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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 17, 1997
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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TRAVELERS BANK CREDIT CARD MASTER TRUST I
(Issuer of Securities)
CC CREDIT CARD CORPORATION
(Originator of the Trust described herein)
(Exact Name of Registrant as Specified in Its Certificate of Incorporation)
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DELAWARE [PENDING]
(State or Other Jurisdiction (I.R.S. Employer
of Organization) Identification Number)
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CC CREDIT CARD CORPORATION
388 GREENWICH STREET
NEW YORK, NEW YORK 10013
( ) -
(Address, Including Zip Code, and Telephone Number,
Including Area Code, of Registrant's Principal Executive Offices)
STEPHANIE B. MUDICK, ESQ.
DEPUTY GENERAL COUNSEL
TRAVELERS GROUP INC.
388 GREENWICH STREET
NEW YORK, NEW YORK 10013
(212) 816-8000
(Name, Address, Including Zip Code, and Telephone Number,
Including Area Code, of Agent For Service)
COPIES TO:
CAMERON L. COWAN, ESQ.
ORRICK, HERRINGTON & SUTCLIFFE LLP
WASHINGTON HARBOUR
3050 K STREET, N.W.
WASHINGTON, D.C. 20007
(202) 339-8400
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after this Registration Statement becomes effective as determined by
market conditions.
If any of the securities being registered on this Form are to be offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act Registration Statement number of the earlier
effective Registration Statement for the same offering. / / ________________
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
Registration Statement number of the earlier effective Registration Statement
for the same offering. / / ________________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
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CALCULATION OF REGISTRATION FEE
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PROPOSED MAXIMUM PROPOSED MAXIMUM
AMOUNT TO BE AGGREGATE AGGREGATE AMOUNT OF
TITLE OF SECURITIES TO BE REGISTERED REGISTERED PRICE PER UNIT* OFFERING PRICE* REGISTRATION FEE
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Asset Backed Certificates................... $1,000,000 100% $1,000,000 $304
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* Estimated solely for the purpose of calculating the registration fee.
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
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SUBJECT TO COMPLETION, DATED NOVEMBER 17, 1997
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF ANY OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
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PROSPECTUS
TRAVELERS BANK CREDIT CARD MASTER TRUST I
ASSET BACKED CERTIFICATES, ISSUABLE IN SERIES
CC CREDIT CARD CORPORATION
TRANSFEROR
THE TRAVELERS BANK
SERVICER
This Prospectus relates to certain Asset Backed Certificates (the
"Certificates") which may be issued from time to time by the Travelers Bank
Credit Card Master Trust I (the "Trust") in one or more series (each a
"Series"). The Trust will be formed pursuant to a pooling and servicing
agreement among CC Credit Card Corporation, as Transferor, The Travelers Bank,
as Servicer (the "Servicer"), and The Bank of New York, as Trustee (the
"Trustee"). The property of the Trust (the "Trust Assets") includes and will
include the Transferor's interest in receivables described herein (the
"Receivables") or generated from time to time in the ordinary course of business
in a portfolio of consumer revolving credit card accounts (the "Accounts") owned
by The Travelers Bank and The Travelers Bank USA (each a "Bank" and,
collectively, the "Banks") certain participation interests in other pooled
assets and all monies due in payment of the Receivables and certain other
property, as more fully described herein and, with respect to any Series, in the
related Prospectus Supplement. The Receivables in the Accounts will be first
sold by the Banks to the Transferor and then transferred by the Transferor to
the Trust as more fully described herein.
The Certificates will be offered from time to time under this Prospectus on
terms determined for each Series at the time of the sale and as described in the
related prospectus supplement (each, a "Prospectus Supplement"). Each Series
will consist of one or more classes of Certificates (each, a "Class"), one or
more of which may be fixed-rate Certificates, floating-rate Certificates or
other types of Certificates as specified in the related Prospectus Supplement.
Payments of interest on each Class will be made on each Distribution Date
specified in the related Prospectus Supplement. Principal payments on each Class
will be made as specified in the related Prospectus Supplement. Any Series may
include one or more Classes that are subordinated in right and priority to the
extent described in the related Prospectus Supplement to payment of principal or
interest to one or more other Classes of such Series.
Each Certificate will represent an undivided interest in the Trust Assets and
each Certificateholder will be entitled to receive a varying percentage of each
month's collections with respect to the Receivables at the times and in the
manner described herein and, with respect to any Series, in the related
Prospectus Supplement. One or more Classes of a Series may be entitled to the
benefits of a cash collateral guaranty or account, letter of credit, surety
bond, insurance policy or other form of enhancement as specified in the
Prospectus Supplement relating to such Series.
THE CERTIFICATES WILL REPRESENT INTERESTS IN THE TRUST ASSETS AND WILL NOT
REPRESENT INTERESTS IN OR RECOURSE OBLIGATIONS OF CC CREDIT CARD CORPORATION,
THE TRAVELERS BANK, THE TRAVELERS BANK USA OR ANY AFFILIATE THEREOF. A
CERTIFICATE IS NOT A DEPOSIT AND IS NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION (THE "FDIC"). THE RECEIVABLES ARE NOT INSURED OR GUARANTEED BY THE
FDIC OR ANY OTHER GOVERNMENTAL AGENCY OR INSTRUMENTALITY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
POTENTIAL INVESTORS SHOULD CONSIDER, AMONG OTHER THINGS, THE INFORMATION SET
FORTH IN "RISK FACTORS" COMMENCING ON PAGE 18 HEREIN AND IN THE RELATED
PROSPECTUS SUPPLEMENT.
The Certificates offered by this Prospectus and by the related Prospectus
Supplement are offered by the underwriters, if any, subject to prior sale, to
withdrawal, cancellation or modification of the offer without notice, to
delivery to and acceptance by the underwriters, if any, and certain further
conditions. Retain this Prospectus for future reference.
Certain capitalized terms used herein are defined elsewhere in the Prospectus. A
listing of the pages on which such terms are defined can be found in "Index of
Defined Terms" beginning on page 73 herein.
Each Series of Certificates or Class of Certificates offered hereby will be
rated in one of the four highest rating categories by at least one nationally
recognized statistical rating organization.
THIS PROSPECTUS MAY NOT BE USED TO CONSUMMATE SALES OF THE SECURITIES OFFERED
HEREBY UNLESS ACCOMPANIED BY A PROSPECTUS SUPPLEMENT.
, 1997
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TABLE OF CONTENTS
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PROSPECTUS SUPPLEMENT.................. 2
REPORTS TO CERTIFICATEHOLDERS.......... 2
AVAILABLE INFORMATION.................. 2
INCORPORATION OF CERTAIN DOCUMENTS BY
REFERENCE............................ 3
PROSPECTUS SUMMARY..................... 4
RISK FACTORS........................... 18
USE OF PROCEEDS........................ 23
THE TRUST.............................. 23
THE BANKS' CREDIT CARD ACTIVITIES...... 24
General................................ 24
Acquisition and Use of Credit Cards.... 24
Billing and Payments................... 25
Delinquencies.......................... 26
Interchange............................ 27
Competition............................ 27
THE BANKS.............................. 27
THE TRANSFEROR......................... 28
THE ACCOUNTS........................... 28
DESCRIPTION OF THE
CERTIFICATES......................... 28
General................................ 29
Book-Entry Registration................ 30
Definitive Certificates................ 33
The Transferor Certificate; Additional
Transferors.......................... 33
Interest Payments...................... 34
Principal Payments..................... 35
Shared Principal Collections and
Transferor Principal Collections..... 35
Sharing of Excess Finance Charge
Collections.......................... 36
Companion Series....................... 36
Groups................................. 36
New Issuances.......................... 37
THE RECEIVABLES TRANSFER
AGREEMENTS........................... 38
Sale of Receivables.................... 38
Addition of Accounts................... 38
Purchase Price of Receivables.......... 39
Representations and Warranties......... 39
THE POOLING AND SERVICING AGREEMENT
GENERALLY............................ 39
Trust Assets........................... 39
Transfer and Assignment of
Receivables.......................... 39
Additional Transferors................. 40
Cessation of Transfer of Receivables... 40
Representations, Warranties and
Covenants............................ 40
Addition of Accounts or Participation
Interests............................ 45
Automatic Account Additions............ 46
Removal of Accounts.................... 47
Servicing Procedures................... 48
Discount Option........................ 48
Trust Accounts......................... 49
Series Percentage and Transferor
Percentage........................... 50
Application of Collections............. 50
Operation of Excess Funding Account.... 50
Defaulted Receivables; Rebates and
Fraudulent Charges................... 51
Final Payment of Principal and
Interest; Termination................ 51
Pay Out Events and Reinvestment
Events............................... 52
Servicing Compensation and Payment of
Expenses............................. 53
Certain Matters Regarding the
Servicer............................. 53
Indemnification........................ 54
Servicer Default....................... 54
Reports to Certificateholders.......... 56
Evidence as to Compliance.............. 56
Amendments............................. 57
Interest Rate Swaps and Related Caps,
Floors and Collars................... 58
Defeasance............................. 58
List of Certificateholders............. 59
The Trustee............................ 59
SERIES ENHANCEMENT..................... 59
General................................ 59
Subordination.......................... 60
Letter of Credit....................... 60
Cash Collateral Guaranty or Account.... 60
Collateral Interest.................... 60
Surety Bond or Insurance Policy........ 61
Spread Account......................... 61
CERTAIN LEGAL ASPECTS OF THE
RECEIVABLES.......................... 61
Transfer of Receivables................ 61
Certain Matters Relating to
Insolvency........................... 62
Consumer Protection Laws............... 63
Proposed Legislation................... 64
Recent Litigation...................... 64
CERTAIN FEDERAL INCOME TAX
CONSEQUENCES......................... 64
General................................ 64
Treatment of the Certificates as
Debt................................. 65
Treatment of the Trust................. 65
Taxation of Interest Income of U.S.
Certificate Owners................... 67
Sale or Exchange of Certificates....... 68
Non-U.S. Certificate Owners............ 68
Information Reporting and Backup
Withholding.......................... 69
State and Local Taxation............... 70
ERISA CONSIDERATIONS................... 70
PLAN OF DISTRIBUTION................... 72
LEGAL MATTERS.......................... 72
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PROSPECTUS SUPPLEMENT
Each Prospectus Supplement relating to a Series to be offered thereby and
hereby will, among other things, set forth with respect to such Series: (a) the
initial aggregate principal amount, the certificate interest rate (or method for
determining it) of each Class of such Series; (b) certain information concerning
the Receivables and other property, if any, allocated to such Series; (c) the
expected date or dates on which the principal amount of the Certificates will be
paid to Certificateholders; (d) the extent to which any Class within a Series is
subordinated to any other Class of such Series or any other Series; (e) the
identity of each Class of floating-rate Certificates and fixed-rate Certificates
included in such Series, if any, or such other type of Class of Certificates;
(f) the Distribution Dates for the respective Classes; (g) relevant financial
information with respect to the Receivables and other property, if any; (h)
additional information with respect to any Series Enhancement, guaranteed
investment contract or other agreement relating to such Series; and (i) the plan
of distribution of such Series.
REPORTS TO CERTIFICATEHOLDERS
Unless and until Definitive Certificates are issued, monthly and annual
unaudited reports, containing information concerning the Trust and prepared by
the Servicer, will be sent on behalf of the Trust to Cede & Co., as registered
holder of the Certificates, pursuant to the Pooling and Servicing Agreement. See
"Description of the Certificates--Book Entry Registration," and "The Pooling and
Servicing Agreement Generally--Reports to Certificateholders" and "--Evidence as
to Compliance." Such reports will not constitute financial statements prepared
in accordance with generally accepted accounting principles. None of CC Credit
Card Corporation, The Travelers Bank, The Travelers Bank USA or any of their
affiliates intend to send any of their financial reports to Certificateholders.
The Travelers Bank as Servicer will file with the Securities and Exchange
Commission (the "Commission") such reports with respect to the Trust as are
required under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and the rules and regulations of the Commission thereunder.
AVAILABLE INFORMATION
CC Credit Card Corporation, as Transferor (in such capacity, the
"Transferor") and as originator of the Trust, has filed a Registration Statement
under the Securities Act of 1933, as amended (the "Act"), with the Commission on
behalf of the Trust with respect to the Certificates offered pursuant to this
Prospectus. This Prospectus, which forms part of the Registration Statement,
does not contain all of the information contained in the Registration Statement
and amendments thereof and exhibits thereto. For further information, reference
is made to the Registration Statement and amendments thereof and exhibits
thereto, which are available for inspection without charge at the public
reference facilities maintained by the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549; the Commission's regional offices at Seven World Trade
Center, 13th Floor, New York, New York 10048; and Citicorp Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661-2511. Copies of the
Registration Statement and amendments thereof and exhibits thereto may be
obtained from the Public Reference Section of the Commission, 450 Fifth Street,
N.W., Washington, D.C. 20549, at prescribed rates. In addition, the Commission
maintains a public access site on the Internet through the World Wide Web at
which site reports, proxy and information statements and other information
regarding registrants, including all electronic filing, may be viewed. The
Internet address of the Commission's World Wide Web site is http:// www.sec.gov.
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INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
All reports and other documents filed with the Commission by the Servicer
with respect to the Trust pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act subsequent to the date of this Prospectus and prior to the
termination of the offering of the Certificates offered hereby shall be deemed
to be incorporated by reference into this Prospectus and to be part hereof. Any
statement contained herein or in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus.
The Servicer will provide without charge to each person to whom a copy of
this Prospectus is delivered, on the written or oral request of any such person,
a copy of any or all of the documents incorporated herein by reference, except
the exhibits to such documents (unless such exhibits are specifically
incorporated by reference in such documents). Written requests for such copies
should be directed to the Servicer at Christiana Corporate Center, 100 Commerce
Drive, Newark, Delaware, 19713 Attention: Chief Financial Officer. Telephone
requests for such copies should be directed to The Travelers Bank, as the
Servicer at (302) 454-5500.
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PROSPECTUS SUMMARY
THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE
DETAILED INFORMATION APPEARING ELSEWHERE IN THIS PROSPECTUS AND IN THE
PROSPECTUS SUPPLEMENT WITH RESPECT TO THE SERIES OFFERED THEREBY. CERTAIN
CAPITALIZED TERMS USED HEREIN ARE DEFINED ELSEWHERE IN THIS PROSPECTUS. A
LISTING OF THE PAGES ON WHICH SUCH TERMS ARE DEFINED IS FOUND IN THE "INDEX OF
DEFINED TERMS." OTHER SERIES THAT MAY BE ISSUED PURSUANT TO OTHER SIMILAR
PROSPECTUSES OR DISCLOSURE DOCUMENTS MAY ALSO USE SUCH CAPITALIZED TERMS IN SUCH
PROSPECTUSES OR DOCUMENTS. HOWEVER, IN SUCH CASES, REFERENCE TO SUCH TERMS WILL,
UNLESS THE CONTEXT OTHERWISE REQUIRES, ONLY BE MADE IN THE CONTEXT OF SUCH OTHER
SERIES.
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TRUST............................. The Travelers Bank Credit Card Master Trust I (the
"Trust") will be formed pursuant to the pooling and
servicing agreement (the "Pooling and Servicing
Agreement") among CC Credit Card Corporation, as
Transferor, The Travelers Bank, as Servicer (the
"Servicer") and The Bank of New York, as Trustee (the
"Trustee").
TRUST ASSETS...................... The assets of the Trust (the "Trust Assets") will
include a portfolio of receivables (the "Receivables")
arising under selected
MasterCard-Registered Trademark-* and
VISA-Registered Trademark-* credit card accounts or
other consumer revolving credit card accounts (the
"Accounts") in portfolios of consumer revolving credit
card accounts originated by The Travelers Bank, The
Travelers Bank USA or affiliates of one of the Banks,
all monies due or to become due and all amounts
received with respect thereto, all proceeds of the
Receivables (not including, however, amounts recovered
from Accounts in which the Receivables have been
written off as uncollectible), proceeds of credit
insurance policies relating to the Receivables, all
monies on deposit in certain bank accounts of the
Trust and, if applicable, the benefits of any type of
enhancement ("Series Enhancement") issued with respect
to any Series (the drawing on or payment of such
Series Enhancement being available only to
Certificateholders of a specified Series or Class
unless otherwise indicated in the related Prospectus
Supplement). The subordination of any Series or Class
of Certificates to another Series or Class of
Certificates will be deemed to be a Series
Enhancement. The Trust Assets may also include
participations (including 100% participations)
representing undivided interests in a pool of assets
primarily consisting of revolving consumer credit card
receivables or consumer loan receivables (secured and
unsecured), and any interests in both such types of
receivables, including securities representing or
backed by both such types of receivables, and other
self-liquidating financial assets owned by The
Travelers Bank or The Travelers Bank USA or any
affiliate of a Bank and collections thereon
(collectively, "Participation Interests"). At the time
of formation of the Trust, each of the Banks will
convey to the Transferor all Receivables existing
under certain
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* MasterCard and VISA are registered trademarks of MasterCard International
Incorporated and VISA USA, Inc., respectively.
4
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designated Accounts and all Receivables arising under
such Accounts from time to time thereafter and the
Transferor will convey such Receivables to the Trust.
In addition, in the future Additional Accounts
(including Automatic Additional Accounts) may be
designated and the Receivables in such Additional
Accounts as of the cut-off date with respect to such
Additional Accounts and all Receivables arising
thereafter in such Additional Accounts will be
conveyed by an Account Owner to the Transferor and by
the Transferor to the Trust.
ACCOUNT OWNERS.................... On the date of formation of the Trust, The Travelers
Bank and The Travelers Bank USA. Each Bank will enter
into a separate Receivables Transfer Agreement with
the Transferor and, pursuant to such respective
Receivables Transfer Agreements, convey Receivables to
the Transferor. In the future, affiliates of the Banks
may enter into receivables transfer agreements and
transfer Receivables to the Transferor. Each of the
Banks and each affiliate that owns an Account and
transfers the Receivables therein to the Transferor is
an "Account Owner."
TRANSFEROR........................ CC Credit Card Corporation, a Delaware corporation and a
wholly-owned subsidiary of Commercial Credit Company.
Subject to certain conditions described herein under
"The Pooling and Servicing Agreement
Generally--Additional Transferors," the Transferor may
designate one or more of its affiliates to transfer
Receivables or Participation Interests to the Trust
from time to time, whereupon any such affiliate will
become a "Transferor" for purposes of the Pooling and
Servicing Agreement.
SERVICER.......................... The Travelers Bank, a Delaware state-chartered banking
corporation, is the servicer (in such capacity, the
"Servicer") and is a wholly-owned subsidiary of
Commercial Credit Company.
TRUSTEE........................... The Bank of New York, a New York banking corporation.
THE CERTIFICATES.................. The investor certificates issued by the Trust, including
any investor certificates offered pursuant to this
Prospectus and any Prospectus Supplement (the
"Certificates"), represent undivided interests in the
Trust Assets, which, with respect to each Series,
shall consist of the right to receive, to the extent
necessary to make the required payments with respect
to the Certificates of such Series at the times and in
the amounts specified in the series supplement to the
Pooling and Servicing Agreement for such Series (each,
a "Series Supplement," and collectively with the
Pooling and Servicing Agreement sometimes referred to
herein as the "Pooling and Servicing Agreement"), the
portion of collections allocable to Certificateholders
of such Series pursuant to the Pooling and Servicing
Agreement and the related Series Supplement, funds on
deposit in the Collection Account and the Excess
Funding Account allocable to Certificateholders of
such Series pursuant to the Pooling and Servicing
Agreement and
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the related Series Supplement, funds on deposit in any
deposit, trust, escrow or similar account maintained
for the benefit of such Series or any Class of such
Series (each, a "Series Account") and, if specified in
the related Prospectus Supplement, funds available
pursuant to any related Series Enhancement
(collectively, with respect to all Series, the
"Certificateholders' Interest"), it being understood
that the Certificates of any Series or Class shall not
represent any interest in any Series Account or Series
Enhancement for the benefit of any other Series or
Class. The Certificates may be issued from time to
time pursuant to the Pooling and Servicing Agreement
and a related Series Supplement. Each Series will
consist of one or more classes (each a "Class"), one
or more of which may be Classes of fixed-rate
Certificates or floating-rate Certificates or other
types of Certificates. Each Class may differ in, among
other things, the priority of principal payments, the
maturity date, distribution dates and rate of
interest. Additionally, the Certificates of one or
more Classes may be subordinated to the Certificates
of one or more other Classes with respect to the right
to receive payments of principal, interest, or both
under the circumstances and in such amounts as
described herein and in the related Prospectus
Supplement. The Transferor may, with respect to any
Series, retain one or more subordinated Classes of the
Certificates. The term "Certificateholders" refers to
holders of the Certificates (including, if applicable,
the Transferor), and the term "Series" refers to any
series of Certificates issued by the Trust. See
"Description of the Certificates."
Unless otherwise specified in the related Prospectus
Supplement, the Certificates of a Series will be
available for purchase in minimum denominations of
$1,000 and in integral multiples of $1,000 in excess
thereof and will be available only in book-entry form,
except in certain limited circumstances. The Trust
Assets will be allocated among the Certificateholders'
Interest of each Series, including, if applicable,
certain providers of Series Enhancement holding
certificated or uncertificated subordinated interests,
and the interest of the holders of the Transferor
Certificates (the "Transferor's Interest"). The
Transferor's Interest represents the right to the
assets of the Trust not allocated to the
Certificateholders' Interest. The term "Transferor
Amount" refers to, at any time of determination, an
amount equal to the sum of (a) the product of the
aggregate amount of Principal Receivables in the Trust
at such time and one minus the Discount Percentage in
effect at such time and (b) the principal amount on
deposit in the Excess Funding Account at such time,
minus the sum of the amount of Principal Receivables
and the amount on deposit in the Excess Funding
Account allocated to each Series then outstanding (for
each Series, its "Invested Amount"). The Transferor
Amount will
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fluctuate as the amount of Principal Receivables in
the Trust changes from time to time. The term
"Investor Amount" for a Series will be set forth in
the Series Supplement for such Series and, for a
Series offered hereby, the related Prospectus
Supplement, and generally refers to the principal
amount of the Certificateholders' Interest in the
assets of the Trust.
The Certificates of a Class offered hereby and pursuant
to a Prospectus Supplement will represent the right to
receive, from the assets of the Trust allocated to the
applicable Series, funds up to (but not in excess of)
the amounts required to make payments of interest on
the Certificates of such Class at the rate specified
in the related Prospectus Supplement, and payments of
principal during any related Amortization Period to
the extent specified in the related Prospectus
Supplement.
Each Class of Certificates will include the right to
receive (but only to the extent needed to make
required payments under the Pooling and Servicing
Agreement) varying percentages of collections of
Finance Charge Receivables and Principal Receivables
for the related Monthly Period. During the Revolving
Period relating to a Class, subject to certain
limitations, collections of Principal Receivables
allocable to the Certificates of such Class will
generally be allocated and paid to the holders of the
Transferor Certificates or to other Series. During any
Amortization Period relating to such Class,
collections of Principal Receivables will be allocated
to such Class as provided herein and in the related
Prospectus Supplement.
The Certificates of each Series represent the right to
receive payments from the Trust only and do not
represent interests in or recourse obligations of CC
Credit Card Corporation, either of the Banks or any
affiliate thereof. None of the Certificates, the
Accounts, the Receivables or the Participation
Interests are insured or guaranteed by the Federal
Deposit Insurance Corporation (the "FDIC") or any
other governmental agency or instrumentality.
NEW ISSUANCES..................... The Pooling and Servicing Agreement authorizes the
Trustee to issue three types of certificates: (i) one
or more Series of Certificates which will have the
characteristics described below, (ii) a certificate
evidencing the Transferor's interest in the Trust (the
"Transferor Certificate"), which will initially be
held by the Transferor, and (iii) Supplemental
Certificates delivered in exchange for a portion of
the Transferor Certificate under certain circumstances
described in the Pooling and Servicing Agreement
(each, a "Supplemental Certificate" and, together with
the Transferor Certificate, the "Transferor
Certificates").
Following the issuance of the initial Series of
Certificates, a new issuance of Certificates (a "New
Issuance") may occur only upon satisfaction of the
following conditions: (i) on or before the fifth day
immediately preceding the date of such New
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Issuance, the Transferor shall have given notice of
such issuance and its date to the Trustee and the
Servicer; and on or before the tenth day immediately
preceding the date of such New Issuance, the
Transferor shall have given each Rating Agency notice
of such issuance and (ii) the Transferor shall have
delivered to the Trustee (a) the related Series
Supplement specifying the Principal Terms of the new
Series, (b) if applicable, the agreement relating to
the Series Enhancement, (c) written confirmation from
each Rating Agency that the New Issuance will not
result in the Rating Agency reducing or withdrawing
its rating of any outstanding Series or Class (with
the respect to any action or proposed series of
actions, the "Rating Agency Condition"), (d) an
officer's certificate from the Transferor stating that
the Transferor reasonably believes that such New
Issuance will not cause a Pay Out Event or a
Reinvestment Event to occur with respect to any
Series, and (e) an opinion of counsel to the effect
that, for Federal income tax purposes, (i) the New
Issuance will not adversely affect the tax
characterization of Certificates of any outstanding
Series or Class that were characterized as debt at the
time of their issuance, (ii) the New Issuance will not
cause the Trust to be deemed to be an association (or
publicly traded partnership) taxable as a corporation
and (iii) such New Issuance will not cause an event in
which gain or loss would be recognized by any
Certificateholder or the Trust (an opinion of counsel
to the effect referred to in clauses (i), (ii) and
(iii) with respect to any action is referred to herein
as a "Tax Opinion"). The Transferor may offer a Series
to the public or other investors under a prospectus or
other disclosure document (a "Disclosure Document") in
transactions either registered under the Act or exempt
from registration thereunder, directly or through one
or more underwriters or placement agents, in
fixed-price offerings or in negotiated transactions or
otherwise.
THE ACCOUNTS...................... The Accounts generally consist of consumer revolving
credit card accounts owned by one of the Banks, or
under certain conditions described in the Pooling and
Servicing Agreement, an affiliate of one of the Banks
(in each case, each Bank and any such affiliate, an
"Account Owner"). The Accounts are not being sold or
transferred to the Trust and will continue to be
controlled and held by the applicable Account Owner.
At the time of formation of the Trust, each Bank will
enter into a receivables transfer agreement and any
additional Account Owners will enter into a
substantially similar agreement (each a "Receivables
Transfer Agreement") with the Transferor. Pursuant to
the applicable Receivables Transfer Agreement, the
Account Owner will, from time to time, sell to the
Transferor all of the Account Owner's right, title and
interest in the Receivables in designated Accounts.
The Transferor, in turn, from time to time, will
transfer such
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Receivables to the Trust pursuant to the Pooling and
Servicing Agreement.
THE RECEIVABLES................... The Receivables arise in the Accounts and consist of
amounts charged by cardholders for merchandise and
services, cash advances and check advances
(collectively, the "Principal Receivables"), plus the
related periodic finance charges, annual membership
fees and annual service charges, late fees, overlimit
fees, cash advance fees, all other fees and charges
with respect to Accounts designated by the Transferor
to be included as Finance Charge Receivables
(collectively, the "Finance Charge Receivables");
provided, however, that an amount equal to the product
of the Discount Percentage and the amount of
collections of Principal Receivables will be treated
as collections of Finance Charge Receivables. See "The
Pooling and Servicing Agreement Generally--Discount
Option." All new Receivables arising in Accounts will
be conveyed to the Trust, except as described herein,
but will not affect the amount of the initial Investor
Amount of a Series. The total amount of Receivables
will fluctuate from day to day, because the amount of
new Receivables arising in the Accounts and the amount
of payments collected on existing Receivables will
usually differ each day. Because the Transferor's
Interest represents the interest in the Principal
Receivables not represented by the Certificates of any
Series, the amount of the Transferor's Interest in
Principal Receivables will fluctuate daily as
Receivables are collected and new Receivables are
conveyed to the Trust. See "The Receivables" in the
Prospectus Supplement.
REGISTRATION OF CERTIFICATES...... Unless otherwise specified in the related Prospectus
Supplement, the Certificates of each Series initially
will be represented by certificates registered in the
name of Cede & Co. ("Cede"), as the nominee of The
Depository Trust Company ("DTC"). No person acquiring
a beneficial interest in the Certificates of a Series
(a "Certificate Owner") will be entitled to receive a
definitive certificate representing such person's
interest (a "Definitive Certificate"), except in the
event that Definitive Certificates of such Series are
issued under the limited circumstances described
herein and in the related Prospectus Supplement. See
"Description of the Certificates--Definitive
Certificates."
CLEARANCE AND SETTLEMENT.......... Unless otherwise provided in the related Prospectus
Supplement, Certificate Owners of each Series offered
hereby may elect to hold their Certificates through
any of (i) DTC (in the United States) or (ii) Cedel or
Euroclear (in Europe). Transfers within DTC, Cedel or
Euroclear, as the case may be, will be made in
accordance with the usual rules and operating
procedures of the relevant system. Cross-market
transfers between persons holding directly or
indirectly through DTC, on the one hand, and
counterparties holding directly or indirectly through
Cedel or Euroclear, on the other, will be
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effected in DTC through the relevant Depositaries of
Cedel or Euroclear. See "Description of the
Certificates--Book-Entry Registration."
COLLECTIONS....................... All collections of Receivables and Participation
Interests, if any, will be allocated by the Servicer
between amounts collected on Principal Receivables and
amounts collected on Finance Charge Receivables;
provided, however, that the Transferor has the option
(the "Discount Option") to designate from time to
time, subject to certain conditions, a percentage
(which initially will be %) of all or a portion of
the amount of Principal Receivables collected that
will instead be treated as collections of Finance
Charge Receivables. See "The Pooling and Servicing
Agreement Generally--Discount Option." All such
amounts will then be allocated in accordance with the
respective interests of the Certificateholders of each
Class of each Series as described in the related
Prospectus Supplement. The Servicer will deposit all
collections of Receivables and Participation
Interests, if any, distributable to Certificateholders
in an eligible account established for such purpose
(the "Collection Account") no later than the day prior
to the applicable Distribution Date. The "Distribution
Date" for a Series will usually be the fifteenth day
of each month (or, if such day is not a business day,
the next business day) or such other date specified in
the Series Supplement for a Series. See "The Pooling
and Servicing Agreement Generally--Series Percentage
and Transferor Percentage" herein and "Description of
the Certificates--Allocation Percentages" in the
Prospectus Supplement.
INTEREST.......................... Interest on the Certificates for each Interest Period
with respect to a Series will be distributed as set
forth in the related Prospectus Supplement. Interest
payments in respect of a Series will generally be
funded from the portion of Finance Charge Receivables
collected during the related Monthly Period allocable
to such Series and, if necessary and if specified in
the related Prospectus Supplement, from any Series
Enhancement available for such Series. The terms
"Interest Period" and "Monthly Period" have the
meanings specified in the Prospectus Supplement
relating to each Series. See "Description of the
Certificates--Interest Payments" and "Risk
Factors--Payments and Maturity."
REVOLVING PERIOD.................. During the period from the closing date with respect to
a Series (the "Relevant Closing Date") and ending on
the day immediately preceding the commencement of an
Amortization Period with respect to such Series (the
"Revolving Period"), collections of Principal
Receivables allocated to the Certificates of such
Series will be paid from the Trust to the holders of
the Transferor Certificates, to other Series or
deposited in the Excess Funding Account (except in
certain limited circumstances).
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AMORTIZATION PERIODS; PRINCIPAL
PAYMENTS OR ACCUMULATION........ Unless otherwise specified in the Prospectus Supplement
relating to any Class, at the end of any Revolving
Period for a Class, collections of Principal
Receivables that had been allocated to
Certificateholders of such Class but had been paid to
the holders of the Transferor Certificates, to other
Series or deposited in the Excess Funding Account
shall instead be either paid directly to such
Certificateholders or accumulated for payment to such
Certificateholders, in each case as specified in the
Prospectus Supplement relating to such Class. The
Revolving Period for a Series shall end and an
amortization period shall commence either upon the
occurrence of a Pay Out Event with respect to such
Series (a "Rapid Amortization Period"), a Reinvestment
Event with respect to such Series (a "Rapid
Accumulation Period") or at a scheduled date (a
"Scheduled Amortization Date") set forth in the
Prospectus Supplement applicable to such Series (a
"Controlled Amortization Period," "Limited
Amortization Period," "Principal Amortization Period,"
"Optional Amortization Period," "Controlled
Accumulation Period" or other like period,
collectively referred to herein as an "Amortization
Period," in each case as described in the related
Prospectus Supplement). In the event of a Rapid
Amortization Period, collections of Principal
Receivables allocated to Certificateholders will
generally be paid directly to such Certificateholders,
subject to any subordination provisions specified in
the related Prospectus Supplement. In the event of a
Rapid Accumulation Period, collections of Principal
Receivables allocated to Certificateholders will
generally be accumulated in the Principal Funding
Account and paid to the Certificateholders on the
expected final payment date. See "The Pooling and
Servicing Agreement Generally--Pay Out Events and
Reinvestment Events" for a discussion of the events
which might lead to a Rapid Amortization Period or a
Rapid Accumulation Period. In the event of another
Amortization Period with respect to a Class,
collections of Principal Receivables will either be
paid directly to Certificateholders in specified
amounts on a monthly or other periodic basis or
accumulated in a Series Account for the benefit of
Certificateholders or otherwise applied, in each case,
as set forth in the Prospectus Supplement relating to
such Class.
