an amount equal to the Class A Investor Interest minus the
Principal Funding Account Balance on such date of determination.
"Class A Available Funds" means, as to any Monthly Period, an amount
equal to the sum of (a) the Class A Floating Allocation of Reallocated
Investor Finance Charge Collections, excluding the portion of Reallocated
Investor Finance Charge Collections 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
4.17(b), if any, with respect to the related Transfer Date that are to be
applied as Class A Available Funds pursuant to subsection 4.17(b) and (c)
amounts, if any, to be withdrawn from the Reserve Account that will be
deposited into the Finance Charge Account on the related Transfer Date
pursuant to subsections 4.18(b) and 4.18(d) (or that will be required to be
deposited in the Finance Charge Account pursuant to such subsections on the
related Transfer Date (before giving effect to any permitted netting)).
"Class A Certificate Rate" means with respect to each Interest Period
(or, in the case of the initial Interest Period, with respect to each
portion thereof having a separate LIBOR Determination Date) a per annum
rate equal to 0.___% per annum in excess of LIBOR, as determined on the
related LIBOR Determination Date.
"Class A Certificates" is defined in subsection 1(a) of this Series
Supplement.
"Class A Deficiency Amount" is defined in subsection 4.8(a).
"Class A Fixed Allocation" means, for any Monthly Period following the
Revolving Period, the percentage equivalent (which percentage shall never
exceed 100%) of a fraction, the numerator of which is the Class A Investor
Interest as of the close of business on the last day of the Revolving
Period and the denominator of which is equal to the numerator used in
determining the related Fixed Investor Percentage; provided that if Series
1997-1 is paired with a Paired Series and a Pay Out Event occurs with
respect to such Paired Series during the Controlled Accumulation Period,
Transferor may, by written notice delivered to Trustee and Servicer,
designate a different numerator (provided that such numerator is not less
than the Class A Adjusted Investor Interest (less the balance
3
<PAGE>
on deposit in the Principal Account) as of the last day of the revolving
period for such Paired Series).
"Class A Floating Allocation" means, for any Monthly Period, the
percentage equivalent (which percentage shall never exceed 100%) of a
fraction, the numerator of which is the Class A Adjusted Investor Interest
as of the close of business on the last day of the preceding Monthly Period
and the denominator of which is equal to the Adjusted Investor Interest as
of the close of business on such day; provided that, with respect to the
first Monthly Period, the Class A Floating Allocation means the percentage
equivalent of a fraction, the numerator of which is the Class A Initial
Investor Interest and the denominator of which is the Initial Investor
Interest.
"Class A Holder" means the Person in whose name a Class A Certificate
is registered in the Certificate Register.
"Class A Initial Investor Interest" means the aggregate initial
principal amount of the Class A Certificates, which is $___________.
"Class A Investor Allocation" means, for any Monthly Period, (a) with
respect to Net Default Amounts and Reallocated Investor Finance Charge
Collections at any time and Principal Receivables during the Revolving
Period, the Class A Floating Allocation and (b) with respect to Principal
Receivables during the Controlled Accumulation Period or Rapid Amortization
Period, the Class A Fixed Allocation.
"Class A Investor Charge-Off" is defined in subsection 4.12(a).
"Class A Investor Interest" means, 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 Holders prior to
such date and minus (c) the excess, if any, of the aggregate amount of
Class A Investor Charge- Offs pursuant to subsection 4.12(a) over Class A
Investor Charge-Offs reimbursed pursuant to subsection 4.13(b) prior to
such date of determination; provided that the Class A Investor Interest may
not be reduced below zero.
"Class A Monthly Interest" is defined in subsection 4.8(a).
"Class A Monthly Principal" is defined in subsection 4.9(a).
"Class A Net Default Amount" means, as to each Transfer Date, an
amount equal to the product of (a) the Series Net Default Amount for such
Transfer Date and (b) the Class A Floating Allocation applicable for the
related Monthly Period.
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"Class A Required Amount" is defined in subsection 4.10(a).
"Class A Scheduled Payment Date" means the ______ _______
Distribution Date.
"Class A Servicing Fee" is defined in subsection 3(a) of this
Series Supplement.
"Class B Additional Interest" is defined in subsection 4.8(b).
"Class B Available Funds" means, as to any Monthly Period, an amount
equal to the Class B Floating Allocation of Reallocated Investor Finance
Charge Collections, excluding the portion of Reallocated Investor Finance
Charge Collections attributable to Servicer Interchange.
"Class B Certificate Rate" means, with respect to each Interest Period
(or, in the case of the initial Interest Period, with respect to each
portion thereof having a separate LIBOR Determination Date) a per annum
rate equal to 0.___% per annum in excess of LIBOR, as determined on the
related LIBOR Determination Date.
"Class B Certificates" is defined in subsection 1(a) of this Series
Supplement.
"Class B Deficiency Amount" is defined in subsection 4.8(b).
"Class B Fixed Allocation" means, for any Monthly Period following the
Revolving Period, the percentage equivalent (which percentage shall never
exceed 100%) of a fraction, the numerator of which is the Class B Investor
Interest as of the close of business on the last day of the Revolving
Period and the denominator of which is equal to the numerator used in
determining the related Fixed Investor Percentage; provided that if Series
1997-1 is paired with a Paired Series and a Pay Out Event occurs with
respect to such Paired Series during the Controlled Accumulation Period,
Transferor may, by written notice delivered to Trustee and Servicer,
designate a different numerator (provided that such numerator is not less
than the Class B 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).
"Class B Floating Allocation" means, for any Monthly Period, the
percentage equivalent (which percentage shall never exceed 100%) of a
fraction, the numerator of which is the Class B Investor Interest as of the
close of business
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on the last day of the preceding Monthly Period and the denominator of
which is equal to the Adjusted Investor Interest as of the close of
business on such day; provided that, with respect to the first Monthly
Period, the Class B Floating Allocation means the percentage equivalent of
a fraction, the numerator of which is the Class B Initial Investor Interest
and the denominator of which is the Initial Investor Interest.
"Class B Holder" means the Person in whose name a Class B
Certificate is registered in the Certificate Register.
"Class B Initial Investor Interest" means the aggregate initial
principal amount of the Class B Certificates, which is $____________.
"Class B Investor Allocation" means, for any Monthly Period, (a) with
respect to Net Default Amounts and Reallocated Investor Finance Charge
Collections 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-Off" is defined in subsection 4.12(b).
"Class B Investor Interest" means, 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 Holders prior to
such date, minus (c) the aggregate amount of Class B Investor Charge-Offs
for all prior Transfer Dates pursuant to subsection 4.12(b), minus (d) the
amount of the Reallocated Class B Principal Collections allocated pursuant
to subsection 4.15(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 4.12(a), plus (f) the aggregate amount of
Excess Spread allocated and available on all prior Transfer Dates pursuant
to subsection 4.13(d) for the purpose of reimbursing amounts deducted
pursuant to the foregoing clauses (c), (d) and (e); provided that the Class
B Investor Interest may not be reduced below zero.
"Class B Monthly Interest" is defined in subsection 4.8(b).
"Class B Monthly Principal" is defined in subsection 4.9(b).
"Class B Net Default Amount" means, as to each Transfer Date, an
amount equal to the product of (a) the Series Net Default Amount for such
Transfer Date and (b) the Class B Floating Allocation applicable for the
related Monthly Period.
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"Class B Required Amount" is defined in subsection 4.10(b).
"Class B Scheduled Payment Date" means the ______ _______
Distribution Date.
"Class B Servicing Fee" is defined in subsection 3(a) of this
Series Supplement.
"Closing Date" means ______________ ___, 1997.
"Collateral Allocation" means, for any Monthly Period, (a) with
respect to Net Default Amounts and Reallocated Investor Finance Charge
Collections 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" means, as to any Monthly Period, an
amount equal to the Collateral Floating Allocation of Reallocated Investor
Finance Charge Collections, excluding the portion of Reallocated Investor
Finance Charge Collections attributable to Servicer Interchange.
"Collateral Charge-Off" is defined in subsection 4.12(c).
"Collateral Fixed Allocation" means, for any Monthly Period following
the Revolving Period, the percentage equivalent (which percentage shall
never exceed 100%) of a fraction, the numerator of which is the Collateral
Interest as of the close of business on the last day of the Revolving
Period and the denominator of which is equal to the numerator used in
determining the related Fixed Investor Percentage; provided that if Series
1997-1 is paired with a Paired Series and a Pay Out Event occurs with
respect to such Paired Series during the Controlled Accumulation Period,
Transferor may, by written notice delivered to Trustee and Servicer,
designate a different numerator (provided that such numerator is not less
than the Collateral Interest (less, if the Class 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).
"Collateral Floating Allocation" means, for any Monthly Period, the
percentage equivalent (which percentage shall never exceed 100%) of a
fraction, the numerator of which is the Collateral Interest as of the close
of business on the last day of the preceding Monthly Period and the
denominator of which is equal to the Adjusted Investor Interest as of the
close of business on such day; provided that, with respect to the first
Monthly Period, the Collateral Floating Allocation
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means 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" means $___________.
"Collateral Interest" means, on any date of determination, a
fractional undivided interest in the Trust that shall consist of the right
to receive, to the extent necessary to make the required payments to the
Collateral Interest Holder under this Series Supplement, the portion of
Collections allocable thereto under the Agreement and this Series
Supplement and funds on deposit in the Collection Account allocable thereto
pursuant to the Agreement and this Series Supplement. On any date, for
purposes of all calculations in the Agreement and this Series Supplement,
the amount of the Collateral Interest shall be an amount equal to (a) the
Collateral Initial Interest, minus (b) the aggregate amount of principal
payments made to the Collateral Interest Holder prior to such date, minus
(c) the aggregate amount of Collateral Charge-Offs for all prior Transfer
Dates pursuant to subsection 4.12(c), minus (d) the amount of Reallocated
Principal Collections allocated pursuant to subsections 4.15(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 4.12(a) and (b), plus (f) the aggregate amount of
Excess Spread allocated and available on all prior Transfer Dates pursuant
to subsection 4.13(h) for the purpose of reimbursing amounts deducted
pursuant to the foregoing clauses (c), (d) and (e); provided that the
Collateral Interest may not be reduced below zero.
"Collateral Interest Holder" means the entity so designated in the Loan
Agreement.
"Collateral Interest Servicing Fee" is defined in subsection 3(a)
of this Series Supplement.
"Collateral Monthly Interest" is defined in subsection 4.8(c).
"Collateral Monthly Principal" is defined in subsection 4.9(c).
"Collateral Net Default Amount" means, as to any Transfer Date, an
amount equal to the product of (a) the Series Net Default Amount for such
Transfer Date and (b) the Collateral Floating Allocation applicable for the
related Monthly Period.
"Collateral Rate" means, for any Interest Period, the rate specified in the
Loan Agreement.
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"Collection Recomputation Date" means, with respect to Collections
received during any Billing Cycle that are initially allocated on an
estimated basis as provided in subsection 4.7(d), the date on which
Servicer performs the recomputations provided for in subsection 4.7(e),
which date shall not be later than the Determination Date in the Monthly
Period following the Monthly Period in which such Billing Cycle ends.
"Controlled Accumulation Amount" means, for any Transfer Date with
respect to the Controlled Accumulation Period prior to the payment in full
of the Class A Investor Interest, $__________________; provided that if the
Controlled Accumulation Period Length is modified pursuant to subsection
4.11(i), (i) the Controlled Accumulation Amount for each Transfer Date with
respect to the Controlled Accumulation Period shall mean the amount
determined in accordance with Section 4.11(i) on the date on which the
Controlled Accumulation Period has most recently been modified and (ii) the
sum of the Controlled Accumulation Amounts for all Transfer Dates with
respect to the modified Controlled Accumulation Period shall not be less
than the Class A Investor Interest.
"Controlled Accumulation Date" means _____________, ____.
"Controlled Accumulation Period" means, unless a Pay Out Event shall
have occurred prior thereto, the period commencing at the close of business
on the Controlled Accumulation Date or such later date as is determined in
accordance with subsection 4.11(i) and ending on the first to occur of (a)
the commencement of the Rapid Amortization Period and (b) the Series 1997-1
Termination Date.
"Controlled Accumulation Period Length" is defined in subsection 4.11(i).
"Controlled Deposit Amount" means, with respect to any Transfer Date,
the sum of (a) the Controlled Accumulation Amount for such Transfer Date
and (b) any existing Accumulation Shortfall.
"Covered Amount" means an amount determined as of each Transfer Date
with respect to any Interest Period as the product of (a) (i) one-twelfth,
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" means (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.
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"Credit Enhancement Provider" means the Collateral Interest Holder.
"Cumulative Series Principal Shortfall" means the sum of the Series
Principal Shortfalls (as such term is defined in each of the related
Supplements) for each Principal Sharing Series.
"Deficiency Amount" means, at any time of determination, the sum of
(a) the Class A Deficiency Amount and (b) the Class B Deficiency Amount.
"Distribution Date" means ___________ __[15], 1997 and the fifteenth
day of each calendar month thereafter or, if such fifteenth day is not a
Business Day, the next succeeding Business Day.
"Estimated Allocations" is defined in subsection 4.7(e).
"Excess Principal Funding Investment Proceeds" means, with respect to
each Transfer Date relating to the Controlled Accumulation Period, the
amount, if any, by which the Principal Funding Investment Proceeds for such
Transfer Date exceed the Covered Amount determined on such Transfer Date.
"Excess Spread" means, with respect to any Transfer Date, the sum of
(a) the sum of the amounts, if any, with respect to that Transfer Date
specified pursuant to subsections 4.11(a)(iv), 4.11(b)(iii) and
4.11(c)(ii), plus (b) the Excess Finance Charge Collections, if any,
allocated to the Investor Interest pursuant to Section 4.5 for that
Transfer Date.
"Finance Charge Shortfall" means, with respect to any Transfer Date,
an amount equal to the excess, if any, of (a) the sum of the amounts
specified in clauses (a) through (j) of Section 4.13 for that Transfer Date
over (b) the sum of the amounts, if any, with respect to such Transfer Date
specified pursuant to subsections 4.11(a)(iv), 4.11(b)(iii) and
4.11(c)(ii).
