==============================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant
to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported) August 7, 1997
--------------------
FIRST NATIONAL BANK OF COMMERCE
- -----------------------------------------------------------------------------
(Exact Name of Registrant as Specified in its Charter)
United States
- -----------------------------------------------------------------------------
(State or Other Jurisdiction of Incorporation)
333-24023 72-0269760
- ------------------------------------- -----------------------------------
(Commission File Number) (I.R.S. Employer Identification No.)
201 Saint Charles Avenue, 29th Floor, New Orleans, Louisiana 70170
- -----------------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
(504) 623-1492
- -----------------------------------------------------------------------------
(Registrant's Telephone Number, Including Area Code)
Not Applicable
- -----------------------------------------------------------------------------
(Former Name or Former Address, if Changed Since Last Report)
==============================================================================
<PAGE>
Item 5. Other Events.
The Registrant is filing final forms of the exhibits listed in
Item 7(c) below.
Item 7. Financial Statements and Exhibits.
(c) Exhibits.
Exhibit
No. Document Description
- ------- --------------------
1.1 Underwriting Agreement between First National Bank of Commerce
("First NBC") and Merrill Lynch, Pierce Fenner & Smith
Incorporated, as Representative of the Several Underwriters,
dated as of July 30, 1997.
4.1 Pooling and Servicing Agreement between First NBC and The First
National Bank of Chicago (the "Trustee"), dated as of August 7,
1997.
4.2 Series 1997-1 Supplement between First NBC and the Trustee,
dated as of August 7, 1997.
8.1 Opinion of Mayer, Brown & Platt with respect to tax matters
dated August 7, 1997.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
FIRST NATIONAL BANK OF COMMERCE
(Registrant)
Dated: August ___, 1997 By: /s/ Michael J. Fowler
-----------------------
Name: Michael J. Fowler
Title: Executive Vice President
<PAGE>
INDEX TO EXHIBITS
Exhibit
No. Document Description
- ------- --------------------
1.1 Underwriting Agreement between First National Bank of Commerce
("First NBC") and Merrill Lynch, Pierce Fenner & Smith
Incorporated, as Representative of the Several Underwriters,
dated as of July 30, 1997
4.1 Pooling and Servicing Agreement between First NBC and The First
National Bank of Chicago (the "Trustee"), dated as of August 7,
1997.
4.2 Series 1997-1 Supplement between First NBC and the Trustee,
dated as of August 7, 1997.
8.1 Opinion of Mayer, Brown & Platt with respect to tax matters
dated August 7, 1997.
FIRST NATIONAL BANK OF COMMERCE
First NBC Credit Card Master Trust
$259,500,000 6.15% Class A
Asset Backed Certificates - Series 1997-1
$21,000,000 6.35% Class B
Asset Backed Certificates - Series 1997-1
FORM UNDERWRITING AGREEMENT
July 31, 1997
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
as Representative of the Several Underwriters
Named in Schedule I hereto
World Financial Center
250 Vesey Street
New York, New York 10281-1310
Dear Sirs:
First National Bank of Commerce ("First NBC" or the
"Transferor") proposes to 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") $259,500,000
6.15% Class A Asset Backed Certificates, Series 1997-1 (the "Class A
Certificates") and $21,000,000 6.35% Class B Asset Backed Certificates,
Series 1997- 1 (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, to be dated as of August 1, 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 1997-1 Supplement to the Pooling and
<PAGE>
Servicing Agreement, to be dated as of August 1, 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
2
<PAGE>
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
3
<PAGE>
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 proceedings
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.
4
<PAGE>
(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, 1996 and 1995 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
5
<PAGE>
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 99.56% 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
6
<PAGE>
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 99.619375% 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 Mayer, Brown & Platt in Chicago,
Illinois at 9:00 A.M. Chicago time on August 7, 1997, 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
Chicago, Illinois, 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
7
<PAGE>
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
8
<PAGE>
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 $20,000) 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) Cadwalader, Wickersham & Taft, 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
9
<PAGE>
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) an (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
10
<PAGE>
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 signer 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., counsel to 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
11
<PAGE>
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,
12
<PAGE>
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
13
<PAGE>
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
14
<PAGE>
(xv) the statements in the Registration
Statement and Prospectus under the heading "Tax Matters"
accurately describe the material Federal, 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.
15
<PAGE>
(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 they are (i) 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 office 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;
16
<PAGE>
(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 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.
17
<PAGE>
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
Certificates 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
18
<PAGE>
(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
19
<PAGE>
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, in which case,
if such indemnified party notifies such indemnifying party in writing that
it elects to employ separate counsel at the expense of such indemnifying
party, such indemnifying party shall not have the right to assume the
defense of such action on behalf of such indemnified party (it being
understood, however, that the indemnifying party shall not, in connection
with any one such action or separate but substantially similar or related
actions in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the reasonable fees and
expenses of more than one separate firm of attorneys (in addition to any
local counsel) at any time for all indemnified parties, which firm shall be
designated in writing by the Representative, if the indemnified parties
under this Section 8 consist of any Underwriter or any of their respective
officers, employees or controlling persons, or by the Transferor, if the
indemnified parties under this Section 8 consist of the Transferor or the
Transferor's directors, officers, employees or controlling persons). 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.
20
<PAGE>
(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
21
<PAGE>
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
22
<PAGE>
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 Merrill Lynch, Pierce, Fenner & Smith Incorporated,
World Financial Center, 10281, Attention: General Counsel; if sent to the
Transferor, will be mailed, delivered or telegraphed and confirmed to them
at 201 Saint Charles Avenue, 29th 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.
23
<PAGE>
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.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By:______________________
Name:
Title:
For themselves and the other Several Underwriters named in
Schedule I to the foregoing Agreement.