Funds on deposit in the Collection Account shall, at the
direction of the Servicer, be invested by the Trustee
in Eligible Investments selected by the Servicer.
SHARED PRINCIPAL COLLECTIONS AND
TRANSFEROR PRINCIPAL
COLLECTIONS..................... On each Distribution Date, (a) the Servicer shall
allocate Shared Principal Collections to each Series
entitled thereto (each, a "Principal Sharing Series"),
pro rata, in proportion to the Principal Shortfalls,
if any, with respect to
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each such Series and (b) the Servicer shall withdraw
from the Collection Account and pay to the holders of
the Transferor Certificates an amount equal to the
excess, if any, of (x) the aggregate amount for all
outstanding Series of collections of Principal
Receivables which the related Series Supplements
specify are to be treated as "Shared Principal
Collections" for such Distribution Date over (y) the
aggregate amount for all outstanding Principal Sharing
Series which the related Series Supplements specify
are "Principal Shortfalls" for such Distribution Date;
provided, however, that if on any Distribution Date
the Transferor Amount is less than or equal to the
Required Transferor Amount, the Servicer will not
distribute to the holders of the Transferor
Certificates any Shared Principal Collections that
otherwise would be distributed to the holders of the
Transferor Certificates, but shall deposit such funds
in the Excess Funding Account. Any such reallocation
will not result in a reduction in the Invested Amount
of the Series to which such collections were initially
allocated. In addition, if so specified in the related
Prospectus Supplement, collections otherwise payable
to the Transferor may be designated to be paid to the
Certificateholders of the applicable Series.
SHARING OF EXCESS COLLECTIONS OF
FINANCE CHARGE RECEIVABLES...... Collections of Finance Charge Receivables allocable to
any Class in excess of the amounts necessary to make
required payments with respect to such Class may, if
specified in the related Series Supplement, be applied
to cover shortfalls, if any, with respect to amounts
payable from collections of Finance Charge Receivables
allocable to any other Class or Series then
outstanding, pro rata based upon the amount of the
shortfall as provided in the related Series
Supplement. In addition, if so specified in the
related Prospectus Supplement, collections of Finance
Charge Receivables otherwise payable to the Transferor
may be designated to be paid to the Certificateholders
of the applicable Series.
COMPANION SERIES.................. If specified in the Prospectus Supplement relating to a
Series, a Series of Certificates may be issued (each,
a "Companion Series"), that is paired with one or more
other Series or a portion of one or more other Series
previously issued by the Trust (a "Prior Series"),
such that a reduction in the Invested Amount of the
Prior Series results in an increase in the Invested
Amount of the Companion Series. If a Pay Out Event or
Reinvestment Event occurs with respect to the Prior
Series or the Companion Series when the Prior Series
is in an Amortization Period, the percentage specified
in the applicable Prospectus Supplement for the
allocation of collections of Principal Receivables for
the Prior Series may be reset to a lower percentage as
set forth in the Prospectus Supplement for the Prior
Series and the Amortization Period for the Prior
Series may be lengthened.
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GROUPS............................ If specified in the Prospectus Supplements relating to
any group of Series (each, a "Group"), such Series may
be allocated all collections with respect to certain
portions of the Receivables and any Participation
Interests may be allocated to such Series, provided
that the Rating Agency Condition is satisfied and that
such grouping will not result in the occurrence of a
Pay Out Event or Reinvestment Event with respect to
any Series or materially adversely affect the amount
or timing of distributions to be made to any Series or
Class (an "Adverse Effect").
FUNDING PERIOD.................... The Prospectus Supplement relating to a Series of
Certificates may specify that for a period beginning
on the Relevant Closing Date for such Series and
ending on a specified date before the commencement of
an Amortization Period with respect to such Series
(the "Funding Period"), the aggregate amount of
Principal Receivables in the Trust allocable to such
Series may be less than the aggregate principal amount
of the Certificates of such Series and an amount equal
to the amount of such deficiency (the "Pre-Funding
Amount") will be held in a trust account established
with the Trustee for the benefit of Certificateholders
of such Series (the "Pre-Funding Account") pending the
transfer of additional Principal Receivables to the
Trust or pending the reduction of the Invested Amounts
of other Series issued by the Trust. The related
Prospectus Supplement will specify the initial
Invested Amount on the Relevant Closing Date, the
aggregate principal amount of the Certificates of such
Series (the "Full Invested Amount") and the date by
which the Invested Amount is expected to equal the
Full Invested Amount. The Invested Amount will
increase as Principal Receivables are delivered to the
Trust or as the Invested Amount of other Series of the
Trust are reduced. The Invested Amount may also
decrease due to the occurrence of a Pay Out Event or
Reinvestment Event as specified in the related
Prospectus Supplement.
During the Funding Period, funds on deposit in the
Pre-Funding Account for a Series of Certificates will
be withdrawn and paid to the Transferor to the extent
of any increases in the Invested Amount. In the event
that the Invested Amount does not, for any reason,
equal the Full Invested Amount by the end of the
Funding Period, any amount remaining in the Pre-
Funding Account and any additional amount specified in
the related Prospectus Supplement will be payable to
the Certificateholders of such Series in a manner and
at such time as set forth in the related Prospectus
Supplement.
If so specified in the related Prospectus Supplement,
monies in the Pre-Funding Account with respect to any
Series will be invested by the Trustee in Eligible
Investments or will be subject to a guaranteed rate or
investment agreement or other similar arrangement, and
investment earnings and any
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applicable payment under any such investment
arrangement will be applied to pay interest on the
Certificates of such Series.
SERIES ENHANCEMENT................ Enhancement with respect to one or more Classes of a
Series ("Series Enhancement") may be provided in the
form of subordination, a letter of credit, a cash
collateral guaranty, a cash collateral account, a
collateral interest, a surety bond, insurance policy
or other form of support or any combination of the
above as specified in the related Prospectus
Supplement. Series Enhancement may also be provided to
a Class or Classes of different Series by a
cross-support feature which requires that
distributions of principal or interest be made with
respect to Certificates of one or more Classes of a
particular Series before distributions are made to one
or more Classes of another Series.
The type, characteristics and amount of the Series
Enhancement will be determined based on several
factors, including the characteristics of the
Receivables and Accounts and other property underlying
or comprising the Trust assets as of the Relevant
Closing Date with respect to any Series, and will be
established on the basis of requirements of each
Rating Agency rating the Certificates of such Series.
The terms of the Series Enhancement with respect to
any Series offered hereby will be described in the
related Prospectus Supplement. If so specified in the
Prospectus Supplement for a Series, the level of
Series Enhancement for such Series may be reduced if
such reduction satisfies the Rating Agency Condition.
If so specified in the related Prospectus Supplement,
any such Series Enhancement may apply only in the
event of certain types of losses and the protection
against losses provided by such Series Enhancement
will be limited. See "Series Enhancement" and "Risk
Factors--Limited Nature of Rating."
A. SUBORDINATION................ A Series of Certificates may include one or more Classes
of Certificates which are subordinate to one or more
other Classes of such Series. The rights of the
holders of any such subordinated Certificates to
receive distributions on any Distribution Date for
such Series will be subordinate in right and priority
to the rights of the holders of Certificates which are
senior to such subordinated Certificates, but only to
the extent set forth in the related Prospectus
Supplement. If so specified in the related Prospectus
Supplement, subordination may apply only in the event
of certain types of losses not covered by another
Series Enhancement. The related Prospectus Supplement
will also set forth information concerning the amount
of subordination of a Class or Classes of subordinated
Certificates in a Series, the circumstances in which
such subordination will be applicable, the manner, if
any, in which the amount of subordination will
decrease over time, and the conditions under which
amounts available from
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payments that would otherwise be made to holders of
such subordinated Certificates will be distributed to
holders of Certificates which are senior to such
subordinated Certificates. If cash flows otherwise
distributable to holders of a subordinated Class of a
Series will be used as support for a Class of another
Series, the related Prospectus Supplement will specify
the manner and conditions for applying such a
cross-support feature. See "Series Enhancement--
Subordination."
B. LETTER OF CREDIT............. If so specified in the related Prospectus Supplement,
support for a Series or one or more Classes of a
Series may be provided by one or more letters of
credit. A letter of credit may provide limited
protection against certain losses in addition to or in
lieu of another Series Enhancement. The issuer of the
letter of credit (the "L/C Bank") will be obligated to
honor demands with respect to such letter of credit,
to the extent of the amount available thereunder, to
provide funds under the circumstances and subject to
such conditions as are specified in the related
Prospectus Supplement. The liability of the L/C Bank
under its letter of credit may be reduced by the
amount of unreimbursed payments thereunder.
The maximum liability of a L/C Bank under its letter of
credit will generally be an amount equal to a
percentage specified in the related Prospectus
Supplement of the initial Investor Amount of a Series
or a Class of such Series. The maximum amount
available at any time to be paid under a letter of
credit will be determined in the manner specified
therein and in the related Prospectus Supplement. See
"Series Enhancement--Letter of Credit."
C. CASH COLLATERAL
GUARANTY OR ACCOUNT........... If so specified in the related Prospectus Supplement,
support for a Series or one or more Classes of a
Series may be provided by a guaranty (the "Cash
Collateral Guaranty") secured by the deposit of cash
or certain permitted investments in an account (the
"Cash Collateral Account") reserved for the
beneficiaries of the Cash Collateral Guaranty or by a
Cash Collateral Account alone. The amount available
pursuant to the Cash Collateral Guaranty or the Cash
Collateral Account will be the lesser of the amounts
on deposit in the Cash Collateral Account and an
amount specified in the related Prospectus Supplement.
The related Prospectus Supplement will set forth the
circumstances under which payments are made to
beneficiaries of the Cash Collateral Guaranty from the
Cash Collateral Account or from the Cash Collateral
Account directly.
D. COLLATERAL INTEREST.......... If so specified in the related Prospectus Supplement,
support for a Series or one or more Classes of a
Series may be provided initially by an uncertificated,
subordinated interest in the Trust (the "Collateral
Interest") in an amount initially
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equal to a percentage specified in the related
Prospectus Supplement of the initial Investor Amount.
E. SURETY BOND OR INSURANCE
POLICY........................ If so specified in the related Prospectus Supplement,
support for a Series or one or more Classes of a
Series may be provided by the posting of a surety bond
or the issuance of insurance by an insurance company,
in each instance designed to assure the distribution
of interest or principal on the Certificates of such
Class or Series in the manner and amount specified in
the related Prospectus Supplement.
F. SPREAD ACCOUNT............... If so specified in the related Prospectus Supplement,
support for a Series or one or more Classes of a
Series may be provided by the periodic deposit of
certain available excess cash flow from the Trust
assets into an account (the "Spread Account") intended
to assure the subsequent distribution of interest or
principal on the Certificates of such Class or Series
in the manner specified in the related Prospectus
Supplement.
RECORD DATE....................... The last day of the month preceding any Distribution
Date, except as otherwise specified with respect to a
Series in the related Prospectus Supplement.
OPTIONAL REPURCHASE............... If specified in a Prospectus Supplement, the Investor
Amount of a Series may be subject to optional
repurchase by the Transferor on any Distribution Date
after such Investor Amount is less than or equal to a
certain specified level, unless certain events as
specified in the Pooling and Servicing Agreement have
occurred. The purchase price on the Distribution Date
on which such repurchase occurs will be as specified
in the related Prospectus Supplement and will
generally be equal to the Investor Amount plus accrued
and unpaid interest on the applicable Certificates.
See "Description of the Certificates--Optional
Repurchase" in the Prospectus Supplement.
FINAL PAYMENT OF PRINCIPAL AND
INTEREST; TERMINATION OF
TRUST........................... The interest of the Certificateholders of a Series in
the Trust will terminate following the earliest of (i)
the day after the Distribution Date on which the
Investor Amount of such Series is paid in full, (ii) a
date specified in the Series Supplement for such
Series (the "Stated Series Termination Date") and
(iii) the termination of the Trust (the "Trust
Termination Date"). All principal and interest will be
due and payable no later than the Stated Series
Termination Date.
TAX STATUS........................ Except to the extent otherwise specified in the related
Prospectus Supplement, it is anticipated that Special
Tax Counsel to the Transferor will render an opinion,
in connection with the issuance of each Series, that
the Certificates of a Series (or certain Classes
thereof) will be properly characterized as
indebtedness for Federal income tax purposes. It is
anticipated that under the Pooling and Servicing
Agreement, the Certificate Owners of each Class as
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to which such opinion is rendered will be deemed to
agree to treat the Certificates as indebtedness for
tax purposes. See "Certain Federal Income Tax
Consequences" for additional information concerning
the application of Federal income tax laws.
ERISA CONSIDERATIONS.............. Under a regulation issued by the Department of Labor,
the Trust Assets would not be deemed "plan assets" of
any employee benefit plan holding interests in a Class
of the Certificates of a Series if certain conditions
are met. If the Trust Assets were deemed to be "plan
assets" of an employee benefit plan, there is
uncertainty as to whether existing exemptions from the
"prohibited transaction" rules of the Employee
Retirement Income Security Act of 1974, as amended
("ERISA"), would apply to all transactions involving
the Trust Assets. No assurance can be made with
respect to any offering of any Class of the
Certificates of any Series that the conditions which
would allow the Trust Assets not to be "plan assets"
will be met, although the intention of the
Underwriters (but not their assurance) as to whether
any Class of the Certificates of a particular Series
will be "publicly-offered securities," and therefore
eligible for an ERISA exemption, will be set forth in
the related Prospectus Supplement. Accordingly,
fiduciaries or other persons contemplating purchasing
interests in the Certificates of any Series with "plan
assets" of any employee benefit plan should consult
their counsel before making a purchase. See "ERISA
Considerations."
CERTIFICATE RATING................ It will be a condition to the issuance of the
Certificates offered by this Prospectus and the
related Prospectus Supplement that they be rated in
one of the four highest applicable rating categories
by at least one nationally recognized statistical
rating organization selected by the Transferor (each
such rating organization rating any Series, a "Rating
Agency"). The rating or ratings applicable to the
Certificates of each Class will be as set forth in the
related Prospectus Supplement. The Certificates
offered pursuant to this Prospectus and the related
Prospectus Supplement must be investment grade
asset-backed securities within the meaning of the Act
and the rules promulgated thereunder.
A security rating should be evaluated independently of
similar ratings of different types of securities. A
rating is not a recommendation to buy, sell or hold
securities and may be subject to revision or
withdrawal at any time by the assigning rating
organization. Each rating should be evaluated
independently of any other rating. See "Risk Factors--
Limited Nature of Rating."
LISTING........................... If so specified in the Prospectus Supplement for a
Series, application will be made to list the
Certificates of such Series, or all or a portion of
any Class thereof, on the Luxembourg Stock Exchange or
any other specified exchange.
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RISK FACTORS
INVESTORS SHOULD CONSIDER, AMONG OTHER THINGS, THE FOLLOWING FACTORS IN
CONNECTION WITH THE PURCHASE OF CERTIFICATES
LIMITED LIQUIDITY. There can be no assurance that a secondary market for
the Certificates of any Series will develop or, if it does develop, that such
market will provide Certificateholders with liquidity of investment or that it
will continue for the life of the Certificates of such Series. It is anticipated
that, to the extent permitted, the underwriters of any Series of Certificates
offered hereby will make a market in such Certificates, but in no event will any
such underwriter be under an obligation to do so.
CHARACTERISTICS AS A SALE; INSOLVENCY AND RECEIVERSHIP RISKS. Each Account
Owner will represent and warrant in its respective Receivables Transfer
Agreement that the transfer of the Receivables to the Transferor pursuant
thereto will be a valid sale and assignment of all of the Account Owner's right,
title and interest in the Receivables and all proceeds thereof to the
Transferor. Each Account Owner will take certain actions required to perfect the
Transferor's Interest in the Receivables. While each Account Owner and the
Transferor will treat the Transactions described in the respective Receivables
Transfer Agreement as a sale of the Receivables to the Transferor, under
applicable state law, nevertheless a tax, government lien or other nonconsensual
lien on property of an Account Owner arising before Receivables come into
existence or are transferred to the Transferor may have priority over the
Transferor's and, therefore, the Trust's interest in such Receivables, and if
the Federal Deposit Insurance Corporation ("FDIC") were appointed conservator or
receiver of an Account Owner, certain administrative expenses of the conservator
or receiver or the Delaware State Bank Commissioner and certain borrowings made
by the conservator or receiver may also have priority over the Transferor's
interest and, therefore, the Trust's interest in such Receivables. If a
conservatorship or receivership proceeding were to be commenced involving an
Account Owner and the conservator or receiver of the Account Owner were to take
the position that the transfer of the Receivables from the Account Owner to the
Transferor should be characterized as a pledge of such Receivables, then delays
in distributions on the Certificates and reductions in such distributions could
result. In addition, while The Travelers Bank is the Servicer, cash collections
held by the Servicer may, subject to certain conditions, be commingled and used
for the benefit of The Travelers Bank prior to the date on which such
collections are required to be deposited in the Collection Account as described
under "The Pooling and Servicing Agreement Generally--Application of
Collections." In the event of the conservatorship or receivership of The
Travelers Bank or, in certain circumstances, the lapse of certain time periods,
the Transferor (and therefore the Trust) may not have a perfected interest in
such collections and, in such event, the Trust may suffer a loss of all or part
of such collections which may result in a loss to Certificateholders. See
"Certain Legal Aspects of the Receivables--Transfer of Receivables."
To the extent that the Account Owners have granted a security interest in
the Receivables to the Transferor and that security interest was validly
perfected before the insolvency of an Account Owner and was not granted or taken
in contemplation of insolvency or with the intent to hinder, delay or defraud
the relevant Account Owner or its creditors, the Federal Deposit Insurance Act
("FDIA"), as amended by the Financial Institutions Reform, Recovery and
Enforcement Act of 1989, as amended ("FIRREA"), provides that such security
interest should not be subject to avoidance by the FDIC, as conservator or
receiver for the relevant Account Owner. Positions taken by the FDIC staff prior
to the passage of FIRREA do not suggest that the FDIC, as conservator or
receiver for the relevant Account Owner, would interfere with the timely
transfer to the Transferor (and, therefore, to the Trust) of payments collected
on the Receivables. If, however, the FDIC were to assert a contrary position,
such as requiring the Transferor to establish its right to those payments by
submitting to and completing the administrative claims procedure under the FDIA,
or the conservator or receiver were to request a stay of proceedings with
respect to such Account Owner as provided under the FDIA, delays in payments on
the related Series of Certificates and possible reductions in the amount of
those payments could occur. In addition, the FDIC, if appointed as conservator
or receiver for an Account Owner, has the power under the FDIA to repudiate
contracts, including secured contracts of the Account Owners. The FDIA provides
that a claim for damages arising from the
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repudiation of a contract is limited to "actual direct compensatory damages." In
the event the FDIC were to be appointed as conservator or receiver of an Account
Owner and were to repudiate the Receivables Transfer Agreement entered into by
such Account Owner, then the amount payable out of available collateral to the
Certificateholders could be lower than the outstanding principal and accrued
interest on the Certificates. In the event of a Servicer Default, if a
conservator or receiver is appointed for the Servicer, and no Servicer Default
other than such conservatorship or receivership or insolvency of the Servicer
exists, the conservator or receiver may have the power to prevent either the
Trustee or Certificateholders from effecting a transfer of servicing to a
successor Servicer.
The Transferor represents and warrants in the Pooling and Servicing
Agreement that the transfer of the Receivables by it to the Trust pursuant to
the Pooling and Servicing Agreement is either a valid sale and assignment of
such Receivables to the Trust or the grant to the Trust of a security interest
in such Receivables. The Transferor will file appropriate UCC financing
statements to evidence this sale and perfect the Trust's right, title and
interest in such Receivables. Nevertheless, a tax or government lien or other
nonconsensual lien on property of the Transferor arising before a receivable is
transferred to the Trust may have priority over the Trust's ownership or
security interest in such Receivable. If the Transferor were to become a debtor
in a bankruptcy case and a bankruptcy trustee or a creditor of the Transferor
were to take the position that the transfer of the Receivables from the
Transferor to the trust should be characterized as a pledge of such Receivables,
then delays in distributions on the Certificates and possible reductions in such
distributions could result. See "Certain Legal Aspects of the
Receivables--Certain Matters Relating to Insolvency."
CONSUMER PROTECTION LAWS. The Accounts and the Receivables are subject to
numerous federal and state consumer protection laws and regulations that impose
requirements on the making and collection of consumer loans. Such laws, as well
as any new laws or rulings which may be adopted (including, but not limited to,
federal or state interest rate or fee caps on credit cards), may adversely
affect the Servicer's ability to collect on the Receivables or maintain previous
levels of finance charges, annual cardholder fees and other fees, and failure by
the Servicer to comply with such requirements also could adversely affect the
Servicer's ability to collect on the Receivables. Pursuant to the Pooling and
Servicing Agreement, the Transferor will covenant to accept the transfer of all
Receivables in an Account upon the breach of certain representations and
warranties relating to requirements of law applicable to the Account, if any
Receivable in such Account becomes a Defaulted Receivable or the Trust's rights
in, to or under such Receivables are impaired or the proceeds thereof are not
available to the Trust free and clear of any lien (subject to certain cure
periods). The Transferor also will make certain other representations and
warranties relating to the validity and enforceability of the Accounts and the
Receivables. The Account Owners will make similar covenants and representations
and warranties in the respective Receivables Transfer Agreements. However, the
Trustee will not make any examination of the Receivables or the records relating
thereto for the purpose of establishing the presence or absence of defects,
compliance with such representations and warranties, or for any other purpose.
The sole remedy if any such representation or warranty is breached and such
breach continues beyond the applicable cure period, if any, is that the
Transferor will generally be obligated to accept the transfer of all Receivables
in the Account affected thereby (for transfer to the applicable Account Owner
under its Receivables Transfer Agreement). In addition, in the event of a breach
of certain representations and warranties, the Servicer may be obligated to
accept the reassignment and transfer of the Receivables transferred by it to the
Trust, which reassignment will constitute the sole remedy available to
Certificateholders with respect to any such breach. See "The Pooling and
Servicing Agreement Generally--Representations, Warranties and Covenants" and
"Certain Legal Aspects of the Receivables--Consumer Protection Laws."
Application of federal and state bankruptcy and debtor relief laws would
affect the interests of the Certificateholders in the Receivables, if such laws
result in any Receivables being written off as uncollectible. See "Description
of the Certificates--Defaulted Receivables; Rebates and Fraudulent Charges."
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PROPOSED LEGISLATION--LIMITATION ON FINANCE CHARGES. Congress and the
states may enact new laws and amendments to existing laws to regulate further
the credit card industry or to reduce finance charges or other fees or charges
applicable to credit card accounts. The potential effect of any such legislation
could be to reduce the yield on the Accounts. If such yield is reduced, a Pay
Out Event or Reinvestment Event could occur, and a Rapid Amortization Period or
Rapid Accumulation Period may commence. See "The Pooling and Servicing Agreement
Generally--Pay Out Events and Reinvestment Events."
COMPETITION IN THE BANK CREDIT CARD INDUSTRY. The bank credit card industry
is highly competitive. There is increased competitive use of advertising, target
marketing and pricing competition in interest rates and annual cardholder fees
as both traditional and new credit card issuers seek to expand or to enter the
market. As a result of this competition, the industry is undergoing significant
consolidation. This consolidation may have the effect of making some of the
largest credit card issuers more cost efficient allowing them to accept lower
yields to grow market share. In addition, the competition for high credit
quality individuals results in a significant number of solicitations for a
finite number of prospects. The use of introductory or "teaser" rates has lead
to an increased number of individuals shopping among credit cards and,
therefore, a lowered loyalty to any one credit card. The Account Owners' ability
to compete in the credit card industry will affect their ability to generate new
Receivables. If the rate at which new Receivables are generated declines
significantly and the Account Owners do not designate Additional Accounts, a Pay
Out Event or Reinvestment Event could occur, in which event a Rapid Amortization
Period or Rapid Accumulation Period would commence. See "The Banks' Credit Card
Activities-- Competition."
GENERATION OF ADDITIONAL RECEIVABLES; DEPENDENCY ON CARDHOLDER
REPAYMENTS. The Receivables in the Trust may be paid at any time and there is
no assurance that there will be additional Receivables created in the Accounts
the Receivables of which are included in the Trust or that any particular
pattern of cardholder repayments will occur. The continuation of the Revolving
Period of a Series will be dependent upon the continued generation of new
Receivables for the Trust. A significant decline in the amount of Receivables
generated in the Accounts could result in the occurrence of a Pay Out Event or
Reinvestment Event for one or more Series and the commencement of the Rapid
Amortization Period or Rapid Accumulation Period for each such Series. In
addition, increased convenience use, where cardholders pay their Account
balances in full on or prior to the due date and thus avoid all finance charges
on purchases, would decrease the effective yield on the Accounts, and could
cause the commencement of the Rapid Amortization Period or Rapid Accumulation
Period for one or more Series, as well as decreased protection to holders of
Certificates against defaults under the Accounts. Convenience use is more common
among cardholders who are not assessed any annual cardholder fee than among
those who pay such fees, and a substantial majority of the cardholders on the
Accounts are not charged an annual cardholder fee. A decrease in the rate of
payment by cardholders could delay the return of principal to the
Certificateholders during the Amortization Periods for each Series. See
"Receivable Yield Considerations" in the Prospectus Supplement. A significant
portion of the Receivables which will be transferred to the Trust exist or will
arise in Accounts resulting from two large affinity and co-branded credit card
programs. See "The Receivables--Affinity Groups" in the Prospectus Supplement.
While the Banks have enjoyed a long relationship with such groups, the
possibility exists that the groups could move their endorsement to another
institution. In such case, the Banks would expect to reissue credit cards to the
cardholders; however, it is not possible to predict how many of the Accounts
would be closed. This could affect the ability of the Trust to generate new
Receivables or to designate Additional Accounts when required, which could
result in the occurrence of a Pay Out Event or Reinvestment Event for one or
more Series. The Pooling and Servicing Agreement provides that the Transferor
will be required and the Receivables Transfer Agreements provide that the
applicable Account Owner will be required (subject to certain conditions) to
designate Additional Accounts, the Receivables of which will be added to the
Trust in the event that the Transferor Amount or the amount of the Principal
Receivables is not maintained at a certain minimum amount. If Additional
Accounts are not designated by the Transferor and the Account Owners when
required, a Pay Out Event or Reinvestment Event for one or more Series may occur
and
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result in the commencement of a Rapid Amortization Period or Rapid Accumulation
Period for such Series. See "The Pooling and Servicing Agreement Generally--Pay
Out Events and Reinvestment Events" herein and "Description of the
Certificates--Pay Out Events and Reinvestment Events" in the Prospectus
Supplement for a discussion of other events which might lead to the commencement
of the Rapid Amortization Period or Rapid Accumulation Period for a Series.
SOCIAL, GEOGRAPHIC AND ECONOMIC FACTORS. Changes in card use, payment
patterns and the rate of defaults by cardholders may result from a variety of
social, economic and geographic factors. Economic factors include the rate of
inflation, the unemployment rates and relative interest rates offered for
various types of loans. Adverse changes in economic conditions in any states
where cardholders are located could have a direct impact on the timing and
amount of payments on the Certificates of any Series. See "The Banks' Credit
Card Activities" herein and in the Prospectus Supplement. Neither the Account
Owners nor the Transferor are able to determine and have no basis to predict
whether, or to what extent, economic, social or geographic factors will affect
future card use or repayment patterns.
ABILITY TO CHANGE TERMS OF THE RECEIVABLES; DECREASE IN FINANCE
CHARGES. Pursuant to the Receivables Transfer Agreements, the Account Owners
are not transferring to the Transferor and, therefore, the Transferor is not and
cannot transfer to the Trust, the Accounts, but only the Receivables arising in
the Accounts. As owner of the Accounts, the Account Owners have the right to
determine the finance charges and the other fees and charges which will be
applicable from time to time on the Accounts, to alter the minimum monthly
payment required under the Accounts and to change various other terms of their
respective agreements with cardholders with respect to the Accounts. A decrease
in the finance charges and the other fees and charges assessed on the Accounts
would decrease the effective yield on the Accounts and could result in the
occurrence of a Pay Out Event or Reinvestment Event for one or more Series and
commencement of the Rapid Amortization Period or Rapid Accumulation Period for
each such Series. Under the Receivables Transfer Agreement, each Account Owner
will agree that, unless required by law or as is otherwise necessary, in its
sole discretion, to maintain its lending business on a competitive basis based
on a good faith assessment by such Account Owner of the nature of its
competition in the lending business, it will not reduce the annual percentage
rate at which finance charges are assessed on the Receivables or the other fees
and charges assessed on any of the Accounts owned by it, if, as a result of such
reduction, either (i) such Account Owner's reasonable expectation is that such
reduction will cause a Pay Out Event or Reinvestment Event to occur, or (ii)
such reduction is not also applied to any comparable segments of consumer
revolving credit card accounts owned by such Account Owner which have
characteristics the same as, or substantially similar to, such Accounts. Each
Account Owner also covenants that it will change the terms relating to any of
the accounts owned by it only if the change is made applicable to the comparable
segment of the consumer revolving credit card accounts owned by such Account
Owner with characteristics the same as or substantially similar to such
Accounts, subject to compliance with all requirements of law. In servicing the
Accounts, the Servicer will be required to exercise the same care and apply the
same policies that it exercises in handling similar matters for its own
comparable accounts. Except as set forth above, neither the Pooling and
Servicing Agreement nor any Receivables Transfer Agreement contains any
restrictions on the ability of an Account Owner to change the terms of the
Accounts or the Receivables. See "The Pooling and Servicing Agreement
Generally--Representations, Warranties and Covenants." There can be no assurance
that changes in applicable law, changes in the marketplace or prudent business
practice might not result in a determination by an Account Owner to decrease
finance charges or other fees and charges for existing accounts, or take actions
which would otherwise change the terms of the Accounts. In addition, there can
be no assurance that a change made in the terms of the Accounts would not result
in the downgrade of the rating of the Certificates.
EFFECT OF ADDITION OF TRUST ASSETS ON CREDIT QUALITY. The Transferor and
the Account Owners expect, and in some cases will be obligated (subject to
certain exceptions) to designate Additional Accounts, the Receivables of which
will be conveyed to the Trust. Such Additional Accounts may include accounts
originated using criteria different from those that were applied to the Accounts
designated on an earlier
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date, because such accounts were originated at a different date or were acquired
from another institution. Consequently, there can be no assurance that
Additional Accounts designated in the future will be of the same credit quality
as Accounts designated on an earlier date. In addition, the Pooling and
Servicing Agreement provides that the Transferor may add Participation Interests
to the Trust. The designation of Additional Accounts and Participation Interests
will be subject to the satisfaction of certain conditions described herein under
"The Pooling and Servicing Agreement Generally--Addition of Accounts or
Participation Interests."
BASIS RISK. The Accounts generally have finance charges set at a variable
rate above the prime rate or other specified index. Any Class of Certificates
offered hereby may bear interest at a fixed-rate or a floating-rate based on a
different floating-rate index. If there is a decline in the prime rate or such
other specified index, the amount of collections of Finance Charge Receivables
on the Accounts may be reduced, whereas the amounts payable as interest with
respect to the Certificates and other amounts required to be funded out of
collections of Finance Charge Receivables may not be similarly reduced.
IMPACT OF DISCOUNT OPTION; SLOWER PAYMENT RATE. Pursuant to the Pooling and
Servicing Agreement, the Transferor will designate a percentage of collections
of Principal Receivables to be treated as collections of Finance Charge
Receivables. Such designation will result in an increase in the amount of
collections of Finance Charge Receivables and a lower amount of collections in
respect of Principal Receivables than otherwise would occur. The Transferor may,
without notice to or the consent of Certificateholders, increase, reduce or
eliminate the percentage of collections of Principal Receivables treated as
collections of Finance Charge Receivables. See "The Pooling and Servicing
Agreement Generally--Discount Option." Any such change that raises the Discount
Percentage would result in an increase in the amount of collections of Finance
Charge Receivables and a lower payment rate of collections of Principal
Receivables and will reduce the Transferor Amount (which is calculated after
applying the Discount Percentage to the aggregate amount of Principal
Receivables), thereby making certain Pay Out Events or Reinvestment Events based
in part on the amount of collections of Finance Charge Receivables less likely
to occur and increasing the likelihood that the Transferor will be required to
designate Additional Accounts. Any such change that reduces or eliminates the
Discount Percentage will have the opposite effect.
LIMITED NATURE OF RATING. Any rating assigned to the Certificates of a
Series or a Class of a Series by a Rating Agency will reflect such Rating
Agency's assessment solely of the likelihood that Certificateholders will
receive the payments of interest and principal required to be made under the
Pooling and Servicing Agreement and will be based primarily on the value of the
Receivables in the Trust and the availability of any Series Enhancement with
respect to such Series or Class of such Series. Any such rating will therefore
generally address credit risk and will not, unless otherwise specified in the
related Prospectus Supplement with respect to any Class or Series offered
hereby, address the likelihood that the principal of, or interest on, any
certificates of such Class or Series will be prepaid, paid on a scheduled date
or paid on any particular date before the applicable Stated Series Termination
Date. In addition, any such rating will not address the possibility of the
occurrence of a Pay Out Event or Reinvestment Event with respect to such Class
or Series or the possibility of the imposition of United States withholding tax
with respect to non-U.S. Certificateholders. Further, the available amount of
any Series Enhancement for any such Series or Class may be limited and may be
subject to reduction from time to time as described in the related Prospectus
Supplement. The rating will not be a recommendation to purchase, hold or sell
Certificates of such Series or Class of such Series, and such rating will not
comment as to the marketability of such Certificates, any market price or
suitability for a particular investor. There is no assurance that any rating
will remain for any given period of time or that any rating will not be lowered
or withdrawn entirely by a Rating Agency, if in such Rating Agency's judgment,
circumstances so warrant.