"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 (a) the
Aggregate Principal Receivables 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 for all outstanding Series with
respect to Principal Receivables on such date of determination; provided
that (x) if Series 1997-1 is paired with a Paired Series and a Pay Out
Event occurs with respect to such Paired Series during the Controlled
Accumulation Period, Transferor may, by written notice delivered to Trustee
and Servicer, designate a different numerator (provided that such numerator
is not less than the Adjusted Investor Interest (less the balance on
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deposit in the Principal Account) as of the last day of the revolving
period for such Paired Series) and (y) if one or more Reset Dates occur in
a Monthly Period, the Fixed Investor Percentage for the portion of the
Monthly Period falling after each such Reset Date (the "subject Reset
Date") and prior to the earlier of the last day of the current Monthly
Period and any subsequent Reset Date shall be determined using a
denominator equal to the greater of the amounts specified in clause (a) and
clause (b) above determined as of the subject Reset Date.
"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 (a) the Aggregate Principal Receivables as of the close of
business on the last day of the preceding Monthly Period and (b) the sum of
the numerators used to calculate the Investor Percentages for all
outstanding Series with respect to Finance Charge Receivables, Net Default
Amounts or Principal Receivables, as applicable, on such date of
determination; provided that if one or more Reset Dates occurs in a Monthly
Period, the Floating Investor Percentage for the portion of the Monthly
Period falling after each such Reset Date (the "subject Reset Date") and on
or prior to the earlier of the last day of the current Monthly Period and
any subsequent Reset Date shall be determined using a denominator equal to
the greater of the amounts specified in clause (a) and clause (b) above
determined as of the subject Reset Date.
"Group I" means Series 1997-1 and each other Series specified in
the related Supplement to be included in Group I.
"Group I Investor Charge-Offs" means, with respect to any Transfer
Date, the sum of (a) the Series Investor Charge-Offs for such Transfer Date
and (b) the series investor charge-offs for all other Series included in
Group I for such Transfer Date.
"Group I Investor Finance Charge Collections" means, with respect to
any Transfer Date, the sum of (a) the Investor Finance Charge Collections
for such Distribution Date and (b) the aggregate investor finance charge
collections for all other Series included in Group I for such Distribution
Date.
"Group I Monthly Fees" means, with respect to any Transfer Date, the
sum of (a) the Series Monthly Fees for such Transfer Date and (b) the
aggregate series monthly fees for all other Series included in Group I for
such Transfer Date.
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"Group I Monthly Interest" means, with respect to any Transfer Date,
the sum of (a) the Series Monthly Interest for such Transfer Date and (b)
the aggregate series monthly interest for all other Series included in
Group I for such Transfer Date.
"Group I Net Default Amount" means, with respect to any Transfer Date,
the sum of (a) the Series Net Default Amount for such Transfer Date and (b)
the aggregate series net default amounts for all other Series included in
Group I for such Transfer Date.
"Initial Investor Interest" means $__________.
"Interest Period" means, with respect to any Distribution Date, the
period from and including the previous Distribution Date through and
including the day preceding such Distribution Date, except that the initial
Interest Period will be the period from and including the Closing Date
through the day preceding the initial Distribution Date.
"Investor Certificates" means the Class A Certificates, the Class
B Certificates and the Collateral Interest.
"Investor Finance Charge Collections" means for any Transfer Date,
the sum of the following amounts determined for the related Monthly Period:
(a) insofar as such Monthly Period fell prior to the
Conversion Date, an amount equal to the aggregate Collections of
Finance Charge Receivables processed during each Billing Cycle
which ended during such Monthly Period (and prior to the
Conversion Date) which are deposited in the Finance Charge Account
(or required to be deposited in the Finance Charge Account on that
Transfer Date (before giving effect to any permitted netting) with
respect to such portion of such Monthly Period pursuant to
subsection 4.2(e), the third paragraph of subsection 4.3(a) and
subsection 4.7(d) of the Agreement), less any amount required to
be withdrawn from the Finance Charge Account with respect to such
portion of such Monthly Period pursuant to subsection 4.7(f); plus
(b) insofar as such Monthly Period fell on or after the
Conversion Date, an amount equal to the aggregate Collections of
Finance Charge Receivables deposited in the Finance Charge Account
on each day in such Monthly Period falling on or after the
Conversion Date (or required to be deposited in the Finance Charge
Account on that Transfer Date (before giving effect to any
permitted netting) with respect to any such day pursuant to
subsection 4.2(e), the third paragraph of subsection 4.3(a) and
subsection 4.7(d) of the Agreement); plus
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(c) any amount required to be deposited in the Finance
Charge Account on that Transfer Date (before giving effect to any
permitted netting) with respect to such Monthly Period pursuant to
subsection 3(b) of this Series Supplement and investment earnings
(net of losses and investment expenses) accrued on or prior to
that Transfer Date in connection with the investment of funds on
deposit in the Principal Account.
"Investor Holder" means (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 Interest" means, 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" with respect to Series 1997-1 means, for any
Monthly Period, (a) with respect to Finance Charge Receivables and Net
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" means, for any Monthly Period, the sum
of:
(a) insofar as such Monthly Period fell prior to the
Conversion Date, an amount equal to the aggregate Collections of
Principal Receivables processed during each Billing Cycle which
ended during such Monthly Period (and prior to the Conversion
Date) which are deposited (or required to be deposited on the
related Transfer Date (before giving effect to any permitted
netting)) into the Principal Account for such Monthly Period
pursuant to subsections 4.7(a)(ii), (iii) and (iv), 4.7(b)(ii),
(iii) and (iv), or 4.7(c)(ii), in each case, as applicable to such
Monthly Period, minus any amount required to be withdrawn from the
Principal Account with respect to such Monthly Period pursuant to
subsection 4.7(f) of the Agreement; plus
(b) insofar as such Monthly Period fell on or after the
Conversion Date, an amount equal to the aggregate Collections of
Principal Receivables (or required to be deposited on the related
Transfer Date (before giving effect to any permitted netting))
into the Principal Account on any day in such Monthly Period
falling on or after the Conversion Date
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pursuant to subsections 4.7(a)(ii), (iii) and (iv), 4.7(b)(ii),
(iii) and (iv), or 4.7(c)(ii), in each case, as applicable to such
Monthly Period; plus
(c) the aggregate amount to be treated as Investor
Principal Collections pursuant to subsections 4.11(a)(iii) and
4.13(a), (b), (c), (d), (g) and (h) for such Monthly Period (other
than such amount paid from Reallocated Principal Collections),
plus
(d) the aggregate amount transferred (or required to be
transferred on the related Distribution Date (before giving effect
to any permitted netting)) from the Excess Funding Account into
the Principal Account pursuant to subsection 4.2(f).
"Investor Servicing Fee" is defined in subsection 3(a) of this Series
Supplement.
"LIBOR" means, for the period from and including the Closing Date
through _______________ __, 1997 and the period from and including
___________ __, 1997 through the day preceding the Distribution Date with
respect to the initial Interest Period, and for any Interest Period
thereafter, the London interbank offered rate for one-month United States
dollar deposits determined by Trustee for each such period in accordance
with the provisions of Section 4.19.
"LIBOR Determination Date" means (a) for the initial Interest Period,
___________ __, 1997 (for the period from and including the Closing Date
through _________ __, 1997) and ___________ __, 1997 (for the period from
and including ____________ __, 1997 through ____________ __, 1997) and (b)
for each subsequent Interest Period, the second London Business Day prior
to the commencement of such Interest Period.
"Loan Agreement" means the agreement among Transferor, Servicer,
Trustee, and the Collateral Interest Holder, dated as of ___________ __,
1997, as amended or modified from time to time.
"London Business Day" means any Business Day on which dealings in
deposits in United States dollars are transacted in the London interbank
market.
"Monthly Period" is defined in the Agreement, except that for all
purposes other than the definition of "Floating Allocation Percentage" the
first Monthly Period with respect to the Investor Certificates begins on
and includes the Cut Off Date and ends on and includes ____________ __,
1997.
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"Net Servicing Fee Rate" means (a) so long as Transferor or [Trustee's
Name] is Servicer, [0.50]% per annum, and (b) if neither Transferor nor
[Trustee name] is Servicer, [2.00]% per annum.
"Paired Series" means a Series that has been paired with Series 1997-1
(which Series may be prefunded or partially prefunded or may be a Variable
Interest) such that a reduction of the Adjusted Investor Interest results
in (or permits) an increase of the investor interest of such Series that
has been paired with Series 1997-1.
"Pay Out Commencement Date" means the date on which a Trust Pay Out
Event is deemed to occur pursuant to Section 9.1 of the Agreement or a
Series 1997-1 Pay Out Event is deemed to occur pursuant to Section 9 of
this Series Supplement.
"Portfolio Adjusted Yield" means, with respect to any Transfer Date,
the average of the percentages obtained for each of the three preceding
Monthly Periods by subtracting the Base Rate from the Portfolio Yield for
such Monthly Period and deducting ____% from the result for each Monthly
Period.
"Portfolio Yield" means, with respect to any Monthly Period, the
annualized percentage equivalent of a fraction, the numerator of which is
an amount equal to the sum of (a) the amount of Reallocated Investor
Finance Charge Collections for the related Transfer Date, (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 4.18, each deposited
or required to be deposited into the Finance Charge Account on the Transfer
Date (before giving effect to any permitted netting) relating to such
Monthly Period, such sum to be calculated on a cash basis after subtracting
the Series 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 Account" is defined in subsection 4.17(a).
"Principal Funding Account" is defined in subsection 4.17(a).
"Principal Funding Account Balance" means, with respect to any date of
determination, the principal amount, if any, on deposit in the Principal
Funding Account on such date of determination.
"Principal Funding Investment Proceeds" means, with respect to each
Transfer Date, the investment earnings on funds in the Principal Funding
Account
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(net of investment expenses and losses) for the period from and including
the immediately preceding Transfer Date to but excluding such Transfer
Date.
"Principal Funding Investment Shortfall" means, with respect to each
Transfer Date relating to the Controlled Accumulation Period, the amount,
if any, by which the Principal Funding Investment Proceeds for such
Transfer Date are less than the Covered Amount determined as of such
Transfer Date.
"Rapid Amortization Period" means the period commencing on the Pay Out
Commencement Date and ending on the earlier to occur of (a) the Series
1997-1 Termination Date and (b) the termination of the Trust pursuant to
Section 12.1.
"Rating Agency" means Moody's and Standard & Poor's.
"Rating Agency Condition" means the notification in writing by each
Rating Agency to Transferor, Servicer and Trustee that an action will not
result in any Rating Agency reducing or withdrawing its then existing
rating of the Class A Certificates or the Class B Certificates.
"Reallocated Class B Principal Collections" means, with respect to any
Transfer Date, Collections of Principal Receivables applied in accordance
with subsection 4.15(a) in an amount not to exceed the product of (a) the
Class B Investor Allocation for the Monthly Period relating to such
Transfer Date and (b) the Investor Percentage for the Monthly Period
relating to such Transfer Date and (c) the amount of Collections of
Principal Receivables for the Monthly Period relating to such Transfer
Date; provided that such amount shall not exceed the Class B Investor
Interest after giving effect to any Class B Investor Charge-Offs for such
Transfer Date.
"Reallocated Collateral Principal Collections" means, with respect to
any Transfer Date, Collections of Principal Receivables applied in
accordance with subsections 4.15(a) and (b) in an amount not to exceed the
product of (a) the Collateral Allocation for the Monthly Period relating to
such Transfer Date and (b) the Investor Percentage for the Monthly Period
relating to such Transfer Date and (c) the amount of Collections of
Principal Receivables for the Monthly Period relating to such Transfer
Date; provided that such amount shall not exceed the Collateral Interest
after giving effect to any Collateral Charge-Offs for such Transfer Date.
"Reallocated Investor Finance Charge Collections" means that portion
of Group I Investor Finance Charge Collections allocated to Series 1997-1
pursuant to Section 4.14.
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"Reallocated Principal Collections" means the sum of (a) Reallocated
Class B Principal Collections and (b) Reallocated Collateral Principal
Collections.
"Reference Banks" means four major banks in the London interbank
market selected by Servicer.
"Required Collateral Interest" means (a) initially, $______________
and (b) on any Transfer Date thereafter, __% of (1) the sum of the Class A
Adjusted Investor Interest and the Class B Investor Interest on such
Transfer Date, in each case after taking into account deposits into the
Principal Funding Account on such Transfer Date and payments to be made on
the related Distribution Date, plus (2) the Collateral Interest on the
prior Transfer Date, after any adjustments to be made on such date, but not
less than $_________; provided that (x) if either (i) there is a reduction
in the Collateral Interest pursuant to clause (c), (d) or (e) of the
definition of such term or (ii) a Pay Out Event with respect to the
Investor Certificates has occurred, the Required Collateral Interest for
any Transfer Date shall (subject to clauses (y) and (z)) equal the Required
Collateral Interest for the Transfer Date immediately preceding such
reduction or Pay Out Event, (y) in no event shall the Required Collateral
Interest exceed the sum of the outstanding principal amounts of (i) the
Class A Certificates and (ii) the Class B Certificates, each as of the last
day of the Monthly Period preceding such Transfer Date after taking into
account the payments to be made on the related Distribution Date and (z)
the Required Collateral Interest may be reduced at Transferor's option at
any time to a lesser amount if Transferor, Servicer, the Collateral
Interest Holder and Trustee have been provided evidence that the Rating
Agency Condition has been satisfied.
"Required Reserve Account Amount" means, with respect to any Transfer
Date on or after the Reserve Account Funding Date, an amount equal to (a)
___% of the outstanding principal balance of the Class A Certificates or
(b) any other amount designated by Transferor; provided that if such
designation is less than the amount determined pursuant to clause (a),
Transferor shall (i) provide Servicer, the Collateral Interest Holder and
Trustee with evidence that the Rating Agency Condition has been satisfied
and (ii) deliver to Trustee a certificate of an authorized officer to the
effect that, based on the facts known to such officer at such time, in the
reasonable belief of Transferor, such designation will not cause 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 1997-1.
"Reserve Account" is defined in subsection 4.18(a).
"Reserve Account Funding Date" means the Transfer Date that occurs not
later than the earliest of: (a) the Transfer Date with respect to the
Monthly Period that commences __ months prior to the commencement of the
Controlled
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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 that commences __ 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 that
commences __ 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 that commences __ months
prior to the commencement of the Controlled Accumulation Period.