<PAGE>
<TABLE>
<CAPTION>
Schedule I
CLASS A CERTIFICATES
Principal
Amount
<S> <C>
Merrill Lynch, Pierce, Fenner & Smith Incorporated.............................. $ 64,875,000
J.P. Morgan Securities Inc. .................................................... 64,875,000
Lehman Brothers Inc............................................................. 64,875,000
Morgan Stanley & Co. Incorporated .............................................. 64,875,000
------------
Total............................................................... $259,500,000
============
<CAPTION>
CLASS B CERTIFICATES
Principal
Amount
<S> <C>
Merrill Lynch, Pierce, Fenner & Smith Incorporated.............................. $21,000,000
===========
</TABLE>
========================================================
FIRST NATIONAL BANK OF COMMERCE
Transferor and Servicer
and
THE FIRST NATIONAL BANK OF CHICAGO
Trustee
on behalf of the Holders
of the First NBC Credit Card Master Trust
-----------------------
POOLING AND SERVICING AGREEMENT
Dated as of August 1, 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...................27
SECTION 2.5 Covenants of Transferor.................................32
SECTION 2.6 Addition of Accounts....................................35
SECTION 2.7 Removal of Accounts.....................................38
SECTION 2.8 Discount Option.........................................40
SECTION 2.9 Additional Transferors..................................40
ARTICLE III ADMINISTRATION AND SERVICING.................................41
SECTION 3.1 Acceptance of Appointment and Other Matters Relating to
Servicer..............................................41
SECTION 3.2 Servicing Compensation..................................43
SECTION 3.3 Representations, Warranties and Covenants of
Servicer..............................................44
SECTION 3.4 Reports and Records for Trustee.........................45
SECTION 3.5 Annual Servicer's Certificate...........................45
SECTION 3.6 Annual Independent Accountants' Servicing
Report................................................46
SECTION 3.7 Tax Treatment...........................................47
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...............................48
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
i
<PAGE> Page
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.........................................64
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
SECTION 6.15 Transfers of Certain Certificates....................68
SECTION 6.16 Trust Tax Election...................................69
ARTICLE VII OTHER MATTERS RELATING TO TRANSFEROR........................69
SECTION 7.1 Liability of Transferor...............................69
SECTION 7.2 Merger or Consolidation of, or Assumption of the
Obligations of, Transferor..........................69
SECTION 7.3 Limitation on Liability...............................70
ARTICLE VIII OTHER MATTERS RELATING TO SERVICER.........................71
SECTION 8.1 Liability of Servicer.................................71
SECTION 8.2 Merger or Consolidation of, or Assumption of the
Obligations of, Servicer............................71
SECTION 8.3 Limitation on Liability of Servicer and Others........72
SECTION 8.4 Servicer Indemnification of the Trust and Trustee.....72
SECTION 8.5 Servicer Not to Resign................................73
SECTION 8.6 Access to Certain Documentation and Information
Regarding the Receivables...........................73
SECTION 8.7 Delegation of Duties..................................73
SECTION 8.8 Examination of Records................................74
ii
<PAGE>
Page
ARTICLE IX TRUST PAY OUT EVENTS.........................................74
SECTION 9.1 Trust Pay Out Events..................................74
SECTION 9.2 Additional Rights Upon the Occurrence of Certain
Events..............................................74
ARTICLE X SERVICER DEFAULTS.............................................75
SECTION 10.1 Servicer Defaults....................................75
SECTION 10.2 Trustee to Act; Appointment of Successor.............77
SECTION 10.3 Notification to Holders..............................79
SECTION 10.4 Waiver of Past Defaults..............................79
ARTICLE XI TRUSTEE......................................................79
SECTION 11.1 Duties of Trustee....................................79
SECTION 11.2 Certain Matters Affecting Trustee....................82
SECTION 11.3 Trustee Not Liable for Recitals in Certificates......83
SECTION 11.4 Trustee May Not Own Certificates.....................83
SECTION 11.5 Servicer to Pay Trustee's Fees and Expenses..........83
SECTION 11.6 Eligibility Requirements for Trustee.................84
SECTION 11.7 Resignation or Removal of Trustee....................84
SECTION 11.8 Successor Trustee....................................85
SECTION 11.9 Merger or Consolidation of Trustee...................85
SECTION 11.10 Appointment of Co-Trustee or Separate Trustee.......86
SECTION 11.11 Tax Returns.........................................87
SECTION 11.12 Trustee May Enforce Claims Without Possession
of Certificates...................................87
SECTION 11.13 Suits for Enforcement...............................88
SECTION 11.14 Rights of Holders to Direct Trustee.................88
SECTION 11.15 Representations and Warranties of Trustee...........88
SECTION 11.16 Maintenance of Office or Agency.....................89
ARTICLE XII TERMINATION.................................................90
SECTION 12.1 Termination of Trust.................................90
SECTION 12.2 Optional Purchase....................................91
SECTION 12.3 Final Payment with Respect to any Series.............91
SECTION 12.4 Termination Rights of Transferor. ...................93
SECTION 12.5 Defeasance...........................................93
ARTICLE XIII MISCELLANEOUS PROVISIONS...................................94
SECTION 13.1 Amendment............................................94
SECTION 13.2 Protection of Right, Title and Interest to Trust.....96
SECTION 13.3 Limitation on Rights of Holders......................97
SECTION 13.4 GOVERNING LAW........................................98
iii
<PAGE>
Page
SECTION 13.5 Notices................................................98
SECTION 13.6 Severability of Provisions.............................99
SECTION 13.7 Assignment.............................................99
SECTION 13.8 Certificates Non-Assessable and Fully Paid.............99
SECTION 13.9 Further Assurances.....................................99
SECTION 13.10 No Waiver; Cumulative Remedies........................99
SECTION 13.11 Counterparts.........................................100
SECTION 13.12 Third-Party Beneficiaries............................100
SECTION 13.13 Actions by Holders...................................100
SECTION 13.14 Rule 144A Information................................100
SECTION 13.15 Merger and Integration...............................100
SECTION 13.16 Headings.............................................101
SECTION 9.2 Additional Rights Upon the Occurrence of Certain
Events...............................................I-1
EXHIBITS
EXHIBIT A Form of Assignment of Receivables in
Additional Accounts
EXHIBIT B Form of Monthly Servicer's Certificate
EXHIBIT C Form of Annual Servicer's Certificate
EXHIBIT D Form of Opinion of Counsel Regarding
Additional Accounts
EXHIBIT E Form of Annual Opinion of Counsel
EXHIBIT F Form of Reassignment of Receivables
EXHIBIT G Form of Reconveyance of Receivables
EXHIBIT H Form of Amended Section 9.2
iv
<PAGE>
POOLING AND SERVICING AGREEMENT, dated as of August 1, 1997, by and
between FIRST NATIONAL BANK OF COMMERCE, a national banking association, as
Transferor and Servicer, and THE FIRST NATIONAL BANK OF CHICAGO, a national
banking association, as Trustee.