ISSUANCE OF NEW SERIES; EFFECT ON TIMING OR AMOUNT OF PAYMENTS TO
CERTIFICATEHOLDERS AND VOTING RIGHTS. The Trust, as a master trust, is expected
to issue an initial Series of Certificates and to issue additional
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Series from time to time thereafter. While the Principal Terms of any Series
will be specified in a Series Supplement, the provisions of a Series Supplement
and, therefore, the terms of any additional Series, will not be subject to the
prior review or consent of holders of the Certificates of any previously issued
Series. Such Principal Terms may include methods for determining applicable
investor percentages and allocating collections, provisions creating different
or additional security or other Series Enhancement, provisions subordinating
such Series to another Series or other Series (if the Series Supplement relating
to such Series so permits) to such Series, and any other amendment or supplement
to the Pooling and Servicing Agreement which is made applicable only to such
Series. Such Principal Terms, including any subordination or other relationship
of a Series to other subsequently or previously issued Series, will be described
in the Prospectus Supplement relating to such Series. The issuance of any
additional Series is subject to the Rating Agency Condition and, if any Series
outstanding was characterized as debt at the time of its issuance, the delivery
of a Tax Opinion. There can be no assurance, however, that the Principal Terms
of any Series issued from time to time might not have an impact on the timing
and amount of payments received by a Certificateholder of any other Series. No
Series Supplement relating to a Series may change the terms of the Pooling and
Servicing Agreement applicable to the Certificates of any other Series, whether
such other Series have been issued before or after the Series to which such
Series Supplement relates. However, the Certificateholders of any Series issued
in addition to outstanding Series will have voting rights which, with respect to
certain votes, waivers or consents under the Pooling and Servicing Agreement,
will reduce the percentage interest represented by the Certificates of the
outstanding Series of the aggregate unpaid principal amount of the Certificates
of all Series that are entitled to vote. Such votes, waivers and consents
include directing the appointment of a successor Servicer following a Servicer
Default, amending the Pooling and Servicing Agreement and directing a
reassignment of the entire portfolio of Accounts. See "Description of the
Certificates--New Issuances."
ALLOCATIONS. To the extent provided in any Series Supplement, or any
amendment to the Pooling and Servicing Agreement, portions of the Receivables or
Participation Interests conveyed to the Trust and all collections received with
respect thereto may be allocated to one or more Series or Groups as long as the
Rating Agency Condition is satisfied for such allocation and the Servicer shall
have delivered an officer's certificate to the Trustee to the effect that the
Servicer reasonably believes that such allocation will not have an Adverse
Effect.
USE OF PROCEEDS
The net proceeds from the sale of each Series offered hereby and by the
related Prospectus Supplement will be paid to the Transferor. Unless otherwise
specified in the related Prospectus Supplement, the Transferor will use such
proceeds to purchase additional Receivables and repay loans made by Commercial
Credit Company or its affiliates.
THE TRUST
The Trust will be formed, in accordance with the laws of the State of
Delaware, pursuant to the Pooling and Servicing Agreement. The Trust will not
engage in any activity other than acquiring and holding the Receivables and any
other assets of the Trust and proceeds therefrom, issuing Certificates with
respect to each Series issued by the Trust, the Transferor Certificate and any
Supplemental Certificates and making payments thereon, obtaining Series
Enhancement applicable to any Series and activities related thereto. As a
consequence, the Trust does not have and is not expected to have any source of
capital resources other than the Trust Assets.
The Transferor will convey to the Trust, without recourse, its interest in
all Receivables existing on a date designated prior to the issuance of the first
Series of Certificates (the "Initial Cut-Off Date") in certain VISA and
MasterCard consumer revolving credit card Accounts (the "Initial Accounts") that
meet the criteria provided in the Pooling and Servicing Agreement for an
Eligible Account as of the Initial Cut-Off Date, and will convey to the Trust,
without recourse, its interest in all Receivables arising under such
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Initial Accounts thereafter, in exchange for the net cash proceeds from the sale
of such first Series of Certificates plus the Transferor Certificate
representing the Transferor's Interest. In addition, the Transferor may convey
from time to time to the Trust, without recourse, except as provided in the
Pooling and Servicing Agreement, its interest in all Receivables existing in
designated accounts ("Additional Accounts"), if any, at the close of business on
the applicable cut-off date and Receivables thereafter arising in such
Additional Accounts, and the Transferor may, from time to time, convey
Participation Interests to the Trust. The Trust Assets consist of the
Receivables arising under selected credit card accounts or other consumer
revolving credit card accounts originated by The Travelers Bank, The Travelers
Bank USA or affiliates of the Banks, all monies due or to become due and all
amounts received with respect thereto, all proceeds of the Receivables, proceeds
of credit insurance policies relating to the Receivables, all monies on deposit
in certain bank accounts of the Trust and the benefits of any type of Series
Enhancement. The Receivables, the proceeds thereof and the Trust Assets do not,
however, include amounts recovered ("Recoveries") from Accounts in which the
Receivables have been written off as uncollectable. The Trust Assets may also
include Participation Interests. Under the Receivables Transfer Agreements, the
Transferor will have the right (subject to certain limitations and restrictions)
and, in some circumstances, under the Pooling and Servicing Agreement will be
obligated to require the Account Owners to designate Additional Accounts to be
included as Accounts and the Transferor will convey to the Trust, pursuant to
the Pooling and Servicing Agreement, its interest in all Receivables of such
Additional Accounts. See "The Pooling and Servicing Agreement
Generally--Addition of Accounts or Participation Interests." In addition, the
Transferor may, but is not obligated to, designate, from time to time,
Participation Interests or Receivables be removed from the Trust. See "The
Pooling and Servicing Agreement Generally--Removal of Accounts."
THE BANKS' CREDIT CARD ACTIVITIES
GENERAL
The Receivables which the Banks have conveyed or will convey to the
Transferor pursuant to the respective Receivables Transfer Agreements have been
or will be, except as otherwise described in the Prospectus Supplement,
generated from transactions made by holders of selected MasterCard and VISA
credit card accounts, including regular and premium accounts, from the Travelers
Consumer Credit Card Portfolio. Both premium and regular accounts undergo the
same credit analysis, but premium accounts have higher initial credit limits
because of the higher incomes of the cardholders. In addition, premium accounts
generally offer a wider variety of services to the cardholders. Servicing of the
Travelers Consumer Credit Card Portfolio is performed primarily by the Banks;
however, certain data processing and administrative functions associated with
the servicing of the Travelers Consumer Credit Card Portfolio are currently
performed on behalf of the Banks by First Data Resources, Inc. ("FDR"). See
"Description of FDR." If FDR were to fail or become insolvent, delays in
processing and recovery of information with respect to charges incurred by
cardholders could occur, and the replacement of the services that FDR currently
provides to the Banks could be time consuming. As a result, delays in payments
to Certificateholders of any Series outstanding at such time could occur.
Set forth below is certain information relating to the activities of the
Banks. The Prospectus Supplement may amend, modify or supplement such
information. To the extent the Trust assets include any Participation Interests
or Receivables other than those of the type described herein, the Prospectus
Supplement will describe the nature and characteristics of such Participation
Interests or Receivables.
ACQUISITION AND USE OF CREDIT CARDS
Substantially all of the Banks' new accounts are generated through direct
mail and telemarketing solicitations of potential cardholders. The Banks
marketing efforts are directed towards affinity groups (such as nationwide
professional associations, fraternal organizations and affiliates of Travelers)
and individuals. The Banks utilize a number of methods to identify potential
cardholders who meet their
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respective credit and demographic criteria, including acquiring lists of
potential cardholders from credit bureaus and other various sources.
Since 1995, the criteria applied by the Banks to evaluate potential
cardholders have included credit scoring using a custom model developed by the
Fair, Isaac's Companies, an independent firm experienced in developing credit
scoring models. Credit scoring evaluates a potential cardholder's credit profile
to arrive at an estimate of the associated credit risk. Credit scoring models
are developed by statistically evaluating common characteristics and their
correlation with credit risk. Prior to 1995, the Banks used generic scorecards
to evaluate applicant credit risk.
Potential cardholders must meet minimum credit and income level standards
established by the Banks to receive a specific credit limit. Cardholders not
meeting the minimum standards for the initial product offer are offered a
reduced credit limit for which they qualify or their application is declined.
Cardholders may request to have their credit line increased upon completion of a
full application. After a review of the full application and credit bureau
report, the Banks decide whether to extend additional credit. Also, the Banks
periodically initiate credit line increases for cardholders meeting minimum
standards for usage and payment history established by the Banks.
Accounts are opened with an initial term of three years. At the anniversary
date, accounts which meet certain criteria for usage and payment history are
reissued for three year terms.
Each cardholder is subject to an agreement governing the terms and
conditions of the related MasterCard or VISA account. Pursuant to each such
agreement, the Bank that owns the Account reserves the right, upon advance
notice to the cardholders to change or terminate any terms, conditions, services
or features of its MasterCard and VISA accounts at any time, including
increasing or decreasing finance charges, other fees and charges or minimum
payment terms. The agreement with each cardholder provides that the relevant
Bank may apply such changes, when applicable, to current outstanding balances as
well as to future transactions. However, the laws of the state in which
particular cardholders reside may impact the ability of the relevant Bank to
apply changes. Under state law certain fees and charges may be limited. See
"Risk Factors--Consumer Protection Loans" and "Certain Legal Aspects of the
Receivables--Consumer Protection Laws."
A cardholder may use the credit card for either purchases, cash advances or
to transfer balances from other credit card accounts. Cardholders make purchases
when using the credit card to buy goods or services. A cash advance is made when
a credit card is used to obtain cash from a financial institution or an
automated teller machine or when the cardholder uses special drafts issued by
the relevant Bank to draw against the cardholder's credit line. The Banks do not
generally limit the amount of credit available for cash advances on new accounts
other than the total credit line available for such account.
When a cardholder uses the credit card issued by a bank under contract with
MasterCard or VISA (a "member bank"), the seller of goods or services or the
provider of cash advances generally sells the resulting receivable to a merchant
bank, which in turn sells the receivable (usually indirectly, through a clearing
corporation and its agent bank) to the member bank for its face amount less
interchange and other fees. The member bank is usually required by its contracts
with MasterCard and VISA to purchase and pay daily for all receivables generated
by use of credit cards issued by the member bank. If the member bank were to
fail to perform such obligations, MasterCard or VISA would have the right to
cancel the credit cards issued by the member bank.
BILLING AND PAYMENTS
Each Bank, using FDR as its service bureau, generates and mails to
cardholders monthly statements summarizing account activity. Cardholders receive
a grace period on purchases of 20 to 25 days. Cardholders must make a minimum
monthly payment equal to 1/50th of their total account balance (which includes
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their principal balance and finance and other charges). If such amount is less
than a stated minimum monthly payment (generally $15), the stated minimum
monthly payment is due.
All fees, charges and credit insurance premiums assessed by the Banks are
automatically charged to an account and are included in the account balance at
the end of each billing cycle. The finance charges assessed by the Banks are
calculated by multiplying the average daily balances of cash advances and
previously billed unpaid purchases in an account by the applicable periodic
rate. Finance charges are not assessed in most circumstances on purchases if all
balances shown in the billing statement are paid by the due date. Under certain
conditions related to customer performance, the Banks may immediately convert
the Annual Percentage Rate applicable to existing and future balances to a
higher rate.
The Banks primarily offer cards to customers without an annual fee. The
Banks also assess miscellaneous transaction fees, including cash advance and
draft fees, late and over limit charges, and returned check, returned draft, and
draft stop payment charges. Such miscellaneous fees are not expected to
constitute a material portion of Finance Charge Receivables.
Certain data processing and administrative functions associated with the
servicing of the Travelers Consumer Credit Card Portfolio are currently being
performed on behalf of the Banks by FDR. FDR is located in Omaha, Nebraska and
provides computer data processing services primarily to the bankcard industry.
FDR is a subsidiary of First Data Corp.
DELINQUENCIES
Each account is billed monthly on or about the same day of the month. An
account is "contractually delinquent" if the minimum payment indicated on the
cardholder's statement is not received by the due date. For purposes of
determining the delinquency of an account, the period from one monthly billing
statement to the next is considered a period of 30 days, regardless of the
actual number of days elapsed. Efforts to collect contractually delinquent
credit card receivables currently are made by the personnel of Commercial Credit
Corporation, on behalf of the Banks, who are dedicated to the servicing of the
portfolios of the Banks. Collection activities include statement messages,
formal collection letters and telephone calls. Collection personnel initiate
telephone contact with cardholders as early as 5 days contractually delinquent.
The intensity at which collection activity is pursued depends on the risk the
account presents to the Bank that owns such account which is determined by
credit bureau scoring, behavioral scoring and adaptive control techniques. In
the event that initial telephone contact fails to resolve the delinquency, the
Bank that owns such account continues to contact the cardholder by telephone and
by mail. Although such arrangements are made infrequently, the Banks may also
enter into arrangements with cardholders to extend or otherwise change payment
schedules based on demonstrated financial need. Delinquency levels are regularly
monitored by management of the Banks. Accounts are charged off in the month
following the date in which they bill 180 days contractually delinquent. Non-
bankrupt accounts are scored using a custom recovery score. Accounts with a low
collectibility score are assigned to outside collection agencies within 30 days.
Each of the Banks may continue to employ its standard collection procedures for
up to one year for those accounts which do not receive a low collectibility
score. The Banks charge-off accounts within 30 days after receipt of official
notice that the customer has died (a death certificate) or filed for bankruptcy
(a discharge notice), and within 90 days after receipt of any notice of
fraudulent charges within such account. The credit evaluation, servicing and
charge-off policies and collection practices of the Banks may change from time
to time in accordance with each Bank's business judgment and applicable laws and
regulations.
Information with respect to the delinquency and loss experience of the
Travelers Consumer Credit Card Portfolio, including charts relating to such
information, is contained in the Prospectus Supplement.
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INTERCHANGE
Creditors participating in VISA and MasterCard systems receive certain fees
("Interchange") as partial compensation for processing transactions, taking
credit risk, absorbing fraud losses and funding receivables for a limited period
prior to initial billing. Under the VISA and MasterCard systems, a portion of
the Interchange in connection with cardholder charges for merchandise and
services is passed from banks which clear the transactions for merchants to
credit card-issuing banks. Interchange approximates 1.4% of the transaction
amount. VISA and MasterCard may from time to time change the amount of
Interchange reimbursed to banks issuing their credit cards. The Finance Charge
Receivables transferred to the Trust do not and are currently not anticipated to
include Interchange.
COMPETITION
The bank credit card industry is highly competitive. There is increased
competitive use of advertising, target marketing and pricing competition in
interest rates and annual cardholder fees as both traditional and new credit
card issuers seek to expand or to enter the market. The Banks issue MasterCard
and VISA credit cards to customers nationwide competing with certain money
center banks and other large nationwide issuers, as well as with regional and
local banks, savings and loan associations, and other depository institutions,
many of whom have sizable branch systems through which credit cards are marketed
to the institutions' customer bases. Many of these competitors have larger
credit card portfolios than either Bank. Certain major credit card issuers are
more aggressive than the Banks regarding the solicitation of new accounts
through direct mail and telemarketing. The Banks have primarily responded to the
increased competition by marketing cards to affinity groups (including
affiliates of Travelers) and by offering promotional rates on new accounts and
on balance transfers from existing accounts.
The Trust will be dependent upon the Banks' continued ability to generate
new Receivables. The Banks' ability to compete in the credit card industry will
directly affect its ability to generate new Receivables. If the rate at which
new Receivables are generated declines significantly, a Pay Out or Reinvestment
Event with respect to a Series could occur and the Rapid Amortization Period or
Rapid Accumulation Period with respect to such Series could commence.
THE BANKS
Each of the Banks is a wholly-owned subsidiary of Commercial Credit Company
("Commercial Credit"), which is a wholly-owned subsidiary of Travelers Group
Inc. ("Travelers"). The Travelers Bank is a Delaware state-chartered bank formed
in February 1963. The Travelers Bank USA is a Delaware state-chartered bank
formed in September 1989.
Each Bank must undergo periodic examination, by the Delaware State Bank
Commissioner and the FDIC and is subject to regulations relating to
capitalization, leverage, reporting, dividends and permitted assets and
liability products. The Travelers Bank has applied to become a federal savings
bank. The Travelers Bank is also covered by the Competitive Equality Banking Act
of 1987 ("CEBA"), which, among other things, restricts cross marketing of
products by or of certain affiliates. The Travelers Bank USA is a credit card
bank. The Banks are also subject to the Community Reinvestment Act, which
assesses the records of the Banks in helping to meet the credit needs in the
delineated community of the Banks including low and moderate income
neighborhoods, consistent with a safe and sound banking operation. In addition,
a number of federal and state consumer protection laws and regulations are
applicable to the Banks including the Truth in Lending Act, which requires
consumer disclosure of the cost of credit and governs billing dispute
resolution, the Equal Credit Opportunity Act which prohibits discrimination in
any aspect of a credit transaction based on race, color, national origin, sex,
marital status, age, income from public assistance programs and exercise of
rights under the Consumer Protection Act, the Fair Credit Reporting Act, which
is aimed at ensuring the accuracy and fairness of the mechanism by which
consumer
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credit and other information on consumers is assembled and evaluated. Each
Bank's deposits are insured by the FDIC.
The principal executive office of The Travelers Bank is located at
Christiana Corporate Center, 100 Commerce Drive, Newark, Delaware 19713
(telephone: (302) 454-5500). The principal executive office of The Travelers
Bank USA is located at Christiana Corporate Center, 100 Commerce Drive, Newark,
Delaware 19713 (telephone: (302) 454-5500).
THE TRANSFEROR
CC Credit Card Corporation is a Delaware corporation incorporated on
November 7, 1997. Its principal executive office is located at 388 Greenwich
Street, New York, New York 10013 and its telephone number is (212) 816-8000. The
Transferor is a subsidiary of Commercial Credit Company. The Prospectus
Supplement for each Series will provide additional information relating to the
Transferor.
THE ACCOUNTS
The Receivables will arise in certain credit card accounts designated by the
Banks pursuant to the respective Receivables Transfer Agreements (the "Trust
Portfolio") and selected from the total portfolio of MasterCard and VISA
accounts of The Travelers Bank and The Travelers Bank USA (the "Travelers
Consumer Credit Card Portfolio"). An account in the Travelers Consumer Credit
Card Portfolio must be an Eligible Account to be selected for inclusion in the
Trust Portfolio.
For information concerning the origination of accounts in the Travelers
Consumer Credit Card Portfolio see "The Banks' Credit Card Activities." For
Information concerning the designation of Accounts and the representations and
warranties made by the Account Owners, see "The Receivables Transfer
Agreements."
The Prospectus Supplement relating to a Series will provide certain
information about the Trust Portfolio as of the date specified. Such information
will include the amount of Principal Receivables, the amount of Finance Charge
Receivables, the range of principal balances of the Accounts and the average
thereof, the range of credit lines of the Accounts and the average thereof, the
range of ages of the Accounts and the average thereof, information with respect
to the geographic distribution of the Accounts, the types of Accounts and
delinquency statistics relating to the Accounts.
DESCRIPTION OF THE CERTIFICATES
The Certificates will be issued in Series pursuant to the Pooling and
Servicing Agreement (as supplemented by a Series Supplement relating to such
Series) entered into among CC Credit Card Corporation, as Transferor, The
Travelers Bank, as Servicer of the Accounts and the Receivables, and The Bank of
New York, as Trustee for the Certificateholders of each Series. Pursuant to the
Pooling and Servicing Agreement, the Transferor may execute further Series
Supplements among the Transferor, the Servicer and the Trustee in order to issue
additional Series. See "--New Issuances." The Trustee will provide a copy of the
Pooling and Servicing Agreement (without exhibits or schedules), including any
Series Supplements, to Certificateholders of any Series without charge upon
written request. A copy of the form of Pooling and Servicing Agreement has been
filed with the Commission as an exhibit to the Registration Statement of which
this Prospectus forms a part.
The following summaries describe certain provisions common to each Series.
The summaries do not purport to be complete and are subject to, and are
qualified in their entirety by reference to, the provisions of the Pooling and
Servicing Agreement and the Series Supplement relating to each Series. When
particular provisions or terms used in the Pooling and Servicing Agreement or
any Series Supplement are referred to herein, such provisions or terms shall be
as specified in the Pooling and Servicing Agreement or Series Supplement.
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GENERAL
The Pooling and Servicing Agreement does not limit the amount of
Certificates that can be issued thereunder and provides that any Series may be
issued thereunder up to the aggregate principal amount specified in the related
Series Supplement that may be entered into among the Transferor, the Servicer
and the Trustee. Each Series will consist of one or more Classes, one or more of
which may be floating-rate Certificates or fixed-rate Certificates or other type
of Certificates as specified in the related Prospectus Supplement. A Series may
include a Class or Classes that are subordinated in right of payment of
principal and/or interest to another Class or other Classes of such Series or
any other Series. If so specified in a related Prospectus Supplement, such
subordinated Class or Classes may be offered hereby and by the related
Prospectus Supplement or may be retained by the Transferor or an affiliate of
the Transferor.
The Certificates of any Series will generally represent the right to
receive, to the extent of amounts then payable on the applicable Series of
Certificates, from the Trust Assets, a floating percentage (in the case of
Principal Receivables during the Revolving Period of a Series and Finance Charge
Receivables and Defaulted Receivables during the Revolving Period and the
Amortization Period of a Series) or a percentage calculated as a fraction with a
fixed numerator, subject to certain exceptions (in the case of Principal
Receivables during any Amortization Period for a Series) (each, the "Series
Percentage") of all cardholder payments on the Receivables.
The Transferor holds the interest in the Principal Receivables (the
"Transferor Amount") not represented by the Certificates of all outstanding
Series. The Transferor holds an undivided interest in the Trust (the
"Transferor's Interest"), including the right to a percentage (the "Transferor
Percentage") of all cardholder payments on the Receivables.
During the Revolving Period for any Series, the Invested Amount for such
Series will generally remain constant except in certain limited circumstances
(such as a Series with a Pre-Funding Account) as specified in the related
Prospectus Supplement. See "The Pooling and Servicing Agreement
Generally--Defaulted Receivables; Rebates and Fraudulent Charges." The amount of
Principal Receivables, however, will vary each day as new Principal Receivables
are created and others are paid. The Transferor Amount will fluctuate daily,
therefore, to reflect the changes in the amount of the Principal Receivables. In
addition, the Transferor Amount will be reduced by the effect of the Discount
Percentage in effect from time to time. When a Series is amortizing, the
Invested Amount for such Series will generally decline for each Monthly Period
as cardholder payments of Principal Receivables allocated to such Series are
collected and held for distribution to the Certificateholders or deposited in a
Series Account for the benefit of such Series or a Class of such Series for
payment to the applicable Certificateholders when due. As a result, the
Transferor Amount will generally increase each month to reflect the reductions
in the Invested Amount of a Series and will also change to reflect the
variations in the amount of Principal Receivables.
Unless otherwise specified in the related Prospectus Supplement,
Certificates of each Series initially will be represented by certificates
registered in the name of the nominee of DTC (together with any successor
depository selected by the Transferor, the "Depository") except as set forth
below. Unless otherwise specified in the related Prospectus Supplement, with
respect to each Series of Certificates, beneficial interests in the Certificates
will be available for purchase in minimum denominations of $1,000 and integral
multiples of $1,000 in excess thereof in book-entry form only. The Transferor
has been informed by DTC that DTC's nominee will be Cede & Co. ("Cede").
Accordingly, Cede is expected to be the holder of record of each Series of
Certificates. No Certificate Owner acquiring an interest in the Certificates
will be entitled to receive a certificate representing such person's interest in
the Certificates. Unless and until Definitive Certificates are issued for any
Series under the limited circumstances described herein, all references herein
to actions by Certificateholders shall refer to actions taken by DTC upon
instructions from its Participants (as defined below), and all references herein
to distributions, notices, reports and statements to Certificateholders shall
refer to distributions, notices, reports and statements to DTC or Cede, as the
registered holder of the Certificates, as the case may be, for distribution to
Certificate
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Owners in accordance with DTC procedures. See "--Book-Entry Registration" and
"--Definitive Certificates."
If so specified in the Prospectus Supplement relating to a Series,
application will be made to list the Certificates of such Series, or all or a
portion of any Class thereof, on the Luxembourg Stock Exchange or any other
specified exchange.
BOOK-ENTRY REGISTRATION
Unless otherwise specified in the related Prospectus Supplement, with
respect to each Series of Certificates, Certificateholders may hold their
Certificates through DTC (in the United States) or Cedel or Euroclear (in
Europe) if they are participants of such systems.
Cede, as nominee for DTC, will hold the global Certificates. Cedel and
Euroclear will hold omnibus positions on behalf of the Cedel Participants and
the Euroclear Participants, respectively, through customers' securities accounts
in Cedel's and Euroclear's names on the books of their respective depositaries
(collectively, the "Depositaries") which in turn will hold such positions in
customers' securities accounts in the Depositaries' names on the books of DTC.
Unless and until Definitive Certificates are issued, it is anticipated that
the only Certificateholder of the Certificates will be Cede as nominee of DTC.
No Certificate Owner acquiring an interest in Certificates of a Series which
have been issued in book-entry form will be entitled to receive a certificate
representing such person's interest in the Certificates of such Series unless
and until Definitive Certificates are issued under the limited circumstances
described herein. All references herein to actions by Certificateholders of a
Series shall refer (unless Definitive Certificates are so issued with respect to
such Series) to actions taken by DTC, Cedel or Euroclear upon instructions from
DTC Participants, Cedel Participants or Euroclear Participants, respectively,
and all references herein to distributions, notices, reports and statements to
Certificateholders shall refer to distributions, notices, reports and statements
to DTC or Cede, as the registered holder of the Certificates of such Series, as
the case may be, for distribution to Certificate Owners of such Series in
accordance with DTC procedures. See "--Definitive Certificates." Distributions
will be made to DTC in immediately available funds.
DTC is a limited-purpose trust company organized under the laws of the State
of New York, a member of the Federal Reserve System, a "clearing corporation"
within the meaning of the New York UCC, and a "clearing agency" registered
pursuant to the provisions of Section 17A of the Securities Exchange Act of
1934, as amended. DTC was created to hold securities for its participating
organizations ("Participants") and facilitate the clearance and settlement of
securities transactions between Participants through electronic book-entry
changes in accounts of its Participants, thereby eliminating the need for
physical movement of certificates. Participants include securities brokers and
dealers (including the Underwriters), banks, trust companies and clearing
corporations and may include certain other organizations. Indirect access to the
DTC system also is available to others ("Indirect Participants") such as banks,
brokers, dealers and trust companies that clear through, or maintain a custodial
relationship with, Participants, either directly or indirectly.
Transfers between DTC Participants will occur in accordance with DTC rules.
Transfers between Cedel Participants and Euroclear Participants will occur in
the ordinary way in accordance with their applicable rules and operating
procedures.
Cross-market transfers between persons holding directly or indirectly
through DTC (other than Cedel Participants and Euroclear Participants), on the
one hand, and directly or indirectly through Cedel Participants or Euroclear
Participants, on the other, will be effected in DTC in accordance with DTC rules
on behalf of the relevant European international clearing system by its
Depositary; however, such cross-market transactions will require delivery of
instructions to the relevant European international
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clearing system by the counterparty in such system in accordance with its rules
and procedures and within its established deadlines (European time). The
relevant European international clearing system will, if the transaction meets
its settlement requirements, deliver instructions to its Depositary to take
action to effect final settlement on its behalf by delivering or receiving
securities in DTC, and making or receiving payment in accordance with normal
procedures for same-day funds settlement applicable to DTC. Cedel Participants
and Euroclear Participants may not deliver instructions directly to the
Depositaries.
Because of time-zone differences, credits of securities in Cedel or
Euroclear as a result of a transaction with a DTC Participant will be made
during the subsequent securities settlement processing, dated the business day
following the DTC settlement date, and such credits or any transactions in such
securities settled during such processing will be reported to the relevant Cedel
Participant or Euroclear Participant on such business day. Cash received in
Cedel or Euroclear as a result of sales of securities by or through a Cedel
Participant or a Euroclear Participant to a DTC Participant will be received
with value on the DTC settlement date but will be available in the relevant
Cedel or Euroclear cash account only as of the business day following settlement
in DTC.
Certificate Owners of a Series that are not Participants or Indirect
Participants but desire to purchase, sell or otherwise transfer ownership of, or
other interests in, Certificates of such Series may do so only through
Participants and Indirect Participants. In addition, Certificate Owners of a
Series will receive all distributions of principal of and interest on the
Certificates of such Series from the Paying Agent through the Participants who
in turn will receive them from DTC. Under a book-entry system, Certificate
Owners of a Series may experience some delay in their receipt of payments, since
such payments will be forwarded by the Trustee to Cede, as nominee for DTC. DTC
will forward such payments to its Participants, which thereafter will forward
the payments to Indirect Participants or Certificate Owners of such Series.
Certificate Owners of a Series will not be recognized by the Trustee as
Certificateholders of such Series, as such term is used in the Pooling and
Servicing Agreement, and Certificate Owners of a Series will only be permitted
to exercise the rights of Certificateholders of such Series indirectly through
DTC and its Participants, who in turn will exercise the rights of
Certificateholders of such Series through DTC.
Under the rules, regulations and procedures creating and affecting DTC and
its operations, DTC is required to make book-entry transfers among Participants
on whose behalf it acts with respect to the Certificates of a Series and is
required to receive and transmit distributions of principal of and interest on
the Certificates of such Series. Participants and Indirect Participants with
which Certificate Owners of a Series have accounts with respect to the
Certificates of such Series similarly are required to make book-entry transfers
and receive and transmit such payments on behalf of their respective Certificate
Owners. Accordingly, although Certificate Owners of a Series will not possess
Certificates of such Series, such Certificate Owners will receive payments and
will be able to transfer their interests.
Because DTC may only act on behalf of Participants, who in turn act on
behalf of Indirect Participants and certain banks, the ability of a Certificate
Owner of a Series to pledge Certificates to persons or entities that do not
participate in the DTC system, or otherwise take actions in respect of such
Certificates, may be limited due to the lack of a physical certificate for such
Certificates.
DTC has advised the Servicer that it will take any action permitted to be
taken by a Certificateholder of a Series under the Pooling and Servicing
Agreement only at the direction of one or more Participants to whose account
with DTC the Certificates of such Series are credited. Additionally, DTC has
advised the Servicer that it will take such actions with respect to specified
percentages of the applicable Investor Amount only at the direction of and on
behalf of Participants whose holdings include undivided interests that
constitute such specified percentages. DTC may take conflicting actions with
respect to other undivided interests to the extent that such actions are taken
on behalf of Participants whose holdings include such undivided interests.
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Cedel Bank, societe anonyme ("Cedel") is incorporated under the laws of
Luxembourg as a professional depository. Cedel holds securities for its
participating organizations ("Cedel Participants") and facilitates the clearance
and settlement of securities transactions between Cedel Participants through
electronic book-entry changes in accounts of Cedel Participants, thereby
eliminating the need for physical movement of certificates. Transactions may be
settled in Cedel in any of 28 currencies, including United States dollars. Cedel
provides to its Cedel Participants, among other things, services for
safekeeping, administration, clearance and settlement of internationally traded
securities and securities lending and borrowing. Cedel interfaces with domestic
markets in several countries. As a professional depository, Cedel is subject to
regulation by the Luxembourg Monetary institute. Cedel Participants are
recognized financial institutions around the world, including underwriters,
securities brokers and dealers, banks, trust companies, clearing corporations
and certain other organizations and may include the underwriters of any Series
of Certificates. Indirect access to Cedel is also available to others, such as
banks, brokers, dealers and trust companies that clear through or maintain a
custodial relationship with a Cedel Participant, either directly or indirectly.
The Euroclear System was created in 1968 to hold securities for participants
of the Euroclear System ("Euroclear Participants") and to clear and settle
transactions between Euroclear Participants through simultaneous electronic
book-entry delivery against payment, thereby eliminating the need for physical
movement of certificates and any risk from lack of simultaneous transfers of
securities and cash. Transactions may now be settled in any of 32 currencies,
including United States dollars. The Euroclear System includes various other
services, including securities lending and borrowing and interfaces with
domestic markets in several countries generally similar to the arrangement for
cross-market transfers with DTC described above. The Euroclear System is
operated by Morgan Guaranty Trust Company of New York, Brussels, Belgium office
(the "Euroclear Operator" or "Euroclear"), under contract with Euroclear
Clearance System, S.C., a Belgian cooperative corporation (the "Cooperative").