"Reserve Account Surplus" means, as of any Transfer Date following the
Reserve Account Funding Date, the amount, if any, by which the amount on
deposit in the Reserve Account exceeds the Required Reserve Account Amount.
"Reserve Draw Amount" is defined in subsection 4.18(c).
"Reset Date" means any of the following occurring after the Conversion
Date: (a) an Addition Date; (b) a Removal Date on which, if any Series has
been paid in full, Principal Receivables in an aggregate amount
approximately equal to the initial investor interest of such Series are
removed from the Trust; and (c) a date on which there is an increase in the
Investor Interest under any Variable Interest issued by the Trust.
"Revolving Period" means 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 Investor Charge-Offs" means, for any Transfer Date, the sum of
the Class A Investor Charge-Offs, Class B Investor Charge-Offs and the
Collateral Investor Charge-Offs for such Transfer Date.
"Series Monthly Fees" means, for any Transfer Date, the sum of the
Investor Servicing Fee and Servicer Interchange for such Transfer Date.
"Series Monthly Interest" means, for any Transfer Date, the sum of the
Class A Monthly Interest, Class A Deficiency Amount, Class A Additional
Interest, Class B Monthly Interest, Class B Deficiency Amount, Class B
Additional Interest, Collateral Monthly Interest, Collateral Deficiency
Amount and Collateral Additional Interest for such Transfer Date.
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"Series Net Default Amount" means, for any Transfer Date, the product
of the Net Default Amount and the Floating Investor Percentage, in each
case, for the related Monthly Period.
"Series Principal Shortfall" means, with respect to any Transfer Date,
the excess, if any, of (a) the sum of (i) with respect to any Transfer Date
relating to the Controlled Accumulation Period, the sum of (A) the
Controlled Deposit Amount for such Transfer Date, (B) on the Transfer Date
after the Transfer Date on which the Class A Adjusted Investor Interest is
reduced to zero, the Class B Invested Amount and (C) the excess, if any, of
the Collateral Interest for such Transfer Date over the Required Collateral
Interest for such Transfer Date, (ii) with respect to any Transfer Date
during the Rapid Amortization Period, the Adjusted Investor Interest and
(iii) with respect to any Transfer Date relating to the Revolving Period,
the amount specified in clause (a)(i)(C) above over (b) the Investor
Principal Collections minus the Reallocated Principal Collections (other
than any portions thereof that are applied pursuant to (x) subsection
4.11(a)(iii) and (y) subsection 4.13(c) (to the extent such portions
pursuant to subsection 4.13(c) are available to pay the Class B Net Default
Amount)) for such Transfer Date.
"Series Servicing Fee Percentage" means [2.0]%.
"Series 1997-1" means the Series of the First NBC Credit Card
Master Trust represented by the Investor Certificates.
"Series 1997-1 Certificates" means the Class A Certificates and
the Class B Certificates.
"Series 1997-1 Holder" means the holder of record of a Series 1997-1
Certificate.
"Series 1997-1 Pay Out Event" is defined in Section 9 of this
Series Supplement.
"Series 1997-1 Termination Date" means 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.
"Servicer Interchange" is defined in subsection 3(a) of this Series
Supplement.
"Shared Principal Collections" means, as the context requires, either
(a) the amount allocated to the Investor Certificates which may be applied
to the Series Principal Shortfall with respect to other outstanding
Principal Sharing
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Series or (b) the amounts allocated to the investor certificates of other
Principal Sharing Series which the applicable Supplements for such Series
specify are to be treated as "Shared Principal Collections" and which may
be applied to cover the Series Principal Shortfall with respect to the
Investor Certificates.
"Target Amount" is defined in subsection 4.7(d).
"Telerate Page 3750" means the display page currently so designated on
the Dow Jones Telerate Service for the purpose of displaying London
interbank offered rates for deposits in United States dollars as presented
by the British Banker's Association or, if such page has been replaced or
deleted, then such other page on Telerate or such other service that
displays the London interbank offered rate for deposits in United States
dollars as presented by the British Banker's Association.
SECTION 3. Servicing Compensation and Assignment of Interchange and
Other Account Revenues. (a) The share of the Servicing Fee allocable to
Series 1997-1 with respect to any Transfer Date (the "Investor Servicing
Fee") shall, for purposes of calculating the Base Rate for the related
Monthly Period, 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 that
with respect to the first Transfer Date, the Investor Servicing Fee shall
equal $___________________ (or, for purposes of calculating the Base Rate
for the first Monthly Period, shall equal $_________________). The Investor
Servicing Fee shall be paid only from the sources and to the extent
provided in this Section 3. On each Transfer Date for which Transferor or
Trustee is Servicer, a portion of Interchange with respect to the related
Monthly Period that is on deposit in the Finance Charge Account shall be
withdrawn from the Finance Charge Account and paid to Servicer in payment
of a portion of the Investor Servicing Fee with respect to such Monthly
Period ("Servicer Interchange"); provided the amount so withdrawn and paid
to Servicer (and constituting 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) __%. Should
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 equal
$____________. The share of the Investor Servicing Fee allocable to the
Class A Investor Interest (the "Class A Servicing Fee"), the Class B
Investor Interest (the "Class B Servicing Fee") and the Collateral Interest
(the "Collateral Interest Servicing Fee") with respect to any Transfer Date
shall equal one-twelfth of the product of
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(i) the Class A Floating Allocation, the Class B Floating Allocation or the
Collateral Floating Allocation, respectively, (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 that with respect to
the first Transfer Date, the Class A Servicing Fee, the Class B Servicing
Fee and the Collateral Interest Servicing Fee shall equal $__________,
$___________ and $__________, respectively. Except as specifically provided
in this subsection 3(a), the Servicing Fee shall be paid by the cash flows
from the Trust allocated to the Holder of the Transferor Certificate or the
certificateholders of other Series (as provided in the related Supplements)
and in no event shall the Trust, Trustee or the Investor Holders be liable
therefor. The Class A Servicing Fee shall be payable to Servicer solely to
the extent amounts are available for distribution in respect thereof
pursuant to subsections 4.11(a)(ii) and 4.13(a). The Class B Servicing Fee
shall be payable solely to the extent amounts are available for
distribution in respect thereof pursuant to subsections 4.11(b)(ii) and
4.13(c). The Collateral Interest Servicing Fee shall be payable solely to
the extent amounts are available for distribution in respect thereof
pursuant to subsection 4.13(f) or, if applicable. subsection 4.11(c)(i).
(b) On or before each Transfer Date, Transferor shall notify Servicer
of the amount of Interchange and Other Account Revenues to be included as
Finance Charge Collections with respect to the preceding Monthly Period as
determined pursuant to this subsection 3(b). The amount of Interchange to
be so included shall be equal to the product of (i) the total amount of
Interchange paid or payable to Transferor with respect to such Monthly
Period and (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 Transferor with
respect to such Monthly Period. The amount of Other Account Revenues to be
so included shall be equal to the portion of the revenues in each
applicable category for the entire Bank Portfolio that is allocable to the
Accounts, as determined by Transferor using any reasonable method. On each
Transfer Date, Transferor shall pay to Servicer, and Servicer shall deposit
into the Finance Charge Account, in immediately available funds, the amount
of Interchange and Other Account Revenues to be so included as Finance
Charge Collections with respect to the preceding Monthly Period. Transferor
hereby assigns, sets over, conveys, pledges and grants a security interest
and lien to Trustee, for the benefit of the Investor Holders, in
Interchange and Other Account Revenues and the proceeds of both, 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 1997-1, assigns, sets over, conveys,
pledges or grants a security interest in Interchange and Other Account
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Revenues 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 and Other
Account Revenues 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.
SECTION 4. Reassignment and Transfer Terms. The Investor Certificates
shall be subject to retransfer to Transferor at its option, in accordance
with subsection 12.2(a), on any Distribution Date on or after the
Distribution Date on which the Investor Interest is reduced to an amount
less than or equal to 5% of the Initial Investor Interest. The deposit
required in connection with any such repurchase shall include the amount,
if any, on deposit in the Principal Funding Account and will be equal to
the sum of (a) the Investor Interest and (b) accrued and unpaid interest on
the Investor Certificates through the day preceding the Distribution Date
on which the repurchase occurs.
SECTION 5. Delivery and Payment for the Investor Certificates.
Transferor shall execute and deliver the Series 1997-1 Certificates to
Trustee for authentication in accordance with Section 6.1. The Trustee
shall deliver such Certificates when authenticated in accordance with
Section 6.2.
SECTION 6. Depository; Form of Delivery of Investor Certificates;
Legends; Transfer Restrictions and Procedures. (a) The Class A Certificates
and the Class B Certificates shall be delivered as Book-Entry Certificates
as provided in Sections 6.1 and 6.10.
(b) The Depository for Series 1997-1 shall be The Depository Trust
Company, and the Class A Certificates shall be initially registered in the
name of Cede & Co., its nominee.
SECTION 7. Article IV of Agreement. Sections 4.1 through 4.5 shall
read in their entirety as provided in the Agreement. Article IV (except for
Sections 4.1 through 4.5 thereof) shall be read in its entirety as follows
and shall be applicable only to the Investor Certificates:
ARTICLE IV RIGHTS OF HOLDERS AND ALLOCATION AND
APPLICATION OF COLLECTIONS
SECTION 4.6 Rights of Holders and the Collateral Interest Holder. The
Investor Certificates shall represent undivided interests in the Trust,
consisting of the right to receive, to the extent necessary to make the
required payments with respect to such Investor Certificates at the times
and in the amounts specified in
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this Agreement (and subject to reallocation as provided herein), (a) the
applicable Investor Percentage of Collections received with respect to the
Receivables and (b) funds on deposit in the Collection Account, the Finance
Charge Account, the Principal Account, the Principal Funding Account, the
Reserve Account and the Distribution Account. The Collateral Interest shall
be subordinate to the Class A Certificates and the Class B Certificates to
the extent described herein. The Class B Certificates shall be subordinate
to the Class A Certificates to the extent described herein. Transferor
shall not have any interest in the Collection Account, the Finance Charge
Account, the Principal Account, the Principal Funding Account, the Reserve
Account or the Distribution Account, except as specifically provided in
this Article IV.
SECTION 4.7 Allocations. (a) Allocations During the Revolving Period.
During the Revolving Period, Servicer shall allocate Collections to the
Investor Holders as follows:
(i) allocate to the Investor Holders an amount equal to
the product of (A) the Investor Percentage on the Date of
Processing of such Collections and (B) the aggregate amount of
Collections processed in respect of Finance Charge Receivables on
such Date of Processing;
(ii) allocate to the Investor Holders an amount equal to
the product of (A) the Collateral 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; and
(iii) allocate to the Investor Holders 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.
In addition, 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 each Date of Processing shall be treated as Shared Principal
Collections.
(b) Allocations During the Controlled Amortization Period. During the
Controlled Amortization Period, Servicer shall allocate Collections to the
Investor Holders as follows:
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(i) allocate to the Investor Holders an amount equal to
the product of (A) the Investor Percentage on the Date of
Processing of such Collections and (B) the aggregate amount of
Collections processed in respect of Finance Charge Receivables on
such Date of Processing;
(ii) allocate to the Investor Holders an amount equal to
the product of (A) the Collateral 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;
(iii) allocate to the Investor Holders 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; and
(iv) (A) allocate to the Investor Holders 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 that the amount
allocated pursuant to this subsection 4.7(b)(iv)(A) during any
Monthly Period shall not exceed the Controlled Deposit Amount for
the related Transfer Date (after taking into account any payments
to be made on the immediately preceding Distribution Date) and (B)
treat as Shared Principal Collections any amount not allocated as
a result of the proviso to clause (A).
(c) Allocations During the Rapid Amortization Period. During the Rapid
Amortization Period, Servicer shall allocate Collections to the Investor
Holders as follows:
(i) allocate to the Investor Holders an amount equal to
the product of (A) the Investor Percentage on the Date of
Processing of such Collections and (B) the aggregate amount of
Collections processed in respect of Finance Charge Receivables on
such Date of Processing;
(ii) allocate to the Investor Holders an amount equal to
the product of (A) the Collateral Allocation on the Date of
Processing of such Collections and (B) the Investor Percentage on
the Date of Processing of such Collections and (C) the aggregate
amount of Collections processed in respect of Principal
Receivables on such Date of Processing;
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(iii) allocate to the Investor Holders 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; and
(iv) (A) allocate to the Investor Holders an amount equal
to the product of (1) the Class A Investor Allocation on the Date
of Processing of such Collections and (2) the Investor Percentage
on the Date of Processing of such Collections and (3) the
aggregate amount of Collections processed in respect of Principal
Receivables on such Date of Processing; provided that the
aggregate amount allocated pursuant to this subsection
4.7(c)(iv)(A) during any Monthly Period shall not exceed the
Adjusted 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 Invested Amount to be made on the Transfer Date relating to
such Monthly Period) and (B) treat as Shared Principal Collections
any amount not allocated as a result of the proviso to clause (A).