In consideration of the mutual agreements herein contained, each party
agrees as follows for the benefit of the other parties and the 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)* 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.
"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
- -------------------
* VISA(R) and MasterCard(R) are registered servicemarks of VISA
U.S.A., Inc. and of MasterCard International Inc., respectively.
1
<PAGE>
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
2
<PAGE>
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
3
<PAGE>
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, the city in which the
Corporate Trust Office is located, 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 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.
4
<PAGE>
"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 corporate trust
office of Trustee at which, at any particular time, its corporate trust
business is administered, which office at the date hereof is located at One
First National Plaza, Suite 0216, Chicago, Illinois 60670-0126, Attention:
Corporate Trust Services Division, except for purposes of Section 11.16,
where such term shall mean the office or agency of the Trustee in the
Borough of Manhattan, the City of New York, which office at the date hereof
is located at First Chicago Trust Company of New York, 14 Wall Street,
Eighth Floor, New York, New York 10005.
"Coupons" is defined in Section 6.1.
5
<PAGE>
"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 April 30, 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.
6
<PAGE>
"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
7
<PAGE>
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
8
<PAGE>
general and except as such enforceability may be limited by general
principles of equity (whether considered in a suit at law or in
equity);
(f) that, at the time of its transfer to the Trust,
is not subject to any right of rescission, setoff, counterclaim or
any other defense of the Obligor (including the defense of usury),
other than defenses arising out of any bankruptcy or other
insolvency laws and except as enforceability may be limited by
general principles of equity (whether considered in a suit at law
or equity) or as to which Servicer makes a Credit Adjustment
pursuant to subsection 4.3(c); and
(g) 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
9
<PAGE>
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 August 7, 1997.
"Initial Investor Interest" means, as to any Series, the amount stated
in the related Supplement.
"Insolvency Event" is defined in Section 9.2.
10
<PAGE>
"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
11
<PAGE>
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 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 7%; 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.
12
<PAGE>
"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 (except
that no tax opinion or opinion delivered pursuant to Section 8.5 may be
delivered by such an employee), 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.
13
<PAGE>
"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 as
to timely payment 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 or common trust 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
14
<PAGE>
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, qualification 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).
15
<PAGE>
"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) 3% 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 0.97 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).
16
<PAGE>
"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.
17
<PAGE>
"Standard & Poor's" means Standard & Poor's Ratings Services, a
division of The McGraw Hill Companies, Inc.
"Subject Certificate" is defined in subsection 6.15(a).
"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 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).
18
<PAGE>
"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
19
<PAGE>
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 The First National Bank of Chicago a national
banking association, 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
20
<PAGE>
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 B, 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.
21
<PAGE>
(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
22
<PAGE>
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
23
<PAGE>
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. No liability to any Obligor under any
Account Agreement, any Requirement of Law, or any of the Receivables
arising out of any act or omission to act of Transferor in originating the
Receivables or Servicer in servicing the Receivables is intended to be
assumed by the Trust, Trustee, or the Certificateholders under or as a
result of this Agreement and the transactions contemplated hereby, and to
the maximum extent permitted and valid under mandatory provisions of law,
each expressly disclaims such assumption.
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
24
<PAGE>
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
25
<PAGE>
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
26
<PAGE>
(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 Transferor Interest, 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 as of the end of the Addition Cut-Off 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
27
<PAGE>
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 $814,353,580, of which $802,881,646 consisted of the
Aggregate Principal Receivables and $11,471,934 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
28
<PAGE>
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 the Minimum Transferor Interest,
Transferor shall promptly, and in no event later than 10 Business
29
<PAGE>
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
30
<PAGE>
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:
31
<PAGE>
(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., MasterCard International Inc.,
and the Air Force Logistics Command's Club Card Program, 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. Transferor
shall provide the Rating Agencies written notice if Transferor's management
contract for the Air Force Logistics Command's Club Card Program is not
renewed.
(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
32
<PAGE>
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
33
<PAGE>
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
34
<PAGE>
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;
35
<PAGE>
(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 A (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), and (ii) the Transferor Interest 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
36
<PAGE>
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 D; 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;
37
<PAGE>
(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 F (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.
38
<PAGE>
(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); provided that prior to any such
designation and issuance the conditions set forth in Section 6.3(b) and the
Rating Agency Condition shall have been satisfied.
39
<PAGE>
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
written 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
40
<PAGE>
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
41
<PAGE>
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. The relationship of Servicer (and any Successor Servicer other than
Trustee) to Trustee under this Agreement is intended by the parties to be
that of independent contractor and not that of a joint venturer, partner,
or agent of Trustee, including any act of Servicer performed in the name of
Trustee.
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
Transferor (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:
42
<PAGE>
(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
43
<PAGE>
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 B (which includes
the Schedule thereto specified as such in each Supplement) as to such
matters as are set forth in Exhibit B.
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 C 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
44
<PAGE>
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.
45
<PAGE>
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, 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, 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 to have the Trust or any
Series treated as a "financial asset securitization investment trust" under
the Internal Revenue Code, 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 Aggregate
Investor Interest at such time. Transferor shall own the remaining
undivided interest in the
46
<PAGE>
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 on
account of the Transferor Interest. Transferor's aggregate interest in the
Principal Receivables at any time shall not exceed the Transferor Interest
at such time and Transferor shall not have 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 Interest 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 or 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 the depository institution or trust
company at which the Collection Account is maintained (including, if
applicable, Servicer) 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
47
<PAGE>
maintained with an office or branch of a Qualified Institution. Trustee
shall possess all right, title and interest in all funds and Permitted
Investments 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 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 or be payable on
demand 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
48
<PAGE>
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. 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 Transferor on any date to the extent that no
Retention Condition would exist after such withdrawal (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.
49
<PAGE>
Servicer shall allocate such amounts to each Series of Investor
Certificates and to Transferor in accordance with this Article IV and shall
withdraw the required amounts from the Collection Account or pay such
amounts to Transferor 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, 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. Throughout the existence of the
Trust, unless otherwise stated in any Supplement, Servicer shall allocate
to Transferor 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,
50
<PAGE>
Servicer need not deposit this amount or any other amounts so allocated to
Transferor pursuant to any Supplement into the Collection Account and shall
pay, or be deemed to pay, such amounts as collected to Transferor.
(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 the Minimum Transferor Interest, 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
51
<PAGE>
and, based upon such recomputation, (x) Servicer shall pay to
Transferor 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) Transferor 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.