All operations are conducted by the Euroclear Operator, and all Euroclear
securities clearance accounts and Euroclear cash accounts are accounts with the
Euroclear Operator, not the Cooperative. The Cooperative establishes policy for
the Euroclear System on behalf of Euroclear Participants. Euroclear Participants
include banks (including central banks), securities brokers and dealers and
other professional financial intermediaries and may include the underwriters of
any Series of Certificates. Indirect access to the Euroclear System is also
available to other firms that clear through or maintain a custodial relationship
with a Euroclear Participant, either directly or indirectly.
The Euroclear Operator is the Belgian branch of a New York banking
corporation which is a member bank of the Federal Reserve System. As such, it is
regulated and examined by the Board of Governors of the Federal Reserve System
and the New York State Banking Department, as well as the Belgian Banking
Commission.
Securities clearance accounts and cash accounts with the Euroclear Operator
are governed by the Terms and Conditions Governing Use of Euroclear and the
related Operating Procedures of the Euroclear System and applicable Belgian law
(collectively, the "Terms and Conditions"). The Terms and Conditions govern
transfers of securities and cash within the Euroclear System, withdrawal of
securities and cash from the Euroclear System, and receipts of payments with
respect to securities in the Euroclear System. All securities in the Euroclear
System are held on a fungible basis without attribution of specific certificates
to specific securities clearance accounts. The Euroclear Operator acts under the
Terms and Conditions only on behalf of Euroclear Participants and has no record
of or relationship with persons holding through Euroclear Participants.
Distributions with respect to Certificates held through Cedel or Euroclear
will be credited to the cash accounts of Cedel Participants or Euroclear
Participants in accordance with the relevant system's rules and procedures, to
the extent received by its Depositary. Such distributions will be subject to tax
reporting in accordance with relevant United States tax laws and regulations.
See "Certain Federal Income Tax
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Consequences." Cedel or the Euroclear Operator, as the case may be, will take
any other action permitted to be taken by a Certificateholder under a related
agreement on behalf of a Cedel Participant or Euroclear Participant only in
accordance with its relevant rules and procedures and subject to its
Depositary's ability to effect such actions on its behalf through DTC.
Although DTC, Cedel and Euroclear have agreed to the foregoing procedures in
order to facilitate transfers of Certificates among participants of DTC, Cedel
and Euroclear, they are under no obligation to perform or continue to perform
such procedures and such procedures may be discontinued at any time.
DEFINITIVE CERTIFICATES
Book-entry Certificates of a Series will be re-issued in fully registered,
certificated form ("Definitive Certificates") to Certificate Owners of such
Series or their respective nominees rather than to DTC or its nominee only if
(i) the Transferor advises the Trustee in writing that DTC is no longer willing
or able properly to discharge its responsibilities as Depository with respect to
any Class of Certificates of such Series, and the Trustee or the Transferor is
unable to locate a qualified successor, (ii) the Transferor, at its option,
advises the Trustee that it elects to terminate the book-entry system with
respect to such Series or Class through DTC, or (iii) after the occurrence of a
Servicer Default, Certificate Owners of such Series or Class evidencing more
than 50% of the aggregate unpaid principal amount of such Series or Class advise
the Trustee and DTC through Participants in writing that the continuation of a
book-entry system with respect to the Certificates of such Series or Class
through DTC (or a successor thereto) is no longer in the best interest of the
Certificate Owners of such Certificates.
Upon the occurrence of any of the events described in the immediately
preceding paragraph, DTC is required to notify all Participants of the
availability through DTC of Definitive Certificates of such Series. Upon
surrender by DTC of the definitive certificates representing the Certificates of
such Series or Class and instructions for re-registration, the Transferor will
execute and the Trustee will authenticate and deliver such Certificates as
Definitive Certificates, and thereafter the Trustee will recognize the holders
of such Definitive Certificates as holders under the Pooling and Servicing
Agreement ("Holders").
Distribution of principal and interest on the Definitive Certificates of a
Series will be made by the Paying Agent for such Series directly to Holders of
such Series in accordance with the procedures set forth herein and in the
Pooling and Servicing Agreement. Interest payments and any principal payments on
each Distribution Date will be made to Holders in whose names the Definitive
Certificates were registered at the close of business on the related Record Date
for a Series. Distributions will be made by check mailed to the address of such
Holder as it appears on the register maintained by the Trustee. The final
payment on any Certificate (whether Definitive Certificates or the Certificates
registered in the name of Cede representing the Certificates), however, will be
made only upon presentation and surrender of such Certificate at the office or
agency specified in the notice of final distribution to respective
Certificateholders. The Trustee will provide such notice to registered
Certificateholders of such Series not later than the fifth day of the month of
such final distribution.
Definitive Certificates of a Series will be transferable and exchangeable at
the offices of the Transfer Agent and Registrar for such Series. No service
charge will be imposed for any registration of transfer or exchange, but the
Transfer Agent and Registrar of such Series may require payment of a sum
sufficient to cover any tax or other governmental charge imposed in connection
therewith.
THE TRANSFEROR CERTIFICATE; ADDITIONAL TRANSFERORS
The Pooling and Servicing Agreement provides that the Transferor may
surrender the Transferor Certificate to the Trustee in exchange for a newly
issued Transferor Certificate and one or more additional certificates (each, a
"Supplemental Certificate") for transfer or assignment to a person designated by
the Transferor upon the execution and delivery of a supplement to the Pooling
and Servicing Agreement
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(which supplement will be subject to the amendment section of the Pooling and
Servicing Agreement to the extent that it amends any of the terms of the Pooling
and Servicing Agreement; see "The Pooling and Servicing Agreement Generally --
Amendments"); provided, that (a) the Transferor shall have given written notice
to each Rating Agency of such exchange, (b) the Transferor Amount (excluding the
interest represented by any Supplemental Certificate) shall not be less than 2%
of the total amount of Principal Receivables as of the date of, and after giving
effect to, such exchange and (c) if any Series of Certificates are outstanding
that were characterized as debt at the time of their issuance, the Transferor
shall have delivered to the Trustee and each Rating Agency a Tax Opinion, dated
the date of such exchange (or transfer or exchange as provided below), with
respect thereto. Any transfer or exchange of a Supplemental Certificate is
subject to the conditions set forth in clauses (b) and (c) above.
The Transferor Certificate (or any interest therein) may be transferred to
an entity that is a member of the "affiliated group" of which Travelers Group
Inc. is the "common parent" (as such terms are defined in Section 1504(a) of the
Code); provided, that (i) the Transferor shall have delivered to the Trustee and
each Rating Agency a Tax Opinion, and (ii) any such transferee will be deemed to
be a "Transferor" for all purposes of the provisions of the Pooling and
Servicing Agreement.
The Transferor may designate affiliates of Commercial Credit Company to be
included as a Transferor ("Additional Transferors") under the Pooling and
Servicing Agreement (by means of an amendment to the Pooling and Servicing
Agreement that will not require the consent of any Certificateholder; see "The
Pooling and Servicing Agreement Generally --Amendments") and, in connection with
such designation, the Transferor shall surrender the Transferor Certificate to
the Trustee in exchange for a newly issued Transferor Certificate modified to
reflect such Additional Transferor's interest in the Transferor's Interest;
provided, however, that (i) the conditions set forth in the preceding two
paragraphs with respect to the issuance of a Supplemental Certificate or the
transfer of the Transferor Certificate, as applicable, shall have been satisfied
with respect thereto prior to such designation and exchange and (ii) any
applicable conditions described in "The Pooling and Servicing Agreement
Generally -- Addition of Accounts" shall have been satisfied with respect to the
transfer of Receivables or Participation Interests by any Additional Transferor
to the Trust. Following the inclusion of an Additional Transferor, the
Additional Transferor will be treated in the same manner as a Transferor and
each Additional Transferor generally will have the same obligations and rights
as the initial Transferor described herein.
INTEREST PAYMENTS
Each Class of a Series will accrue interest at the rate per annum specified
in, or in the manner determined in, the related Prospectus Supplement
(calculated on the basis specified in the related Prospectus Supplement).
Interest on all Certificates will be due and payable on the Distribution Dates
specified in the related Prospectus Supplement. Unless otherwise specified in
the related Prospectus Supplement, interest for a Class of a Series will be
calculated based on the outstanding principal balance of such Class at the end
of the rate determination period preceding the applicable Distribution Date.
To the extent provided in the related Prospectus Supplement, a Series may
include one or more Classes of floating-rate Certificates. The interest rate on
floating-rate Certificates will be a variable or adjustable rate. It is the
Transferor's present intention, subject to changing market conditions, that the
floating interest rate formula or index be based on an established financial
index in the national or international financial markets. The Distribution Dates
for floating-rate Certificates will be set forth in the related Prospectus
Supplement and need not be the same as the Distribution Dates for the other
Certificates of such Series, but may be either more or less frequent. For each
Class of floating-rate Certificates, the related Prospectus Supplement will set
forth the initial floating-rate certificate interest rate (or the method of
determining it), the dates or the method for determining the dates on which the
floating-rate certificate interest rate is adjusted, and the formula, index or
other method by which such interest rate is determined on such dates.
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PRINCIPAL PAYMENTS
Unless otherwise specified in the related Prospectus Supplement, the
Revolving Period for a Class of Certificates begins on the Relevant Closing Date
and ends on the day before an Amortization Period begins for such Class. On each
Distribution Date with respect to the Revolving Period, collections of Principal
Receivables allocable to the Certificateholders' Interest of a Series will,
subject to certain limitations, be paid to the holders of the Transferor
Certificates, to amortizing or accumulating Series or deposited in the Excess
Funding Account. After an Amortization Period begins with respect to any Class
of Certificates, collections of Principal Receivables allocable to such Class
will no longer be paid to the holders of the Transferor Certificates, to
amortizing or accumulating Series or deposited in the Excess Funding Account but
will generally either be deposited in the Collection Account or a Series Account
to be distributed to Certificateholders on a date or dates specified in the
related Prospectus Supplement or paid to such Certificateholders on the
Distribution Dates specified in the related Prospectus Supplement following the
commencement of the Amortization Period. To the extent that collections of
Principal Receivables are available, subject to any controlled distribution
amount or controlled deposit amount or other limitation set forth in the related
Prospectus Supplement, payments of principal will be paid to Certificateholders
of a Class until the Investor Amount of such Class has been paid in full;
provided, that if one or more Classes is subordinated in right of payment of
principal to another Class or Classes, the Certificateholders of such
subordinated Class or Classes will, to the extent provided in the related
Prospectus Supplement, receive payment only after the Investor Amount of the
senior Class or Classes has been paid in part or in full. The extent of
subordination of a Class of subordinated Certificates may be limited as
described in the related Prospectus Supplement.
Funds on deposit in the Collection Account or Series Account may be subject
to a guaranteed rate agreement or guaranteed investment contract or other
mechanism specified in the related Prospectus Supplement intended to assure a
minimum rate of return on the investment of such funds. In order to enhance the
likelihood of the payment in full of the principal amount of a Class of
Certificates at the end of an Accumulation Period, such Class of Certificates
may be subject to a maturity guaranty or other similar mechanism specified in
the related Prospectus Supplement.
SHARED PRINCIPAL COLLECTIONS AND TRANSFEROR PRINCIPAL COLLECTIONS
On each Distribution Date, (a) the Servicer will allocate Shared Principal
Collections to each Principal Sharing Series, pro rata, in proportion to the
Principal Shortfalls, if any, with respect to each such Series and (b) the
Servicer will withdraw from the Collection Account and pay to the holders of the
Transferor Certificates an amount equal to the excess, if any, of (x) the
aggregate amount for all outstanding Series of collections of Principal
Receivables which the related Series Supplements specify are to be treated as
"Shared Principal Collections" for such Distribution Date over (y) the aggregate
amount for all outstanding Principal Sharing Series which the related Series
Supplements specify are "Principal Shortfalls" for such Distribution Date;
provided, however, that if on any Distribution Date the Transferor Amount is
less than or equal to the Required Transferor Amount or if the aggregate amount
of Principal Receivables is less than the Required Principal Balance, the
Servicer will not distribute to the holders of the Transferor Certificates any
Shared Principal Collections that otherwise would be distributed to the holders
of the Transferor Certificates, but will deposit such funds in the Excess
Funding Account. There can be no assurance that there will be any Shared
Principal Collections with respect to any Monthly Period.
The Servicer will determine the amount of collections of Principal
Receivables for any Monthly Period allocated to the Transferor's Interest but
not due to the holder of any Supplemental Certificate and other amounts payable
to the Transferor with respect to collections of Principal Receivables,
regardless of whether such Collections were initially allocated to the
Transferor or any Series, plus the amount of Excess Transferor Finance Charge
Collections, if applicable, remaining after application to amounts payable from
collections of Finance Charge Receivables (collectively, "Shared Transferor
Principal Collections"). The Servicer will allocate the Shared Transferor
Principal Collections to cover any Principal Shortfalls that have
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not been covered out of the Shared Principal Collections allocated to each
Series that has been designated in the applicable Series Supplement as being
entitled to receive Shared Transferor Principal Collections. If Principal
Shortfalls remaining after the application of Shared Principal Collections
exceed Shared Transferor Principal Collections for any Monthly Period, Shared
Transferor Principal Collections will be allocated pro rata among each Series
which in accordance with the Series Supplement for such Series is designated as
being entitled to receive Shared Transferor Principal Collections. Shared
Transferor Principal Collections permit coverage of Principal Shortfalls
remaining after the application of Shared Principal Collections by using
collections that would have been paid to the Transferor and in certain
circumstances may allow an Amortization Period to be shortened. There can be no
assurance that there will be any Shared Transferor Principal Collections with
respect to any Monthly Period.
SHARING OF EXCESS FINANCE CHARGE COLLECTIONS
Collections of Finance Charge Receivables allocable to any Series in excess
of the amounts necessary to make required payments with respect to such Series
may, if specified in the related Series Supplement, be applied to cover
shortfalls, if any, with respect to amounts payable from collections of Finance
Charge Receivables allocable to any other Series then outstanding as provided in
the related Series Supplement.
If specified in the Prospectus Supplement for a Series, collections of
Finance Charge Receivables allocable to the Transferor's Interest in excess of
the amounts necessary to make required payments with respect to any Supplemental
Certificates and all other amounts otherwise payable to the Transferor with
respect to collections of Finance Charge Receivables regardless of whether such
collections were initially allocated to the Transferor or any Series (the
"Excess Transferor Finance Charge Collections") will be applied to cover any
shortfalls (after giving effect to the application of Excess Finance Charge
Collections) with respect to amounts payable from collections of Finance Charge
Receivables allocable to each Series designated in the applicable Series
Supplement as being entitled to receive Excess Transferor Finance Charge
Collections, pro rata based upon the amount of the shortfall (after giving
effect to the application of Excess Finance Charge Collections), if any, with
respect to each other Series designated in the applicable Series Supplement as
being entitled to receive Excess Transferor Finance Charge Collections. In all
cases, any Excess Transferor Finance Charge Collections remaining after covering
shortfalls with respect to all designated Series will be treated as Shared
Transferor Principal Collections. Excess Transferor Finance Charge Collections
permit coverage of shortfalls with respect to amounts payable from collections
of Finance Charge Receivables and Excess Finance Charge Collections allocable to
a Series by using collections of Finance Charge Receivables which would
otherwise be paid to the Transferor.
COMPANION SERIES
If specified in the Prospectus Supplement relating to a Series, a Prior
Series may be paired with a later issued Series (each, a "Companion Series"),
such that a reduction in the Invested Amount of the Prior Series results in an
increase in the Invested Amount of the Companion Series. If a Pay Out Event or
Reinvestment Event occurs with respect to the Prior Series or the Companion
Series when the Prior Series is in an Amortization Period, the Series Percentage
for the allocation of collections of Principal Receivables for the Prior Series
may be reset to a lower percentage as set forth in the Prospectus Supplement for
the Prior Series and the Amortization Period for the Prior Series may be
lengthened.
GROUPS
Any Series offered hereby may be included in a group of Series (together, a
"Group"). The Prospectus Supplement relating to a Series will specify whether
such Series will be included in a Group and will identify any previously issued
Series included in such Group. If specified in the related Prospectus
Supplement, the Certificateholders of a Series within a Group or any Class
thereof may be entitled to share in their pro rata portion of excess collections
of Finance Charge Receivables generated by other
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Series within such Group to cover certain shortfalls in amounts payable from
collections of Finance Charge Receivables allocated to such Group.
NEW ISSUANCES
The Pooling and Servicing Agreement authorizes the Transferor to execute and
direct the Trustee to authenticate and deliver three types of certificates: (i)
one or more Series of Certificates which are transferable and have the
characteristics described below, (ii) a Transferor Certificate, evidencing the
Transferor's Interest in the Trust, which will initially be held by the
Transferor and which is transferable in certain circumstances to members of the
affiliated group of which Travelers Group Inc. is the ultimate common parent and
(iii) Supplemental Certificates delivered in exchange for a portion of the
Transferor Certificate under certain circumstances described in the Pooling and
Servicing Agreement (each, a "Supplemental Certificate," and, together with the
Transferor Certificate, the "Transferor Certificates"). The Transferor
Certificate and the Supplemental Certificates represent the ownership interest
in the remainder of the Trust Assets not allocated pursuant to the Pooling and
Servicing Agreement to the Certificateholders' Interest, including certain
rights to receive collections with respect to the Receivables and other amounts
pursuant to the Pooling and Servicing Agreement (the "Transferor's Interest").
The Series Supplement for a Series will specify the following principal terms
with respect to any new Series: (i) its name or designation, (ii) its initial
Investor Amount and Series Investor Amount (or method for calculating such
amounts), (iii) its certificate rate (or method for the determination thereof),
(iv) the payment date or dates and the date or dates from which interest shall
accrue, (v) the method for allocating collections to Certificateholders of such
Series, (vi) the designation of any Series Accounts to be used by such Series
and the terms governing the operation of any such Series Accounts, (vii) the
method of calculating the servicing fee with respect thereto, (viii) the terms
of any form of Series Enhancement with respect thereto, (ix) the terms on which
the Certificates of such Series may be exchanged for Certificates of another
Series, repurchased by the Transferor or remarketed to other investors, (x) the
Stated Series Termination Date of such Series, (xi) the number of Classes of
such Series and, if such Series consists of more than one Class, the rights and
priorities of each such Class, (xii) the extent to which the Certificates of
such Series will be issuable in temporary or permanent global form (and, in such
case, the depositary for such global Certificate or Certificates, the terms and
conditions, if any, upon which such global Certificate may be exchanged, in
whole or in part, for Definitive Certificates, and the manner in which any
interest payable on a temporary or global Certificate will be paid), (xiii)
whether such Certificates may be issued as bearer certificates and any
limitations imposed thereon, (xiv) the priority of such Series with respect to
any other Series, (xv) the Group, if any, to which such Series belongs, (xvi)
whether or not such Series is a Principal Sharing Series, and (xvii) any other
terms of such Series (all such terms the "Principal Terms" of such Series). None
of the Transferor, the Servicer, the Trustee or the Trust is required or intends
to obtain the consent of any Certificateholder of any outstanding Series to
issue any additional Series. However, as a condition of a New Issuance, the
Rating Agency Condition must be satisfied and if any outstanding Series was
characterized as debt at the time of its issuance, the Transferor must deliver a
Tax Opinion. The Transferor may offer any Series under a Disclosure Document in
transactions either registered under the Act, or exempt from registration
thereunder, directly, through one or more underwriters or placement agents, in
fixed-price offerings or in negotiated transactions or otherwise. Any such
Series may be issued in fully registered or book-entry form in minimum
denominations determined by the Transferor.
The Pooling and Servicing Agreement permits New Issuances such that each
Series has a period during which amortization or accumulation of the principal
amount thereof is intended to occur which may have a different length and begin
on a different date than such periods for any other Series. Further, one or more
Series may be in their Amortization Periods while other Series are not. Thus,
certain Series may not be amortizing or accumulating, while other Series are
amortizing or accumulating. Moreover, one or more Series, or Classes of a
Series, may have the benefits of forms of Series Enhancement different from the
forms of Series Enhancement available with respect to another Class or Classes
of any other Series. Under the Pooling and Servicing Agreement, the Trustee will
hold any form of Series Enhancement only
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on behalf of the Certificateholders of the Series (or Class) with respect to
which it relates. Collections allocated to Finance Charge Receivables not used
to pay interest on the Certificates will be allocated as provided in the related
Series Supplement. There is no limit to the number of New Issuances that the
Transferor may perform under the Pooling and Servicing Agreement. The Trust will
terminate only as provided in the Pooling and Servicing Agreement.
Under the Pooling and Servicing Agreement and pursuant to a Series
Supplement, a New Issuance may occur only upon satisfaction of the following
conditions: (i) on or before the fifth day immediately preceding the Relevant
Closing Date, the Transferor shall have given the Trustee and the Servicer
notice of such issuance and its date; and on or before the tenth day immediately
preceding the Relevant Closing Date, the Transferor shall have given each Rating
Agency notice of such issuance and its date and (ii) the Transferor shall have
delivered to the Trustee (a) a related Series Supplement specifying the
Principal Terms of the new Series, (b) any agreement relating to the Series
Enhancement, (c) written confirmation from each Rating Agency that the New
Issuance will not result in the Rating Agency reducing or withdrawing its rating
of any outstanding Series or Class (the "Rating Agency Condition"), (d) an
officer's certificate from the Transferor stating that the Transferor reasonably
believes that such issuance will not cause a Pay Out Event or Reinvestment Event
to occur with respect to any Series, and (e) a Tax Opinion. Upon satisfaction of
such conditions, the Trustee will execute the related Series Supplement and
authenticate the Certificates of the new Series upon execution thereof by the
Transferor.
THE RECEIVABLES TRANSFER AGREEMENTS
The following summary describes certain provisions contained in the
Receivables Transfer Agreements to be entered into by each of the Banks at the
time of formation of the Trust and by any additional Account Owners at the time
any such additional Account Owner commences transfers to the Transferor. This
summary does not purport to be complete and is subject to and is qualified in
its entirety by reference to, the provisions of the respective Receivables
Transfer Agreement. When particular provisions or terms used in a Receivables
Transfer Agreement are referred to herein, such provisions or terms shall be as
specified in the respective Receivables Transfer Agreement.
SALE OF RECEIVABLES
At the time of formation of the Trust, each Bank will enter into a
Receivables Transfer Agreement and will, pursuant to the terms thereof, sell,
transfer, assign, set over and otherwise convey to the Transferor all of such
Bank's right, title and interest in, to and under (i) the Receivables existing
at the close of business on the Initial Cut-Off Date, in the case of Receivables
arising in the Initial Accounts and on each Addition Cut-Off Date, in the case
of Receivables arising in Additional Accounts and, in each case, Receivables
thereafter created from time to time in such Accounts and all monies due and or
to become due and all amounts received with respect thereto and all proceeds
thereof, and (ii) the right to receive Recoveries with respect to such
Receivables.
ADDITION OF ACCOUNTS
In each Receivables Transfer Agreement, the Account Owner agrees that, if
the Transferor becomes obligated to designate Additional Accounts pursuant to
the Pooling and Servicing Agreement, then the Transferor may, at its option,
give the Account Owner written notice thereof and upon receipt of such notice
the Account Owner shall on or before the Addition Date, designate sufficient
Eligible Accounts which, together with Additional Accounts designated by any
other Account Owners will cause the Transferor to be in compliance with the
requirements of the Pooling and Servicing Agreement and, from time to time,
Additional Accounts may be designated to be included as Additional Accounts upon
the mutual agreement of the Transferor and the respective Account Owner. In any
such event, the Account Owner shall have the sole responsibility for selecting
the Additional Accounts.
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PURCHASE PRICE OF RECEIVABLES
The purchase price for the Receivables in the Initial Accounts as of the
Initial Cut-Off Date conveyed to the Transferor under the Receivables Transfer
Agreement, shall be an amount equal to a percentage of the aggregate balance of
the Principal Receivables in those Accounts as of the Initial Cut-Off Date,
adjusted to reflect such factors as the respective Bank and the Transferor
mutually agree will result in a purchase price determined to be not less than
the fair market value of such Receivables. The purchase price for receivables to
be conveyed to the Transferor after the initial closing, shall be an amount
equal to a percentage of the aggregate balance of the Principal Receivables so
conveyed adjusted to reflect such factors as the Bank and the Transferor
mutually agree will result in a purchase price determined to be not less than
the fair market value of such new Principal Receivables.
REPRESENTATIONS AND WARRANTIES
The Account Owners represent and warrant, among other things, that (i) each
Receivable has been conveyed to the Transferor free and clear of any lien (with
an exception for certain permitted liens); (ii) on the Initial Cut-Off Date,
each Account is an Eligible Account and, in the case of each Additional Account,
on the Addition Cut-Off Date, each related Additional Account is an Eligible
Account, (iii) on the Initial Cut-Off Date, each Receivable conveyed to the
Transferor is an Eligible Receivable and, in the case of Additional Accounts, on
the applicable Addition Cut-Off Date, each Receivable contained in such Account
and conveyed to the Transferor is an Eligible Receivable and as of the date of
the creation of any new Receivable, such Receivable is an Eligible Receivable
and (iv) no selection procedures believed by the Account Owner to be materially
adverse to the interests of the Transferor or the Certificateholders have been
used in selecting the Accounts.
THE POOLING AND SERVICING AGREEMENT GENERALLY
The following summary describes certain provisions of the Pooling and
Servicing Agreement. This summary does not purport to be complete and is subject
to, and is qualified in its entirety by reference to, the provisions of the
Pooling and Servicing Agreement. When particular provisions or terms used in the
Pooling and Servicing Agreement are referred to herein, such provisions or terms
shall be as specified in the Pooling and Servicing Agreement.
TRUST ASSETS
The Trust Assets will include the Receivables, all monies due or to become
due thereunder and all amounts received with respect thereto, all proceeds of
the Receivables, the right to receive certain Recoveries, proceeds of credit
insurance policies relating to the Receivables, all monies on deposit in certain
bank accounts of the Trust and the benefits of any Series Enhancement issued
with respect to any Series (the drawing on or payment of such Series Enhancement
being available only to Certificateholders of such Series or Class of such
Series). The Trust Assets may also include Participation Interests.
TRANSFER AND ASSIGNMENT OF RECEIVABLES
Pursuant to the Pooling and Servicing Agreement, the Transferor will
transfer and assign to the Trust all of its right, title and interest in and to
specifically identified Receivables existing in the designated Accounts owned by
the Account Owners on the day of the relevant transfer and assignment and in and
to all Receivables created in such Accounts thereafter and all proceeds thereof.
In connection with a transfer of the Receivables to the Trust, the
Transferor will indicate in its computer files that the Receivables have been
conveyed to the Trust for the benefit of the Certificateholders. In addition,
the Transferor will provide to the Trustee a computer file or a microfiche list
containing a true and complete list of all Accounts the Receivables of which
have been designated for inclusion in the Trust which specifies for each such
Account, its account number, the aggregate amount
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outstanding and the aggregate amount of Principal Receivables outstanding as of
the Initial Cut-Off Date or Addition Cut-Off Date, as applicable. The Transferor
will not deliver to the Trustee any other records or agreements relating to such
Accounts or the Receivables. The records and agreements relating to such
Accounts and the Receivables maintained by the Account Owners, the Transferor or
the Servicer will not be segregated from other documents and agreements relating
to other credit card accounts and receivables and will not be stamped or marked
to reflect the transfer of the Receivables to the Trust. The Transferor will
file UCC financing statements meeting the requirements of applicable state law
with respect to the Receivables. See "Risk Factors -- Characteristics as a Sale;
Insolvency and Receivership Risks" and "Certain Legal Aspects of the
Receivables."
ADDITIONAL TRANSFERORS
As described under the caption "Description of the Certificates--The
Transferor Certificate; Additional Transferors," the Transferor may designate
affiliates of Commercial Credit Company to be included as Transferors
("Additional Transferors") under the Pooling and Servicing Agreement. An
additional Transferor may be added by amendment to the Pooling and Servicing
Agreement without the consent of any Certificateholder. If an Additional
Transferor or Additional Transferors are added, references herein to the
Transferor shall refer, collectively, to the initial and all Additional
Transferors.
CESSATION OF TRANSFER OF RECEIVABLES
If an Insolvency Event occurs with respect to the Transferor, the Transferor
will immediately cease to transfer Principal Receivables to the Trust and
promptly notify the Trustee thereof. Notwithstanding any cessation of the
transfer to the Trust of additional Principal Receivables, Principal Receivables
transferred to the Trust prior to the occurrence of such Insolvency Event and
collections in respect of such Principal Receivables and Finance Charge
Receivables whenever created, accrued in respect of such Principal Receivables,
shall continue to be a part of the Trust.
The collections from the Receivables shall be immediately deposited in the
Collection Account, and shall be allocated and distributed to Certificateholders
in accordance with the terms of each Series Supplement.
REPRESENTATIONS, WARRANTIES AND COVENANTS
The Transferor makes representations and warranties relating to the
Receivables as of the Relevant Closing Date and, with respect to Receivables in
Additional Accounts, as of the related Addition Date, to the effect, among other
things, that (i) the Pooling and Servicing Agreement, each Series Supplement
and, in the case of Additional Accounts, the related assignment document, each
constitute legal, valid and binding obligations of the Transferor enforceable
against the Transferor in accordance with their terms, subject to bankruptcy,
insolvency, reorganization, moratorium and similar laws of general applicability
relating to or affecting the enforcement of creditors' rights in general and the
rights of creditors of national banks under United States law and except as such
enforceability may be limited by general principles of equity (whether
considered in a suit at law or in equity), (ii) the schedule of Accounts
referred to in the Pooling and Servicing Agreement is an accurate and complete
listing in all material respects of the Accounts designated as an Account as of
the Initial Cut-Off Date or Addition Cut-Off Date, as applicable, and the
information contained therein with respect to the identity of such Accounts and
the Receivables existing thereunder is true and correct in all material respects
as of the Initial Cut-Off Date or Addition Cut-Off Date, as applicable, (iii)
each Receivable conveyed to the Trust by the Transferor has been conveyed to the
Trust free and clear of any lien other than liens permitted by the Pooling and
Servicing Agreement, (iv) all authorizations, consents, orders or approvals of
or registrations or declarations with any governmental authority required to be
obtained, effected or given by the Transferor in connection with the conveyance
by the Transferor of Receivables to the Trust have been duly obtained, effected
or given and are in full force and effect, (v) either the Pooling and Servicing
Agreement and, in the case of
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Additional Accounts, the related assignment document, each constitute a valid
sale, transfer and assignment to the Trust of all right, title and interest of
the Transferor in the Receivables conveyed to the Trust by the Transferor and
the proceeds thereof or, if the transfer pursuant to the Pooling and Servicing
Agreement or the related assignment document does not constitute a sale of such
property, it constitutes a grant of a "security interest" (as defined in the
UCC) in such property to the Trust, which, in the case of Receivables then
existing and the proceeds thereof, is enforceable upon execution and delivery of
the Pooling and Servicing Agreement or the related assignment document as of the
applicable date and which will be enforceable with respect to such Receivables
thereafter created and the proceeds thereof upon such creation and that upon the
filing of financing statements required pursuant to the Pooling and Servicing
Agreement, the Trust shall have a first priority perfected security or ownership
interest in such property and proceeds except for (x) liens permitted under the
Pooling and Servicing Agreement, (y) the interest of the Transferor as holder of
the Transferor Certificate or any Supplemental Certificate and (z) the
Transferor's right to receive interest accruing on and investment earnings, if
any, in respect of the Collection Account or any Series Account, as provided in
the Pooling and Servicing Agreement or the related Series Supplement, (vi)
except as otherwise expressly provided in the Pooling and Servicing Agreement or
the related Series Supplement, neither the Transferor nor any person claiming
through or under the Transferor has any claim to or interest in the Collection
Account, the Excess Funding Account, any Series Account or any Series
Enhancement, (vii) as of the Initial Cut-Off Date or Addition Cut-Off Date, as
applicable, each Initial Account or Additional Account is an Eligible Account,
(viii) as of the Initial Cut-Off Date or Addition Cut-Off Date, as applicable,
each Receivable contained in any related Account owned by the Transferor and
being designated on such date is an Eligible Receivable, (ix) as of the date of
the creation of any new Receivable in an Account, such Receivable is an Eligible
Receivable, and (x) no selection procedure has been utilized by the Transferor
which it reasonably believes would result in the selection of an Account that
would be materially adverse to the interests of Certificateholders of any
Series.