(d) Applications of Allocated Funds. During any period when Servicer
is permitted by Section 4.3 to make a single monthly deposit to the
Collection Account, amounts allocated to the Investor Holders pursuant to
Sections 4.7(a), (b) and (c) with respect to any Monthly Period need not be
deposited into the Collection Account or any Series Account prior to the
related Transfer Date, and, when so deposited, (x) may be deposited net of
any amounts required to be distributed to Transferor and, if First NBC is
Servicer, Servicer and (y) shall be deposited into the Finance Charge
Account (in the case of Collections of Finance Charge Receivables) and the
Principal Account (in the case of Collections of Principal Receivables (not
including any Shared Principal Collections allocated to Series 1997-1
pursuant to Section 4.16)), subject in either case to the proviso to the
next sentence. At any other time, amounts so allocated on each Date of
Processing shall be deposited on that Date of Processing into the Finance
Charge Account (in the case of Collections of Finance Charge Receivables)
and the Principal Account (in the case of Collections of Principal
Receivables (not including any Shared Principal Collections allocated to
Series 1996-A pursuant to Section 4.16)), provided that:
(i) with respect to any day falling after the LIBOR
Determination Date in each Monthly Period falling in the Revolving
Period or in that portion of each Monthly Period in the Controlled
Accumulation Period falling on or after the day on which
Collections of Principal Receivables equal to the related
Controlled Deposit Amount have been allocated
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pursuant to subsection 4.7(b)(iv) and deposited pursuant to this
subsection 4.7(d)), Collections of Finance Charge Receivables
shall be deposited into the Finance Charge Account only until such
time as the aggregate amount so deposited, plus amounts similarly
deposited pursuant to the Supplement for each other outstanding
Series in Group I, equals the sum of (x) the sum (the "Target
Amount") of (A) the amounts of Class A Monthly Interest, Class B
Monthly Interest, and any Class A Deficiency Amount, Class A
Additional Interest, Class B Deficiency Amount and Class B
Additional Interest for the related Distribution Date, (B) if
First NBC is not Servicer, the Class A Servicing Fee, Class B
Servicing Fee and Collateral Interest Servicing Fee for the
related Distribution Date, (C) any Collateral Monthly Interest due
on the related Transfer Date, plus (y) the target amounts for each
other Series in Group I, calculated as provided in the related
Supplements, plus (z) any Finance Charge Shortfalls (as defined in
the related Supplement) for any outstanding Excess Allocation
Series not included in Group I; and
(ii) with respect to each Monthly Period falling in the
Revolving Period, Collections of Principal Receivables allocated
to the Investor Holders pursuant to Section 4.7(a)(ii) and (iii)
shall (after an amount equal to any Collateral Monthly Principal
for that Monthly Period has been deposited into the Principal
Account) be paid to Transferor (or, if the Transferor Interest is
less than the Minimum Transferor Interest, deposited into the
Excess Funding Account), but Transferor shall make an amount equal
to the Reallocated Principal Collections for the related Transfer
Date available on that Transfer Date for application in accordance
with Section 4.15.
With respect to any Monthly Period when deposits of Collections of Finance
Charge Receivables into the Finance Charge Account are limited in
accordance with clause (i) of the preceding proviso, notwithstanding such
limitation: (1) "Excess Spread" for the related Transfer Date shall be
calculated as if the full amount of Finance Charge Collections allocated to
the Investor Certificates during that Monthly Period had been deposited in
the Finance Charge Account and applied on such Transfer Date in accordance
with Sections 4.11(a), 4.11(b) and 4.11(c); (2) Collections of Finance
Charge Receivables released to Transferor pursuant to such clause (i) shall
be deemed, for purposes of all calculations under this Supplement and the
Loan Agreement, to have been distributed on account of or otherwise applied
to the items specified in Sections 4.11(a), 4.11(b), 4.11(c) and 4.13 to
which such amounts would have been applied (and in the priority in which
they would have been applied) had such amounts been available in the
Finance Charge Account on such Transfer Date. To avoid doubt, the
calculations referred to in the preceding clause (2) include the
calculations required by clause (c) of the definition of Class A Investor
Interest, clause (f) of the definition of
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Class B Investor Interest, clause (f) of the definition of Collateral
Interest and Section 4.10.
Notwithstanding clause (i) above, if on any Business Day Servicer
determines that the Target Amount for a Monthly Period exceeds the Target
Amount for that Monthly Period as previously calculated by Servicer, then
(x) Servicer shall (on the same Business Day) inform Transferor of such
determination, and (y) within two Business Days of receiving such notice
Transferor shall deposit into the Finance Charge Account funds in an amount
equal to the amount of Collections of Finance Charge Receivables allocated
to the Investor Certificates for that Monthly Period but not deposited into
the Finance Charge Account due to the operation of clause (i) (but not in
excess of the amount required so that the aggregate amount deposited for
the subject Monthly Period equals the Target Amount). In addition, if on
any Transfer Date the Transferor Interest will be less than the Minimum
Transferor Interest after giving effect to all transfers and deposits on
that Transfer Date, Transferor shall, on that Transfer Date, deposit into
the Principal Account funds in an amount equal to the amounts of Class A
Available Funds and Excess Spread that are required to be treated as
Investor Principal Collections pursuant to Sections 4.11(a)(iii) and 4.13
but are not available from funds in the Finance Charge Account as a result
of the operation of clause (i).
(e) Allocation Adjustments. Unless the Servicer is depositing
Collections monthly pursuant to Section 4.3, on each Collection
Recomputation Date to and including the Collection Recomputation Date after
the Collection Recomputation Date referred to in clause (ii) below, the
Servicer shall recompute the allocations to the Series 1997-1 Certificates
previously made pursuant to subsections 4.7(a), (b) and (c)
(i) in the case of a Collection Recomputation Date which
occurs prior to the Conversion Date, during each Billing Cycle
which ended during the preceding Monthly Period and
(ii) in the case of the Collection Recomputation Date
which occurs in the Monthly Period in which the Conversion Date
occurs, during each Billing Cycle which ended during the preceding
Monthly Period and on any other Date of Processing during such
Monthly Period prior to the Conversion Date
(such allocations with respect to any such period, the "Estimated
Allocations") based on the Collected Finance Charge Receivables and the
Collected Principal Receivables (such allocations with respect to any such
period, the "Actual Allocations"), and based on the Actual Allocations of
Finance Charge Receivables
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and Principal Receivables not later than 11:00 a.m. New York City time on
the Transfer Date following such Collection Recomputation Date:
(1) make any necessary deposits or withdrawals with
respect to the Finance Charge Account and the Principal Account
such that the amount on deposit in each such account with respect
to such Monthly Period is equal to the amount that would have been
on deposit if the Actual Allocation of Finance Charge Receivables
and the Actual Allocation of Principal Receivables had been made
on each day during such Monthly Period;
(2) pay to the Holder of the Transferor Certificate any
underpayment with respect to allocations of Principal Receivables
or Finance Charge Receivables with respect to such Monthly Period;
(3) notify the Holder of the Transferor Certificate of
the amount of any overpayment to such Holder which such
recomputation discloses, and the Holder of the Transferor
Certificate shall deposit into the Finance Charge Account, the
Principal Account and the Excess Funding Account, as provided in
the notice from the Servicer, any portion of any such overpayment
which resulted in a shortfall in the amounts deposited into each
such account; and
(4) for the purposes of administrative convenience,
payments to be made to the Holder of the Transferor Certificate
and deposits to be made by the Holder of the Transferor
Certificate pursuant to this subsection 4.7(e) may be netted
against each other.
It is the intention of the parties that this subsection 4.7(e) be
construed so that the reallocation provided for herein shall result in the
Series 1997-1 Certificateholders and the Collateral Interest Holder on the
one hand and the Holder of the Transferor Certificate on the other hand
being in the same position they would have been in if the Estimated
Allocations had been based upon actual Collections of Principal
Receivables.
(f) Certain Investment Earnings. On each Transfer Date, Servicer shall
allocate to the Investor Holders an amount equal to the product of the
Investor Percentage for the related Monthly Period and the aggregate amount
of interest and other investment earnings (net of losses and investment
expenses) accrued on or prior to the related Transfer Date in connection
with the investment of funds on deposit in the Collection Account, the
Distribution Account, the Excess Funding Account and the Finance Charge
Account and apply such amount as provided in subsection 4.7(d) as if such
amount had been allocated to the Investor
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Holders as Collections of Finance Charge Receivables during the related
Monthly Period.
(g) Errors. On any date, Servicer may withdraw from the Collection
Account or any Series Account any amounts inadvertently deposited in such
account that should have not been so deposited.
SECTION 4.8 Determination of Monthly Interest. (a) The amount of
monthly interest distributable to the Class A Certificates shall equal the
product of (i) (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 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, provided that on the first Distribution Date interest will
be distributable to the Class A Certificates in the amount of $_________
(the "Class A Monthly Interest"); provided further that in addition to
Class A Monthly Interest an amount equal to the amount of any unpaid Class
A Deficiency Amounts, as defined below plus an amount equal to 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, times (B)
the sum of the Class A Certificate Rate in effect with respect to the
related Interest Period plus 2% per annum, and (B) any Class A Deficiency
Amount from the prior Transfer Date, as defined below (or the portion
thereof that has not theretofore been paid to Class A Holders) (the "Class
A Additional Interest"), shall also be distributable to the Class A
Certificates, and on such Transfer Date Trustee shall deposit such funds,
to the extent available, into the Distribution Account. The "Class A
Deficiency Amount" for any Transfer Date shall equal the excess, if any, of
the aggregate amount accrued pursuant to this subsection 4.8(a) as of the
prior Interest Period over the amount actually transferred to the
Distribution Account for payment of such amount. Notwithstanding anything
to the contrary herein, Class A Additional Interest shall be payable or
distributed to the Class A Certificateholders only to the extent permitted
by applicable law.
(b) The amount of monthly interest distributable to the Class B
Certificates shall equal 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 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 that on the first Distribution Date interest will be
distributable to the Class B Certificates in an amount equal to
$______________; provided, further that in addition to the Class B Monthly
Interest, an amount equal to the amount of any unpaid Class B Deficiency
Amounts, as defined below, plus an amount equal to the product of (A) a
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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
sum of the Class B Certificate Rate in effect with respect to the related
Interest Period plus 2% per annum, and (B) any Class B Deficiency Amount
from the prior Transfer Date, as defined below (or the portion thereof
which has not theretofore been paid to Class B Holders) (the "Class B
Additional Interest") shall also be distributable to the Class B
Certificates, and on such Transfer Date Trustee shall deposit such funds,
to the extent available, into the Distribution Account. The "Class B
Deficiency Amount" for any Transfer Date shall equal the excess, if any, of
the aggregate amount accrued pursuant to this subsection 4.8(b) as of the
prior Interest Period over the amount actually transferred to the
Distribution Account for payment of such amount. Notwithstanding anything
to the contrary herein, Class B Additional Interest shall be payable or
distributed to the Class B Certificateholders only to the extent permitted
by applicable law.
(c) The amount of monthly interest distributable to the Collateral
Interest shall equal 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, times (ii) the Collateral Interest
determined as of the Record Date preceding such Transfer Date, provided
that on the first Distribution Date interest will be distributable to the
Collateral Interest in an amount equal to the sum of (A) the product of (x)
a fraction, the numerator of which is the actual number of days during the
period from and including the Closing Date through _____________ __, 1997
and the denominator of which is 360, times (y) the Collateral Rate in
effect for such period, determined using the LIBOR Determination Date for
such period, times (z) the outstanding principal balance of the Collateral
Interest as of the Closing Date, plus (B) the product of (x) a fraction,
the numerator of which is the actual number of days during the period from
and including _____________ __, 1997 through ___________ __, 1997 and the
denominator of which is 360, times (y) the Collateral Rate in effect for
such period, determined using the LIBOR Determination Date for such period,
times (z) the outstanding principal balance of the Collateral Interest
determined as of the Closing Date (the "Collateral Monthly Interest");
provided that for the purposes of determining Collateral Monthly Interest
only, the Collateral Rate shall not exceed a per annum rate of [1]% in
excess of LIBOR, as determined on the related LIBOR Determination Date.
SECTION 4.9 Determination of Monthly Principal. (a) The amount of
monthly principal distributable from the Principal Account with
respect to the Class A Certificates on each Transfer Date ("Class A
Monthly Principal"), beginning with the Transfer Date in the month
following the month in which the Controlled Accumulation Period begins
or, if earlier, the Transfer Date following the commencement of the
Rapid Amortization Period, shall be equal to the least
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of (i) the Available Investor Principal Collections on deposit in the
Principal Account with respect to such Transfer Date, (ii) for each
Transfer Date with respect to the Controlled Accumulation Period prior to
the Class A Scheduled Payment Date, the Controlled Deposit Amount for such
Transfer Date and (iii) the Class A Adjusted Investor Interest on such
Transfer Date prior to any deposit into the Principal Funding Account to be
made on such day.
(b) The amount of monthly principal distributable from the Principal
Account with respect to the Class B Certificates on each Transfer Date (the
"Class B Monthly Principal") for the Controlled Accumulation Period,
beginning with the Transfer Date after the one on which the Class A
Adjusted Investor Interest is reduced to zero (and for the Rapid
Amortization Period beginning with the Transfer Date on which the Class A
Investor Interest is reduced to zero, after giving effect to payments to be
made on the related Distribution Date), shall be an amount equal to the
lesser of (i) the excess, if any, of (A) the Available Investor Principal
Collections on such Transfer Date over (B) the Class A Monthly Principal on
such Transfer Date, if any, and (ii) the Class B Investor Interest (after
taking into account any adjustments to be made on such Transfer Date
pursuant to Sections 4.12 and 4.15) on such Transfer Date.
(c) The amount of monthly principal (the "Collateral Monthly
Principal") distributable from the Principal Account with respect to the
Collateral Interest on each Transfer Date shall be (i) if any reduction of
the Required Collateral Interest has occurred pursuant to clause (z) of the
proviso in the definition thereof during the Revolving Period, an amount
equal to the lesser of (A) the excess, if any, of the Collateral Interest
(after taking into account any adjustments to be made on such Transfer Date
pursuant to Sections 4.12 and 4.15) over the Required Collateral Interest
on such Transfer Date, and (B) the Available Investor Principal Collections
on such Transfer Date or (ii) at all times during the Controlled
Accumulation Period or Rapid Amortization Period, an amount equal to the
lesser of (A) the excess, if any, of the Collateral Interest (after taking
into account any adjustments to be made on such Transfer Date pursuant to
Sections 4.12 and 4.15) over the Required Collateral Interest on such
Transfer Date and (B) the excess, if any, of (1) the Available Investor
Principal Collections on such Transfer Date over (2) the sum of the Class A
Monthly Principal and the Class B Monthly Principal for such Transfer Date.
SECTION 4.10 Coverage of Required Amount. (a) On or before each
Transfer Date, Servicer shall determine the amount (the "Class A Required
Amount"), if any, by which the sum of (i) the Class A Monthly Interest for
such Transfer Date, plus (ii) the Class A Deficiency Amount, if any, for
such Transfer Date, plus (iii) the Class A Additional Interest, if any, for
such Transfer Date, plus (iv) the Class A Servicing Fee for the prior
Monthly Period, plus (v) the Class A Servicing Fee, if any, due but not
paid on any prior Transfer Date, plus
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(vi) the Class A Net Default Amount, if any, for such Transfer Date,
exceeds the Class A Available Funds for the related Monthly Period.