Notwithstanding the foregoing, on or after the Conversion Date the
provisions of this Section 4.3(d) shall not be applicable, and Collections
shall be allocated as otherwise provided in this Agreement.
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 Transferor; 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 Transferor 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 Transferor any Shared
Principal Collections that otherwise would be distributed to Transferor,
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
52
<PAGE>
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 Transferor 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 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.
53
<PAGE>
[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 Investor Certificates 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. 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) to the extent such delivery is required
pursuant to the applicable supplement. Upon the receipt of such payment and
the issuance of the Investor Certificates, such Investor Certificates shall
be fully paid and non-assessable. 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
54
<PAGE>
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
55
<PAGE>
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
56
<PAGE>
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 Interest or
any interest therein. Transferor may from time to time transfer a portion
of the Transferor Interest by causing the issuance of 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
57
<PAGE>
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, Transferor 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
58
<PAGE>
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
59
<PAGE>
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
60
<PAGE>
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.
61
<PAGE>
(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
62
<PAGE>
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
63
<PAGE>
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
64
<PAGE>
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
65
<PAGE>
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.
SECTION 6.15 Transfers of Certain Certificates. (a)
Notwithstanding any other provision of this Agreement, any Certificate for
which an Opinion of Counsel has not been issued opining that such
Certificates would be treated as debt for Federal income tax purposes
(each, a "Subject Certificate") shall be subject to the next succeeding
paragraph.
(b) No transfer (or purported transfer) of all or any part of a
Subject Certificate (or any economic interest therein), whether to another
Certificate Owner or to a person who is not a Certificate Owner shall be
effective, and any such transfer (or purported transfer) shall be void ab
initio, and no Person shall otherwise become a Holder of a Subject
Certificate if: (i) at the time of such transfer (or purported
66
<PAGE>
transfer) any Subject Certificates are traded on an established securities
market; (ii) after such transfer (or purported transfer) the Trust would
have more than 100 Holders of Subject Certificates; or (iii) the Subject
Certificates have been issued in a transaction or transactions that were
required to be registered under the Securities Act, and to the extent such
offerings or sales were not required to be registered under the Securities
Act by reason of Regulation S (17 CFR 230.901 through 230.904 or any
successor thereto) such offerings or sales would not have been required to
be registered under the Securities Act if the interests so offered or sold
had been offered and sold within the United States. For purposes of clause
(i) of the preceding sentence, an established securities market is a
national securities exchange described in Treasury Regulation 1.7704-1(b).
For purposes of determining whether the Trust will have more than 100
Holders of Subject Certificates, each Person indirectly owning an interest
in the Trust through a partnership (including any entity treated as a
partnership for federal income tax purposes), a grantor trust or an S
corporation (each such entity a "flow-through entity") shall be treated as
a Holder of a Subject Certificate unless the Servicer determines in its
sole discretion, after consulting with qualified tax counsel, that less
than substantially all of the value of the beneficial owner's interest in
the flow-through entity is attributable to the flow through entity's
interest (direct or indirect) in the Trust.
SECTION 6.16 Trust Tax Election. No Person, including the Trustee,
shall have the authority to make an election under Treasury Regulation
301.7701-3(c) to cause the Trust to be classified as an association taxable
as a corporation.
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
67
<PAGE>
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 the Transferor Interest, and any other right,
title or interest of Transferor in and to the 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
stating that (A) the new Transferor has effectively assumed all
obligations of the Transferor and, if so agreed, the Servicer
under this Agreement and (B) all actions necessary to perfect the
interest of the Trustee in the Trust Assets as against the new
Transferor have been taken; and
(ii) the Rating Agency Condition is satisfied.
(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
68
<PAGE>
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
69
<PAGE>
(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 or any Credit Enhancement, including 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
70
<PAGE>
Accounts or Receivables which are charged off as uncollectible and (d)
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
71
<PAGE>
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
72
<PAGE>
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 five 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, specifying such notice to be
a notice of Servicer Default hereunder, 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, specifying such
notice to be a notice of Servicer Default hereunder, 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
73
<PAGE>
(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 or waived, 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, the Distribution
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
74
<PAGE>
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 10 Business
Days or under subsection 10.1(b) or (c) for a period of 30 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, each Rating Agency 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. The Trustee, when acting as Successor Servicer, is authorized to
perform any servicing function through agents or affiliates.
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.
75
<PAGE>
(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. Notwithstanding the above, or
anything in this Section to the contrary, Trustee, if it becomes Servicer
pursuant to this Section, shall have no responsibility or obligation for
any act or omission of either a predecessor or Successor Servicer other
than Trustee. Any Successor Servicer, by its acceptance of its appointment,
will automatically agree to be bound by the terms and provisions of each
Credit Enhancement, but only to the extent applicable to Servicer. No
Successor Servicer shall have any responsibility for the duties of
Transferor under any circumstance.
(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. The Servicer
being terminated shall bear all costs of the appointment of a Successor
hereunder, including those of Trustee reasonably allocable to specific
employees and overhead, legal fees and expenses, accounting and financial
consulting fees and expenses, and costs of amending this Agreement, if
necessary.
(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.
76
<PAGE>
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 the Rating Agencies, 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 the Rating Agencies and the 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 (including any Servicer Default) 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 or waiver 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 and for
which a Successor Servicer has not been appointed), 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, provided, however that if Trustee is acting as Successor Servicer
it shall exercise such of the rights and powers, and use the same degree of
care and skill in its exercise, as the Servicer under this Agreement.
(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 on their face to
77
<PAGE>
the requirements of this Agreement. Trustee shall be under no duty to verify
the contents or computations contained therein.
(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 willful 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, so
long as Trustee was not negligent in carrying out such directions;
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
Servicer.
(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
78
<PAGE>
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 either its own interests or 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.
(i) Subject to Section 11.4, Trustee may transact banking and
trust business generally with Transferor, Servicer, and any Credit
Enhancement Provider as freely as if it were not Trustee hereunder.