In the event (i) any representation or warranty of the Transferor contained
in clause (ii), (iii), (iv), (vii), (viii), (ix) or (x) above is not true and
correct in any material respect as of the date specified therein with respect to
any Receivable transferred to the Trust by the Transferor or an Account and as a
result of such breach any Receivables in the related Account become Defaulted
Receivables or the Trust's rights in, to or under such Receivables or the
proceeds of such Receivables are impaired or such proceeds are not for any
reason available to the Trust free and clear of any lien, unless cured within 60
days (or such longer period, not in excess of 150 days, as may be agreed to by
the Trustee) after the earlier to occur of the discovery thereof by the
Transferor or receipt by the Transferor of notice thereof given by the Trustee,
or (ii) a Receivable is evidenced by an instrument or chattel paper to the
extent (and subject to the limitations) provided in the Pooling and Servicing
Agreement with respect to any Receivables transferred to the Trust by the
Transferor, then the Transferor shall accept reassignment of all Receivables in
the related Account ("Ineligible Receivables") on the terms and conditions set
forth below; provided, however, that such Receivables will not be deemed to be
Ineligible Receivables and will not be reassigned to the Transferor if, on any
day prior to the end of such 60-day or longer period, (x) either (A) in the case
of an event described in clause (i) above the relevant representation and
warranty shall be true and correct in all material respects as if made on such
day or (B) in the case of an event described in clause (ii) above the
circumstances causing such Receivable to become an Ineligible Receivable shall
no longer exist and (y) the Transferor shall have delivered to the Trustee an
officer's certificate describing the nature of such breach and the manner in
which the relevant representation and warranty became true and correct. Such
Ineligible Receivables shall be automatically removed from the Trust by the
Servicer deducting the portion of the Ineligible Receivables reassigned to the
Transferor which are Principal Receivables from the aggregate amount of
Principal Receivables used to calculate the Transferor Amount, the Series
Percentages and any other percentage used to allocate within or among Series
that is applicable to any Series. In the event that, following the exclusion of
such Principal Receivables from the calculation of the Transferor Amount, the
Transferor Amount would be less than the Required Transferor Amount, not later
than 12:00
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noon, New York City time, on the first Distribution Date following the Monthly
Period in which such reassignment obligation arises, the Transferor shall make a
deposit into the Excess Funding Account in immediately available funds in an
amount equal to the amount by which the Transferor Amount would be reduced below
the Required Transferor Amount (up to the amount of such Principal Receivables).
Upon the deposit, if any, required to be made to the Excess Funding Account
as provided in the Pooling and Servicing Agreement and the reassignment of
Ineligible Receivables, the Trustee, on behalf of the Trust, shall automatically
and without further action be deemed to sell, transfer, assign, set over and
otherwise convey to the Transferor or its designee, without recourse,
representation or warranty, all the right, title and interest of the Trust in
and to such Ineligible Receivables, all monies due or to become due and all
amounts received with respect thereto and all proceeds thereof. The Trustee
shall execute such documents and instruments of transfer or assignment and take
such other actions as shall reasonably be requested by the Transferor to effect
the conveyance of Ineligible Receivables. The obligation of the Transferor to
accept reassignment of any Ineligible Receivables, and to make the deposits, if
any, required to be made to the Excess Funding Account as provided in the
Pooling and Servicing Agreement, shall constitute the sole remedy respecting the
event giving rise to such obligation available to Certificateholders (or the
Trustee on behalf of the Certificateholders.) The obligations of the Transferor
(including any Additional Transferor) to accept reassignment of the Receivables
will be several and not joint with respect to the Receivables transferred by
such Transferor to the Trust. Under the Receivables Transfer Agreements, each
Bank will covenant to repurchase from the Transferor Receivables purchased by
the Transferor in accordance with the second preceding paragraph if such Bank
breaches certain of its similar representations and warranties under its
respective Receivable Transfer Agreement.
The Transferor also makes representations and warranties to the Trust to the
effect, among other things, that as of the Relevant Closing Date with respect to
each Series (i) it is a corporation duly organized and validly existing in good
standing under the laws of the jurisdiction of its organization or incorporation
and has full corporate power, authority and legal right to own its property and
conduct its consumer revolving lending business as such properties are presently
owned and such business is presently conducted, and to execute, deliver and
perform its obligations under the Pooling and Servicing Agreement, each
Receivables Transfer Agreement and each Series Supplement and to execute and
deliver to the Trustee the Certificates pursuant thereto; (ii) it is duly
qualified to do business and is in good standing as a foreign corporation (or is
exempt from such requirements), and has obtained all necessary licenses and
approvals in each jurisdiction in which failure to so qualify or to obtain such
licenses and approvals would have a material adverse effect on the
Certificateholders of any Series; provided, however, that no representation or
warranty will be made with respect to any qualification, licenses or approvals
which the Trustee has or may be required at any time to obtain, if any, in
connection with the transactions contemplated by the Pooling and Servicing
Agreement; (iii) the execution and delivery of the Pooling and Servicing
Agreement, each Receivables Transfer Agreement and each Series Supplement by the
Transferor and the execution and delivery to the Trustee of the Certificates,
and the consummation of the transactions provided for in the Pooling and
Servicing Agreement, each Receivables Transfer Agreement and each Series
Supplement have been duly authorized by the Transferor by all necessary
corporate action on the part of the Transferor and the Pooling and Servicing
Agreement, each Receivables Transfer Agreement and each Series Supplement will
remain, from the time of its execution, an official record of the Transferor;
(iv) the execution and delivery by the Transferor of the Pooling and Servicing
Agreement, each Receivables Transfer Agreement each Series Supplement, the
Certificates, the performance by the Transferor of the transactions contemplated
by the Pooling and Servicing Agreement, each Receivables Transfer Agreement and
each Series Supplement and the fulfillment by the Transferor of the terms
thereof, will not conflict with, result in any breach of any of the material
terms and provisions of, or constitute (with or without notice or lapse of time
or both) a material default under, any indenture, contract, agreement, mortgage,
deed of trust or other instrument to which the Transferor is a party or by which
it or any of its properties are bound; (v) the execution and delivery by it of
the Pooling and Servicing Agreement, each Receivables Transfer Agreement each
Series Supplement and the Certificates, the
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performance by the Transferor of the transactions contemplated by the Pooling
and Servicing Agreement, each Receivables Transfer Agreement and each Series
Supplement and the fulfillment by the Transferor of the terms thereof will not
conflict with or violate any requirements of law applicable to the Transferor,
(vi) there are no proceedings or investigations, pending or, to the best
knowledge of the Transferor, threatened against it, before any court, regulatory
body, administrative agency, or other tribunal or governmental instrumentality
(a) asserting the invalidity of the Pooling and Servicing Agreement, each
Receivables Transfer Agreement or any Series Supplement or the Certificates, (b)
seeking to prevent the issuance of the Certificates or the consummation of any
of the transactions contemplated by the Pooling and Servicing Agreement each
Receivables Transfer Agreement or, any Series Supplement or the Certificates,
(c) seeking any determination or ruling that, in the reasonable judgment of the
Transferor, would materially and adversely affect the performance by it of its
obligations with respect to any Series under the Pooling and Servicing
Agreement, Receivables Transfer Agreement or any Series Supplement, (d) seeking
any determination or ruling that would materially and adversely affect the
validity or enforceability of the Pooling and Servicing Agreement, each
Receivables Transfer Agreement, any Series Supplement or the Certificates, or
(e) seeking to affect adversely the income tax attributes of the Trust or the
Certificates of any Series under the United States federal or Delaware state
income or franchise tax systems; (vii) 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 by the Transferor of the
Pooling and Servicing Agreement, each Receivables Transfer Agreement, each
Series Supplement and the Certificates, the performance by the Transferor of the
transactions contemplated by the Pooling and Servicing Agreement, each
Receivables Transfer Agreement and each Series Supplement and the fulfillment by
it of the terms thereof, have been obtained, except such as may be required by
state securities or "blue sky" laws in connection with the distribution of the
Certificates; (viii) no Insolvency Event with respect to the Transferor has
occurred and the transfer of the Receivables by the Transferor to the Trust has
not been made in contemplation of the occurrence thereof; and (ix) the
Transferor is a bankruptcy-remote entity.
The Pooling and Servicing Agreement provides that the representations and
warranties set forth in the immediately preceding paragraph will survive the
transfer and assignment by the Transferor of the Receivables to the Trust. Upon
discovery by the Transferor, the Servicer or the Trustee of a breach of any of
the representations and warranties by the Transferor set forth in the preceding
paragraph, the party discovering such breach will give prompt written notice to
the others and the Transferor will cooperate with the Servicer and the Trustee
in attempting to cure the breach.
An "Eligible Account" is defined in the Pooling and Servicing Agreement to
mean a consumer revolving credit card account owned by The Travelers Bank or The
Travelers Bank USA, in the case of the Initial Accounts, or The Travelers Bank,
The Travelers Bank USA, or any additional Account Owner, in the case of
Additional Accounts, which account is identified by the relevant Account Owner
as of the Initial Cut-Off Date or Addition Cut-Off Date, as applicable, as
having the following characteristics (a) is in existence and maintained by The
Travelers Bank or The Travelers Bank USA, in the case of the Initial Accounts,
or The Travelers Bank, The Travelers Bank USA or any additional Account Owner,
in the case of Additional Accounts; (b) is payable in United States dollars; (c)
is not a corporate account; (d) except as provided below, has not been
identified as an account the credit card or cards with respect to which have
been reported as having been lost or stolen; (e) the obligor of which has
provided, as his or her billing address, an address located in the United States
(or its territories or possession or military address); (f) has an obligor who
has not been identified by the applicable Account Owner as an employee of such
Account Owner or any affiliate of either thereof; (g) except as provided below,
does not have any Receivables which are Defaulted Receivables; and (h) except as
provided below, does not have any Receivables which have been identified as
having been incurred as a result of fraudulent use of any related credit card.
The Pooling and Servicing Agreement provides that Eligible Accounts may
include Accounts, the Receivables of which have been written off, or with
respect to which the Transferor believes the related obligor is bankrupt, or as
to which certain Receivables have been identified by the obligor as having been
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incurred as a result of fraudulent use of any credit cards, or as to which any
credit cards have been reported as lost or stolen, in each case as of the
Initial Cut-Off Date or Addition Cut-Off Date, as applicable; provided that (a)
the balance of all Receivables included in such Accounts is treated for purposes
of the Pooling and Servicing Agreement as "zero," and (b) charging privileges
with respect to all such Accounts have been canceled in accordance with the
relevant credit card guidelines.
An "Eligible Receivable" is defined in the Pooling and Servicing Agreement
to mean each Receivable (a) which has arisen under an Eligible Account, (b)
which was created in compliance with all requirements of law applicable to the
Account Owner that transferred such Receivable to the Transferor, the failure to
comply with which would have a material adverse effect upon Certificateholders
and pursuant to a credit card agreement which complies with all requirements of
law applicable to such Account Owner, the failure to comply with which would
have a material adverse effect upon Certificateholders, (c) with respect to
which all material consents, licenses, approvals or authorizations of, or
registrations or declarations with, any governmental authority required to be
obtained or given by the relevant Account Owner in connection with the creation
of such Receivable or the execution, delivery and performance by the relevant
Account Owner of its obligations, if any, under the related credit card
agreement have been duly obtained or given and are in full force and effect as
of such date of creation of such Receivable, (d) as to which, at the time of its
transfer to the Trust, the Transferor or the Trust will have good and marketable
title, free and clear of all liens, encumbrances, charges and security interests
(except for certain tax liens permitted by the Pooling and Servicing Agreement),
(e) which has been the subject of either (i) a valid transfer and assignment
from the Transferor to the Trust of all of the Transferor's right, title and
interest therein or (ii) the grant of a first priority perfected security
interest therein (and in the proceeds thereof), effective until the termination
of the Trust, (f) which at and after the time of transfer to the Trust is the
legal, valid and binding payment obligation of the obligor thereon, legally
enforceable against such obligor in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws, now or hereafter in effect,
affecting the enforcement of creditors' rights in general and except as such
enforceability may be limited by general principles of equity (whether
considered in a suit at law or in equity); (g) which constitutes either an
"account" or a "general intangible" under and as defined in Article 9 of the
UCC; (h) which, at the time of its transfer to the Trust, has not been waived or
modified except as permitted in accordance with the credit card guidelines and
which waiver or modification is reflected in the Servicer's computer file of
revolving credit card accounts; (i) which, 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 applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws 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 equity) or as to
which the Servicer is required by the Pooling and Servicing Agreement to make an
adjustment; (j) as to which, at the time of its transfer to the Trust, the
Transferor has satisfied all obligations to be fulfilled by the Transferor at
the time it is transferred to the Trust; and (k) as to which, at the time of its
transfer to the Trust, the Transferor has not taken any action which, or failed
to take any action the omission of which, would, at the time of its transfer to
the Trust, impair the rights of the Trust or the Certificateholders therein.
The Trustee will not make any initial or periodic general examination of the
Receivables or any records relating to the Receivables for the purpose of
establishing the presence or absence of defects, compliance with the
Transferor's representations and warranties or for any other purpose. The
Servicer, however, has agreed to deliver to the Trustee on or before March 31 of
each year an opinion of counsel with respect to the validity of the security
interest of the Trust in and to the Receivables and certain other components of
the Trust.
The Transferor covenants in the Pooling and Servicing Agreement that it will
at all times enforce the covenants and agreements of the Account Owners under
the terms of the Receivables Transfer Agreements, including the covenants on the
part of the Account Owners, that except as otherwise required by
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any requirement of law, or as is deemed by the Account Owner in its sole
discretion to be necessary in order for the Account Owner to maintain its
lending business on a competitive basis, based on a good faith assessment by the
Account Owner of the nature of the competition in the lending business, the
Account Owner will not at any time reduce the annual percentage rate at which
periodic finance charges are assessed on any Receivable or the other fees and
charges assessed on the Accounts owned by it if, as a result of such reduction,
either (i) the Account Owner's reasonable expectation is that such reduction
would cause a Pay Out Event or Reinvestment Event to occur or (ii) such
reduction is not also applied to any comparable segments of consumer revolving
credit card accounts owned by the Account Owner which have characteristics the
same as, or substantially similar to, such Accounts.
ADDITION OF ACCOUNTS OR PARTICIPATION INTERESTS
The Transferor has the right under each of the Receivables Transfer
Agreements (subject to certain exceptions) to require the Account Owner
thereunder to designate from time to time additional Eligible Accounts to be
included as Accounts ("Additional Accounts"). The Account Owners will, in their
sole discretion, select those Accounts which will be designated as Additional
Accounts and will convey to the Transferor, who, in turn, will convey to the
Trust, its interest in all Receivables arising from such Additional Accounts,
whether such Receivables are then existing or thereafter created. Each
Additional Account must be an Eligible Account as of the date such Additional
Accounts were selected (the "Addition Cut-Off Date"). No selection procedures
believed by an Account Owner to be adverse to the interests of the
Certificateholders will be utilized in selecting Additional Accounts from the
available Eligible Accounts in such Account Owner's portfolio. However, since
Additional Accounts may not have been part of the Travelers Consumer Credit Card
Portfolio at the time of the initial transfer of Receivables in the Initial
Accounts to the Trust, Receivables in the Additional Accounts may not be of the
same credit quality as the Initial Accounts. Additional Accounts may have been
originated by the Account Owners at a later date using credit criteria different
from those that were applied to the Initial Accounts or may have been acquired
by the Account Owners from another credit card issuer that had different credit
criteria. Each date on which Receivables in Additional Accounts are first
transferred to the Trust is referred to herein as an "Addition Date."
REQUIRED ADDITIONS. Generally, if either (x) the Transferor Amount is less
than the Required Transferor Amount or (y) the product of (x) the aggregate
amount of Principal Receivables and (y) one minus the Discount Percentage is
less than the Required Principal Balance, the Transferor will be required to
cause the Account Owners to designate additional Eligible Accounts to be
included as Accounts in a sufficient amount such that, after giving effect to
such addition, the Transferor Amount as of the close of business on the
applicable Addition Date is at least equal to the Required Transferor Amount on
such date and the aggregate amount of Principal Receivables exceeds the Required
Principal Balance. In lieu of, or in addition to, so designating Additional
Accounts, the Transferor may, subject to the conditions specified below and in
the Pooling and Servicing Agreement, convey to the Trust participations
(including 100% participations) representing undivided interests in a pool of
assets primarily consisting of revolving credit card receivables, consumer loan
receivables (secured and unsecured), and any interests in both such types of
receivables, including securities representing or backed by both such types of
receivables, and other self-liquidating financial assets (including "eligible
assets" as such term is defined in Rule 3a-7 under the Investment Company Act of
1940 (or any successor to such Rule)) owned by the Transferor or any affiliate
of the Transferor and collections thereon ("Participation Interests").
"Required Transferor Amount" means, with respect to any date, (i) the
product of the Required Transferor Percentage and (ii)(a) the aggregate amount
of Principal Receivables times (b) one minus the Discount Percentage.
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"Required Transferor Percentage" currently means 5%, provided the Required
Transferor Percentage may be reduced to as low as 2% if the Transferor delivers
an officer's certificate stating that such reduction will not have an Adverse
Effect and the Rating Agency Condition is satisfied.
"Required Principal Balance" means, with respect to any date, the sum of the
Series Investor Amounts for each Series minus the amount on deposit in the
Excess Funding Account.
"Series Investor Amount" means, for any Series, the amount set forth in the
related Series Supplement and, for each Series offered hereby, in the Prospectus
Supplement for such Series, but will generally be an amount equal to the
numerator of the Series Percentage for allocating collections of Principal
Receivables for such Series. That numerator for the majority of Series of
Certificates offered hereby will generally be the initial Investor Amount.
RESTRICTED ADDITIONS. The Transferor may from time to time, at its sole
discretion, subject to the conditions specified below, designate additional
Eligible Accounts to be included as Accounts or Participation Interests to be
included as Trust assets, in either case as of the applicable Addition Date.
CONDITIONS TO REQUIRED AND RESTRICTED ADDITIONS. On the Addition Date with
respect to any Additional Accounts or Participation Interests, the Trust shall
purchase the Receivables in such Additional Accounts or shall purchase such
Participation Interests, in each case as of the close of business on the
applicable Addition Date, subject to the satisfaction of the following
conditions: (i) on or before the tenth business day immediately preceding the
Addition Date, the Transferor shall have given the Trustee and each Rating
Agency written notice that the Additional Accounts or Participation Interests
will be included and specifying the applicable Addition Date, the Addition
Cut-Off Date, and the approximate number of accounts expected to be added and
the approximate aggregate balances expected to be outstanding in the accounts to
be added (in case of Additional Accounts); (ii) in the case of Additional
Accounts, the Transferor shall have delivered to the Trustee copies of UCC-1
financing statements covering such Additional Accounts, if necessary to perfect
the Trust's interest in the Receivables arising therein; (iii) as of each of the
Addition Cut-Off Date and the Addition Date, no Insolvency Event with respect to
Transferor or the Account Owner of the Additional Accounts shall have occurred
nor shall the transfer of the Receivables arising in the Additional Accounts or
of the Participation Interests to the Trust have been made in contemplation of
the occurrence thereof; (iv) except in the case of certain required Additions,
the Rating Agency Condition shall have been satisfied; (v) the Transferor shall
have delivered to the Trustee an officer's certificate, dated the Addition Date,
stating that (x) in the case of Additional Accounts, as of the applicable
Addition Cut-Off Date, the Additional Accounts are all Eligible Accounts, (y) to
the extent applicable, the conditions set forth in clauses (ii) through (iv)
above have been satisfied and (z) the Transferor reasonably believes that the
addition by the Transferor of the Receivables arising in the Additional Accounts
or of the Participation Interests to the Trust will not, based on the facts
known to such officer at the time of such addition, then or thereafter cause a
Pay Out Event or Reinvestment Event to occur with respect to any Series; (vi)
the Transferor shall have delivered to the Trustee and each Rating Agency an
opinion of counsel stating the validity and perfection of the transfer of the
Collections received in such Additional Accounts to the Trustee; (vii) in the
case of designation of Additional Accounts, the Transferor shall have delivered
to the Trustee (x) the computer file or microfiche list containing a true and
complete list of such Additional Accounts and (y) a duly executed, written
assignment; and (viii) unless each Rating Agency otherwise consents, the number
of Additional Accounts so designated with respect to a required addition with
respect to any of the three consecutive Monthly Periods commencing in January,
April, July and October of each calendar year, commencing in January 1998, shall
not exceed 15% of the number of Accounts as of the first day of the calendar
year during which such Monthly Periods commence and the number of Additional
Accounts so designated during any calendar year shall not exceed 20% of the
number of Accounts as of the first day of such calendar year.
AUTOMATIC ACCOUNT ADDITIONS
(i) The Transferor may from time to time, at its sole discretion, subject to
and in compliance with the limitations specified in clause (ii) below and the
applicable conditions specified in clauses (iii) through
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(vii) below, designate Eligible Accounts ("Automatic Additional Accounts") to be
included as Accounts as of the applicable Addition Date. For purposes of this
paragraph, Eligible Accounts are deemed to include only consumer revolving
credit card accounts that are originated by one of the Banks or any affiliate of
one of the Banks.
(ii) Unless each Rating Agency otherwise consents, the number of Automatic
Additional Accounts designated with respect to any of the three consecutive
Monthly Periods commencing in January, April, July and October of each calendar
year, commencing in January 1998, shall not exceed 15% of the number of Accounts
as of the first day of the calendar year during which such Monthly Periods
commence and the number of Automatic Additional Accounts designated during any
such calendar year will not exceed 20% of the number of Accounts as of the first
day of such calendar year.
(iii) Within 30 days after the Addition Date with respect to any Automatic
Additional Accounts, the Transferor will deliver to the Trustee and each Rating
Agency an opinion of counsel with respect to the Automatic Additional Accounts
included as Accounts on such Addition Date, confirming the validity and
perfection of the transfer of such Automatic Additional Accounts. If such
opinion of counsel with respect to any Automatic Additional Accounts is not so
received, the ability of the Transferor to designate Automatic Additional
Accounts will be suspended until such time as each Rating Agency otherwise
consents in writing. If the Transferor is unable to deliver an opinion of
counsel with respect to any Automatic Additional Account, such inability shall
be deemed to be a breach of the representation with respect to the Receivables
in such Automatic Additional Account, provided that the cure period for such
breach will not exceed 30 days.
(iv) The Transferor shall have delivered to the Trustee copies of UCC-1
financing statements covering such Automatic Additional Accounts, if necessary
to perfect the Trust's interest in the Receivables arising therein.
(v) As of each of the Addition Cut-Off Date and the Addition Date, no
Insolvency Event with respect to the Transferor or any Account Owner shall have
occurred nor shall the transfer of the Receivables arising in the Automatic
Additional Accounts to the Trust have been made in contemplation of the
occurrence thereof.
(vi) The Transferor shall have delivered to the Trustee an officer's
certificate, dated the Addition Date, stating that (x) as of the applicable
Addition Cut-Off Date, such Automatic Additional Accounts are all Eligible
Accounts, (y) to the extent applicable, the conditions set forth in clauses (ii)
through (v) above have been satisfied and (z) the Transferor reasonably believes
that the addition of the Receivables arising in such Automatic Additional
Accounts will not, based on the facts known to such officer at the time of such
addition, then or thereafter cause a Pay Out Event or Reinvestment Event to
occur with respect to any Series.
(vii) The Transferor shall have delivered to the Trustee (x) a computer file
or microfiche list containing a true and complete list of such Automatic
Additional Accounts and (y) a duly executed assignment of the Receivables
arising in such Automatic Additional Accounts.
REMOVAL OF ACCOUNTS
Unless otherwise specified in the Prospectus Supplement relating to a Series
of Certificates, subject to the conditions set forth below, on any day of any
Monthly Period (unless the exercise of such right is restricted to certain
periods specified in the related Prospectus Supplement), the Transferor shall
have the right to designate certain Accounts to be removed as Accounts and to
require the reassignment to it or its designee of all the Trust's right, title
and interest in, to and under the Receivables then existing and thereafter
created in such removed Accounts, all monies due or to become due and all
amounts received with respect thereto and all proceeds thereof in or with
respect to such Accounts. The Accounts specified for removal shall be set forth
in a Receivables Transfer Agreement (the "Removed Accounts"). The following
conditions apply to the removal of Accounts and the removal of Participation
Interests designated by the Transferor:
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(a) on or before the fifth business day immediately preceding the
Removal Date (the "Removal Notice Date"), the Transferor shall have given
the Trustee, the Servicer, each Rating Agency and the provider of any Series
Enhancement written notice of such removal, specifying the date for removal
of the Removed Accounts or Participation Interests (the "Removal Date");
(b) with respect to Removed Accounts, on or prior to the date that is
ten business days after the Removal Date, the Transferor will deliver to the
Trustee a computer file or microfiche list containing a true and complete
list of the Removed Accounts specifying for each such Account, as of the
last day of the Monthly Period preceding the Removal Notice Date (the
"Removal Cut-Off Date"), its account number, the aggregate amount
outstanding in such Account and the aggregate amount of Principal
Receivables outstanding in such Account;
(c) with respect to Removed Accounts, the Transferor shall have
represented and warranted as of the Removal Date that the list of Removed
Accounts delivered pursuant to paragraph (b) above, as of the Removal
Cut-Off Date, is true and complete in all material respects;
(d) the Rating Agency Condition shall have been satisfied with respect
to such removal;
(e) the Transferor shall have delivered to the Trustee an officer's
certificate, dated the Removal Date, to the effect that the Transferor
reasonably believes that (i) such removal will not, based on the facts known
to such officer at the time of such certification, then or thereafter cause
a Pay Out Event or Reinvestment Event to occur with respect to any Series
and (ii) no selection procedure was utilized which would result in a
selection of Removed Accounts or Participation Interests that would be
materially adverse to the interests of the Certificateholders of any Series
as of the Removal Date;
(f) as of the Removal Cut-Off Date, no more than 10% of the Receivables
outstanding are more than thirty days contractually delinquent; and
(g) such other conditions as are specified in the related Prospectus
Supplement.
Upon satisfaction of the above conditions, the Trustee will execute and
deliver to the Transferor or its designee a written reassignment and will,
without further action, be deemed to sell, transfer, assign, set over and
otherwise convey to the Transferor or its designee, effective as of the Removal
Date, without recourse, representation or warranty, all the right, title and
interest of the Trust in and to the Participation Interests or Receivables
arising in the Removed Accounts, all monies due and to become due and all
amounts received with respect thereto and all proceeds thereof.
SERVICING PROCEDURES
Pursuant to the Pooling and Servicing Agreement, the Servicer will be
responsible for servicing and administering the Receivables in accordance with
the Servicer's customary and usual servicing procedures for servicing credit
card receivables comparable to the Receivables and in accordance with its credit
card guidelines.
DISCOUNT OPTION
The Pooling and Servicing Agreement provides that a percentage (the
"Discount Percentage") (which on the Relevant Closing Date for the first Series
of Certificates issued by the Trust will be %) of collections of Principal
Receivables will be treated as collections of Finance Charge Receivables (the
"Discount Option Collections"). The Transferor may, without notice to or consent
of the Certificateholders, from time to time, increase, reduce or eliminate
(subject to the limitations described below) the Discount Percentage for all or
any specified portion of collections of Principal Receivables on or after the
date of such change (each, a "Discount Option Date"). The Pooling and Servicing
Agreement requires the Transferor to provide to the Trustee and any Rating
Agency 30 days' prior written notice of the Discount Option Date and such
designation will become effective on such Discount Option Date (i) unless such
designation, in the reasonable belief of the Transferor based on facts known to
the Transferor at such time, would cause a Pay Out Event or Reinvestment Event
with respect to any Series to occur, or an event which, with notice or the lapse
of time or both, would constitute a Pay Out Event or Reinvestment Event with
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respect to any Series and (ii) if such designation would cause the Discount
Percentage to be greater than [3]% or less than [1]%, if the Rating Agency
Condition is satisfied. On the date of processing of any collections, the
product of the Discount Percentage and collections that otherwise would be
collections of Principal Receivables will be deemed Discount Option Collections.
An amount equal to the product of (i) the Series Percentage with respect to
Finance Charge Receivables for each Series of Certificates issued and
outstanding and (ii) the amount of such Discount Option Collections will be
deposited by the Servicer into the Collection Account and an amount equal to the
product of (iii) the Transferor Percentage and (iv) the amount of the Discount
Option Collections will be paid to the holders of the Transferor Certificates
or, if applicable, applied as Excess Transferor Finance Charge Collections. The
former amount deposited into the Collection Account will be applied as provided
below regarding collections of Finance Charge Receivables. Any such designation
that raises the Discount Percentage will result in an increase in the amount of
collections of Finance Charge Receivables and a lower payment rate of
collections of Principal Receivables and will reduce the Transferor Amount
(which is calculated after applying the Discount Percentage to the aggregate
amount of Principal Receivables), thereby decreasing the likelihood that certain
Pay Out Events or Reinvestment Events based in part on the amount of collections
of Finance Charge Receivables will occur and increasing the likelihood that the
Transferor will be required to designate Additional Accounts. Any such
designation that reduces the Discount Percentage will have the opposite effect.
Unless otherwise specified, all references herein and in any Prospectus
Supplement to collections of Principal Receivables or Finance Charge Receivables
are references to such collections as defined above.
TRUST ACCOUNTS
The Servicer will cause to be established and maintained, in the name of the
Trustee, for the benefit of Certificateholders of all Series, a "Collection
Account", which at all times is required to be either (a) a segregated account
with an Eligible Institution or (b) a segregated trust account with the
corporate trust department of a depository institution organized under the laws
of the United States or any one of the states thereof, including the District of
Columbia (or any domestic branch of a foreign bank), and acting as a trustee for
funds deposited in such account, so long as any of the securities of such
depository institution shall have a credit rating from each Rating Agency in one
of its generic credit rating categories which signifies investment grade (an
"Eligible Deposit Account"). The Servicer will also cause to be established and
maintained, in the name of the Trustee, an "Excess Funding Account," which also
is required to be an Eligible Deposit Account. An "Eligible Institution" is
defined as (I) a depository institution, which may be the Trustee, organized
under the laws of the United States or any one of the states thereof, including
the District of Columbia (or any domestic branch of a foreign bank) which at all
times (a) has either (i) long-term unsecured debt rating of A-1 or better by
Moody's Investors Service Inc. ("Moody's") or (ii) a certificate of deposit
rating of P-1 by Moody's, (b) has either (i) a long-term unsecured debt rating
of AAA by Standard & Poor's Ratings Group ("Standard & Poor's") or (ii) a
certificate of deposit rating of A-1+ by Standard & Poor's and (c) is a member
of the FDIC or (II) any other institution that is acceptable to each Rating
Agency. If so qualified, the Trustee or the Servicer may be considered an
Eligible Institution.
Funds in the Collection Account and the Excess Funding Account will be
invested, at the direction of the Servicer, in "Eligible Investments" consisting
of book-entry securities, negotiable instruments or securities represented by
instruments in bearer or registered form which evidence: (a) direct obligations
of, and obligations fully guaranteed as to timely payment of principal and
interest by, the United States of America; (b) demand deposits, time deposits or
certificates of deposit (having original maturities of no more than 365 days) of
depository institutions or trust companies 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 short-term debt
rating of such depository institution or trust company shall be in the highest
investment category of each Rating Agency; (c) commercial paper or other
short-term obligations having, at the time of the Trust's investment or
contractual commitment to invest therein, a rating from each Rating Agency in
its highest
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investment category; (d) notes or bankers' acceptances (having original
maturities of no more than 365 days) issued by any depository institution or
trust company referred to in (b) above; (e) investments in money market funds
rated in the highest investment category by each Rating Agency or otherwise
approved in writing by each Rating Agency; (f) time deposits, other than as
referred to in clause (e) above, with a person the commercial paper of which has
a credit rating from each Rating Agency in its highest investment category; or
(g) any other investments approved in writing by each Rating Agency. The
Trustee, acting as the initial paying agent (together with any successor thereto
in such capacity and any entity specified in a Series Supplement to act in such
capacity for the related Series, collectively, the "Paying Agent"), shall have
the revocable power to withdraw funds from the Collection Account for the
purpose of making distributions to the Certificateholders of any Series pursuant
to the related Series Supplement.
SERIES PERCENTAGE AND TRANSFEROR PERCENTAGE
Pursuant to the Pooling and Servicing Agreement, the Servicer will allocate
among the Series, including each Class of each Series, and the Transferor's
Interest all amounts collected with respect to Finance Charge Receivables,
Principal Receivables and all Defaulted Receivables. The Servicer will make each
allocation by reference to the applicable Series Percentage for each Series and
the Transferor Percentage in each case. The Series Percentages for each Series
will be as set forth in the related Series Supplement and, with respect to each
Series offered hereby, in each Prospectus Supplement.
The Transferor Percentage in all cases means the excess of 100% over the
aggregate Series Percentages of all Series then outstanding for each category of
Receivables.
APPLICATION OF COLLECTIONS
Except as provided below or in a Series Supplement, the Servicer will
deposit into the Collection Account, no later than the second business day
following the date of processing, any payment collected by the Servicer on the
Receivables; provided, however, that the Servicer need not deposit amounts
allocated to the Transferor Certificates and certain amounts allocated to
Certificateholders of a Series, as specified in the related Series Supplement,
into the Collection Account, and provided, further, that for so long as The
Travelers Bank remains the Servicer and (x) The Travelers Bank maintains a
certificate of deposit rating of A-1 or better by Standard & Poor's and P-1 by
Moody's (or such other rating below A-1 or P-1, as the case may be, that is
satisfactory to each Rating Agency), (y) Commercial Credit Company has a
commercial paper rating of at least A-1 and P-1 by Standard & Poor's and
Moody's, The Travelers Bank remains a direct or indirect majority-owned
Travelers Group Inc. subsidiary and certain other arrangements are made
satisfactory to each Rating Agency or (z) any other arrangement that satisfies
the Rating Agency Condition, the Servicer need not make daily deposits of
collections into the Collection Account, but may make a single monthly deposit
into the Collection Account in immediately available funds.