(b) On or before each Transfer Date, Servicer shall also determine the
amount (the "Class B Required Amount"), if any, equal to the sum of (i) the
amount, if any, by which the sum of (A) the Class B Monthly Interest for
such Transfer Date, plus (B) the Class B Deficiency Amount, if any, for
such Transfer Date, plus (C) the Class B Additional Interest, if any, for
such Transfer Date, plus (D) the Class B Servicing Fee for the prior
Monthly Period, plus (E) the Class B Servicing Fee, if any, due but not
paid on any prior Transfer Date, exceeds the Class B Available Funds for
the related Monthly Period, plus (ii) the Class B Net Default Amount, if
any, for the prior Monthly Period.
(c) If the sum of the Class A Required Amount and the Class B Required
Amount for such Transfer Date is greater than zero, Servicer shall give
written notice to Trustee of such positive Class A Required Amount and/or
Class B Required Amount on or before such Transfer Date. In addition:
(i) If the Class A Required Amount for such Transfer Date
is greater than zero, all or a portion of the Excess Spread 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 4.13(a). If 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 Class B Certificates with respect to the prior Monthly Period
shall be applied as specified in Section 4.15.
(ii) If the Class B 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
B 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 4.13(c). If 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 4.13(c), the Collections of Principal
Receivables allocable to the Collateral Interest (after
application to the Class A Required Amount) shall be applied as
specified in Section 4.15; provided that the sum of any payments
pursuant to this subsection 4.10(c) shall not exceed the sum of
the Class A Required Amount and the Class B Required Amount.
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SECTION 4.11 Monthly Payments. On or before each Transfer Date,
Servicer shall instruct Trustee in writing (which writing shall be
substantially in the form of Exhibit B to the Series Supplement) to
withdraw, and Trustee, acting in accordance with such instructions, shall
withdraw on such Transfer Date or the related Distribution Date, as
applicable, to the extent of available funds, the amounts required to be
withdrawn from the Finance Charge Account, the Principal Account, the
Principal Funding Account and the Distribution Account as follows:
(a) An amount equal to the Class A Available Funds for the related
Monthly Period will be distributed on each Transfer Date, to the extent
available, in the following priority:
(i) an amount equal to Class A Monthly Interest plus any
Class A Deficiency Amount plus any Class A Additional Interest (in
each case for such Transfer Date) shall be deposited by Servicer
or Trustee into the Distribution Account;
(ii) an amount equal to the Class A Servicing Fee for
such Transfer Date plus any Class A Servicing Fee due but not paid
to Servicer on any prior Transfer Date shall be distributed to
Servicer;
(iii) an amount equal to the Class A Net 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
4.13.
(b) An amount equal to the Class B Available Funds for the related
Monthly Period will be distributed on each Transfer Date, to the extent
available, in the following priority:
(i) an amount equal to the Class B Monthly Interest plus
any Class B Deficiency Amount plus any Class B Additional Interest
(in each case for such Transfer Date) shall be deposited by
Servicer or Trustee into the Distribution Account;
(ii) an amount equal to the Class B Servicing Fee for
such Transfer Date plus any Class B Servicing Fee due but not paid
to Servicer on any prior Transfer Date for such Transfer Date
shall be distributed to 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
4.13.
(c) An amount equal to the Collateral Available Funds for the related
Monthly Period will be distributed on each Transfer Date, to the extent
available, in the following priority:
(i) if Transferor or Trustee is no longer Servicer, an
amount equal to the Collateral Interest Servicing Fee for such
Transfer Date plus any Collateral Interest Servicing Fee due but
not paid to Servicer on any prior Transfer Date shall be
distributed to Servicer; and
(ii) the balance, if any, shall constitute Excess Spread
and shall be allocated and distributed as set forth in Section
4.13.
(d) During the Revolving Period, an amount equal to the Available
Investor Principal Collections for the related Monthly Period will be
distributed on each Transfer Date, to the extent available, in the
following priority:
(i) an amount equal to the Collateral Monthly Principal
for such Transfer Date shall be distributed to the Collateral
Interest Holder in accordance with the Loan Agreement;
(ii) an amount equal to the lesser of (A) the product of
(1) a fraction, the numerator of which is equal to the Available
Investor Principal Collections remaining after the application
specified in subsection 4.11(d)(i) and the denominator of which is
equal to the sum of (x) the Shared Principal Collections
(determined in accordance with clause (b) of the definition
thereof), plus (y) the Available Investor Principal Collections
remaining after the application specified in subsection 4.11(d)(i)
and (2) the Cumulative Series Principal Shortfall and (B)
Available Investor Principal Collections shall remain in the
Principal Account to be treated as Shared Principal Collections
and applied to Principal Sharing Series other than this Series
1997-1; and
(iii) an amount equal to the excess, if any, of (A) the
Available Investor Principal Collections for such Transfer Date
over (B) the applications specified in subsections 4.11(d)(i) and
(ii) above shall be paid to the Holder of the Transferor
Certificate; provided that the amount to be paid to the Holder of
the Transferor Certificate pursuant to this subsection
4.11(d)(iii) with respect to such Transfer Date shall be paid to
the Holder of the Transferor Certificate only to the extent that
the Transferor Interest on such Transfer Date is greater than the
Minimum Transferor Interest (after giving effect to the inclusion
in the Trust of all Receivables created
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on or prior to such Transfer Date and the application of payments
referred to in subsection 4.3(b)) and otherwise shall be deposited
into the Excess Funding Account in accordance with subsection
4.7(d).
(e) During the Controlled Accumulation Period or the Rapid
Amortization Period, an amount equal to the Available Investor Principal
Collections for the related Monthly Period will be distributed on each
Transfer Date, beginning with the Transfer Date in the month following the
month in which the Controlled Accumulation Period began or the Transfer
Date following the commencement of the Rapid Amortization Period, as
applicable, to the extent available, in the following priority:
(i) an amount equal to the Class A Monthly Principal for
such Transfer Date shall be, (A) 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), 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 1997-1 Termination Date, in
which case on the Series 1997-1 Termination Date), after giving
effect to the distribution referred to in clauses (i) and (ii), 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 4.11(e)(i), (ii) and (iii) and the
denominator of which is equal to the sum of the Shared Principal
Collections (determined in accordance with clause (b) of the
definition thereof), and (2) the Cumulative Series Principal
Shortfall and (B) the Available Investor Principal Collections
shall remain in the Principal Account to be treated as Shared
Principal Collections and applied to Principal Sharing Series
other than this Series 1997-1; and
(v) an amount equal to the excess, if any, of (A) the
Available Investor Principal Collections over (B) the applications
specified in subsections 4.11(e)(i) through (iv) shall be paid to
the Holder of the Transferor Certificate; provided that the amount
to be paid to the Holder of the Transferor Certificate pursuant to
this subsection 4.11(e)(v) with
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respect to such Transfer Date shall be paid to the Holder of the
Transferor Certificate only to the extent that the Transferor
Interest on such Transfer Date is greater than the Minimum
Transferor Interest (after giving effect to the inclusion in the
Trust of all Receivables created on or prior to such Transfer Date
and the application of payments referred to in subsection 4.3(b))
and otherwise shall be deposited into the Excess Funding Account
in accordance with subsection 4.7(d).
(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, Trustee, acting
in accordance with instructions from Servicer, shall withdraw from the
Principal Funding Account and deposit in the Distribution Account the
amount on deposit in the Principal Funding Account.
(g) On each Distribution Date, Trustee shall pay (i) in accordance
with subsection 5.1(a) to the Class A Holders from the Distribution
Account, the amount deposited into the Distribution Account pursuant to
subsection 4.11(a)(i) on the preceding Transfer Date and (ii) in accordance
with subsection 5.1(b) to the Class B Holders from the Distribution
Account, the amount deposited into the Distribution Account pursuant to
subsection 4.11(b)(i) on the preceding Transfer Date.
(h) On the earlier to occur of (i) the first Distribution Date with
respect to the Rapid Amortization Period and (ii) the Class A Scheduled
Payment Date and on each Distribution Date thereafter, Trustee, acting in
accordance with instructions from Servicer, shall pay in accordance with
Section 5.1 from the Distribution Account the amount so deposited into the
Distribution Account pursuant to subsections 4.11(e) and (f) on the related
Transfer Date in the following priority:
(i) an amount equal to the lesser of such amount on
deposit in the Distribution Account and the Class A Investor
Interest shall be paid to the Class A Holders; and
(ii) for each Distribution Date with respect to the Rapid
Amortization Period and on the Class B Scheduled Payment Date,
after giving effect to the distributions referred to in clause (i)
above, an amount equal to the lesser of such amount on deposit in
the Distribution Account and the Class B Investor Interest shall
be paid to the Class B Holders.
(i) The Controlled Accumulation Period is scheduled to commence at the
close of business on the Controlled Accumulation Date; provided that if the
Controlled Accumulation Period Length (determined as described below) on any
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Determination Date on or after the __________ __________ Determination Date
is less than [twelve] months, upon written notice to Trustee, Transferor
and each Rating Agency, Servicer, at its option, may elect to modify the
date on which the Controlled Accumulation Period actually commences to the
first day of the month that is a number of months prior to the month in
which the Class A Scheduled Payment Date occurs at least equal to the
Controlled Accumulation Period Length (so that as a result of such election
the number of Monthly Periods in the Controlled Accumulation Period will at
least equal the Controlled Accumulation Period Length); provided that (i)
the length of the Controlled Accumulation Period will not be less than
[one] month; (ii) such determination of the Controlled Accumulation Period
Length shall be made on each Determination Date on and after the __________
_________ Determination Date but prior to the commencement of the
Controlled Accumulation Period, and any election to shorten the Controlled
Accumulation Period shall be subject to the subsequent lengthening of the
Controlled Accumulation Period to the Controlled Accumulation Period Length
determined on any subsequent Determination Date, but the Controlled
Accumulation Period shall in no event commence prior to the Controlled
Accumulation Date and (iii) notwithstanding any other provision of this
Series Supplement to the contrary, no election to postpone the commencement
of the Controlled Accumulation Period shall be made after a Pay Out Event
shall have occurred and be continuing with respect to any other Series. The
"Controlled Accumulation Period Length" will mean a number of months such
that the amount available for distribution of principal on the Class A
Certificates on the Class A Scheduled Payment Date is expected to equal or
exceed the Class A Investor Interest, assuming for this purpose that (1)
the payment rate with respect to Collections of Principal Receivables
remains constant at the lowest level of such payment rate during the
[twelve] preceding Monthly Periods (or such lower payment rate as Servicer
may select), (2) the total amount of Principal Receivables in the Trust
(and the principal amount on deposit in the Excess Funding Account, if any)
remains constant at the level on such date of determination, (3) no Pay Out
Event with respect to any Series will subsequently occur and (4) no
additional Series (other than any Series being issued on such date of
determination) will be subsequently issued. Any notice by Servicer electing
to modify the commencement of the Controlled Accumulation Period pursuant
to this clause (i) shall specify (i) the Controlled Accumulation Period
Length, (ii) the commencement date of the Controlled Accumulation Period
and (iii) the Controlled Accumulation Amount with respect to each Monthly
Period during the Controlled Accumulation Period.
SECTION 4.12 Series Investor Charge-Offs. (a) On or before each
Transfer Date, Servicer shall calculate the Class A Net Default Amount. If,
on any Transfer Date, the Class A Net Default Amount for the prior Monthly
Period exceeds the sum of the amounts available for allocation with respect
thereto pursuant to subsection 4.11(a)(iii), subsection 4.13(a) and Section
4.15 with
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respect to such Monthly Period, then 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 Net 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. If such reduction would cause
the Collateral Interest to be a negative number, the Collateral Interest
will be reduced to zero, and the Class B Investor Interest (after giving
effect to reductions for any Class B Investor Charge-Offs and any
Reallocated Class B Principal Collections on such Transfer Date) will be
reduced by the amount by which the Collateral Interest would have been
reduced below zero. If such reduction would cause the Class B Investor
Interest to be a negative number, the Class B Investor Interest will be
reduced to zero, and the Class A Investor Interest will be reduced by the
amount by which the Class B Investor Interest would have been reduced below
zero, but not by more than the Class A Net 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 by the amount of Excess Spread allocated
and available for such purpose pursuant to subsection 4.13(b).
(b) On or before each Transfer Date, Servicer shall calculate the
Class B Net Default Amount. If, on any Transfer Date, the Class B Net
Default Amount for the prior Monthly Period exceeds the amount of Excess
Spread and Reallocated Collateral Principal Collections that are allocated
and available to fund such amount pursuant to subsection 4.13(c) and
Section 4.15, 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 4.12(a)) will be reduced by the amount of such excess, but not
by more than the lesser of the Class B Net 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
4.12(a)) for such Transfer Date. If such reduction would cause the
Collateral Interest to be a negative number, the Collateral Interest shall
be reduced to zero and the Class B 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 Net 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 4.15 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 4.12(a). The Class B Investor Interest will
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thereafter be reimbursed on any Transfer Date by the amount of Excess
Spread allocated and available for that purpose as described under
subsection 4.13(d).
(c) On or before each Transfer Date, Servicer shall calculate the
Collateral Net Default Amount. If, on any Transfer Date, the Collateral Net
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 4.13(g), the Collateral Interest will be reduced by the amount
of such excess but not by more than the lesser of the Collateral Net
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 4.15
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 4.12(a), or the Class
B Investor Interest, pursuant to subsection 4.12(b), respectively. The
Collateral Interest will thereafter be reimbursed on any Transfer Date by
the amount of the Excess Spread allocated and available for that purpose as
described under subsection 4.13(h).