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, any Tax Opinion or any written opinion of its
own counsel shall be full and complete authorization and protection in
respect of any action taken or
79
<PAGE>
suffered or omitted by it hereunder in good faith and in accordance with
such Opinion of Counsel, Tax Opinion or written opinion, so long as Trustee
is not negligent in carrying out the actions so authorized;
(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 or waived, and
for which a Successor Servicer has not been appointed), to exercise such of
the rights and powers vested in it by this Agreement 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 such person's 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, so long as Trustee is not negligent in taking, suffering or
omitting such action;
(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) Subject to 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
80
<PAGE>
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 or any Credit Enhancement 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, and
subject to the provisions of 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
81
<PAGE>
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
82
<PAGE>
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
83
<PAGE>
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
84
<PAGE>
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
85
<PAGE>
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:
(a) Organization and Good Standing. Trustee 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.
(b) Due Qualification. Trustee 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 required under federal or state law.
(c) Due Authorization. The execution and delivery of this
Agreement have been duly authorized by Trustee by all necessary corporate
action on its part, and this Agreement will remain, from the time of its
execution, an official record of Trustee.
(d) No Conflict. The execution and delivery of this Agreement and
the performance of the transactions contemplated by this Agreement and the
fulfillment of the terms hereof by Trustee 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 Trustee 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 Trustee will not
conflict with or violate any Requirements of Law applicable to Trustee.
(f) No Proceedings. There are no proceedings or investigations
pending or, to the best knowledge of Trustee, threatened against Trustee
before any court, regulatory body, administrative agency, or other tribunal
or governmental instrumentality (i) asserting the invalidity of this
Agreement, (ii) seeking any determination or ruling that, in the reasonable
judgment of Trustee, would materially and adversely affect the performance
by Trustee of its obligations under this Agreement, (iii) seeking any
determination or ruling that would materially and adversely affect the
validity or enforceability of this Agreement.
86
<PAGE>
(g) 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 performance of the transactions contemplated by this
Agreement and the fulfillment of the terms hereof by Trustee, have been
obtained.
(h) Trustee. Trustee is not an insider or Affiliate of Transferor.
(i) Binding Obligation; Valid Transfer and Assignment. This
Agreement constitutes a legal, valid and binding obligation of Trustee,
enforceable against Trustee 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).
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 Transferor 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
Transferor 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.
87
<PAGE>
(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 Transferor. 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,"
88
<PAGE>
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
89
<PAGE>
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 Transferor. 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, Trustee shall
execute a written reconveyance substantially in the form of Exhibit G
pursuant to which it shall reconvey to Transferor (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 Transferor to
vest in Transferor 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
90
<PAGE>
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 the Rating Agency
91
<PAGE>
Condition has been satisfied with respect to 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 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" under the Internal
Revenue Code (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 H), 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.
92
<PAGE>
(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.
93
<PAGE>
(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 D; 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
E.
(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 an Officer's
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.
94
<PAGE>
(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
95
<PAGE>
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 Sections 8.2 and 8.5, 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, and satisfaction of the Rating Agency Condition.
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,
96
<PAGE>
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.
97
<PAGE>
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.
98
<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: Michael J. Fowler
Title: Chief ALCO Officer
THE FIRST NATIONAL BANK OF CHICAGO,
Trustee
By:_________________________________________
Name: T. Marshall
Title: Trust Officer
99
<PAGE>
EXHIBIT A
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 _____________, ___** by and between FIRST NATIONAL
BANK OF COMMERCE, a national banking association, as Transferor
("Transferor") and Servicer ("Servicer"), and THE FIRST NATIONAL BANK OF
CHICAGO, a national banking association, 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 August 1, 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 each 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.
"Addition Date" means, with respect to the Additional
Accounts designated hereby, ________, ____.
- -------------------------
** To be dated as of the applicable Addition Date.
A-1
<PAGE>
"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 perfect, 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.
A-2
<PAGE>
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.
A-3
<PAGE>
(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 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
fulfillment 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
A-4
<PAGE>
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 materi ally 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 confirmed and the
Agreement as so supplemented by this Assignment shall be read, taken and
construed as one and the same instrument.
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.
A-5
<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:
THE FIRST NATIONAL BANK OF CHICAGO,
Trustee
By:_____________________________________
Name:
Title:
A-6
<PAGE>
EXHIBIT B
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 August 1, 1997 (the "Pooling and Servicing
Agreement") by and between First National Bank of Commerce and The First
National Bank of Chicago, 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-1
<PAGE>
(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:
B-2
<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]
1
<PAGE>
EXHIBIT C
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 August 1, 1997 (as may be
amended and supplemented from time to time, the "Agreement"), among First
NBC, as Transferor and Servicer, and The First National Bank of Chicago, 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
C-1
<PAGE>
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:
C-2
<PAGE>
EXHIBIT D
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 either a valid sale
of the Receivables in such Additional Accounts and the proceeds thereof, or
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.
D-1
<PAGE>
EXHIBIT E
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.
E-1
<PAGE>
EXHIBIT F
FORM OF REASSIGNMENT OF RECEIVABLES
(As required by Section 2.7 of
the Pooling and Servicing Agreement)
REASSIGNMENT No. _______ OF RECEIVABLES dated as of _________,
____* by and among FIRST NATIONAL BANK OF COMMERCE, a national banking
association, as Transferor ("Transferor") and Servicer ("Servicer"), and
THE FIRST NATIONAL BANK OF CHICAGO, a national banking association
("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 August 1, 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, ____________, _____.
"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
- ----------------------
* To be dated as of the Removal Date.
F-1
<PAGE>
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 proceeds 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
F-2
<PAGE>
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; and
(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
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.
F-3
<PAGE>
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:
THE FIRST NATIONAL BANK OF CHICAGO,
Trustee
By:_________________________________
Name:
Title:
F-4
<PAGE>
EXHIBIT G
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 THE FIRST NATIONAL BANK OF CHICAGO, a national
banking association (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 August 1, 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 wishes to cause Trustee to reconvey all of the Receivables and
proceeds thereof, whether now existing or hereafter created, from the Trust
to Transferor 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
Transferor 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.
G-1
<PAGE>
3. Conveyance of Receivables. (a) Trustee does hereby reconvey to
Transferor, 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 Transferor 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 CON STRUED 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.
G-2
<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:
THE FIRST NATIONAL BANK OF CHICAGO,
Trustee
By_____________________________________
Name:
Title:
G-3
<PAGE>
EXHIBIT H
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
H-1
<PAGE>
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.