OPERATION OF EXCESS FUNDING ACCOUNT
On any Distribution Date on which the Transferor Amount is less than the
Required Transferor Amount or on which the aggregate amount of Principal
Receivables is less than the Required Principal Balance, the Servicer will
deposit any Shared Principal Collections that would otherwise be distributed to
the holders of the Transferor Certificates into the Excess Funding Account. The
Servicer will determine, with respect to each Distribution Date on which no
Series is in an Amortization Period, the lesser of (x) the amount by which the
Transferor Amount exceeds the Required Transferor Amount and (y) the amount by
which the aggregate amount of Principal Receivables exceeds the Required
Principal Balance, and will instruct the Trustee to withdraw such amount from
the Excess Funding Account, to the extent of the principal amount of funds on
deposit therein, and pay such amount to the holders of the Transferor
Certificates. The Servicer will determine, with respect to each Distribution
Date on which one or more Series is in an Amortization Period, the aggregate
amount of Principal Shortfalls, if any, with respect to each Series that is a
Principal Sharing Series and will instruct the Trustee to withdraw such amount
from the Excess Funding Account, to the extent of the principal amount of funds
on deposit therein, and allocate such amount among each such Series as Shared
Principal Collections.
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DEFAULTED RECEIVABLES; REBATES AND FRAUDULENT CHARGES
The term "Defaulted Receivables" means, for any Monthly Period, all
Principal Receivables which are charged off as uncollectible in such Monthly
Period in accordance with the Servicer's credit card guidelines and customary
and usual servicing procedures for servicing consumer revolving credit card and
other revolving credit account receivables comparable to the Receivables. A
Principal Receivable shall become a Defaulted Receivable on the day on which
such Principal Receivable is recorded as charged off on the Servicer's computer
master file of consumer revolving credit card accounts but, in any event, shall
be deemed a Defaulted Receivable no later than the day the related Account
becomes 180 days contractually delinquent unless the obligor cures such default
by making a partial payment which satisfies the criteria for curing
delinquencies set forth in the Servicer's applicable credit card guidelines. The
term "Defaulted Amount" means, with respect to any Monthly Period, an amount
(which shall not be less than zero) equal to (a) the amount of Principal
Receivables which became Defaulted Receivables in such Monthly Period, minus (b)
the amount of any Defaulted Receivables included in any Account the Receivables
in which the Transferor or the Servicer became obligated to accept reassignment
or assignment in accordance with the terms of the Pooling and Servicing
Agreement during such Monthly Period; provided, however, that, if an Insolvency
Event occurs with respect to the Transferor, the amount of such Defaulted
Receivables which are subject to reassignment to the Transferor in accordance
with the terms of the Pooling and Servicing Agreement shall not be added to the
sum so subtracted and, if certain events involving insolvency occur with respect
to the Servicer, the amount of such Defaulted Receivables which are subject to
reassignment or assignment to the Servicer in accordance with the terms of the
Pooling and Servicing Agreement shall not be added to the sum so subtracted.
On each day that the Servicer adjusts downward the amount of any Receivable
because of a rebate, refund, unauthorized charge or billing error to a
cardholder, or because such Receivable was created in respect of merchandise
which was refused or returned by a cardholder, or if the Servicer otherwise
adjusts downward the amount of any Receivable without receiving collections
therefor or charging off such amount as uncollectible, then, in any such case,
the amount of Principal Receivables used to calculate the Transferor Amount, the
Series Percentages and any other percentages used to allocate within or among
Series will be reduced by the amount of the adjustment. Similarly, the amount of
Principal Receivables used to calculate the Transferor Amount, the Series
Percentages and any other percentage used to allocate within or among Series
will be reduced by the amount of any Receivable discovered to have been created
through a fraudulent or counterfeit charge. Furthermore, in the event that the
exclusion of such Principal Receivables from the calculation of the Transferor
Amount at such time would cause the Transferor Amount to be less than the
Required Transferor Amount or the aggregate amount of Principal Receivables to
be less than the Required Principal Balance, the Transferor shall be required to
pay an amount equal to such deficiency into the Excess Funding Account (up to
the amount of such Principal Receivables).
FINAL PAYMENT OF PRINCIPAL AND INTEREST; TERMINATION
Subject to prior termination as described herein and in the Prospectus
Supplement, the interest of the Certificateholders of a Series in the Trust will
terminate following the earliest of (i) the day after the Distribution Date on
which the final payment of principal and interest is made to the
Certificateholders of such Series, (ii) the date specified for termination in
the applicable Series Supplement ("Stated Series Termination Date" for such
Series) and (iii) the Trust Termination Date. In the event the Investor Amount
of any Series would be greater than zero on the Stated Series Termination Date
for such Series or such earlier date specified in the related Series Supplement,
the Trustee will sell or cause to be sold Principal Receivables and the related
Finance Charge Receivables (or interests therein), as specified in the Pooling
and Servicing Agreement and the related Series Supplement, in an amount equal to
100% of the Investor Amount of the Certificates of such Series and accrued and
unpaid interest thereon on such date (but not more than the applicable Series
Percentages of Receivables on such date for the Certificates of such Series).
The proceeds of such sale will be allocated and distributed in accordance with
the applicable Series Supplement.
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The Trust will terminate only on the earliest to occur of (a) the day
following the payment date on which the aggregate Investor Amount and Series
Enhancement investor amounts, if any, of each Series is zero (provided that the
Transferor has delivered a written notice to the Trustee electing to terminate
the Trust), (b) January 1, 2044, or (c) if the Receivables are sold, disposed of
or liquidated following the occurrence of an Insolvency Event as described under
"--Pay Out Events and Reinvestment Events," immediately following such sale,
disposition or liquidation (the "Trust Termination Date"). Upon termination of
the Trust, all right, title and interest in the Receivables and other funds of
the Trust (other than amounts in accounts maintained by the Trust for the final
payment of principal and interest to Certificateholders) will be conveyed and
transferred to the Transferor.
PAY OUT EVENTS AND REINVESTMENT EVENTS
The Revolving Period for a Series will continue through the date specified
in the applicable Prospectus Supplement and the Amortization Period will begin
at such time, unless a Pay Out Event or Reinvestment Event occurs prior to such
time. All Series will commence either a Rapid Amortization Period or (if so
provided in the Series Supplement) a Rapid Accumulation Period upon the
occurrence of a Pay Out Event with respect to all Series. If so provided in the
related Series Supplement, a Pay Out Event with respect to such Series may be
treated as a Reinvestment Event. With respect to each Series, additional events
described in the Prospectus Supplement may constitute a Pay Out Event or
Reinvestment Event. The Rapid Amortization Period for a Series will commence
when a Pay Out Event for such Series occurs and the Rapid Accumulation Period
for a Series will commence when a Pay Out Event with respect to all Series
deemed to constitute a "Reinvestment Event" with respect to such Series or a
Reinvestment Event for such Series as described in the Prospectus Supplement
occurs. A "Pay Out Event" with respect to all Series happens upon the occurrence
of any of the following:
(a) an Insolvency Event relating to the Transferor or an Account Owner;
(b) the Trust shall become subject to regulation by the Commission as an
"investment company" within the meaning of the Investment Company Act of
1940, as amended; or
(c) the Transferor is unable for any reason to transfer Receivables to
the Trust in accordance with the provisions of the Pooling and Servicing
Agreement.
In addition, a Pay Out Event or Reinvestment Event may occur with respect to
a specific Series if a Pay Out Event or Reinvestment Event affecting such
Series, as specified in the related Series Supplement and described in the
related Prospectus Supplement, occurs with respect to such Series. On the date
on which a Pay Out Event with respect to a Series is deemed to have occurred,
the Rapid Amortization Period with respect to such Series will commence, and on
the date on which a Reinvestment Event with respect to a Series is deemed to
have occurred, the Rapid Accumulation Period with respect to such Series will
commence. If a Rapid Amortization Period commences with respect to a Series,
distributions of principal will be made to the Certificateholders of such Series
in the priority provided for in the related Series Supplement and described in
the related Prospectus Supplement. If, because of the occurrence of a Pay Out
Event, the Rapid Amortization Period begins earlier than the Scheduled
Amortization Date or the expected final payment date of such Series,
Certificateholders of such Series will begin receiving distributions of
principal earlier than they otherwise would have, which may shorten the final
maturity of the Certificates of such Series. If a Rapid Accumulation Period
commences with respect to a Series, collections of Principal Receivables will be
deposited into the Principal Funding Account and used to make distributions of
principal to the Certificateholders of such Series or a Class of such Series on
the expected final payment date for such Series or Class unless a Rapid
Amortization Event subsequently occurs with respect to such Series.
An "Insolvency Event" shall occur if the Transferor, any Additional
Transferor, any Account Owner (including any Additional Account Owner) shall
consent to the appointment of a conservator or receiver
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or liquidator in any insolvency, readjustment of debt, marshaling of assets and
liabilities or similar proceedings of or relating to such Transferor or Account
Owner 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 liquidation of its affairs, shall
have been entered against the Transferor or Account Owner; or the Transferor or
an Account Owner 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.
If an Insolvency Event occurs with respect to the Transferor, the Transferor
will immediately cease to transfer Principal Receivables to the Trust and
promptly notify the Trustee thereof as provided under "--Liquidation of
Receivables."
If the portion of such proceeds allocated to the Certificateholders and the
proceeds of any collections on the Receivables in the Collection Account and the
amounts available under any Series Enhancement are not sufficient to pay in full
the remaining amount due on the Certificates, the Certificateholders will suffer
a corresponding loss. See "Certain Legal Aspects of the Receivables--Certain
Matters Relating to Insolvency" for a discussion of the impact of Federal
legislation on the Trustee's ability to liquidate the Receivables.
SERVICING COMPENSATION AND PAYMENT OF EXPENSES
The Servicer's compensation for its servicing activities and reimbursement
for its expenses for any Monthly Period will be a servicing fee (the "Servicing
Fee") payable monthly on the related Distribution Date in an amount equal to
one-twelfth of the product of (a) the weighted average of the applicable
servicing fee rates with respect to each Series outstanding (based upon the
applicable servicing fee rate for each Series and the Investor Amount of such
Series or other amount specified in the applicable Series Supplement) and (b)
the amount of Principal Receivables outstanding on the last day of the prior
Monthly Period. The Servicing Fee will be allocated among the Transferor's
Interest and the Certificateholders' Interests of all Series. The share of the
Servicing Fee allocable to the Certificateholders' Interest of a particular
Series (the "Monthly Servicing Fee") will be determined in accordance with the
applicable Series Supplement. The remainder of the Servicing Fee shall be paid
by the Certificateholders of other Series and by the holders of the Transferor
Certificates and in no event shall the Trust, the Trustee or the
Certificateholders of any Series be liable for the share of the Servicing Fee to
be paid by the holders of the Transferor Certificates. Unless otherwise provided
in any Series Supplement, in the case of the first Monthly Period with respect
to any Series, the Monthly Servicing Fee will accrue from the Relevant Closing
Date.
The Servicer will pay from its servicing compensation certain expenses
incurred in connection with servicing the Receivables including, without
limitation, payment of the fees and disbursements of the Trustee, any Paying
Agent and transfer agent and registrar and independent accountants and other
fees which are not expressly stated in the Pooling and Servicing Agreement to be
payable by the Trust or the Certificateholders of a Series other than Federal,
state, local and foreign income, franchise or other taxes, if any, or any
interest or penalties with respect thereto, imposed upon the Trust.
CERTAIN MATTERS REGARDING THE SERVICER
The Servicer may not resign from its obligations and duties under the
Pooling and Servicing Agreement, except upon determination that (i) the
performance of its duties under the Pooling and Servicing Agreement is no longer
permissible under applicable law and (ii) there is no reasonable action which
the Servicer could take to make the performance of its duties thereunder
permissible under
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applicable law. Any such determination permitting the resignation of the
Servicer will be evidenced by an opinion of counsel to such effect delivered to
the Trustee. No such resignation will become effective until the Trustee or a
successor Servicer that is an Eligible Servicer shall have assumed the
responsibilities and obligations of the Servicer in accordance with the Pooling
and Servicing Agreement.
"Eligible Servicer" means the Trustee, or if the Trustee is not acting as
Servicer, an entity which, at the time of its appointment as Servicer, (i) is
servicing a portfolio of revolving credit card accounts, (ii) is legally
qualified and has the capacity to service the Accounts, (iii) has demonstrated
the ability to professionally and completely service a portfolio of similar
accounts in accordance with high standards of skill and care, (iv) is qualified
to use the software that is then being used to service the Accounts or obtains
the right to use, or has its own software, which is adequate to perform its
duties under the Pooling and Servicing Agreement, and (v) has a net worth or
capital and surplus of at least $50,000,000 as of the end of its most recent
fiscal quarter.
Pursuant to the Pooling and Servicing Agreement, The Travelers Bank, as
Servicer has the right to delegate any of its responsibilities and obligations
as Servicer to any entity that agrees to conduct such duties in accordance with
the Pooling and Servicing Agreement and the Account Owners' credit card
guidelines; provided, that in the case of a significant delegation to an entity
other than an Account Owner, or any affiliate of an Account Owner, (i) at least
30 days' prior written notice must be given to the Trustee and each Rating
Agency of such delegation and (ii) at or prior to the end of such 30-day period
the Servicer must determine that the Rating Agency Condition has been met.
INDEMNIFICATION
The Pooling and Servicing Agreement provides that the Servicer will
indemnify and hold harmless the Trust and the Trustee from and against any loss,
liability, expense, damage or injury suffered or sustained by reason of any acts
or omissions of the Servicer with respect to the Trust pursuant to the Pooling
and Servicing Agreement, including any judgment, award, settlement, reasonable
attorneys' fees and other costs or expenses incurred in connection with the
defense of any action, proceeding or claim; provided, however, that the Servicer
will not indemnify: (i) the Trustee if such acts or omissions constitute or are
caused by fraud, negligence, or willful misconduct by the Trustee; (ii) the
Trust, the Certificateholders or the Certificate Owners for any liabilities,
costs or expenses of the Trust with respect to any action taken by the Trustee
at the request of the Certificateholders; (iii) the Trust, the
Certificateholders or the Certificate Owners as to any losses, claims or damages
incurred by any of them in their capacities as investors, including without
limitation losses incurred as a result of Defaulted Receivables; or (iv) the
Trust, Certificateholders or Certificate Owners for any liabilities, costs or
expenses of the Trust, the Certificateholders or the Certificate Owners arising
under any tax law, including without limitation, any Federal, state, 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) required to be paid
by the Trust, the Certificateholders or the Certificate Owners in connection
herewith to any taxing authority. Any such indemnifications will not be payable
from the Trust Assets; provided further, however, that the Servicer shall
indemnify the Trust for any property, sales, excise or similar taxes imposed on
or with respect to the Receivables.
SERVICER DEFAULT
In the event of any Servicer Default, so long as the Servicer Default shall
not have been remedied, the Trustee, or Certificateholders evidencing more than
50% of the aggregate Investor Amount of the Certificates of all Series, by
notice to the Servicer (and to the Trustee if given by Certificateholders) (a
"Termination Notice"), may terminate all but not less than all of the rights and
obligations of the Servicer as Servicer under the Pooling and Servicing
Agreement and in and to the Receivables and the proceeds thereof. The rights and
interest of the Transferor under the Pooling and Servicing Agreement and in the
Transferor Certificates will not be affected by such termination; provided,
however, if within 60 days of
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receipt of a Termination Notice, the Trustee does not receive any bids from
Eligible Servicers in accordance with the Pooling and Servicing Agreement to act
as a successor Servicer and receives an officer's certificate of the Servicer to
the effect that the Servicer cannot in good faith cure the Servicer Default
which gave rise to the Termination Notice, then the Trustee will offer the
Transferor the right at its option to purchase the Certificateholders' Interest
on the next succeeding Distribution Date. The purchase price for the
Certificateholders' Interest will be equal to the sum of the amounts specified
therefor in the related Series Supplements. The Transferor will notify the
Trustee in writing prior to the Record Date for the Distribution Date of the
purchase if it is exercising such option. If the Transferor exercises such
option, the Transferor will (i) if the Transferor's short-term deposits or
long-term unsecured debt obligations are not rated at the time at least P-3 or
Baa3, respectively, by Moody's, deliver to the Trustee an opinion of counsel
(which must be an independent outside counsel), to the effect that the purchase
would not be considered a fraudulent conveyance and (ii) deposit the purchase
price into the Collection Account on such Distribution Date in immediately
available funds.
A "Servicer Default" refers to any of the following events:
(a) any failure by the Servicer to make any payment, transfer or deposit
or to give instructions or notice to the Trustee pursuant to the Pooling and
Servicing Agreement or any Series Supplement on or before the date occurring
five business days after the date such payment, transfer, deposit or such
instruction or notice is required to be made or given, as the case may be,
under the terms of the Pooling and Servicing Agreement or any Series
Supplement;
(b) failure on the part of the Servicer duly to observe or perform in
any material respect any other covenants or agreements of the Servicer set
forth in the Pooling and Servicing Agreement or any Series Supplement, which
has a material adverse effect on the Certificateholders of any Series or
Class and which failure continues unremedied for a period of 60 days after
the date on which written notice of such failure, requiring the same to be
remedied, shall have been given to the Servicer by the Trustee, or to the
Servicer and the Trustee by Certificateholders evidencing more than 50% of
the aggregate Investor Amount of all Series then outstanding (or, with
respect to any failure that does not relate to all Series, the Series to
which such failure relates); or the Servicer shall delegate its duties under
the Pooling and Servicing Agreement except as permitted under the terms
thereof, a responsible officer of the Trustee has actual knowledge of such
delegation and such delegation continues unremedied for 15 days after the
date on which written notice thereof, requiring the same to be remedied,
shall have been given to the Servicer by the Trustee, or to the Servicer and
the Trustee by Certificateholders evidencing more than 50% of the aggregate
Investor Amount of all Series;
(c) any representation, warranty or certification made by the Servicer
in the Pooling and Servicing Agreement or any Series Supplement or in any
certificate delivered pursuant to the Pooling and Servicing Agreement or any
Series Supplement shall prove to have been incorrect when made, which has a
material adverse effect on the Certificateholders of any Series or Class and
which continues to be incorrect in any material respect for a period of 60
days after the date on which written notice of such failure, requiring the
same to be remedied, shall have been given to the Servicer by the Trustee,
or to the Servicer and the Trustee by Certificateholders evidencing more
than 50% of the aggregate Investor Amount of all Series then outstanding
(or, with respect to any such representation, warranty or certification that
does not relate to all Series, the Series to which such representation,
warranty or certification relates); or
(d) the Servicer shall consent to the appointment of a conservator or
receiver or liquidator in any insolvency, readjustment of debt, marshalling
of assets and liabilities or similar proceedings of or relating to the
Servicer or of or relating to all or substantially all of its property, or a
decree or order of a court or agency or supervisory authority having
jurisdiction in the premises for the appointment of a conservator or
receiver or liquidator in any insolvency, readjustment of debt, marshalling
of assets and liabilities or similar proceedings, or for the winding-up or
liquidation of its affairs, shall have been
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entered against the Servicer and such decree or order shall have remained in
force undischarged or unstayed for a period of 60 days; or the Servicer
shall admit in writing its inability to pay its debts generally as they
become due, file a petition to take advantage of any applicable insolvency
or reorganization statute, make any assignment for the benefit of its
creditors or voluntarily suspend payment of its obligations.
Notwithstanding the foregoing, a delay in or failure of performance under
clauses (a), (b) or (c), will not, for certain limited periods, constitute a
Servicer Default if such delay or failure (i) could not be prevented by the
exercise of reasonable diligence by the Servicer and (ii) was caused by an act
of God or the public enemy, acts of declared or undeclared war, terrorism,
public disorder, rebellion or sabotage, epidemics, landslides, lightning, fire,
hurricanes, earthquakes, floods or similar causes. The preceding sentence will
not relieve the Servicer from using its best efforts to perform its respective
obligations in a timely manner in accordance with the terms of the Pooling and
Servicing Agreement and any Series Supplement and the Servicer will provide the
Trustee, each Rating Agency, the holders of the Transferor Certificates and the
Certificateholders of all Series with an officer's certificate giving prompt
notice of such failure or delay by it, together with a description of its
efforts to so perform its obligations.
REPORTS TO CERTIFICATEHOLDERS
Unless otherwise specified in the related Prospectus Supplement, on each
Distribution Date of a Series, the Paying Agent will forward to each
Certificateholder of record of such Series a statement prepared by the Servicer
setting forth, among other things, (a) the total amount distributed to
Certificateholders of each Class of such Series, (b) the amount of any
distribution allocable to principal on such Certificates, (c) the amount of such
distribution allocable to interest on such Certificates, (d) the aggregate
amount of collections processed during the prior Monthly Period and allocated in
respect of the Certificates, (e) the amount of collections of Principal
Receivables processed during the prior Monthly Period and allocated in respect
of the Certificates, (f) the amount of collections of Finance Charge Receivables
processed during the prior Monthly Period and allocated in respect of the
Certificates, (g) the Series Percentage with respect to each Class of
Certificates with respect to Principal Receivables and Finance Charge
Receivables, each as of the end of the last day of the prior Monthly Period, (h)
the aggregate outstanding balance of Accounts which are 30 or more days
contractually delinquent, by class of delinquency, as of the end of the last day
of the prior Monthly Period, (i) the Defaulted Amount for the prior Monthly
Period, (j) the amount of the Monthly Servicing Fee for each Class for the prior
Monthly Period, and (k) the amount of any Series Enhancement, if any, available
with respect to each Class as of the close of business on such Distribution
Date.
On or before a date of each calendar year specified in the related
Prospectus Supplement, ending in the year following the date a Series
terminates, the Paying Agent will furnish to each person who at any time during
the preceding calendar year was a Certificateholder of record of such Series a
statement prepared by the Servicer containing the information required to be
contained in the regular monthly report to Certificateholders of such Series, as
set forth in clauses (a), (b) and (c) above, aggregated for such calendar year
or the applicable portion thereof during which such person was a
Certificateholder, together with such other customary information (consistent
with the treatment of the Certificates as debt) as the Trustee or the Servicer
deems necessary or desirable to enable the Certificateholders of such Series to
prepare their tax returns.
EVIDENCE AS TO COMPLIANCE
The Pooling and Servicing Agreement provides that on or before March 31 of
each calendar year, the Servicer will cause a firm of nationally recognized
independent public accountants (who may also render other services to the
Servicer, the Transferor or any Account Owner) to furnish a report (addressed to
the Trustee) to the effect that such firm has applied certain agreed-upon
procedures to certain documents and
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records relating to the servicing of the Receivables for the prior calendar year
and that, based upon such agreed-upon procedures, no matters came to their
attention that caused them to believe that such servicing (including the
allocations of collections) was not conducted in compliance with certain
applicable terms and conditions set forth in the Pooling and Servicing Agreement
and any Series Supplements except for such exceptions as such firm shall believe
to be immaterial and such other exceptions as shall be set forth in such
statement. Such report will set forth the agreed-upon procedures performed.
The Pooling and Servicing Agreement provides for delivery to the Trustee on
or before March 31 of each calendar year of a statement signed by an authorized
officer of the Servicer to the effect that the Servicer has, or has caused to
be, fully performed its obligations in all material respects under the Pooling
and Servicing Agreement and any Series Supplements throughout the preceding year
or, if there has been a default in the performance of any such obligations,
specifying the nature and status of the default.
Copies of all statements, certificates and reports furnished to the Trustee
may be obtained by a request in writing delivered to the Trustee.
AMENDMENTS
The Pooling and Servicing Agreement or any Series Supplement may be amended
from time to time (including, among other things, in connection with the
provision of additional Series Enhancement for the benefit of the
Certificateholders of any Series or the reduction of such Series Enhancement,
the issuance of a Supplemental Certificate, the addition of a Participation
Interest to the Trust or the designation of an Additional Transferor) by the
Transferor, the Servicer and the Trustee, without Certificateholder consent,
provided that the Transferor has delivered to the Trustee an officer's
certificate to the effect that the Transferor reasonably believes that such
amendment will not have an Adverse Effect and that the Rating Agency Condition
has been satisfied. In addition, the Pooling and Servicing Agreement or any
Series Supplement may be amended from time to time without notice to or consent
of the Certificateholders and without satisfaction of the Rating Agency
Condition to (i) enable all or a portion of the Trust to qualify as a "financial
asset securitization investment trust" under the Code or (ii) to enable the
trust to qualify as a partnership for purposes of any state tax laws.
The Pooling and Servicing Agreement or any Series Supplement may also be
amended by the Transferor, the Servicer and the Trustee with the consent of the
holders of Certificates evidencing not less than 66 2/3% of the aggregate
Investor Amount of all adversely affected Series of Certificates for the purpose
of adding any provisions to, changing in any manner or eliminating any of the
provisions of the Pooling and Servicing Agreement or any Series Supplement or of
modifying in any manner the rights of Certificateholders. No such amendment,
however, may (a) reduce in any manner the amount of or delay the timing of
distributions to be made to Certificateholders or deposits of amounts to be so
distributed or the amount available under any Series Enhancement without the
consent of each affected Certificateholder, (b) change the definition of or the
manner of calculating the interest of any Certificateholder without the consent
of each affected Certificateholder, (c) reduce the aforesaid percentage required
to consent to any such amendment without the consent of each Certificateholder
or (d) adversely affect the rating of any Series or Class by any Rating Agency
without the consent of Certificateholders of such Series or Class evidencing not
less than 66 2/3% of the aggregate Investor Amount of such Series or Class. Any
amendment shall be deemed not to adversely affect any outstanding Series with
respect to which the Transferor deliver an opinion of counsel that such
amendment will not have an Adverse Effect with respect to such Series. Promptly
following the execution of any such amendment, the Trustee will furnish written
notice (provided to the Trustee by the Servicer) of the substance of such
amendment to each Certificateholder.
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INTEREST RATE SWAPS AND RELATED CAPS, FLOORS AND COLLARS
The Trustee on behalf of the Trust may enter into interest rate swaps and
related caps, floors and collars to minimize the risk to Certificateholders from
adverse changes in interest rates (collectively, "Swaps").
An interest rate Swap is an agreement between two parties ("counterparties")
to exchange a stream of interest payments on an agreed hypothetical or
"notional" principal amount. No principal amount is exchanged between the
counterparties to an interest rate Swap. In the typical Swap, one party agrees
to pay a fixed rate on a notional principal amount, while the counterparty pays
a floating rate based on one or more reference interest rates such as the London
Interbank Offered Rate ("LIBOR"), a specified bank's prime rate, or U.S.
Treasury Bill rates. Interest rate Swaps also permit counterparties to exchange
a floating-rate obligation based upon one reference interest rate (such as
LIBOR) for a floating-rate obligation based upon another referenced interest
rate (such as U.S. Treasury Bill rates).
The Swap market has grown substantially in recent years with a significant
number of banks and financial service firms acting both as principals and as
agents utilizing standardized Swap documentation. Caps, floors and collars are
more recent innovations, and they are less liquid than other Swaps. There can be
no assurance that the Trust will be able to enter into or offset Swaps at any
specific time or at prices or on other terms that are advantageous. In addition,
although the terms of Swaps may provide for termination under certain
circumstances, there can be no assurance that the Trust will be able to
terminate or offset a Swap on favorable terms.
DEFEASANCE
Pursuant to the Pooling and Servicing Agreement, the Transferor may
terminate its substantive obligations in respect of any Series or all
outstanding Series (the "Defeased Series") by depositing with the Trustee (such
deposit to be made from other than the Transferor's or any affiliate of the
Transferor's funds), under the terms of an irrevocable trust agreement
satisfactory to the Trustee, monies or Eligible Investments (or a combination
thereof) sufficient to make all remaining scheduled interest and principal
payments on the Defeased Series on the dates scheduled for such payments and to
pay all amounts owing to any provider of Series Enhancement with respect to such
Defeased Series. To achieve that end, the Transferor has the right to use
collections on Receivables allocated to the Defeased Series and available to
purchase additional Receivables to be applied to purchase Eligible Investments
rather than additional Receivables. Prior to the first exercise of the right to
substitute monies or Eligible Investments for Receivables, the Transferor shall
deliver to the Trustee an opinion of counsel to the effect that such deposit and
termination of obligations will not cause the Trust to be an association or
publicly traded partnership taxable as a corporation, and shall deliver to the
Servicer and the Trustee written notice from each Rating Agency that the Rating
Agency Condition shall have been satisfied. In addition, the Transferor must
comply with certain other requirements set forth in the Pooling and Servicing
Agreement, including requirements that the Transferor deliver to the Trustee an
opinion of counsel to the effect that the deposit and termination of obligations
will not require the Trust to register as an "investment company" within the
meaning of the Investment Company Act of 1940, as amended, and that the
Transferor deliver to the Trustee and certain providers of Series Enhancement a
certificate of an authorized officer stating that, based on the facts known to
such officer at the time, in the reasonable opinion of the Transferor, such
deposit and termination of obligations will not at the time of its occurrence
cause a Pay Out Event or an event that, after the giving of notice or the lapse
of time, would constitute a Pay Out Event, to occur with respect to any Series.
If the Transferor discharges its substantive obligations in respect of the
Defeased Series, any Series Enhancement for the affected Series might no longer
be available to make payments with respect thereto.
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LIST OF CERTIFICATEHOLDERS
Upon application of Certificateholders of record representing undivided
interests in the Trust aggregating not less than 10% of the aggregate unpaid
principal amount of any Series or all Series, as applicable, the Trustee will,
having been adequately indemnified by such Certificateholders, within five
business days of such request, afford such Certificateholders access during
business hours to the current list of registered Certificateholders of such
Series or all Series, as applicable, for purposes of communicating with other
Certificateholders with respect to their rights under the Pooling and Servicing
Agreement or any Series Supplement or the Certificates.
THE TRUSTEE
The Bank of New York, a New York banking corporation, will be Trustee under
the Pooling and Servicing Agreement. The Transferor, the Servicer and their
respective affiliates may from time to time enter into normal banking and
trustee relationships with the Trustee and its affiliates. The Trustee, the
Transferor, the Servicer and any of their respective affiliates may hold
Certificates in their own names. In addition, for purposes of meeting the legal
requirements of certain local jurisdictions, the Trustee shall have the power to
appoint a co-trustee or separate trustees of all or any part of the Trust. In
the event of such appointment, all rights, powers, duties and obligations
conferred or imposed upon the Trustee by the Pooling and Servicing Agreement
shall be conferred or imposed upon the Trustee and such separate trustee or
co-trustee jointly, or, in any jurisdiction in which the Trustee shall be
incompetent or unqualified to perform certain acts, singly upon such separate
trustee or co-trustee who shall exercise and perform such rights, powers, duties
and obligations solely at the direction of the Trustee.
The Trustee may resign at any time, in which event the Servicer will be
obligated to appoint a successor Trustee. The Servicer may also remove the
Trustee if the Trustee ceases to be eligible to continue as such under the
Pooling and Servicing Agreement, is legally unable to act or if the Trustee
becomes bankrupt or insolvent. In such circumstances, the Servicer will be
obligated to appoint a successor Trustee. Any resignation or removal of the
Trustee and appointment of a successor Trustee does not become effective until
acceptance of the appointment by the successor Trustee.
SERIES ENHANCEMENT
GENERAL
For any Series, Series Enhancement may be provided with respect to one or
more Classes thereof. Series Enhancement may be in the form of the subordination
of one or more Classes of the Certificates of such Series, a letter of credit,
the establishment of a cash collateral guaranty or account, a collateral
interest, a surety bond, insurance, the use of cross support features or another
method of Series Enhancement described in the related Prospectus Supplement, or
any combination of the foregoing. If so specified in the related Prospectus
Supplement, any form of Series Enhancement may be structured so as to be drawn
upon by more than one Class to the extent described therein.
Unless otherwise specified in the related Prospectus Supplement for a
Series, the Series Enhancement will not provide protection against all risks of
loss and will not guarantee repayment of the entire principal balance of the
Certificates and interest thereon. If losses occur which exceed the amount
covered by the Series Enhancement or which are not covered by the Series
Enhancement, Certificateholders will bear their allocable share of deficiencies.
If Series Enhancement is provided with respect to a Series, the related
Prospectus Supplement will include a description of (a) the amount payable under
such Series Enhancement, (b) any conditions to payment thereunder not otherwise
described herein, (c) the conditions (if any) under which the amount payable
under such Series Enhancement may be reduced and under which such Series
Enhancement may
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be terminated or replaced and (d) any provisions of any agreement relating to
such Series Enhancement material to the Certificateholders of such Series.
Additionally, the related Prospectus Supplement may set forth certain
information with respect to the issuer of any third-party Series Enhancement,
including (i) a brief description of its principal business activities, (ii) its
principal place of business, place of incorporation and the jurisdiction under
which it is chartered or licensed to do business, (iii) if applicable, the
identity of regulatory agencies which exercise primary jurisdiction over the
conduct of its business and (iv) its total assets, and its stockholders' or
policyholders' surplus, if applicable, as of the date specified in the
Prospectus Supplement.
SUBORDINATION
If so specified in the related Prospectus Supplement, one or more Classes of
a Series may be subordinated to one or more other Classes of a Series. If so
specified in the related Prospectus Supplement, the rights of the holders of the
subordinated Certificates to receive distributions of principal and/or interest
on any Distribution Date will be subordinated to such rights of the holders of
the Certificates which are senior to such subordinated Certificates to the
extent set forth in the related Prospectus Supplement. The amount of
subordination may decrease whenever certain amounts otherwise payable to the
holders of subordinated Certificates are paid to the holders of the Certificates
that are senior to such subordinated Certificates.