SECTION 4.13 Excess Spread. On or before each Transfer Date, Servicer
shall instruct Trustee in writing (which writing shall be substantially in
the form of Exhibit B to the Series Supplement) to apply, and Trustee,
acting in accordance with such instructions shall apply, Excess Spread with
respect to the related Monthly Period, to make the following distributions
on each Transfer Date in the following priority:
(a) an amount equal to the Class A Required Amount, if any, with
respect to such Transfer Date will be used to fund the Class A Required
Amount and be applied in accordance with, and in the priority set forth in,
subsection 4.11(a);
(b) an amount equal to the aggregate amount of Class A Investor
Charge- Offs which have not been previously reimbursed will be treated as a
portion of Investor Principal Collections and deposited into the Principal
Account on such Transfer Date;
(c) an amount equal to the Class B Required Amount, if any, with
respect to such Transfer Date will be used to fund the Class B Required
Amount and be applied first in accordance with, and in the priority set
forth in, subsection 4.11(b) and then any remaining amount available to pay
the Class B Net 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 Class B Initial Investor
Interest for
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reasons other than the payment of principal to the Class B Holders (but not
in excess of the aggregate amount of such reductions which have not been
previously reimbursed) will be treated as a portion of Investor Principal
Collections and deposited into the Principal Account on such Transfer Date;
(e) an amount equal to the Collateral Monthly Interest plus the amount
of any past due Collateral Monthly Interest for such Transfer Date will be
held in the Finance Charge Account, invested overnight in Permitted
Investments and paid to the Collateral Interest Holder on the related
Distribution Date in accordance with the Loan Agreement;
(f) if Transferor or Trustee is Servicer, an amount equal to the
aggregate amount of accrued but unpaid Collateral Interest Servicing Fee
will be paid to Servicer;
(g) an amount equal to the Collateral Net Default Amount, if any, for
the prior Monthly Period will be treated as a portion of Investor Principal
Collections and deposited into the Principal Account on such Transfer Date;
(h) an amount equal to the aggregate amount by which the Collateral
Interest has been reduced below the Required Collateral Interest for
reasons other than the payment of principal to the Collateral Interest
Holder (but not in excess of the aggregate amount of such reductions which
have not been previously reimbursed) will 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 subsection 4.18(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;
(j) an amount equal to all other amounts specified in the Loan
Agreement (to the extent payable from "Available Non-Principal Funds," as
defined therein) shall be held in the Finance Charge Account, invested
overnight in Permitted Investments and distributed on the related
Distribution Date in accordance with the Loan Agreement; and
(k) the balance, if any, after giving effect to the payments made
pursuant to clauses (a) through (j), shall constitute "Excess Finance
Charge Collections" to be applied with respect to other Principal Sharing
Series in accordance with Section 4.5 of the Agreement.
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SECTION 4.14 Reallocated Investor Finance Charge Collections. (a) That
portion of Group I Investor Finance Charge Collections for any Transfer
Date equal to the amount of Reallocated Investor Finance Charge Collections
for such Transfer Date will be allocated to Series 1997-1 and will be
distributed as set forth in this Supplement.
(b) Reallocated Investor Finance Charge Collections with respect to
any Transfer Date shall equal the sum of (i) the aggregate amount of Series
Monthly Interest, Series Monthly Fees, Series Net Default Amount and Series
Investor Charge-Offs for such Distribution Date and (ii) that portion of
excess Group I Investor Finance Charge Collections to be included in
Reallocated Investor Finance Charge Collections pursuant to subsection
4.14(c); provided that if the amount of Group I Investor Finance Charge
Collections for such Distribution Date is less than the sum of (w) Group I
Investor Monthly Interest, (x) Group I Investor Monthly Fees, (y) Group I
Net Default Amount and (z) Group I Investor Charge-Offs, then "Reallocated
Investor Finance Charge Collections" shall equal the sum of the following
amounts for such Distribution Date:
(A) The product of (I) Group I Investor Finance Charge
Collections (up to the amount of Group I Investor Monthly
Interest) and (II) a fraction, the numerator of which is Series
Monthly Interest and the denominator of which is Group I Investor
Monthly Interest;
(B) the product of (I) Group I Investor Finance Charge
Collections less the amount of Group I Investor Monthly Interest
(up to the Group I Investor Monthly Fees) and (II) a fraction, the
numerator of which is the Series Monthly Fees and the denominator
of which is the Group I Investor Monthly Fees;
(C) the product of (I) Group I Investor Finance Charge
Collections less the amount of Group I Investor Monthly Interest
and the Group I Investor Monthly Fees (up to Group I Net Default
Amount) and (II) a fraction, the numerator of which is Series Net
Default Amount and the denominator of which is Group I Net Default
Amount; and
(D) the product of (I) Group I Investor Finance Charge
Collections less the sum of (x) Group I Investor Monthly Interest,
(y) the Group I Investor Monthly Fees and (z) Group I Net Default
Amount and (II) a fraction, the numerator of which is Series
Investor Charge-Offs and the denominator of which is Group I
Investor Charge-Offs.
(c) If the amount of Group I Investor Finance Charge Collections for
such Distribution Date exceeds the sum of (i) Group I Investor Monthly
Interest, (ii)
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Group I Investor Monthly Fees, (iii) Group I Net Default Amount and (iv)
Group I Investor Charge-Offs, then Reallocated Investor Finance Charge
Collections for such Distribution Date shall include an amount equal to the
product of (x) the amount of such excess and (y) a fraction, the numerator
of which is the Investor Interest as of the last day of the second
preceding Monthly Period (or, for Series 1997-1 only, with respect to the
first Transfer Date, as of the Closing Date) and the denominator of which
is the sum of such Investor Interest and the aggregate Investor Interests
for all other Series included in Group I as of such last day (or, for
Series 1997-1 only, with respect to the first Transfer Date, as of the
Closing Date).
SECTION 4.15 Reallocated Principal Collections. On or before each
Transfer Date, Servicer shall instruct Trustee in writing (which writing
shall be substantially in the form of Exhibit B to the Series Supplement)
to, and Trustee in accordance with such instructions shall, withdraw from
the Principal Account and apply Reallocated Principal Collections (applying
all Reallocated Collateral Principal Collections in accordance with
subsections 4.15(a) and (b) prior to applying any Reallocated Class B
Principal Collections in accordance with subsection 4.15(a) for any amounts
still owing after the application of Reallocated Collateral Principal
Collections) with respect to such Transfer Date, to make the following
distributions on each Transfer Date in the following priority:
(a) an amount equal to the excess, if any, of (i) the Class A Required
Amount, if any, with respect to such Transfer Date over (ii) the amount of
Excess Spread with respect to the related Monthly Period, shall be applied
pursuant to subsections 4.11(a)(i), (ii) and (iii); and
(b) an amount equal to the excess, if any, of (i) the Class B Required
Amount, if any, with respect to such Transfer Date over (ii) the amount of
Excess Spread allocated and available to the Class B Certificates pursuant
to subsection 4.13(c) on such Transfer Date shall be applied first pursuant
to subsections 4.11(b)(i) and (ii) and then pursuant to subsection 4.13(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 applied pursuant to subsections
4.15(a) and/or (b) on such Transfer Date. If such reduction would cause the
Collateral Interest (after giving effect to any Collateral Charge-Offs for
such Transfer Date) to be a negative number, the Collateral Interest (after
giving effect to any Collateral Charge-Offs for such Transfer Date) shall
be reduced to zero and the Class B Investor Interest shall be reduced by
the amount by which the Collateral Interest would have been reduced below
zero. If the reallocation of Reallocated Principal Collections would cause
the Class B Investor Interest (after giving effect to any Class B Investor
Charge-Offs for such Transfer Date) to be a negative
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<PAGE>
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 4.16 Shared Principal Collections. (a) The portion of Shared
Principal Collections on deposit in the Principal Account equal to the
amount of Shared Principal Collections allocable to Series 1997-1 on any
Transfer Date shall be applied as Available Investor Principal Collections
pursuant to Section 4.11 and pursuant to such Section 4.11 shall be
deposited in the Distribution Account or distributed in accordance with the
Loan Agreement.
(b) Shared Principal Collections allocable to Series 1997-1 with
respect to any Transfer Date means an amount equal to the Series Principal
Shortfall, if any, with respect to Series 1997-1 for such Transfer Date;
provided that if the aggregate amount of Shared Principal Collections for
all Principal Sharing Series for such Transfer Date is less than the
Cumulative Series Principal Shortfall for such Transfer Date, then Shared
Principal Collections allocable to Series 1997-1 on such Transfer Date
shall equal the product of (i) Shared Principal Collections for all
Principal Sharing Series for such Transfer Date and (ii) a fraction, the
numerator of which is the Series Principal Shortfall with respect to Series
1997-1 for such Transfer Date and the denominator of which is the
Cumulative Series Principal Shortfall for all Principal Sharing Series for
such Transfer Date.
(c) Solely for the purpose of determining the amount of Available
Investor Principal Collections to be treated as Shared Principal
Collections on any Transfer Date allocable to other Principal Sharing
Series, on each Determination Date, Servicer shall determine the Class A
Required Amount, the Class B Required Amount, Excess Spread and Reallocated
Principal Collections as of such Determination Date for the following
Transfer Date.
SECTION 4.17 Principal Account and Principal Funding Account. (a) The
Trustee shall establish and maintain with a Qualified Institution, which
may be Trustee, in the name of the Trustee, on behalf of the Trust, for the
benefit of the Investor Holders, two segregated trust accounts with the
corporate trust department of such Qualified Institution (the "Principal
Account" and the "Principal Funding Account"), bearing a designation
clearly indicating that the funds deposited therein are held for the
benefit of the Investor Holders. The Trustee shall possess all right, title
and interest in all funds on deposit from time to time in the Principal
Account and the Principal Funding Account and in all proceeds thereof. The
Principal Account and the Principal Funding Account shall be under the sole
dominion and control of Trustee for the benefit of the Investor Holders. If
at any time the institution holding the Principal Account and the Principal
Funding Account ceases to be a Qualified Institution, Transferor shall
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<PAGE>
notify Trustee, and Trustee upon being notified (or Servicer on its behalf)
shall, within 10 Business Days, establish a new Principal Account and 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 Account and Principal Funding Account. The Trustee, at
the direction of Servicer, shall (i) make withdrawals from the Principal
Account and the Principal Funding Account from time to time in the amounts
and for the purposes set forth in this Agreement, and (ii) on each Transfer
Date (from and after the commencement of the Controlled Accumulation
Period) prior to termination of the Principal Funding Account make a
deposit into the Principal Funding Account in the amount specified in, and
otherwise in accordance with, subsection 4.11(e).
(b) Funds on deposit in the Principal Account and the Principal
Funding Account shall be invested at the direction of Servicer by 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 Holders, 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, Trustee, acting at Servicer's direction given
on or before such Transfer Date, shall transfer (i) from the Principal
Account to the Finance Charge Account all investment earnings (net of
losses and investment expenses) accrued on or prior to that Transfer Date
in connection with the investment of funds on deposit in the Principal
Account for application as a part of Investor Finance Charge Collections
and (ii) from the Principal Funding Account to the Finance Charge Account
the Principal Funding Investment Proceeds on deposit in the Principal
Funding Account, but not in excess of the Covered Amount, for application
as Class A Available Funds applied pursuant to subsection 4.11(a)(i).
Any Excess Principal Funding Investment Proceeds shall be paid to the
Holder of the Transferor Certificate on each Transfer Date. An amount equal
to any Principal Funding Investment Shortfall will be deposited in the
Finance Charge Account on each Transfer Date from the Reserve Account to
the extent funds are available pursuant to subsection 4.18(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 Agreement.
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<PAGE>
SECTION 4.18 Reserve Account. (a) The Trustee shall establish and
maintain with a Qualified Institution, which may be Trustee, in the name of
the Trust, on behalf of the Trust, for the benefit of the Investor Holders,
a segregated trust account 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 Holders. The Trustee shall possess all right, title
and interest in all funds on deposit from time to time in the Reserve
Account and in all proceeds thereof. The Reserve Account shall be under the
sole dominion and control of Trustee for the benefit of the Investor
Holders. If at any time the institution holding the Reserve Account ceases
to be a Qualified Institution, Transferor shall notify Trustee, and Trustee
upon being notified (or Servicer on its behalf) shall, within 10 Business
Days, establish a new Reserve Account meeting the conditions specified
above with a Qualified Institution, and shall transfer any cash or any
investments to such new Reserve Account. The Trustee, at the direction of
Servicer, shall (i) make withdrawals from the Reserve Account from time to
time in an amount up to the Available Reserve Account Amount at such time,
for the purposes set forth in this Agreement, 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 4.13(i).
(b) Funds on deposit in the Reserve Account shall be invested at the
direction of Servicer by 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 Holders, 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
Agreement, 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
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and on or before the first Transfer Date with respect to the Rapid
Amortization Period, Servicer shall calculate the "Reserve Draw Amount"
which shall be equal to the Principal Funding Investment Shortfall with
respect to each Transfer Date with respect to the Controlled Accumulation
Period or the first Transfer Date with respect to the Rapid Amortization
Period less, in each case, the amount of funds deposited into the Finance
Charge Account on such Transfer Date pursuant to subsection 4.18(b).
(d) If the Reserve Draw Amount for any Transfer Date is greater than
zero, the Reserve Draw Amount, up to the Available Reserve Account Amount,
shall be withdrawn from the Reserve Account on such Transfer Date by
Trustee (acting in accordance with the instructions of Servicer), deposited
into the Finance Charge Account and included in Class A Available Funds for
such Transfer Date.
(e) If the Reserve Account Surplus on any Transfer Date, after giving
effect to all deposits to and withdrawals from the Reserve Account with
respect to such Transfer Date, is greater than zero, Trustee, acting in
accordance with the instructions of Servicer, shall withdraw from the
Reserve Account, and pay in accordance with the Loan Agreement, an amount
equal to such Reserve Account Surplus.
(f) Upon the earliest to occur of (i) the termination of the Trust
pursuant to Article XII, (ii) the first Transfer Date relating to the Rapid
Amortization Period and (iii) the Transfer Date immediately preceding the
Class A Scheduled Payment Date, Trustee, acting in accordance with the
instructions of Servicer, after the prior payment of all amounts owing to
the Series 1997-1 Holders that are payable from the Reserve Account as
provided herein, shall withdraw from the Reserve Account and pay in
accordance with the Loan Agreement all amounts, if any, on deposit in the
Reserve Account and the Reserve Account shall be deemed to have terminated
for purposes of this Series Supplement.