H-2
FIRST NATIONAL BANK OF COMMERCE
Transferor and Servicer
and
THE FIRST NATIONAL BANK OF CHICAGO
Trustee
on behalf of the Series 1997-1 Holders
--------------------------------------
SERIES 1997-1 SUPPLEMENT
Dated as of August 1, 1997
to
POOLING AND SERVICING AGREEMENT
Dated as of August 1, 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..................................................19
SECTION 4. Reassignment and Transfer Terms............................... 21
SECTION 5. Delivery and Payment for the Investor Certificates.............21
SECTION 6. Depository; Form of Delivery of Investor Certificates; Legends;
Transfer Restrictions and Procedures...........................21
SECTION 7. Article IV of Agreement........................................21
SECTION 4.6 Rights of Holders and the Collateral Interest Holder.21
SECTION 4.7 Allocations..........................................22
SECTION 4.8 Determination of Monthly Interest....................28
SECTION 4.9 Determination of Monthly Principal...................29
SECTION 4.10 Coverage of Required Amount.........................30
SECTION 4.11 Monthly Payments....................................31
SECTION 4.12 Series Investor Charge-Offs.........................36
SECTION 4.13 Excess Spread.......................................37
SECTION 4.14 Reallocated Investor Finance Charge Collections.....39
SECTION 4.15 Reallocated Principal Collections...................40
SECTION 4.16 Shared Principal Collections........................41
SECTION 4.17 Principal Account and Principal Funding Account.....42
SECTION 4.18 Reserve Account.....................................43
SECTION 4.19 [RESERVED]..........................................45
SECTION 4.20 Transferor's or Servicer's Failure to Make a Deposit
or Payment........................................45
SECTION 4.21. Conversion Date.....................................45
SECTION 8. Article V of the Agreement.....................................45
SECTION 5.1 Distributions........................................45
SECTION 5.2 Monthly Series 1997-1 Holders' Statement.............46
SECTION 9. Series 1997-1 Pay Out Events...................................47
SECTION 10. Series 1997-1 Termination.....................................48
H-i
<PAGE>
Page
SECTION 11. Periodic Finance Charges and Other Fees.......................48
SECTION 12. Counterparts..................................................48
SECTION 13. Governing Law.................................................48
SECTION 14. No Petition...................................................49
SECTION 15. Amendments....................................................49
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
H-ii
<PAGE>
SERIES 1997-1 SUPPLEMENT, dated as of August 1, 1997 (this "Series
Supplement"), by and between FIRST NATIONAL BANK OF COMMERCE, a national
banking association ("First NBC"), as Transferor and Servicer, and THE
FIRST NATIONAL BANK OF CHICAGO, as Trustee under the Pooling and Servicing
Agreement dated as of August 1, 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 6. 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 6.15% Asset
Backed Certificates, Series 1997-1 (the "Class A Certificates") and the
Class B 6.35% 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 7. 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, and the Collateral Rate (each for the related Interest Period) plus
(b) the Series Servicing Fee Percentage.
2
<PAGE>
"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) and Series Investment Earnings, (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 6.15%.
"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 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
3
<PAGE>
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 $259,500,000.
"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.
"Class A Required Amount" is defined in subsection 4.10(a).
"Class A Scheduled Payment Date" means the August, 2002
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).
4
<PAGE>
"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) and Series
Investment Earnings.
"Class B Certificate Rate" means 6.35%.
"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 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 $21,000,000.
"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
5
<PAGE>
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.
"Class B Required Amount" is defined in subsection 4.10(b).
"Class B Scheduled Payment Date" means the September, 2002
Distribution Date.
"Class B Servicing Fee" is defined in subsection 3(a) of this
Series Supplement.
"Closing Date" means August 7, 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.
6
<PAGE>
"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) and Series
Investment Earnings.
"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 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 $19,500,000.
"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
7
<PAGE>
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.
"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, $21,625,000; 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 July 31, 2001.
8
<PAGE>
"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.
"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 September 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
9
<PAGE>
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
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
10
<PAGE>
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.
"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 $300,000,000.
"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:
11
<PAGE>
(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
(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.
12
<PAGE>
"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(e) 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 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.
"Loan Agreement" means the agreement among Transferor, Servicer,
Trustee, and the Collateral Interest Holder, dated as of August 7, 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.
13
<PAGE>
"Net Servicing Fee Rate" means (a) so long as Transferor or The
First National Bank of Chicago is Servicer, 1.25% per annum, and (b) if
neither Transferor nor The First National Bank of Chicago 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 0.50% from the result for each
Monthly Period.
"Portfolio Yield" means, with respect to any Monthly Period, the
annualized percentage equivalent of a fraction, the numerator of which is
an amount equal to the sum of (a) the amount of 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
14
<PAGE>
(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.
15
<PAGE>
"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, $19,500,000
and (b) on any Transfer Date thereafter, 6.5% 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 $9,000,000; provided that (x) if either (i) there is a reduction
in the Collateral Interest pursuant to clause (c), (d) or (e) of the
definition of such term or (ii) a Pay Out Event with respect to the
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) 0.50% 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 three months prior to the commencement of the
Controlled Accumulation Period; (b) the first Transfer Date for which the
Portfolio Adjusted
16
<PAGE>
Yield is less than 2.00%, but in such event the Reserve Account Funding
Date shall not be required to occur earlier than the Transfer Date with
respect to the Monthly Period that commences 12 months prior to the
commencement of the Controlled Accumulation Period; (c) the first Transfer
Date for which the Portfolio Adjusted Yield is less than 3.00%, but in such
event the Reserve Account Funding Date shall not be required to occur
earlier than the Transfer Date with respect to the Monthly Period that
commences 6 months prior to the commencement of the Controlled Accumulation
Period; and (d) the first Transfer Date for which the Portfolio Adjusted
Yield is less than 4.00%, but in such event the Reserve Account Funding
Date shall not be required to occur earlier than the Transfer Date with
respect to the Monthly Period that commences 4 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 August 1,
1997 to, but not including, the earlier of (a) the day the Controlled
Accumulation Period commences and (b) the Pay Out Commencement Date.
"Series Investment Earnings" means, for any Monthly Period, the
sum of (a) the Floating Investor Percentage of the aggregate amount of
investment earnings (net of losses and investment expenses) accrued during
the period after the Transfer Date falling in that Monthly Period (or, in
the case of the first Monthly Period, from the Closing Date) to and
including the next following 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 plus (b)
the aggregate amount of investment earnings (net of losses and investment
expenses) accrued during the same period in connection with the investment
of funds on deposit in the Principal Account.