LETTER OF CREDIT
If so specified in the related Prospectus Supplement, a letter of credit
with respect to a Series or Class of Certificates may be issued by the bank or
financial institution specified in the related Prospectus Supplement (the "L/C
Bank"). Under the letter of credit, the L/C Bank will be obligated to honor
drawings thereunder in an aggregate fixed dollar amount, net of unreimbursed
payments thereunder, equal to the amount described in the related Prospectus
Supplement. The amount available under the letter of credit will be reduced to
the extent of the unreimbursed payments thereunder.
CASH COLLATERAL GUARANTY OR ACCOUNT
If specified in the related Prospectus Supplement, the Certificates of any
Class or Series may have the benefit of a Cash Collateral Guaranty issued
pursuant to a trust agreement between a cash collateral depositor, a cash
collateral trustee and the Transferor and the Servicer or a Cash Collateral
Account directly. The Cash Collateral Guaranty will generally be an obligation
of the cash collateral trust and not of the cash collateral depositor, the cash
collateral trustee (except to the extent of amounts on deposit in the cash
collateral account), the Trustee, the Transferor, the Servicer or any Account
Owner.
The Servicer will determine on each Determination Date with respect to the
Series enhanced by the Cash Collateral Guaranty or the Cash Collateral Account
whether a deficiency exists with respect to the payment of interest and/or
principal on the Certificates so enhanced. If the Servicer determines that a
deficiency exists, it shall instruct the Trustee to draw an amount equal to such
deficiency from the Cash Collateral Guaranty or the Cash Collateral Account, up
to the maximum amount available thereunder.
COLLATERAL INTEREST
If so specified in the Prospectus Supplement, support for a Series of
Certificates or one or more Classes thereof may be provided initially by a
certificated or uncertificated, subordinated interest in the Trust (the
"Collateral Interest") in an amount initially equal to a percentage of the
Certificates of such Series specified in the Prospectus Supplement.
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SURETY BOND OR INSURANCE POLICY
If so specified in the related Prospectus Supplement, insurance with respect
to a Series or Class of Certificates may be provided by one or more insurance
companies. Such insurance will guarantee, with respect to one or more Classes of
the related Series, distributions of interest or principal in the manner and
amount specified in the related Prospectus Supplement.
If so specified in the related Prospectus Supplement, a surety bond may be
purchased for the benefit of the holders of any Series or Class of such Series
to assure distributions of interest or principal with respect to such Series or
Class of Certificates in the manner and amount specified in the related
Prospectus Supplement.
SPREAD ACCOUNT
If so specified in the related Prospectus Supplement, support for a Series
or one or more Classes of a Series may be provided by the periodic deposit of
certain available excess cash flow from the Trust Assets into an account (the
"Spread Account") intended to assure the subsequent distribution of interest and
principal on the Certificates of such Class or Series in the manner specified in
the related Prospectus Supplement.
CERTAIN LEGAL ASPECTS OF THE RECEIVABLES
TRANSFER OF RECEIVABLES
Under the Receivables Transfer Agreements, the Banks, and any Additional
Account Owners, will sell the Receivables to the Transferor and the Transferor,
in turn, will transfer the Receivables to the Trust. Each Account Owner and the
Transferor represents and warrants that its respective transfer constitutes a
valid sale and assignment of all of its respective right, title and interest in
and to the Receivables. The Transferor also represents and warrants that, if the
transfer of Receivables by the Transferor to the Trust is deemed to create a
security interest under the Uniform Commercial Code ("UCC"), there exists a
valid, subsisting and enforceable first priority perfected security interest in
the Receivables in existence at the time of the formation of the Trust or at the
date of any designation of Additional Accounts, as the case may be, in favor of
the Trust and a valid, subsisting and enforceable first priority perfected
security interest in the Receivables created thereafter in favor of the Trust on
and after their creation, in each case, until termination of the Trust.
Each Account Owner and the Transferor represents and warrants that the
Receivables are "accounts" or "general intangibles" for purposes of the UCC.
Both the sale of accounts and the transfer of accounts as security for an
obligation are treated under Article 9 of the UCC as creating a security
interest therein and are subject to its provisions, and the filing of
appropriate financing statements is required to perfect the security interest of
the Trust. If a transfer of general intangibles is deemed to create a security
interest, the UCC applies and filing of an appropriate financing statement is
also required in order to perfect the Trust's security interest in the
Receivables. Financing statements covering the Receivables will be filed with
the appropriate governmental authority to protect the interests of the Trust in
the Receivables. If a transfer of general intangibles is deemed not to create a
security interest, the filing of a financing statement is not required to
protect the Trust's interest from third parties.
There are certain limited circumstances under the UCC in which a prior or
subsequent transferee of Receivables coming into existence after the date on
which such Receivables are transferred to the Trust could have an interest in
such Receivables with priority over the Trust's interest. Under the Receivables
Transfer Agreement, each Account Owner warrants, and under the Pooling and
Servicing Agreement, the Transferor warrants, that it has transferred the
Receivables free and clear of the lien of any third party, except for certain
tax and governmental liens and other nonconsensual liens. In addition, each of
the Account Owners and the Transferor covenants that, except as permitted by the
Pooling and Servicing Agreement, it will not sell, pledge, assign, transfer or
grant any lien on any Receivable (or any interest therein) other than to the
Transferor on the Trust. A tax or other government lien or other nonconsensual
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lien on property of the Transferor arising prior to the time a Receivable comes
into existence may, however, have priority over the interest of the Trust in
such Receivable. In addition, if the FDIC were appointed as receiver or
conservator of one of the Banks, certain administrative expenses of the receiver
or conservator or the Delaware State Bank Commissioner and certain borrowings
made by the receiver or conservator may also have priority over the interest of
the Trust in the Receivables arising from the Accounts owned by such Bank.
CERTAIN MATTERS RELATING TO INSOLVENCY
Each of the Banks is chartered as a Delaware banking corporation and is
subject to regulation and supervision by the Delaware State Bank Commissioner.
If a Bank becomes insolvent or is in an unsound condition or if certain other
circumstances occur, the Delaware State Bank Commissioner may request the
Attorney General of Delaware to apply to the Delaware Court of Chancery for an
order appointing a receiver for such Bank. Since each Bank is a FDIC-insured
bank, Delaware law would require that the FDIC be appointed receiver and, as a
matter of federal law, the FDIC would be authorized, but not obligated, to
accept such appointment.
The FDIA, as amended by FIRREA, sets forth certain powers that the FDIC
could exercise if it were appointed as receiver or conservator of a Bank.
Positions taken by the FDIC staff prior to the passage of FIRREA do not suggest
that the FDIC, as conservator or receiver for the relevant Bank, would interfere
with the timely transfer to a Trust of payments collected on the related
Receivables. If, however, the FDIC were to assert a contrary position, such as
requiring the Transferor or the Trustee to establish its right to those payments
by submitting to and completing the administrative claims procedure under the
FDIA, or the conservator or receiver were to request a stay of proceedings with
respect to the Transferor or the Trust as provided under the FDIA, delays in
payments on the related Series of Certificates and possible reductions in the
amount of those payments could occur. In addition, the FDIC, if appointed as
conservator or receiver for a Bank, has the power under the FDIA to repudiate
contracts, including secured contracts of such Bank. The FDIA provides that a
claim for damages arising from the repudiation of a contract is limited to
"actual direct compensatory damages." In the event the FDIC were to be appointed
as conservator or receiver of a Bank and were to repudiate the Receivables
Transfer Agreement, then the amount payable out of available collateral to the
Certificateholders could be lower than the outstanding principal and accrued
interest on the Certificates.
The U.S. Court of Appeals for the Tenth Circuit, in OCTAGON GAS SYSTEM, INC.
V. RIMMER decided May 27, 1993, concluded that "accounts," as defined under the
UCC, and which could include the Receivables, may properly be included in the
bankruptcy estate of a transferor regardless of whether the transfer of such
Receivables is treated as a sale or a secured loan. The circumstances under
which the OCTAGON ruling would apply are not fully known and the extent to which
the OCTAGON decision will be followed in other courts or outside of the Tenth
Circuit is not certain. If the findings in the OCTAGON case were applied in a
bankruptcy of the Transferor, the Receivables would be part of its bankruptcy
estate, would be subject to claims of certain creditors and would be subject to
the potential delays and reductions in payments to the Trust and the
Certificateholders even if the transfer is treated as a sale.
The Transferor will take all actions that are required under the UCC to
perfect the Trust's interest in the Receivables and the Transferor has warranted
to the Trust that the Trust will have a first priority security interest therein
and, with certain exceptions, in the proceeds thereof. Nevertheless, a tax or
government lien or other nonconsensual lien on property of the Transferor
arising prior to the time a Receivable is conveyed to the Trust may have
priority over the interest of the Trust in such Receivable. The Transferor has
been structured such that (i) the voluntary or involuntary application for
relief under the Bankruptcy Code or similar applicable state laws, and (ii) the
substantive consolidation of the Transferor and Commercial Credit Company are
unlikely. The Transferor is a separate, limited purpose subsidiary, the
certificate of incorporation of which provides that it shall not file a
voluntary petition for relief under the Bankruptcy Code without the unanimous
affirmative vote of all of its directors. Pursuant to the Pooling and Servicing
Agreement, the Trustee covenants that it will not at any time institute against
the Transferor
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any bankruptcy, reorganization or other proceedings under any federal or state
bankruptcy or similar law. In addition, certain other steps will be taken to
avoid the Transferor's becoming a debtor in a bankruptcy case. Notwithstanding
such steps, if the Transferor were to become a debtor in a bankruptcy case, and
a bankruptcy trustee for the Transferor or a creditor of the Transferor or the
Transferor itself were to take the position that the transfer of the Receivables
from the Transferor to the Trust should be recharacterized as a pledge of such
Receivables, then delays in payments on the Certificates and possible reductions
in the amount of such payments could result.
While The Travelers Bank is the Servicer, cash collections held by the
Servicer may, subject to certain conditions, be commingled and used for the
benefit of The Travelers Bank prior to each Distribution Date and, in the event
of the bankruptcy, insolvency or receivership of The Travelers Bank or, in
certain circumstances, the lapse of certain time periods the Trust may not have
a perfected interest in such collections and accordingly, be entitled to such
collections the Servicer will be allowed to make monthly rather than daily
deposits of collections to the Collection Account if any of the following
conditions are satisfied: (i) The Travelers Bank maintains a commercial paper
rating of at least A-1 and P-1 by Standard & Poor's and Moody's, as applicable,
(for such other rating below A-1 or P-1, as the case may be, that is acceptable
to each Rating Agency), (ii) Commercial Credit Company has a commercial paper
rating of at least A-1 and P-1 by Standard & Poor's and Moody's, The Travelers
Bank remains a direct or indirect majority-owned Travelers Group Inc. subsidiary
and certain other arrangements are made satisfactory to each Rating Agency or
(iii) any other arrangement that satisfies the Rating Agency Condition. If none
of the foregoing conditions are satisfied, then The Travelers Bank will, within
five business days, commence the deposit of collections directly into the
Collection Account within two business days of the Date of Processing.
The Pooling and Servicing Agreement provides that, upon the commencement of
an Insolvency Event with respect to the Transferor, the Transferor will promptly
give notice thereof to the Trustee, and a Pay Out Event with respect to all
Series will occur. Under the Pooling and Servicing Agreement, no new Principal
Receivables will be transferred to the Trust. Upon the occurrence of a Pay Out
Event or a Reinvestment Event, if a conservator or receiver is appointed for the
Transferor and no Pay Out Event or Reinvestment Event other than such
conservatorship or receivership or insolvency of the Transferor exists, the
conservator or receiver may have the power to prevent the commencement of a
Rapid Amortization Period or Rapid Accumulation Period with respect to any
outstanding Series. In addition, a conservator or receiver for the Transferor
may have the power to cause early sale of the Receivables and the early payment
of the Certificates or to prohibit the continued transfer of Principal
Receivables to the Trust.
In the event of a Servicer Default, if a conservator or receiver is
appointed for the Servicer, and no Servicer Default other than such
conservatorship or receivership or insolvency of the Servicer exists, the
conservator or receiver may have the power to prevent either the Trustee or
Certificateholders from effecting a transfer of servicing to a successor
Servicer.
CONSUMER PROTECTION LAWS
The relationship of the cardholder and credit card issuer is extensively
regulated by Federal and state consumer protection laws. With respect to credit
cards issued by the Banks, the most significant of these laws include the
Federal Truth-in-Lending Act, Equal Credit Opportunity Act, Fair Credit
Reporting Act, Fair Debt Collection Practice Act and Electronic Funds Transfer
Act, and comparable statutes in the states in which cardholders reside. These
statutes impose disclosure requirements when a credit card account is
advertised, when it is opened, at the end of monthly billing cycles, upon
account renewal for accounts on which annual fees are assessed, and at year end
and, in addition, limit cardholder liability for unauthorized use, prohibit
certain discriminatory practices in extending credit, and impose certain
limitations on the type of account-related charges that may be assessed. Federal
legislation requires credit card issuers to disclose to consumers the interest
rates, annual cardholder fees, grace periods, and balance calculation methods
associated with their credit card accounts. Cardholders are entitled under
current law to have payments and credits applied to the credit card account
promptly, to receive prescribed notices and to have billing
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errors resolved promptly. Congress and the states may enact new laws and
amendments to existing laws to regulate further the credit card industry.
The Trust may be liable for certain violations of consumer protection laws
that apply to the Receivables, either as assignee of the Account Owner with
respect to obligations arising before transfer of the Receivables to the Trust
or as a party directly responsible for obligations arising after the transfer.
In addition, a cardholder may be entitled to assert such violations by way of
set-off against his obligation to pay the amount of Receivables owing. All
Receivables that were not created in compliance in all material respects with
the requirements of such laws (if such noncompliance has a material adverse
effect on the Certificateholders' Interest therein) will be reassigned to the
Transferor and ultimately back to the applicable Account Owner. The Servicer has
also agreed in the Pooling and Servicing Agreement to indemnify the Trust for,
among other things, any liability arising from such violations. See "The Pooling
and Servicing Agreement Generally--Representations, Warranties and Covenants."
Application of Federal and state bankruptcy and debtor relief laws would
adversely affect the interests of the Certificateholders if such laws result in
any Receivables being written off as uncollectible. See "The Pooling and
Servicing Agreement Generally--Defaulted Receivables; Rebates and Fraudulent
Charges."
PROPOSED LEGISLATION
Congress and the states may enact new laws and amendments to existing laws
to regulate further the credit card industry or to reduce finance charges or
other fees or charges applicable to credit card accounts. The potential effect
of any such legislation could be to reduce the yield on the Accounts. If such
yield is reduced, a Pay Out Event or Reinvestment Event could occur, and the
Rapid Amortization Period or Rapid Accumulation Period would commence. See "The
Pooling and Servicing Agreement Generally-- Pay Out Events and Reinvestment
Events."
RECENT LITIGATION
Since October 1991, a number of lawsuits and administrative actions have
been filed in several states against out-of-state banks (both federally-insured
state-chartered banks and federally-insured national banks) which issued credit
cards. These actions challenge various fees and charges (such as late fees,
over-the-limit fees, returned check charges and annual membership fees) assessed
against residents of the states in which such suits were filed, based on
restrictions or prohibitions under such states' laws alleged to be applicable to
the out-of-state credit card issuers. The Supreme Courts of California, Colorado
and New Jersey have recently issued decisions in such actions. The California
and Colorado Supreme Courts opined that federal law governed late fees and found
for the respective defendant banks, while the New Jersey Supreme Court found
that late payment fees are not interest and that, therefore, state law is not
preempted by federal law with respect to such fees. On June 3, 1996, the United
States Supreme Court upheld the decision of the California Supreme Court,
holding that the late payment fees in question were "interest" and as such were
governed by federal law, which authorizes federally-insured state banks to
charge out-of-state customers an interest rate allowed by the bank's home state.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
GENERAL
The following is a general discussion of material federal income tax
consequences relating to the purchase, ownership and disposition of a
Certificate offered hereunder. Additional federal income tax considerations
relevant to a particular Series may be set forth in the related Prospectus
Supplement. This discussion is based on current law, which is subject to changes
that could prospectively or retroactively modify or adversely affect the tax
consequences summarized below. The discussion does not address all of the tax
consequences relevant to a particular Certificate Owner in light of that
Certificate Owner's circumstances, and some Certificate Owners may be subject to
special tax rules and limitations not discussed below. Each prospective
Certificate Owner is urged to consult its own tax adviser in determining
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the federal, state, local and foreign income and any other tax consequences of
the purchase, ownership and disposition of a Certificate.
For purposes of this discussion, "U.S. Person" means a citizen or resident
of the United States, a corporation or partnership organized in or under the
laws of the United States, any state thereof, or any political subdivision of
either (including the District of Columbia), or an estate or trust the income of
which is includible in gross income for U.S. federal income tax purposes
regardless of its source. The term "U.S. Certificate Owner" means any U.S.
Person and any other person to the extent that the income attributable to its
interest in a Certificate is effectively connected with that person's conduct of
a U.S. trade or business.
TREATMENT OF THE CERTIFICATES AS DEBT
The Transferor and the Certificateholders express in the Pooling and
Servicing Agreement the intent that for federal, state and local income and
franchise tax purposes, the Certificates will be debt secured by the
Receivables. The Transferor, by entering into the Pooling and Servicing
Agreement, and each investor, by the acceptance of a beneficial interest in a
Certificate, will agree to treat the Certificates as debt for federal, state and
local income and franchise tax purposes. However, the Pooling and Servicing
Agreement generally refers to the transfer of Receivables as a "sale," and
because different criteria are used in determining the non-tax accounting
treatment of the transaction, the Transferor will treat the Pooling and
Servicing Agreement for certain non-tax accounting purposes as causing a
transfer of an ownership interest in the Receivables and not as creating a debt
obligation.
A basic premise of federal income tax law is that the economic substance of
a transaction generally determines its tax consequences. The form and non-tax
characterization of a transaction, while relevant factors, are not conclusive
evidence of its economic substance. In appropriate circumstances, the courts
have allowed taxpayers as well as the Internal Revenue Service (the "IRS") to
treat a transaction in accordance with its economic substance as determined
under federal income tax law, even though the participants in the transaction
have characterized it differently for non-tax purposes.
The determination of whether the economic substance of a purchase of an
interest in property is instead a loan secured by the transferred property has
been made by the IRS and the courts on the basis of numerous factors designed to
determine whether the Transferor has relinquished (and the purchaser has
obtained) substantial incidents of ownership in the property. Among those
factors, the primary ones examined are whether the purchaser has the opportunity
to gain if the property increases in value, and has the risk of loss if the
property decreases in value. Except to the extent otherwise specified in the
related Prospectus Supplement, Orrick, Herrington & Sutcliffe LLP, as special
tax counsel, ("Special Tax Counsel"), will deliver its opinion generally to the
effect that, under current law as in effect on the Relevant Closing Date,
although no transaction closely comparable to that contemplated herein has been
the subject of any Treasury regulation, revenue ruling or judicial decision, for
federal income tax purposes the Certificates offered hereunder will not
constitute an ownership interest in the Receivables, but properly will be
characterized as debt. Except where indicated to the contrary, the following
discussion assumes that the Certificates offered hereunder are debt for federal
income tax purposes.
TREATMENT OF THE TRUST
GENERAL. The Pooling and Servicing Agreement permits the issuance of
Certificates and certain other interests in the Trust (including Collateral
Interests), each of which may be treated for federal income tax purposes either
as debt or as equity interests in the Trust. If all of the Certificates and
other interests (other than the Transferor Certificate) in the Trust were
characterized as debt, the Trust might be characterized as a security
arrangement for debt collateralized by the Receivables and issued directly by
the Transferor (or other holders of the Transferor Certificate). Under such a
view, the Trust would be disregarded for federal income tax purposes.
Alternatively, if some of the Certificates or other interests in the Trust
(other than the Transferor Certificate) were characterized as equity, the Trust
might be characterized as a separate
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entity owning the Receivables, issuing its own debt, and jointly owned by the
Transferor (or other holder of the Transferor Certificate) and the other holders
of equity interests in the Trust.
POSSIBLE TREATMENT OF THE TRUST AS A PARTNERSHIP OR A PUBLICLY TRADED
PARTNERSHIP. Although, as described above, Special Tax Counsel will deliver its
opinion that the Certificates will properly be treated as debt for federal
income tax purposes, such opinion will not bind the IRS and thus no assurance
can be given that such treatment will prevail. If the IRS were to contend
successfully that some or all of the Certificates or any other interest in the
Trust (other than the Transferor Certificate, but including any Collateral
Interest) were not debt obligations for federal income tax purposes, all or a
portion of the Trust could be classified as a partnership or a publicly traded
partnership taxable as a corporation for such purposes. Because Special Tax
Counsel will deliver its opinion that the Certificates will be characterized as
debt for federal income tax purposes and because any holder of an interest in a
Collateral Interest will agree to treat that interest as debt for such purposes,
no attempt will be made to comply with any tax reporting requirements that would
apply as a result of such alternative characterizations.
If the Trust were treated in whole or in part as a partnership in which some
or all holders of interests in the publicly offered Certificates were partners,
that partnership could be classified as a publicly traded partnership and so
could be taxable as a corporation. Further, regulations published by the
Treasury Department (the "Regulations") could cause the Trust to constitute a
publicly traded partnership even if all holders of interests in publicly offered
Certificates are treated as holding debt. If the Trust were classified as a
publicly traded partnership, whether by reason of the treatment of publicly
offered Certificates as equity or by reason of the Regulations, it would avoid
taxation as a corporation if its income was not derived in the conduct of a
"financial business;" however, whether the income of the Trust would be so
classified is unclear.
Under the Code and the Regulations, a partnership will be classified as a
publicly traded partnership if equity interests therein are traded on an
"established securities market," or are "readily tradable" on a "secondary
market" or its "substantial equivalent." The Transferor intends to take measures
designed to reduce the risk that the Trust could be classified as a publicly
traded partnership by reason of interests in the Trust other than the publicly
traded Certificates. Although the Transferor expects such measures will
ultimately be successful, certain of the actions that may be necessary for
avoiding the treatment of such interests as "readily tradable" on a "secondary
market" or its "substantial equivalent" are not fully within the control of the
Transferor. As a result, there can be no assurance that the measures the
Transferor intends to take will in all circumstances be sufficient to prevent
the Trust from being classified as a publicly traded partnership under the
Regulations.
If the Trust were treated as a partnership other than a publicly traded
partnership taxable as a corporation, that partnership would not be subject to
federal income tax. Rather, each item of income, gain, loss and deduction of the
partnership generated through the ownership of the related Receivables would be
taken into account directly in computing taxable income of the Transferor (or
the holder of the Transferor Certificate) and any Certificate Owners treated as
partners in accordance with their respective partnership interests therein. The
amounts and timing of income reportable by any Certificate Owners treated as
partners would likely differ from that reportable by such Certificate Owners had
they been treated as owning debt. In addition, if the Trust were treated in
whole or in part as a partnership other than a publicly traded partnership,
income derived from the partnership by any Certificate Owner that is a pension
fund or other tax-exempt entity may be treated as unrelated business taxable
income. Partnership characterization also may have adverse state and local
income or franchise tax consequences for a Certificate Owner. Further, if the
Trust were treated in whole or in part as a partnership and the number of
holders of interests in the publicly offered Certificates and other interests in
the Trust treated as partners equaled or exceeded 100, the Transferor may cause
that Trust to elect to be an "electing large partnership." The consequence of
such election to investors could include the determination of certain tax items
at the partnership level and the disallowance of otherwise allowable deductions.
No representation is made as to whether any such election will be made.
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If the arrangement created by the Pooling and Servicing Agreement were
treated in whole or in part as a publicly traded partnership taxable as a
corporation, that entity would be subject to federal income tax at corporate tax
rates on its taxable income generated by ownership of the related Receivables.
That tax could result in reduced distributions to Certificate Owners. No
distributions from the Trust would be deductible in computing the taxable income
of the corporation, except to the extent that any Certificates were treated as
debt of the corporation and distributions to the related Certificate Owners were
treated as payments of interest thereon. In addition, distributions to
Certificate Owners not treated as holding debt would be dividend income to the
extent of the current and accumulated earnings and profits of the corporation
(and Certificate Owners may not be entitled to any dividends received deduction
in respect of such income).
FASIT ELECTION. Upon satisfying certain conditions set forth in the Pooling
and Servicing Agreement, the Transferor will be permitted to amend the Pooling
and Servicing Agreement and any Supplement in order to enable all or a portion
of a Trust to qualify under the Code as a "financial asset securitization
investment trust" or "FASIT" and to permit a FASIT election to be made with
respect thereto. See "The Pooling and Servicing Agreement
Generally--Amendments." Under the FASIT provisions of the Code, a FASIT
generally would avoid federal income taxation and could issue securities
substantially similar to the Certificates, and those securities would be treated
as debt for federal income tax purposes. However, there can be no assurance that
the Transferor will or will not cause any permissible FASIT election to be made
with respect to a Trust, or amend the Pooling and Servicing Agreement or any
Supplement in connection with any election. However, if such an election is
made, it may cause a holder to recognize gain (but not loss) with respect to its
Certificate, even though Special Tax Counsel will deliver its opinion that a
Certificate will be treated as debt for federal income tax purposes without
regard to the election and the Certificate would be treated as debt following
the election. Additionally, any such election and any related amendments to the
Pooling and Servicing Agreement and any Supplement may have other tax and
non-tax consequences to Certificateholders. Accordingly, prospective
Certificateholders should consult their tax advisors with regard to the effects
of any such election and any permitted related amendments on them in their
particular circumstances.
TAXATION OF INTEREST INCOME OF U.S. CERTIFICATE OWNERS
GENERAL. Stated interest on a beneficial interest in a Certificate will be
includible in gross income in accordance with a U.S. Certificate Owner's method
of accounting.
ORIGINAL ISSUE DISCOUNT. If the Certificates are issued with original issue
discount ("OID"), the provisions of sections 1271 through 1273 and 1275 of the
Internal Revenue Code of 1986 (the "Code") will apply to the Certificates. Under
those provisions, a U.S. Certificate Owner (including a cash basis holder)
generally would be required to accrue the OID on its interest in a Certificate
in income for federal income tax purposes on a constant yield basis, resulting
in the inclusion of OID in income somewhat in advance of the receipt of cash
attributable to that income. In general, a Certificate will be treated as having
OID to the extent that its "stated redemption price" exceeds its "issue price,"
if such excess is more than 0.25 percent multiplied by the weighted average life
of the Certificate (determined by taking into account only the number of
complete years following issuance until payment is made for any partial
principal payments). Under section 1272(a)(6) of the Code, special provisions
apply to debt instruments on which payments may be accelerated due to
prepayments of other obligations securing those debt instruments. However, no
regulations have been issued interpreting those provisions, and the manner in
which those provisions would apply to the Certificates is unclear. Additionally,
the IRS could take the position based on Treasury regulations that none of the
interest payable on a Certificate is "unconditionally payable" and hence that
all of such interest should be included in the Certificate's stated redemption
price at maturity. If sustained, such treatment should not significantly affect
the tax liability of most Certificate Owners, but prospective U.S. Certificate
Owners should consult their own tax advisers concerning the impact to them in
their particular circumstances.
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MARKET DISCOUNT. A U.S. Certificate Owner who purchases an interest in a
Certificate at a discount that exceeds any unamortized OID may be subject to the
"market discount" rules of sections 1276 through 1278 of the Code. These rules
provide, in part, that gain on the sale or other disposition of a Certificate
and partial principal payments on a Certificate are treated as ordinary income
to the extent of accrued market discount. The market discount rules also provide
for deferral of interest deductions with respect to debt incurred to purchase or
carry a Certificate that has market discount.
MARKET PREMIUM. A U.S. Certificate Owner who purchases an interest in a
Certificate at a premium may elect to offset the premium against interest income
over the remaining term of the Certificate in accordance with the provisions of
section 171 of the Code.
SALE OR EXCHANGE OF CERTIFICATES
Upon a disposition of an interest in a Certificate, a U.S. Certificate Owner
generally will recognize gain or loss equal to the difference between the amount
realized on the disposition and the U.S. Certificate Owner's adjusted basis in
its interest in the Certificate. A taxable exchange of a Certificate also could
occur as a result of the Transferor's substitution of money or investments for
Receivables; see "The Pooling and Servicing Agreement Generally--Defeasance."
The adjusted basis in the interest in the Certificate will equal its cost,
increased by any OID or market discount includible in income with respect to the
interest in the Certificate prior to its sale and reduced by any principal
payments previously received with respect to the interest in the Certificate and
any amortized premium. Subject to the market discount rules, gain or loss will
be capital gain or loss if the interest in the Certificate was held as a capital
asset. Capital losses generally may be used only to offset capital gains.
NON-U.S. CERTIFICATE OWNERS
In general, a non-U.S. Certificate Owner will not be subject to U.S. federal
income tax on interest (including OID) on a beneficial interest in a Certificate
unless (i) the non-U.S. Certificate Owner actually or constructively owns 10
percent or more of the total combined voting power of all classes of stock of
the Transferor entitled to vote (or of a profits or capital interest of the
Trust if characterized as a partnership), (ii) the non-U.S. Certificate Owner is
a controlled foreign corporation that is related to the Transferor (or the Trust
if treated as a partnership) through stock ownership, (iii) the non-U.S.
Certificate Owner is a bank described in Code Section 881(c)(3)(A), (iv) such
interest is contingent interest described in Code Section 871(h)(4), or (v) the
non-U.S. Certificate Owner bears certain relationships to any holder of either
the Transferor Certificate other than the Transferor or any other interest in
the Trust not properly characterized as debt. To qualify for the exemption from
taxation, under currently applicable procedures the last U.S. Person in the
chain of payment prior to payment to a non-U.S. Certificate Owner (the
"Withholding Agent") must have received (in the year in which a payment of
interest or principal occurs or in either of the two preceding years) a
statement that (i) is signed by the non-U.S. Certificate Owner under penalties
of perjury, (ii) certifies that the non-U.S. Certificate Owner is not a U.S.
Person and (iii) provides the name and address of the non-U.S. Certificate
Owner. The statement may be made on a Form W-8 or substantially similar
substitute form, and the non-U.S. Certificate Owner must inform the Withholding
Agent of any change in the information on the statement within 30 days of the
change. If a Certificate is held through a securities clearing organization or
certain other financial institutions, the organization or institution may
provide a signed statement to the Withholding Agent. However, in that case, the
signed statement must be accompanied by a Form W-8 or substitute form provided
by the non-U.S. Certificate Owner to the organization or institution holding the
Certificate on behalf of the non-U.S. Certificate Owner. The U.S. Treasury
Department is considering implementation of further certification requirements
aimed at determining whether the issuer of a debt obligation is related to
holders thereof. The U.S. Treasury Department recently issued final regulations
which will revise some of the foregoing procedures whereby a non-U.S.
Certificate may establish an exemption from withholding beginning January 1,
1999. Non-U.S. Certificate Owners should consult their tax advisers concerning
the impact to them, if any, of such procedures.
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Generally, any gain or income realized by a non-U.S. Certificate Owner upon
retirement or disposition of an interest in a Certificate will not be subject to
U.S. federal income tax, provided that (i) in the case of a Certificate Owner
that is an individual, such Certificate Owner is not present in the United
States for 183 days or more during the taxable year in which such retirement or
disposition occurs and (ii) in the case of gain representing accrued interest,
the conditions described in the preceding paragraph for exemption from
withholding are satisfied. Certain exceptions may be applicable, and an
individual non-U.S. Certificate Owner should consult a tax adviser.
If the Certificates were treated as an interest in a partnership, the
recharacterization could cause a non-U.S. Certificate Owner to be treated as
engaged in a trade or business in the United States. In that event, the non-U.S.
Certificate Owner would be required to file a federal income tax return and, in
general, would be subject to U.S. federal income tax (including the branch
profits tax) on its net income from the partnership. Further, certain
withholding obligations apply with respect to income allocable or distributions
made to a foreign partner. That withholding may be at a rate as high as 39.6
percent. If some or all of the Certificates were treated as stock in a
corporation, any related dividend distributions to a non-U.S. Certificate Owner
generally would be subject to withholding of tax at the rate of 30 percent,
unless that rate were reduced by an applicable tax treaty.
INFORMATION REPORTING AND BACKUP WITHHOLDING
Backup withholding of U.S. federal income tax at a rate of 31 percent may
apply to payments made in respect of a Certificate to a registered owner who is
not an "exempt recipient" and who fails to provide certain identifying
information (such as the registered owner's taxpayer identification number) in
the manner required. Generally, individuals are not exempt recipients whereas
corporations and certain other entities are exempt recipients. Payments made in
respect of a U.S. Certificate Owner must be reported to the IRS, unless the U.S.
Certificate Owner is an exempt recipient or otherwise establishes an exemption.
Compliance with the identification procedures (described in the preceding
section) would establish an exemption from backup withholding for a non-U.S.
Certificate Owner who is not an exempt recipient.
In addition, upon the sale of a Certificate to (or through) a "broker," the
broker must withhold 31 percent of the entire purchase price, unless either (i)
the broker determines that the Transferor is a corporation or other exempt
recipient or (ii) the Transferor provides certain identifying information in the
required manner, and in the case of a non-U.S. Certificate Owner certifies that
the Transferor is a non-U.S. Certificate Owner (and certain other conditions are
met). Such a sale must also be reported by the broker to the IRS, unless either
(i) the broker determines that the Transferor is an exempt recipient or (ii) the
Transferor certifies its non-U.S. status (and certain other conditions are met).