SECTION 4.19 Determination of LIBOR. (a) On each LIBOR Determination
Date for each Interest Period (or, in the case of the initial Interest
Period, for each portion thereof having a separate LIBOR Determination
Date), Trustee will determine LIBOR on the basis of the rate for deposits
in United States dollars for a one-month period (commencing on the first
day of such Interest Period (or such portion of the initial Interest
Period, as applicable)) which appears on Telerate Page 3750 as of 11:00
a.m., London time, on such date. If such rate does not appear on Telerate
Page 3750, the rate for that LIBOR Determination Date will be determined on
the basis of the rates at which deposits in United States dollars are
offered by the Reference Banks at approximately 11:00 a.m., London time, on
that day to prime banks in the London interbank market for a one-month
period (commencing on the first day of such Interest Period (or such
portion of the initial Interest Period, as applicable)). The Trustee
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<PAGE>
will request the principal London office of each of the Reference Banks to
provide a quotation of its rate. If at least two such quotations are
provided, the rate for that LIBOR Determination Date will be the arithmetic
mean of the quotations. If fewer than two quotations are provided as
requested, the rate for that LIBOR Determination Date will be the
arithmetic mean of the rates quoted by three major banks in New York City,
selected by Servicer, at approximately 11:00 a.m., New York City time, on
that day for loans in United States dollars to leading European banks for a
one-month period (commencing on the first day of such Interest Period (or
such portion of the initial Interest Period, as applicable)). If the banks
selected by the Servicer are not quoting rates as provided in the
immediately preceding sentence, LIBOR for such Interest Period shall be
LIBOR in effect for the immediately preceding Interest Period.
(b) The Class B Certificate Rate applicable to the then current and
the immediately preceding Interest Periods may be obtained by any Investor
Holder by telephoning Trustee at its Corporate Trust Office at (212)
815-5286.
(c) On each LIBOR Determination Date prior to 12:00 noon New York City
time, Trustee shall send to Servicer, by facsimile, notification of LIBOR
for the following Interest Period.
SECTION 4.20 Transferor's or Servicer's Failure to Make a Deposit or
Payment. If Servicer or Transferor fails to make, or give instructions to
make, any payment or deposit (other than as required by subsections 2.4(d)
and (e) and 12.2(a) or Sections 10.2 and 12.1) required to be made or given
by Servicer or Transferor, respectively, at the time specified in the
Agreement (including applicable grace periods), Trustee shall make such
payment or deposit from the applicable Investor Account without instruction
from Servicer or Transferor. The Trustee shall be required to make any such
payment, deposit or withdrawal hereunder only to the extent that Trustee
has sufficient information to allow it to determine the amount thereof;
provided that Trustee shall in all cases be deemed to have sufficient
information to determine the amount of interest payable to the Series
1997-1 Holders on each Distribution Date. The Servicer shall, upon request
of Trustee, promptly provide Trustee with all information necessary to
allow Trustee to make such payment, deposit or withdrawal. Such funds or
the proceeds of such withdrawal shall be applied by Trustee in the manner
in which such payment or deposit should have been made by Transferor or
Servicer, as the case may be.
SECTION 4.21. Conversion Date. Notwithstanding anything contained in
the Agreement to the contrary, the Agreement and this Series Supplement may
be amended pursuant to subsection 13.1(a) from time to time by Transferor,
Servicer and Trustee and without the consent of the Certificateholders, to
facilitate the conversion from a Billing Cycle basis to Monthly Period
basis for
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allocations or to remove provisions of the Agreement or this Series
Supplement made superfluous by such conversion.
SECTION 8. Article V of the Agreement. Article V of the Agreement
shall read in its entirety as follows and shall be applicable only to the
Investor Holders:
ARTICLE V DISTRIBUTIONS AND REPORTS TO
INVESTOR HOLDERS
SECTION 5.1 Distributions. (a) On each Distribution Date, Trustee
shall distribute (in accordance with the certificate delivered on or before
the related Transfer Date by Servicer to Trustee pursuant to subsection
3.4(b)) to each Class A Holder of record on the immediately preceding
Record Date (other than as provided in subsection 2.4(e) or Section 12.3
respecting a final distribution) such Holder's pro rata share (based on the
aggregate Undivided Interests represented by Class A Certificates held by
such Holder) of amounts on deposit in the Distribution Account as are
payable to the Class A Holders pursuant to Section 4.11 by check mailed to
each Class A Holder (at such Holder's address as it appears in the
Certificate Register), except that with respect to Class A Certificates
registered in the name of the nominee of a Clearing Agency, such
distribution shall be made in immediately available funds.
(b) On each Distribution Date, Trustee shall distribute (in accordance
with the certificate delivered on or before the related Transfer Date by
Servicer to Trustee pursuant to subsection 3.4(b)) to each Class B Holder
of record on the immediately preceding Record Date (other than as provided
in subsection 2.4(e) or Section 12.3 respecting a final distribution) such
Holder's pro rata share (based on the aggregate Undivided Interests
represented by Class B Certificates held by such Holder) of amounts on
deposit in the Distribution Account as are payable to the Class B Holders
pursuant to Section 4.11 by check mailed to each Class B Holder (at such
Holder's address as it appears in the Certificate Register), except that
with respect to Class B Certificates registered in the name of the nominee
of a Clearing Agency, such distribution shall be made in immediately
available funds.
SECTION 5.2 Monthly Series 1997-1 Holders' Statement. (a) On or before
each Distribution Date, Trustee shall forward to each Series 1997-1 Holder
a statement substantially in the form of Exhibit C to the Series Supplement
prepared by Servicer and delivered to Trustee.
(b) Annual Holders' Tax Statement. On or before January 31 of each
calendar year, beginning with calendar year 1998, Trustee shall distribute
to each Person who at any time during the preceding calendar year was a
Series 1997-1 Holder, a statement prepared by Servicer containing the
following information:
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(i) the amount of the current distribution allocable to
Class A Monthly Principal, Class B Monthly Principal and
Collateral Monthly Principal, respectively; and
(ii) the amount of the current distribution allocable to
Class A Monthly Interest, Class A Deficiency Amounts, Class A
Additional Interest, Class B Monthly Interest, Class B Deficiency
Amounts, Class B Additional Interest and Collateral Monthly
Interest, and any accrued and unpaid Collateral Monthly Interest,
respectively.
Such information shall be aggregated for such calendar year or the
applicable portion thereof during which such Person was a Series 1997-1
Holder, together with such other customary information (consistent with the
treatment of the Certificates as debt) as Servicer deems necessary or
desirable to enable the Series 1997-1 Holders to prepare their tax returns.
Such obligations of Trustee shall be deemed to have been satisfied to the
extent that substantially comparable information shall be provided by
Trustee pursuant to any requirements of the Internal Revenue Code.
SECTION 9. Series 1997-1 Pay Out Events. If any one of the following
events shall occur with respect to the Investor Certificates:
(a) failure on the part of Transferor (i) to make any payment or
deposit required by the terms of (A) the Agreement or (B) this Series
Supplement, on or before the date occurring five days after the date such
payment or deposit is herein required to be made or (ii) duly to observe or
perform in any material respect any covenants or agreements of Transferor
set forth in the Agreement or this Series Supplement (including the
covenant of Transferor contained in Section 11 of this Series Supplement),
which failure has a material adverse effect on the Series 1997-1 Holders
(which determination shall be made without reference to whether any funds
are available under 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
Transferor by Trustee, or to Transferor and Trustee by the Holders of
Investor Certificates evidencing Undivided Interests aggregating not less
than 50% of the Investor Interest of this Series 1997-1, and continues to
materially and adversely affect the interests of the Series 1997-1 Holders
(which determination shall be made without reference to whether any funds
are available under the Collateral Interest) for such period;
(b) any representation or warranty made by Transferor in the Agreement
or this Series Supplement, or any information contained in an Account
Schedule required to be delivered by Transferor pursuant to Section 2.1 or
2.6, (i) shall prove to have been incorrect in any material respect when
made or when
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delivered, which continues to be incorrect in any material respect for a
period of 60 days after the date on which written notice of such failure,
requiring the same to be remedied, shall have been given to Transferor by
Trustee, or to Transferor and Trustee by the Holders of Investor
Certificates evidencing Undivided Interests aggregating not less than 50%
of the Investor Interest of this Series 1997-1, and (ii) results in a
material and adverse effect on the interests of the Series 1997-1 Holders
(which material adverse effect shall be determined without reference to
whether any funds are available under the Collateral Interest), which
result continues for such period; provided that a Series 1997-1 Pay Out
Event pursuant to this subsection 9(b) shall not be deemed to have occurred
hereunder if Transferor has accepted reassignment of the related
Receivable, or all of such Receivables, if applicable, during such period
in accordance with the provisions of the Agreement;
(c) the average Portfolio Yield for any three consecutive Monthly
Periods is reduced to a rate which is less than the average Base Rate for
such period;
(d) Transferor shall fail to convey Receivables arising under
Additional Accounts, or Participations, to the Trust, as required by
subsection 2.6(b);
(e) any Servicer Default shall occur which would have a material
adverse effect on the Series 1997-1 Holders; or
(f) the Class A Investor Interest shall not be paid in full on the
Class A Scheduled Payment Date or the Class B Investor Interest shall not
be paid in full on the Class B Scheduled Payment Date;
then, in the case of any event described in subsection 9(a), (b), (c) or
(e) of this Series Supplement, after the applicable grace period set forth
in such subsections, either Trustee or Holders of Series 1997-1
Certificates (including, for this purpose, the Collateral Interest Holder)
evidencing Undivided Interests aggregating not less than 50% of the
Investor Interest of this Series 1997-1 by notice then given in writing to
Transferor and Servicer (and to Trustee if given by the Holders) may
declare that a pay out event (a "Series 1997-1 Pay Out Event") has occurred
as of the date of such notice, and in the case of any event described in
subsection 9 (d) or (f) of this Series Supplement, a Series 1997-1 Pay Out
Event shall occur without any notice or other action on the part of Trustee
or the Investor Holders immediately upon the occurrence of such event.
SECTION 10. Series 1997-1 Termination. The right of the Investor
Holders to receive payments from the Trust will terminate on the first
Business Day following the Series 1997-1 Termination Date.
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SECTION 11. Periodic Finance Charges and Other Fees. Transferor hereby
agrees that, except as otherwise required by any Requirement of Law, or as
is deemed by Transferor to be necessary in order for Transferor to maintain
its revolving credit business, based upon a good faith assessment by
Transferor, in its sole discretion, of the nature of the competition in the
credit card business, it shall not at any time reduce the Periodic Finance
Charges assessed on any Receivable or other fees on any Account if
Transferor reasonably expects that, as a result of such reduction, the
Portfolio Yield for the Monthly Period during which such reduction becomes
effective will be less than the Base Rate as at the beginning of such
Monthly Period.
SECTION 12. Counterparts. This Series Supplement may be executed in
any number of counterparts, each of which so executed shall be deemed to be
an original, but all of such counterparts shall together constitute but one
and the same instrument.
SECTION 13. Governing Law. THIS SERIES SUPPLEMENT SHALL BE CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AND THE OBLIGATIONS,
RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
SECTION 14. No Petition. Transferor, Servicer and Trustee, by entering
into this Series Supplement and each Holder, by accepting a Series 1997-1
Certificate, hereby covenant and agree that they will not at any time
institute against the Trust, or join in any institution against the Trust
of, any bankruptcy proceedings under any United States Federal or state
bankruptcy or similar law in connection with any obligations relating to
the Investor Holders, the Agreement or this Series Supplement.
SECTION 15. Amendments. This Series Supplement may be amended pursuant
to Section 13.1 of the Agreement. This Series Supplement may also be
amended by Transferor without the consent of Servicer, Trustee or any
Investor Holder if Transferor provides Trustee with (i) an Opinion of
Counsel to the effect that such amendment or modification would reduce the
risk that the Trust would be treated as taxable as a publicly traded
partnership pursuant to Internal Revenue Code section 7704 and would not
cause the Trust to be classified, for Federal income tax purposes, as an
association (or publicly traded partnership) taxable as a corporation or
cause or constitute an event in which gain or loss would be recognized by
any Investor Holder and (ii) a certificate that such amendment or
modification would not materially and adversely affect any Investor Holder;
provided that no such amendment shall be deemed effective without Trustee's
consent, if Trustee's rights, duties and obligations hereunder are thereby
modified. Promptly after the execution of any such amendment (other than an
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amendment pursuant to subsection 13.1(a)), Trustee shall furnish
notification of the substance of such amendment to each Rating Agency.
IN WITNESS WHEREOF, Transferor, Servicer and Trustee have caused
this Series 1997-1 Supplement to be duly executed by their respective
officers as of the day and year first above written.
FIRST NATIONAL BANK OF COMMERCE,
Transferor and Servicer
By:______________________________________
Name:
Title:
----------------------------------------,
Trustee
By:_____________________________________
Name:
Title:
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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 First
National Bank of Commerce 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.________
FIRST NBC CREDIT CARD MASTER TRUST
CLASS A FLOATING RATE
ASSET BACKED CERTIFICATE, SERIES 1997-1
Evidencing an Undivided Interest in a trust, the corpus of which consists
of a portfolio of MasterCard(R), VISA(R)*<F11> and Private Label credit
card receivables generated or acquired by First National Bank of Commerce
and other assets and interests constituting the Trust under the Pooling and
Servicing Agreement described below.
(Not an interest in or obligation of
First National Bank of Commerce
or any Affiliate thereof.)
- ---------------
<F11>
* MasterCard(R) and VISA(R) are federally registered servicemarks of
MasterCard International Inc. and of VISA U.S.A., Inc., respectively.
<F/11>
Exhibit A-1, Page 1
<PAGE>
This certifies that CEDE & CO. (the "Class A 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 and arising in connection with selected
MasterCard, VISA and Private Label credit card accounts] (the "Accounts")
of First National Bank of Commerce, 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
and Recoveries), the right to certain amounts received as Interchange with
respect to the Accounts, the benefits of the Collateral Interest (as
defined below) and the other assets and interests constituting the Trust
pursuant to a Pooling and Servicing Agreement dated as of _____________ __,
1997 as supplemented by the Series 1997-1 Supplement dated as of
______________ __, 1997 (collectively, the "Pooling and Servicing
Agreement"), by and between First National Bank of Commerce, as Transferor
("Transferor") and as Servicer ("Servicer"), and ___________________, as
Trustee ("Trustee"). The Series 1997-1 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.