"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.
17
<PAGE>
"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.
"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.
18
<PAGE>
"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 September, 2004 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 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.
"Specified Deposit" is defined in subsection 4.7(d).
"Target Amount" is defined in subsection 4.7(d).
SECTION 8. 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 $383,333.33. 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) 0.75%. 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 0.75% 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 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
19
<PAGE>
shall equal one-twelfth of the product of (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 $207,239.58, $16,770.83 and
$15,572.92, 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 Transferor or the certificateholders of other Series
(as provided in the related Supplements) and in no event shall the Trust,
Trustee or the Investor Holders be liable therefor. The Class A Servicing
Fee shall be payable to Servicer solely to the extent amounts are available
for distribution in respect thereof pursuant to 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 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
20
<PAGE>
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 9. 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 10. 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 11. 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 12. 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 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
21
<PAGE>
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:
(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;
22
<PAGE>
(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;
(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
23
<PAGE>
(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. On or prior to the Closing
Date, Transferor shall transfer to Trustee for deposit into the Finance
Charge Account, to be held for the benefit of the Investor Holders,
immediately available funds in the amount of $1,441,062.50 (the "Specified
Deposit"). The Specified Deposit shall not be released from the Finance
Charge Account except (1) for deposit into the Distribution Account if on
any Transfer Date Transferor fails to make the deposit required by the next
following grammatical paragraph (in which case such funds shall be used to
pay the Class A Monthly Interest and Class B Monthly Interest on the
related Distribution Date), or (2) at such time as Transferor shall request
(in which case such funds shall be returned to Transferor), provided that
at the time of any withdrawal pursuant to this clause (2), Transferor and
Servicer must be in compliance with the remainder of this subsection 4.7(d)
as it applies when the Specified Deposit is not being maintained in the
Finance Charge Account.
During any Monthly Period during the Revolving Period when
Transferor is maintaining the Specified Deposit in the Finance Charge
Account and during any other 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
24
<PAGE>
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 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
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, (A) until such time as (x) the sum of the
aggregate Collections of Finance Charge Receivables deposited into
the Finance Charge Account pursuant to clause (i) above with
respect to that Monthly Period and the aggregate Collections of
Principal Receivables deposited into the Principal Account
pursuant to this clause (ii)(A) with respect to that Monthly
Period equals (y) the sum 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, Collections
of Principal Receivables allocated to the Investor Holders
pursuant to Section 4.7(a)(ii) and (iii) shall be deposited into
the Principal Account and be subject to use as Reallocated
Principal Collections on the related Transfer Date and (B)
thereafter, 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
25
<PAGE>
Collections for the related Transfer Date available on that
Transfer Date for application in accordance with Section 4.15.
Funds deposited in the Principal Account pursuant to clause (A)
above may be withdrawn at any time to the extent that (1) the sum
of the amounts specified in subclause (x) of clause (A) (less the
aggregate amount of such withdrawals during the applicable Monthly
Period) would not be less than the sum of the amounts specified in
subclause (y) of clause (A) and (2) such funds are not required to
be retained in the Principal Account puruant to clause (B) above.
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 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).
26
<PAGE>
(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 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 Transferor any underpayment with respect
to allocations of Principal Receivables or Finance Charge
Receivables with respect to such Monthly Period;
(3) notify the Transferor of the amount of any
overpayment to such Holder which such recomputation discloses, and
the Transferor 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 Transferor and deposits to be made by
the Transferor pursuant to this subsection 4.7(e) may be netted
against each other.
27
<PAGE>
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 Transferor 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 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) one-twelfth, times (B) the Class A Certificate Rate
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 $1,684,587.50 (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) (1)
one-twelfth times (2) the sum of the Class A Certificate Rate plus 2% per
annum, and (B) any Class A Deficiency Amount from the prior Transfer Date,
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.
28
<PAGE>
(b) The amount of monthly interest distributable to the Class B
Certificates shall equal the product of (i) (A) one-twelfth, times (B) the
Class B Certificate Rate 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 $140,758.33; 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) (1) one-twelfth times (2) the sum of the Class
B Certificate Rate plus 2% per annum, and (B) any Class B Deficiency Amount
from the prior Transfer Date, 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 or, in the
case of the initial Interest Period, as of the Closing Date (the
"Collateral Monthly Interest").
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 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
29
<PAGE>
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 (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
30
<PAGE>
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.
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:
31
<PAGE>
(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
(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.
32
<PAGE>
(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 held in the Principal Account,
invested overnight in Permitted Investments and distributed to the
Collateral Interest Holder on the related Distribution Date 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 Transferor; provided that the
amount to be paid to the Transferor pursuant to this subsection
4.11(d)(iii) with respect to such Transfer Date shall be paid to
the Transferor 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).
(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,
33
<PAGE>
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 held in the
Principal Account, invested overnight in Permitted Investments and
distributed to the Collateral Interest Holder on the related
Distribution Date 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 Transferor; provided that the amount to be paid to the
Transferor pursuant to this subsection 4.11(e)(v) with respect to
such Transfer Date shall be paid to the Transferor 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.
34
<PAGE>
(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 Determination Date on or after the July 2001 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 July 2001
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
35
<PAGE>
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 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).
36
<PAGE>
(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
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
37
<PAGE>
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 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)
38
<PAGE>
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.
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;
39
<PAGE>
(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) 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
40
<PAGE>
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 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.
41
<PAGE>
(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 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
42
<PAGE>
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 Transferor on each Transfer Date. An amount equal to any Principal
Funding Investment Shortfall will be deposited in the Finance Charge
Account on each Transfer Date from the Reserve Account to the extent funds
are available pursuant to 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.
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
43
<PAGE>
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 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 Distribution Date, after
giving effect to all deposits to and withdrawals from the Reserve Account
with respect to the related 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 Distribution Date relating to the
Rapid Amortization Period and (iii) the Distribution 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.
44
<PAGE>
SECTION 4.19 [RESERVED]
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 allocations or to remove provisions of the
Agreement or this Series Supplement made superfluous by such conversion.
SECTION 13. 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
45
<PAGE>
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:
(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.
46
<PAGE>
SECTION 14. 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 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);
47
<PAGE>
(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) 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 (c),
(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 15. 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.
SECTION 16. 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 17. 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 18. 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.
48
<PAGE>
SECTION 19. 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 20. 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
amendment pursuant to subsection 13.1(a)), Trustee shall furnish
notification of the substance of such amendment to each Rating Agency.
49
<PAGE>
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: Michael J. Fowler
Title: Chief ALCO Officer
THE FIRST NATIONAL BANK OF CHICAGO,
Trustee
By:______________________________________
Name: T. Marshall
Title: Trust Officer
<PAGE>
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. 320958AA9
FIRST NBC CREDIT CARD MASTER TRUST
CLASS A 6.15%
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)** 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.)
- ----------------------
** MasterCard(R) and VISA(R) are federally registered servicemarks of
MasterCard International Inc. and of VISA U.S.A., Inc., respectively.
<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 August 1, 1997 as
supplemented by the Series 1997-1 Supplement dated as of August 1, 1997
(collectively, the "Pooling and Servicing Agreement"), by and between First
National Bank of Commerce, as Transferor ("Transferor") and as Servicer
("Servicer"), and The First National Bank of Chicago, 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.
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
<PAGE>
Insurance Corporation or (except for Receivables in Private Label Accounts)
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.
<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
Attested to:
By:__________________________
Assistant Secretary
Date:________________________
<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.
THE FIRST NATIONAL BANK OF
CHICAGO, 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. 320958AB7
FIRST NBC CREDIT CARD MASTER TRUST
CLASS B 6.35%
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)* 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.)
- ----------------------
* MasterCard(R) and VISA(R) are federally registered servicemarks of
MasterCard International Inc. and of VISA U.S.A., Inc., respectively.
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 August 1, 1997 as
supplemented by the Series 1997-1 Supplement dated as of August 1, 1997
(collectively, the "Pooling and Servicing Agreement"), by and between First
National Bank of Commerce, as Transferor ("Transferor") and as Servicer
("Servicer"), and The First National Bank of Chicago, 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 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
Exhibit A-2, Page 2
<PAGE>
Insurance Corporation or (except for Receivables in Private Label Accounts)
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
Attested to:
By:________________________
Assistant 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.
THE FIRST NATIONAL BANK OF CHICAGO,
Trustee
By:________________________________
Authorized Signatory
August 7, 1997
To the Persons Listed on
Schedule A
Gentlemen and Ladies:
This opinion is furnished to you pursuant to subsection 6(c) of the
Underwriting Agreement dated July 31, 1997 (the "Underwriting Agreement")
between Merrill Lynch, Pierce, Fenner & Smith Incorporated, as Representative
of the several underwriters named therein and First National Bank of Commerce,
a national banking association ("Transferor"). Capitalized terms used but
not defined herein have the same meaning ascribed thereto in the Underwriting
Agreement.
We have examined copies of the Underwriting Agreement, the Pooling and
Servicing Agreement, the Supplement, the Loan Agreement, the forms of
Certificates attached to the Supplement, a signed copy of the legal opinion of
Correro, Fishman & Casteix, l.l.p., counsel to Transferor and a signed copy of
the legal opinion of Jones, Walker, Waechter, Poitevent, Carrere & Denegre,
l.l.p., special Louisiana counsel to Transferor. In addition, we have
examined such other documents, corporate records and certificates of officers
of Transferor as to matters of fact and of public officials as to matters
within their jurisdiction and such other instruments and sources as we have
deemed necessary and advisable for the purpose of rendering this opinion.
In conducting our examination, we have assumed, without investigation,
the authenticity of any documents submitted to us as an original, the
conformity with the original of any document submitted to us as a copy, the
authenticity of the original of any such copy and the genuineness of all
signatures. We have relied, as to factual matters, on the documents we have
examined and upon certificates of Transferor, its officers, public officials
or other persons. We have also assumed the due authorization, execution, and
delivery of all documents by parties thereto and, except as set forth in
paragraph (i) below, the enforceability of any agreements included in such
documents against parties thereto.
Our opinions herein are limited to the Federal law of the United States
of America.
<PAGE>
Based on the foregoing, we are of the opinion that:
(i) The statements in the Prospectus under the headings "U.S.
Federal Income Tax Consequences" and "ERISA Considerations" insofar as
such statements constitute a summary of the legal matters, documents or
proceedings referred to therein have been prepared or reviewed by us
and are correct in all material respects.
(ii) Based upon the applicable provisions of the Internal Revenue
Code of 1986, as amended, Treasury regulations promulgated and proposed
thereunder, current positions of the Internal Revenue Service (the "IRS")
contained in published Revenue Rulings and Revenue Procedures, current
administrative positions of the IRS and existing judicial decisions, and
assuming that the Certificates are executed, delivered and authenticated
in substantially the forms we have examined, we are of the opinion that
the Certificates will be characterized as indebtedness that is secured
by the Receivables, and that the Trust will not be characterized for
Federal income tax purposes as an association (or publicly traded
partnership) taxable as a corporation.
The opinion set forth in this letter is based upon the applicable
provisions of the Internal Revenue Code of 1986, as amended, Treasury
regulations promulgated and proposed thereunder, current positions of the
Internal Revenue Service (the "IRS") contained in published Revenue Rulings
and Revenue Procedures, current administrative positions of the IRS and
existing judicial decisions. This opinion is subject to the explanations and
qualifications set forth under the caption "U.S. Federal Income Tax
Consequences" in the Prospectus which constitutes a part of the Registration
Statement. No tax rulings have been or will be sought from the IRS with
respect to any of the matters discussed herein.
This opinion is for your use and may not be relied upon by any other
person without our prior written consent.
Very truly yours,
MAYER, BROWN & PLATT
<PAGE>
Schedule A
Merrill Lynch, Pierce, Fenner & Smith Incorporated,
as Representative of the Several Underwriters
World Financial Center, North Tower
250 Vesey Street
New York, New York 10055
First National Bank of Commerce
201 Saint Charles Avenue, 22nd Floor
New Orleans, Louisiana 70170
First NBC Credit Card Master Trust
c/o The First National Bank of Chicago
One First National Plaza
2 South Dearborn Street
Chicago, Illinois 60670
The First National Bank of Chicago
One First National Plaza
2 South Dearborn Street
Chicago, Illinois 60670
Standard & Poor's Ratings Services,
a division of The McGraw-Hill
Companies
25 Broadway
New York, New York 10004
Moody's Investors Service, Inc.
99 Church Street
New York, New York 10007
Union Bank of Switzerland
299 Park Avenue
New York, New York 10171