Transferor has structured the Pooling and Servicing Agreement and the
Series 1997-1 Certificates with the intention that the Series 1997-1
Certificates will qualify under applicable tax law as indebtedness, and
each of Transferor, Servicer and each Series 1997-1 Holder (or Series
1997-1 Certificate Owner) by acceptance of its Series 1997-1 Certificate
(or in the case of a Series 1997-1 Certificate Owner, by virtue of such
Series 1997-1 Certificate Owner's acquisition of a beneficial interest
therein), agrees to treat and to take no action inconsistent with the
treatment of the Series 1997-1 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 1997-1 Holder agrees that it will cause any Series
1997-1 Certificate Owner acquiring an interest in a Series 1997-1
Certificate through it to comply with the Pooling and Servicing Agreement
as to treatment of the Series 1997-1 Certificates as indebtedness for
certain tax purposes.
To the extent not defined herein, capitalized terms used herein have
the respective meanings assigned to them in the Pooling and Servicing
Agreement. 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 amended from time to time, the
Class A Holder by virtue of the acceptance hereof assents and by which the
Class A Holder is bound.
Exhibit A-1, Page 2
<PAGE>
This Class A Certificate represents an interest in only the First NBC
Credit Card Master Trust. This Class A Certificate does not represent an
obligation of, or an interest in, Transferor or Servicer, and neither the
Series 1997-1 Certificates nor the Accounts or Receivables are insured or
guaranteed by the Federal Deposit Insurance Corporation or any other
governmental agency. This Series 1997-1 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.
Unless the certificate of authentication hereon has been executed by
or on behalf of 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.
Exhibit A-1, Page 3
<PAGE>
IN WITNESS WHEREOF, First National Bank of Commerce has caused this
Class A Certificate to be duly executed under its official seal.
By:_____________________
Authorized Officer
[Seal]
Attested to:
By:______________________________
Secretary
Date:____________________________
Exhibit A-1, Page 4
<PAGE>
Form of Trustee's Certificate of Authentication
CERTIFICATE OF AUTHENTICATION
This is one of the Class A Certificates, Series 1997-1, of the First
NBC Credit Card Master Trust referred to in the within-mentioned Pooling
and Servicing Agreement.
-------------------,
Trustee
By:__________________________
Authorized Signatory
<PAGE>
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 First
National Bank of Commerce 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.________
FIRST NBC CREDIT CARD MASTER TRUST
CLASS B FLOATING RATE
ASSET BACKED CERTIFICATE, SERIES 1997-1
Evidencing an Undivided Interest in a trust, the corpus of which
consists of a portfolio of MasterCard(R), VISA(R)*<F12> and Private Label
credit card receivables generated or acquired by First National Bank of
Commerce and other assets and interests constituting the Trust under the
Pooling and Servicing Agreement described below.
(Not an interest in or obligation of
First National Bank of Commerce
or any Affiliate thereof.)
- ------------------
<F12>* MasterCard(R) and VISA(R) are federally registered servicemarks of
MasterCard International Inc. and of VISA U.S.A., Inc., respectively.
</F12>
Exhibit A-2, Page 1
<PAGE>
This certifies that CEDE & CO. (the "Class B 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 and arising in connection with selected
MasterCard, VISA and Private Label credit card accounts] (the "Accounts")
of First National Bank of Commerce, 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
and Recoveries), the right to certain amounts received as Interchange with
respect to the Accounts, the benefits of the Collateral Interest (as
defined below) and the other assets and interests constituting the Trust
pursuant to a Pooling and Servicing Agreement dated as of ______________
__, 1997 as supplemented by the Series 1997-1 Supplement dated as of
_______________ __, 1997 (collectively, the "Pooling and Servicing
Agreement"), by and between First National Bank of Commerce, as Transferor
("Transferor") and as Servicer ("Servicer"), and _______________, as
Trustee ("Trustee"). The Series 1997-1 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.
Transferor has structured the Pooling and Servicing Agreement and the
Series 1997-1 Certificates with the intention that the Series 1997-1
Certificates will qualify under applicable tax law as indebtedness, and
each of Transferor, Servicer and each Series 1997-1 Holder (or Series
1997-1 Certificate Owner) by acceptance of its Series 1997-1 Certificate
(or in the case of a Series 1997-1 Certificate Owner, by virtue of such
Series 1997-1 Certificate Owner's acquisition of a beneficial interest
therein), agrees to treat and to take no action inconsistent with the
treatment of the Series 1997-1 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 1997-1 Holder agrees that it will cause any Series
1997-1 Certificate Owner acquiring an interest in a Series 1997-1
Certificate through it to comply with the Pooling and Servicing Agreement
as to treatment of the Series 1997-1 Certificates as indebtedness for
certain tax purposes.
To the extent not defined herein, capitalized terms used herein have
the respective meanings assigned to them in the Pooling and Servicing
Agreement. This Class B 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
Class B Holder by virtue of the acceptance hereof assents and by which the
Class B Holder is bound.
This Class B Certificate represents an interest in only the First NBC
Credit Card Master Trust. This Class B Certificate does not represent an
Exhibit A-2, Page 2
<PAGE>
obligation of, or an interest in, Transferor or Servicer, and neither the
Series 1997-1 Certificates nor the Accounts or Receivables are insured or
guaranteed by the Federal Deposit Insurance Corporation or any other
governmental agency. This Series 1997-1 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.
Unless the certificate of authentication hereon has been executed by
or on behalf of 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.
Exhibit A-2, Page 3
<PAGE>
IN WITNESS WHEREOF, First National Bank of Commerce has caused this
Class B Certificate to be duly executed under its official seal.
By:______________________
Authorized Officer
[Seal]
Attested to:
By:_________________________
Secretary
Date:_______________________
Exhibit A-2, Page 4
<PAGE>
Form of Trustee's Certificate of Authentication
CERTIFICATE OF AUTHENTICATION
This is one of the Class B Certificates, Series 1997-1, of the First
NBC Credit Card Master Trust referred to in the within-mentioned Pooling
and Servicing Agreement.
------------------------,
Trustee
By:_______________________
Authorized Signatory
<PAGE>
EXHIBIT B
FORM OF MONTHLY PAYMENT INSTRUCTIONS AND
NOTIFICATION TO TRUSTEE
FIRST NATIONAL BANK OF COMMERCE
FIRST NBC CREDIT CARD MASTER TRUST, SERIES 1997-1
MONTHLY PERIOD ENDING ______________, ____
[TO COME]
<PAGE>
EXHIBIT C
FORM OF MONTHLY SERIES 1997-1
HOLDERS' STATEMENT
SERIES 1997-1
FIRST NATIONAL BANK OF COMMERCE
------------------------------------
FIRST NBC CREDIT CARD MASTER TRUST
----------------------------------------
[TO COME]
[Mayer, Brown & Platt Letterhead]
Exhibit 5.1
May 30, 1997
First National Bank of Commerce
210 Baronne Street
New Orleans, Louisiana 70112
Re: First National Bank of Commerce Registration
Statement on Form S-3 (No. 333-24023)
Ladies and Gentlemen:
We have acted as special counsel to First National Bank of Commerce, a
national banking association (the "Bank"), in connection with the above-
referenced Registration Statement (together with the exhibits and any
amendments thereto, the "Registration Statement"), filed by the Bank with the
Securities and Exchange Commission in connection with the registration by
the Bank of Asset Backed Certificates (the "Certificates") to be sold from
time to time in one or more series in amounts to be determined at the time
of sale and to be set forth in one or more Supplements (each, a "Prospectus
Supplement") to the Prospectus (the "Prospectus") included in the Registration
Statement.
As described in the Registration Statement, the Certificates of each
series will be issued by a trust (the "Trust") to be formed by the Bank
pursuant to a Pooling and Servicing Agreement (the "Pooling and Servicing
Agreement") by and among the Bank, as Transferor and Servicer, and The First
National Bank of Chicago (the "Trustee"). Each series of Certificates
issued by the Trust will include one or more classes of Certificates. Each
series of Certificates will be issued pursuant to a supplement to the Pooling
and Servicing Agreement (a "Series Supplement").
We are generally familiar with the proceedings required to be taken in
connection with the proposed authorization, issuance and sale of the
Certificates, and in order to express the opinion hereinafter stated, we have
examined copies of the Registration Statement, including the forms of Pooling
and Servicing Agreement and Series Supplement (together, the "Operative
Documents") included as exhibits to the Registration Statement. We have
examined such other documents and such matters of law, and we have satisfied
ourselves as to such matters of fact, as we have considered relevant for
purposes of this opinion.
On the basis of the foregoing and on the basis of our examination of the
Bank's Articles of Association and By-Laws, it is our opinion that, with
respect to Certificates of any series, when, as and if (i) the Registration
Statement becomes effective pursuant to the provisions of the Securities Act
of 1933, as amended, (ii) the amount, price, interest rate and other
principal terms of such Certificates have been duly approved by the Board of
Directors of the Bank, (iii) the Operative Documents relating thereto have
each been duly completed, executed and delivered by the parties thereto
substantially in the form we have examined, duly reflecting the terms
established as described above, and (iv) such Certificates have been duly
issued by the Trust and authenticated by the Trustee all in accordance with
the terms and conditions of the Operative Documents and sold by the Trust or
the Bank in the manner described in the Registration Statement, such
Certificates will have been duly authorized by all necessary action of the
Trustee on behalf of the Trust and will have been legally issued and will be
enforceable in accordance with their terms and entitled to the benefits of the
Operative Documents except as the same may be limited by bankruptcy,
insolvency, reorganization, moratorium, or similar laws affecting the
enforcement of creditors' rights generally (including, without limitation,
the determination pursuant to 12 USC Section 1821(e) of any liability for the
disaffirmance or repudiation of any contract) or the relief of debtors, as
may be in effect from time to time, or by general principles of equity.
We wish to advise you that we are members of the bar of the State of New
York and the opinions expressed herein are limited to the laws of the State of
New York and the Federal laws of the United States.
We hereby consent to the filing of this opinion and our related opinion
with respect to certain tax matters as Exhibits 5.1 and 8.1 to the Registration
Statement, and to the reference to our firm in the Prospectus under the
captions "PROSPECTUS SUMMARY -- Tax Status," "U.S. FEDERAL INCOME TAX
CONSEQUENCES" and "LEGAL MATTERS."In giving such consent, we do not admit
that we are "experts" within the meaning of the term used in the
Securities Act of 1933, as amended, 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.
Sincerely,
/s/ Mayer, Brown & Platt
MAYER, BROWN & PLATT
[Mayer, Brown & Platt Letterhead]
Exhibit 8.1
May 30, 1997
First National Bank of Commerce
210 Baronne Street
New Orleans, Louisiana 70112
Re: First National Bank of Commerce Registration
Statement on Form S-3 (No. 333-24023)
Ladies and Gentlemen:
We have acted as special tax counsel for First National Bank of Commerce,
a national banking association (the "Transferor"), in connection with the
above-referenced Registration Statement (together with the exhibits and any
amendments thereto, the "Registration Statement"), filed by the Transferor
with the Securities and Exchange Commission in connection with (a) the
registration by the Transferor of Asset Backed Certificates (the
"Certificates") to be sold from time to time in one or more series in amounts
to be determined at the time of sale and to be set forth in one or more
Supplements (each, a "Prospectus Supplement") to the Prospectus (the
"Prospectus") included in the Registration Statement and (b) the formation of
the First NBC Credit Card Master Trust (the "Trust") pursuant to a Pooling and
Servicing Agreement (the "Pooling and Servicing Agreement") between the
Transferor, as Transferor and Servicer, and The First National Bank of
Chicago, as Trustee. Capitalized terms used herein which are not defined
herein shall have the meaning set forth in the Pooling and Servicing Agreement.
We are familiar with the proceedings to date in connection with the
proposed issuance and sale of the Certificates and in order to express our
opinion hereinafter stated, (a) we have examined copies of the forms of (i)
the Pooling and Servicing Agreement, (ii) the Series Supplement and (iii)
the Certificates filed as exhibits to the Registration Statement
(collectively the "Operative Documents") and (b) we have examined such other
records and documents and such matters of law, and we have satisfied ourselves
as to such matters of fact, as we have considered relevant for purposes of
this opinion.
The opinions set forth in this letter concerning federal income tax are
based upon the applicable provisions of the Internal Revenue Code of 1986, as
amended, Treasury regulations promulgated and proposed thereunder, current
positions of the Internal Revenue Service (the "IRS") contained in published
Revenue Rulings and Revenue Procedures, current administrative positions of
the IRS and existing judicial decisions. The opinions are subject to the
explanations and qualifications set forth under the caption "U.S. Federal
Income Tax Consequences" in the Prospectus which constitutes a part of the
Registration Statement.
Based on the foregoing and assuming that the Operative Documents are
executed and delivered in substantially the form we have examined, we hereby
confirm our opinion with respect to the Federal income tax characterization of
the Certificates and the Federal income tax treatment of the issuance of the
Certificates set forth under the caption "U.S. Federal Income Tax
Consequences" in the Prospectus and each Prospectus Supplement, subject to
the limitations expressed therein. In our opinion, for Federal income tax
purposes, the Certificates will be characterized as indebtedness, and the
Trust will not be classified as an association (or publicly traded
partnership) taxable as a corporation. Moreover, we are of the opinion that
the statements set forth in the Prospectus under the headings "Prospectus
Summary -- Tax Status," "Prospectus Summary -- ERISA Considerations," "U.S.
Federal Income Tax Consequences" and "ERISA Considerations" and the
Prospectus Supplement under the headings "Summary of Terms -- Tax Status"
and "Summary of Terms -- ERISA Considerations" are a fair and accurate summary
of the material federal income tax and ERISA consequences of the issuance and
holding of the Certificates. There can be no assurance, however, that the tax
conclusions presented therein will not be successfully challenged by the IRS,
or significantly altered by new legislation, changes in IRS positions or
judicial decisions, any of which challenges or alterations may be applied
retroactively with respect to completed transactions.
We note that the Prospectus does not relate to a specific transaction.
Accordingly, the above-referenced description of federal income tax
consequences may, under certain circumstances, require modification in the
context of an actual transaction.
Very truly yours,
/s/ Mayer, Brown & Platt
MAYER, BROWN & PLATT