Certification of the registered owner's non-U.S. status normally would be made
on Form W-8 under penalties of perjury, although in certain cases it may be
possible to submit other documentary evidence. As defined by Treasury
regulations, the term "broker" includes all persons who stand ready to effect
sales made by others in the ordinary course of a trade or business, as well as
brokers and dealers registered as such under the laws of the United States or a
state. These requirements generally will apply to a U.S. office of a broker, and
the information reporting requirements generally will apply to a foreign office
of a U.S. broker as well as to a foreign office of a foreign broker (i) that is
a controlled foreign corporation within the meaning of section 957(a) of the
Code or (ii) 50 percent or more of whose gross income from all sources for the
three year period ending with the close of its taxable year preceding the
payment (or for such part of the period that the foreign broker has been in
existence) was effectively connected with the conduct of a trade or business
within the United States.
Any amounts withheld under the backup withholding rules from a payment to a
Certificate Owner would be allowed as a refund or a credit against such
Certificate Owner's U.S. federal income tax, provided that the required
information is furnished to the IRS.
Recently issued final Treasury regulations will revise some of the foregoing
information reporting and backup withholding procedures beginning January 1,
1999. Certificate Owners should consult their tax advisers concerning the impact
to them, if any, of such revised procedures.
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STATE AND LOCAL TAXATION
The discussion above does not address the taxation of the Trust or the tax
consequences of the purchase, ownership or disposition of an interest in the
Certificates under any state or local tax law. Each investor should consult its
own tax adviser regarding state and local tax consequences.
ERISA CONSIDERATIONS
Section 406 of ERISA and Section 4975 of the Code prohibit certain pension,
profit sharing or other employee benefit plans, individual retirement accounts
or annuities, employee annuity plans and Keogh plans (each, a "Plan") from
engaging in certain transactions involving "plan assets" with persons that are
"parties in interest" under ERISA or "disqualified persons" under the Code
(collectively, "Parties in Interest") with respect to the Plan. ERISA also
imposes certain duties on persons who are fiduciaries of Plans subject to ERISA
or Section 4975 of the Code and prohibits certain transactions between a Plan
and Parties in Interest with respect to such Plans. Under ERISA, any person who
exercises any authority or control respecting the management or disposition of
the assets of a Plan is considered to be a fiduciary of such Plan (subject to
certain exceptions not here relevant). A violation of these "prohibited
transaction" rules may generate excise tax and other liabilities under ERISA and
Section 4975 of the Code for such persons, unless a statutory regulatory or
administrative exemption is available. Plans that are governmental plans (as
defined in section 3(32) of ERISA) and certain church plans (as defined in
section 3(33) of ERISA) are not subject to ERISA requirements.
Plan fiduciaries must determine whether the acquisition and holding of the
Certificates of a Series and the operations of the Trust would result in direct
or indirect prohibited transactions under ERISA or Section 4975 of the Code. The
operations of the Trust could result in prohibited transactions if Plans that
purchase the Certificates of a Series are deemed to own an interest in the
underlying assets of the Trust. There may also be an improper delegation of the
responsibility to manage Plan assets if Plans that purchase the Certificates are
deemed to own an interest in the underlying assets of the Trust.
Pursuant to a regulation (the "Regulation") issued by the Department of
Labor ("DOL") concerning the definition of what constitutes the "plan assets" of
a Plan, the assets and properties of certain entities (including certain
insurance company general accounts) in which a Plan makes an equity investment
could be deemed to be assets of the Plan in certain circumstances. Accordingly,
if Plans purchase Certificates of a Series, the Trust could be deemed to hold
Plan assets unless one of the exceptions under the Regulation is applicable to
the Trust.
The Regulation only applies to the purchase by a Plan of an "equity
interest" in an entity. Because the Certificates will represent beneficial
interests in a Trust, and despite the agreement of the Transferor and the
Certificate Owners to treat each Series of Certificates as debt instruments, the
Certificates are likely to be considered equity interests in the Trust for
purposes of the Regulation, with the result that the Trust Assets are likely to
be treated as "plan assets" of the investing Plans for purposes of ERISA and
Section 4975 of the Code, unless either of the following exceptions applies. The
Regulation contains an exception that provides that if a Plan acquires a
"publicly-offered security," the issuer of the security is not deemed to hold
"plan assets." A publicly-offered security is a security that is (i) freely
transferable, (ii) part of a class of securities that is owned by 100 or more
investors independent of the issuer and of one another at the conclusion of the
initial public offering of such securities and (iii) either is (A) part of a
class of securities registered under Section 12(b) or 12(g) of the Exchange Act
or (B) sold to the Plan as part of an offering of securities to the public
pursuant to an effective registration statement under the Act and the class of
securities of which such security is a part is registered under the Exchange Act
within 120 days (or such later time as may be allowed by the Commission) after
the end of the fiscal year of the issuer during which the offering of such
securities to the public occurred. In addition, the Regulation provides that, if
at all times more than 75% of the value of each Class of equity interests in the
Trust (e.g., each Class of Certificates) is held by investors other than
"benefit plan investors" (which is defined in the Regulation as including Plans
and other employee benefit plans not subject to ERISA, such as governmental or
foreign
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plans, as well as entities holding assets deemed to be "plan assets"), the
investing plan's assets will not include any of the underlying Trust Assets.
No assurance can be made with respect to any offering of any Class of the
Certificates of any Series that the conditions which would allow the Trust
Assets not to be "plan assets" will be met, although the intention of the
Underwriters (but not their assurance) as to whether interests in each Class of
the Certificates of a particular Series will be held by at least 100 independent
investors at the conclusion of the offering for such Series, and therefore
qualify as publicly-offered securities eligible for the exception under the
Regulation, will be set forth in the related Prospectus Supplement.
If interests in a Class of the Certificates of a Series fail to meet the
criteria of publicly-offered securities and the Trust Assets are deemed to
include assets of Plans that hold Certificates of such Class, transactions
involving the Trust and Parties in Interest with respect to such Plans might be
prohibited under Section 406 of ERISA and Section 4975 of the Code unless an
exemption is applicable. In addition, any Transferor or any Underwriter of such
Series may be considered to be a Party in Interest or fiduciary with respect to
an investing Plan. Accordingly, an investment of "plan assets" of a Plan in such
Class of Certificates may result in a prohibited transaction under ERISA and
Section 4975 of the Code unless such investment is subject to a statutory or
administrative exemption. Thus, for example, if a participant in any Plan is a
cardholder of one of the Accounts, under DOL interpretations the purchase of
interests in such Class of Certificates by such Plan could constitute a
prohibited transaction. Five class exemptions issued by the DOL that could apply
in such event are DOL Prohibited Transaction Exemption ("PTCE") 96-23 (Class
Exemption for Plan Asset Transactions Determined by In-House Asset Managers),
PTCE 95-60 (Class Exemption for Certain Transactions Involving Insurance Company
General Accounts), PTCE 91-38 (Class Exemption for Certain Transactions
Involving Bank Collective Investment Funds), PTCE 90-1 (Class Exemption for
Certain Transactions Involving Insurance Company Pooled Separate Accounts) and
PTCE 84-14 (Class Exemption for Plan Asset Transactions Determined by
Independent Qualified Professional Asset Managers). There is no assurance that
these exemptions, even if all of the conditions specified therein are satisfied,
or any other exemption will apply to all transactions involving the Trust
Assets.
In light of the foregoing, fiduciaries or other persons contemplating
purchasing the Certificates (or any interest therein) on behalf or with "plan
assets" of any Plan should consult their own counsel regarding whether the Trust
Assets represented by the Certificates would be considered "plan assets," the
consequences that would apply if the Trust Assets were considered "plan assets,"
and the possibility of exemptive relief from the prohibited transaction rules.
The Small Business Job Protection Act of 1996 added new Section 401(c) of
ERISA relating to the status of the assets of insurance company general accounts
under ERISA and Section 4975 of the Code. Pursuant to Section 401(c), the DOL is
required to issue final regulations (the "General Account Regulations") not
later than December 31, 1997 with respect to insurance policies or annuity
contracts issued on or before December 31, 1998 that are supported by an
insurer's general account. The General Account Regulations are to provide
guidance on which assets held by the insurer constitute "plan assets" for
purposes of the fiduciary responsibility provisions of ERISA and Section 4975 of
the Code. The assets of a general account that support insurance polices or
annuity contracts (other than "guaranteed benefit polices" within the meaning of
Section 401(b)(2) of ERISA) (i) issued to Plans after December 31, 1998 or (ii)
issued to Plans on or before December 31, 1998 for which the insurance company
does not comply with the General Account Regulations, may be treated as "plan
assets." However, except in the case of avoidance of the General Account
Regulations and actions brought by the Secretary of Labor relating to certain
breaches of fiduciary duties that also constitute breaches of state or federal
criminal law, until the date that is 18 months after the General Account
Regulations become final, no liability under the fiduciary responsibility and
prohibited transaction provisions of ERISA and Section 4975 may result on the
basis of a claim that the assets of the general account of an insurance company
constitute the "plan assets" of any Plan. The plan asset status of insurance
company separate accounts is unaffected by new Section 401(c) of ERISA, and
separate account assets continue to be treated as the "plan assets" of any such
Plan invested in a separate account.
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If the assets of a general account invested in the Certificates are treated
as "plan assets" of any Plan or the protections of Section 401(c) of ERISA
become unavailable, certain violations of the prohibited transaction rules may
be deemed to occur as a result of the operation of the Trust. Insurance
companies contemplating the investment of general account assets in the
Certificates should consult with their legal advisors concerning the impact of
Section 401(c) of ERISA, including the status of assets of the general account
as "plan assets" after December 31, 1998, and accordingly, the general account's
ability to continue to hold the Certificates after the date that is 18 months
after the General Account Regulations become final.
Finally, Plan fiduciaries and other Plan investors should consider the
fiduciary standards under ERISA or other applicable law in the context of the
Plan's particular circumstances before authorizing an investment of a portion of
the Plan's assets in the Certificates. Accordingly, among other factors, Plan
fiduciaries and other Plan investors should consider whether the investment (i)
satisfies the diversification requirements of ERISA or other applicable law,
(ii) is in accordance with the Plan's governing instruments, and (iii) is
prudent in light of the "Risk Factors" and other factors discussed herein and in
the related Prospectus Supplement.
PLAN OF DISTRIBUTION
The Certificates of any Series offered hereby and by the related Prospectus
Supplement may be offered by the underwriter or underwriters named in the
related Prospectus Supplement as agent or underwriter, or through underwriting
syndicates represented by such underwriter or underwriters (collectively, the
"Underwriters").
The Prospectus Supplement relating to a Series will set forth the terms of
the offering of such Series and each Class within such Series, including the
name or names of the Underwriters, the proceeds to and their intended use by the
Transferor, and either the initial public offering price, the discounts and
commissions to the Underwriters and any discounts or concessions allowed or
reallowed to certain dealers, or the method by which the price at which the
Underwriters will sell the Certificates of such Series will be determined.
The Underwriters will be obligated, subject to certain conditions, to
purchase all of the Certificates described in the Prospectus Supplement relating
to a Series if any such Certificates are purchased. The Certificates may be
acquired by the Underwriters for their own account and may be resold from time
to time in one or more transactions, including negotiated transactions, at a
fixed public offering price or at varying prices determined at the time of sale.
The Transferor may also sell the Certificates offered hereby and by means of
the related Prospectus Supplements from time to time in negotiated transactions
or otherwise, at prices determined at the time of sale. Such transactions may be
effected by selling Certificates to or through dealers and such dealers may
receive compensation in the form of underwriting discounts, concessions or
commissions from the Transferor and any purchasers of Certificates for whom they
may act as agents.
The place and time of delivery for the Series in respect of which this
Prospectus is delivered will be set forth in the related Prospectus Supplement.
LEGAL MATTERS
It is anticipated that certain legal matters relating to the issuance of the
Certificates of any Series will be passed upon for the Banks by
and, for the Transferor by . Certain legal matters relating to the
issuance of the Certificates under the laws of the State of Delaware will be
passed upon for the Transferor by Richards, Layton & Finger, P.A. and, with
respect to the federal tax consequences of such issuance, by Orrick, Herrington
& Sutcliffe LLP as Special Tax Counsel. Certain legal matters relating to the
issuance of the Certificates of a Series and ERISA matters will be passed upon
for the Underwriters by the counsel named in the Prospectus Supplement.
72
<PAGE>
INDEX OF DEFINED TERMS
<TABLE>
<S> <C>
Account Owner..................................................................... 5, 8
Accounts.......................................................................... 1, 4
Act............................................................................... 2
Addition Cut-Off Date............................................................. 45
Addition Date..................................................................... 45
Additional Accounts............................................................... 24, 45
Additional Transferors............................................................ 34, 40
Adverse Effect.................................................................... 13
Amortization Period............................................................... 11
Automatic Additional Accounts..................................................... 47
Bank.............................................................................. 1, 4
Banks............................................................................. 1, 4
Cash Collateral Account........................................................... 15
Cash Collateral Guaranty.......................................................... 15
CEBA.............................................................................. 27
Cede.............................................................................. 9, 29
Cedel............................................................................. 32
Cedel Participants................................................................ 32
Certificate Owner................................................................. 9
Certificateholders................................................................ 6
Certificateholders' Interest...................................................... 6
Certificates...................................................................... 1, 5
Class............................................................................. 1, 6
Code.............................................................................. 67
Collateral Interest............................................................... 15, 60
Collection Account................................................................ 10, 49
Commercial Credit................................................................. 27
Commission........................................................................ 2
Companion Series.................................................................. 12, 36
Controlled Accumulation Period.................................................... 11
Controlled Amortization Period.................................................... 11
Cooperative....................................................................... 32
Defaulted Amount.................................................................. 51
Defaulted Receivables............................................................. 51
Defeased Series................................................................... 58
Definitive Certificate............................................................ 9
Definitive Certificates........................................................... 33
Depositaries...................................................................... 30
Depository........................................................................ 29
Disclosure Document............................................................... 8
Discount Option................................................................... 10
Discount Option Collections....................................................... 48
Discount Option Date.............................................................. 48
Discount Percentage............................................................... 48
Distribution Date................................................................. 10
DOL............................................................................... 70
DTC............................................................................... 9
Eligible Account.................................................................. 43
</TABLE>
73
<PAGE>
<TABLE>
<S> <C>
Eligible Deposit Account.......................................................... 49
Eligible Institution.............................................................. 49
Eligible Investments.............................................................. 49
Eligible Receivable............................................................... 44
Eligible Servicer................................................................. 54
ERISA............................................................................. 17
Euroclear......................................................................... 32
Euroclear Operator................................................................ 32
Euroclear Participants............................................................ 32
Excess Funding Account............................................................ 49
Excess Transferor Finance Charge Collections...................................... 36
Exchange Act...................................................................... 2
FDIA.............................................................................. 18
FDIC.............................................................................. 1, 7, 18
FDR............................................................................... 24
Finance Charge Receivables........................................................ 9
FIRREA............................................................................ 18
Full Invested Amount.............................................................. 13
Funding Period.................................................................... 13
General Account Regulations....................................................... 71
Group............................................................................. 12, 36
Holders........................................................................... 33
Indirect Participants............................................................. 30
Ineligible Receivables............................................................ 41
Initial Accounts.................................................................. 23
Initial Cut-Off Date.............................................................. 23
Insolvency Event.................................................................. 52
Interchange....................................................................... 27
Interest Period................................................................... 10
Invested Amount................................................................... 6
Investor Amount................................................................... 7
IRS............................................................................... 65
L/C Bank.......................................................................... 15, 60
LIBOR............................................................................. 58
Limited Amortization Period....................................................... 11
Monthly Period.................................................................... 10
Monthly Servicing Fee............................................................. 53
Moody's........................................................................... 49
New Issuance...................................................................... 7
OID............................................................................... 67
Optional Amortization Period...................................................... 11
Participants...................................................................... 30
Participation Interests........................................................... 4, 45
Parties in Interest............................................................... 70
Pay Out Event..................................................................... 52
Paying Agent...................................................................... 50
Plan.............................................................................. 70
Pooling and Servicing Agreement................................................... 4, 5
Pre-Funding Account............................................................... 13
Pre-Funding Amount................................................................ 13
Principal Amortization Period..................................................... 11
</TABLE>
74
<PAGE>
<TABLE>
<S> <C>
Principal Receivables............................................................. 9
Principal Sharing Series.......................................................... 11
Principal Shortfalls.............................................................. 12
Principal Terms................................................................... 37
Prior Series...................................................................... 12
Prospectus Supplement............................................................. 1
PTCE.............................................................................. 71
Rapid Accumulation Period......................................................... 11
Rapid Amortization Period......................................................... 11
Rating Agency..................................................................... 17
Rating Agency Condition........................................................... 8, 38
Receivables....................................................................... 1, 4
Receivables Transfer Agreement.................................................... 8
Recoveries........................................................................ 24
Regulation........................................................................ 70
Regulations....................................................................... 66
Reinvestment Event................................................................ 52
Relevant Closing Date............................................................. 10
Removal Cut-Off Date.............................................................. 48
Removal Date...................................................................... 48
Removal Notice Date............................................................... 48
Removed Accounts.................................................................. 47
Required Principal Balance........................................................ 46
Required Transferor Amount........................................................ 45
Required Transferor Percentage.................................................... 46
Revolving Period.................................................................. 10
Scheduled Amortization Date....................................................... 11
Series............................................................................ 1, 6
Series Account.................................................................... 6
Series Enhancement................................................................ 4, 14
Series Investor Amount............................................................ 46
Series Percentage................................................................. 29
Series Supplement................................................................. 5
Servicer.......................................................................... 1, 4, 5
Servicer Default.................................................................. 55
Servicing Fee..................................................................... 53
Shared Principal Collections...................................................... 12
Shared Transferor Principal Collections........................................... 35
Special Tax Counsel............................................................... 65
Spread Account.................................................................... 16, 61
Standard & Poor's................................................................. 49
Stated Series Termination Date.................................................... 16, 51
Supplemental Certificate.......................................................... 7, 33, 37
Swaps............................................................................. 58
Tax Opinion....................................................................... 8
Termination Notice................................................................ 54
Terms and Conditions.............................................................. 32
Transferor........................................................................ 2, 5
Transferor Amount................................................................. 6, 29
Transferor Certificate............................................................ 7
Transferor Certificates........................................................... 7, 37
</TABLE>
75
<PAGE>
<TABLE>
<S> <C>
Transferor Percentage............................................................. 29
Transferor's Interest............................................................. 6, 29, 37
Travelers......................................................................... 28
Travelers Consumer Credit Card Portfolio.......................................... 28
Trust............................................................................. 1, 4
Trust Assets...................................................................... 1, 4
Trust Portfolio................................................................... 28
Trust Termination Date............................................................ 16, 52
Trustee........................................................................... 1, 4
U.S. Certificate Owner............................................................ 65
U.S. Person....................................................................... 65
UCC............................................................................... 61
Underwriters...................................................................... 72
Withholding Agent................................................................. 68
</TABLE>
76
<PAGE>
ANNEX I
GLOBAL CLEARANCE, SETTLEMENT AND
TAX DOCUMENTATION PROCEDURES
Except in certain circumstances, the globally offered Travelers Bank Credit
Card Master Trust I Asset Backed Securities (the "Global Securities") to be
issued in Series from time to time (each, a "Series") will be available only in
book-entry form. Investors in the Global Securities may hold such Global
Securities through any of The Depository Trust Company ("DTC"), Cedel or
Euroclear. The Global Securities will be tradable as home market instruments in
both the European and U.S. domestic markets. Initial settlement and all
secondary trades will settle in same-day funds.
Secondary market trading between investors holding Global Securities through
Cedel and Euroclear will be conducted in the ordinary way in accordance with
their normal rules and operating procedures and in accordance with conventional
eurobond practice (i.e., seven calendar day settlement).
Secondary market trading between investors holding Global Securities through
DTC will be conducted according to the rules and procedures applicable to U.S.
corporate debt obligations.
Secondary cross-market trading between Cedel or Euroclear and DTC
Participants holding Certificates will be effected on a delivery-against-payment
basis through the respective Depositaries of Cedel and Euroclear (in such
capacity) and as DTC Participants.
Non-U.S. holders (as described below) of Global Securities will be subject
to U.S. withholding taxes unless such holders meet certain requirements and
deliver appropriate U.S. tax documents to the securities clearing organizations
or their participants.
INITIAL SETTLEMENT
All Global Securities will be held in book-entry form by DTC in the name of
Cede & Co. as nominee of DTC. Investors' interests in the Global Securities will
be represented through financial institutions acting on their behalf as direct
and indirect Participants in DTC. As a result, Cedel and Euroclear will hold
positions on behalf of their participants through their respective Depositaries,
which in turn will hold such positions in accounts as DTC Participants.
Investors electing to hold their Global Securities through DTC will follow
the settlement practices applicable to conventional United States credit card
securities. Investor securities custody accounts will be credited with their
holdings against payment in same-day funds on the settlement date.
Investors electing to hold their Global Securities through Cedel or
Euroclear accounts will follow the settlement procedures applicable to
conventional eurobonds, except that there will be no temporary global security
and no "lock-up" or restricted period. Global Securities will be credited to the
securities custody accounts on the settlement date against payment in same-day
funds.
SECONDARY MARKET TRADING
Since the purchaser determines the place of delivery, it is important to
establish at the time of the trade where both the purchaser's and Transferor's
accounts are located to ensure that settlement can be made on the desired value
date.
TRADING BETWEEN DTC PARTICIPANTS. Secondary market trading between DTC
Participants will be settled using the same-day funds.
TRADING BETWEEN CEDEL AND/OR EUROCLEAR PARTICIPANTS. Secondary market
trading between Cedel Participants or Euroclear Participants will be settled
using the procedures applicable to conventional eurobonds in same-day funds.
A-1
<PAGE>
TRADING BETWEEN DTC TRANSFEROR AND CEDEL OR EUROCLEAR PURCHASER. When
Global Securities are to be transferred from the account of a DTC Participant to
the account of a Cedel Participant or a Euroclear Participant, the purchaser
will send instructions to Cedel or Euroclear through a Cedel Participant or
Euroclear Participant at least one business day prior to settlement. Cedel or
Euroclear will instruct the respective Depositary, as the case may be, to
receive the Global Securities against payment. Payment will include interest
accrued on the Global Securities from and including the last coupon payment date
to and excluding the settlement date. Payment will then be made by the
respective Depositary to the DTC Participant's account against delivery of the
Global Securities. After settlement has been completed, the Global Securities
will be credited to the respective clearing system and by the clearing system,
in accordance with its usual procedures, to the Cedel Participant's or Euroclear
Participant's account. The Global Securities credit will appear the next day
(European time) and the cash debit will be back-valued to, and the interest on
the Global Securities will accrue from, the value date (which would be the
preceding day when settlement occurred in New York). If settlement is not
completed on the intended value date (i.e., the trade fails), the Cedel or
Euroclear cash debit will be valued instead as of the actual settlement date.
Cedel Participants and Euroclear Participants will need to make available to
the respective clearing systems the funds necessary to process same-day funds
settlement. The most direct means of doing so is to pre-position funds for
settlement, either from cash on hand or existing lines of credit, as they would
for any settlement occurring within Cedel or Euroclear. Under this approach,
they may take on credit exposure to Cedel or Euroclear until Global Securities
are credited to their accounts one day later.
As an alternative, if Cedel or Euroclear has extended a line of credit to
them, Cedel Participants or Euroclear Participants can elect not to pre-position
funds and allow that credit line to be drawn upon the finance settlement. Under
this procedure, Cedel Participants or Euroclear Participants purchasing Global
Securities would incur overdraft charges for one day, assuming they cleared the
overdraft when the Global Securities were credited to their accounts. However,
interest on the Global Securities would accrue from the value date. Therefore,
in many cases the investment income on the Global Securities earned during that
one-day period may substantially reduce or offset the amount of such overdraft
charges, although this result will depend on each Cedel Participant's or
Euroclear Participant's particular cost of funds.
Since the settlement is taking place during New York business hours, DTC
Participants can employ their usual procedures for sending Global Securities to
the respective Depositary for the benefit of Cedel Participants or Euroclear
Participants. The sale proceeds will be available to the DTC transferor on the
settlement date. Thus, to the DTC Participant a cross-market transaction will
settle no differently than a trade between two DTC Participants.
TRADING BETWEEN CEDEL OR EUROCLEAR TRANSFEROR AND DTC PURCHASER. Due to
time zone differences in their favor, Cedel Participants and Euroclear
Participants may employ their customary procedures for transactions in which
Global Securities are to be transferred by the respective clearing system,
through the respective Depositary, to a DTC Participant. The Transferor will
send instructions to Cedel or Euroclear through a Cedel Participant or Euroclear
Participant at least one business day prior to settlement. In these cases, Cedel
or Euroclear will instruct the respective Depositary, as appropriate, to deliver
the bonds to the DTC Participant's account against payment. Payment will include
interest accrued on the Global Securities from and including the last coupon
payment date to and excluding the settlement date. The payment will then be
reflected in the account of the Cedel Participant or Euroclear Participant the
following day, and receipt of the cash proceeds in the Cedel Participant's or
Euroclear Participant's account would be back-valued to the value date (which
would be the preceding day, when settlement occurred in New York). Should the
Cedel Participant or Euroclear Participant have a line of credit with its
respective clearing system and elect to be in debit in anticipation of receipt
of the sale proceeds in its account, the back-valuation will extinguish any
overdraft charges incurred over that one-day period. If settlement is not
completed on the intended value date (i.e., the trade fails), receipt of the
cash proceeds in the Cedel Participant's or Euroclear Participant's account
would instead be valued as of the actual settlement date.
A-2
<PAGE>
Finally, day traders that use Cedel or Euroclear and that purchase Global
Securities from DTC Participants for delivery to Cedel Participants or Euroclear
Participants should note that these trades would automatically fail on the sale
side unless affirmative action were taken. At least three techniques should be
readily available to eliminate this potential problem:
(a) borrowing through Cedel or Euroclear for one day (until the purchase
side of the day trade is reflected in their Cedel or Euroclear accounts) in
accordance with the clearing system's customary procedures;
(b) borrowing the Global Securities in the U.S. from a DTC Participant
no later than one day prior to settlement, which would give the Global
Securities sufficient time to be reflected in their Cedel or Euroclear
account in order to settle the sale side of the trade; or
(c) staggering the value dates for the buy and sell sides of the trade
so that the value date for the purchase from the DTC Participant is at least
one day prior to the value date for the sale to the Cedel Participant or
Euroclear Participant.
CERTAIN U.S. FEDERAL INCOME TAX DOCUMENTATION REQUIREMENTS
A beneficial owner of Global Securities holding securities through Cedel or
Euroclear (or through DTC if the holder has an address outside the U.S.) will be
subject to the 30% U.S. withholding tax that generally applies to payments of
interest (including original issue discount) on registered debt issued by U.S.
Persons, unless (i) each clearing system, bank or other financial institution
that holds customers' securities in the ordinary course of its trade or business
in the chain of intermediaries between such beneficial owner and the U.S. entity
required to withhold tax complies with applicable certification requirements and
(ii) such beneficial owner takes one of the following steps to obtain an
exemption or reduced tax rate:
EXEMPTION FOR NON-U.S. PERSONS (FORM W-8). Beneficial owners of
Certificates that are non-U.S. Persons generally can obtain a complete exemption
from the withholding tax by filing a signed Form W-8 (Certificate of Foreign
Status). If the information shown on Form W-8 changes, a new Form W-8 must be
filed within 30 days of such change.
EXEMPTION FOR NON-U.S. PERSONS WITH EFFECTIVELY CONNECTED INCOME (FORM
4224). A non-U.S. Person, including a non-U.S. corporation or bank with a U.S.
branch, for which the interest income is effectively connected with its conduct
of a trade or business in the United States, can obtain an exemption from the
withholding tax by filing Form 4224 (Exemption from Withholding of Tax on Income
Effectively Connected with the Conduct of a Trade or Business in the United
States).
EXEMPTION OR REDUCED RATE FOR NON-U.S. PERSONS RESIDENT IN TREATY COUNTRIES
(FORM 1001). Non-U.S. Persons that are Certificate Owners residing in a country
that has a tax treaty with the United States can obtain an exemption or reduced
tax rate (depending on the treaty terms) by filing Form 1001 (Ownership,
Exemption or Reduced Rate Certificate). If the treaty provides only for a
reduced rate, withholding tax will be imposed at that rate unless the filer
alternatively files Form W-8. Form 1001 may be filed by the Certificate Owner or
his agent.
EXEMPTION FOR U.S. PERSONS (FORM W-9). U.S. Persons can obtain a complete
exemption from the withholding tax by filing Form W-9 (Request for Taxpayer
Identification Number and Certification).
U.S. FEDERAL INCOME TAX REPORTING PROCEDURE. The Certificate Owner of a
Global Security or, in the case of a Form 1001 or a Form 4224 filer, his agent,
files by submitting the appropriate form to the person through whom it holds
(the clearing agency, in the case of persons holding directly on the books of
the clearing agency). Form W-8 and Form 1001 are effective for three calendar
years and Form 4224 is effective for one calendar year.
A-3
<PAGE>
The term "U.S. Person" means (i) a citizen or resident of the United States,
(ii) a corporation or partnership organized in or under the laws of the United
States, any state thereof, or any political subdivision of either (including the
District of Columbia) or (iii) an estate or trust the income of which is
includible in gross income for United States tax purposes regardless of its
source. This summary does not deal with all aspects of U.S. Federal income tax
withholding that may be relevant to foreign holders of the Global Securities.
Investors are advised to consult their own tax advisors for specific tax advice
concerning their holding and disposing of the Global Securities. Further, the
U.S. Treasury Department has recently finalized new regulations that will revise
some aspects of the current system for withholding on amounts paid to foreign
persons. Under these regulations, interest or OID paid to a nonresident alien
would continue to be exempt from U.S. withholding taxes (including backup
withholding) provided that the holder complies with the new procedures.
A-4
<PAGE>
PART II
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following is an itemized list of the estimated expenses to be incurred
in connection with the offering of the securities being offered hereunder other
than underwriting discounts and commissions.
<TABLE>
<S> <C>
Registration Statement Fee............................................... $ 304**
Printing and Engraving Expenses.......................................... *
Trustee's Fees and Expenses.............................................. *
Legal Fees and Expenses.................................................. *
Blue Sky Fees and Expenses............................................... *
Accountants' Fees and Expenses........................................... *
Rating Agency Fees....................................................... *
Miscellaneous Fees and Expenses.......................................... *
---------
Total................................................................ $ *
---------
---------
</TABLE>
- ------------------------
* To be filed by amendment.
** Actual
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article X of the Certificate of Incorporation of CC Credit Card Corporation
provides that any person who was or is a party or is threatened to be made a
party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative, by reason of the fact
that such person is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, shall be indemnified and held harmless by
the corporation to the fullest extent legally permissible under the General
Corporation Law of the State of Delaware, as amended from time to time, against
all expenses (including attorneys' fees), liabilities, losses, judgments, fines
and amounts paid in settlement actually and reasonably incurred by such person
in connection with such action, suit or proceeding.
The General Corporation Law of the State of Delaware provides that a
corporation has the power to indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the corporation) by reason of the
fact that the person is or was a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, against
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by the person in connection with
such action, suit or proceeding if the person acted in good faith and in a
manner the person reasonably believed to be in or not opposed to the best
interests of the corporation, and with respect to any criminal action or
proceeding, had no reasonable cause to believe the person's conduct was
unlawful. A corporation also has the power to indemnify any person who was or is
a party or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the corporation to procure a
judgment in its favor by reason of the fact that the person is or was a
director, officer, employee or agent of the corporation, or is or was serving at
the request of the corporation as a director, officer, employee or agent of the
corporation or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against expenses (including attorneys' fees)
actually and reasonably incurred by the person in connection with the defense or
settlement of such action or suit if the person acted in good faith and in a
manner the person reasonably believed to be in or not opposed to the best
interests of the corporation and except that no indemnification shall be made in
respect of any claim, issue
II-1
<PAGE>
or matter as to which such person shall have been adjudged to be liable to the
corporation unless and only to the extent that, despite the adjudication of
liability but in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses which the Court of
Chancery or such other court shall deem proper.
ITEM 16. EXHIBITS.
<TABLE>
<C> <S>
1.1 --Form of Underwriting Agreement for the Certificates*
4.1 --Form of Pooling and Servicing Agreement
4.2 --Form of Series Supplement
4.3 --Representative Form of Prospectus Supplement
5.1 --Opinion of Richards, Layton & Finger, P.A. with respect to legality.*
8.1 --Opinion of Orrick, Herrington & Sutcliffe LLP with respect to federal tax matters.
10.1 --Form of Receivables Transfer Agreement.
23.1 --Consent of Richards, Layton & Finger, P.A. (included in its opinion filed as Exhibit
5.1)*
23.2 --Consents of Orrick, Herrington & Sutcliffe LLP (included in its opinion filed as
Exhibit 8.1)
24.1 --Powers of Attorney (included in Page II-4)
</TABLE>
- ------------------------
* To be Filed by amendment.
ITEM 17. UNDERTAKINGS.
The undersigned Registrant on behalf of the Travelers Bank Credit Card
Master Trust I (the "Trust") hereby undertakes as follows:
(a) (1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement: (i) to include any
prospectus required by Section 10(a)(3) of the Securities Act of 1933; (ii) to
reflect in the prospectus any facts or events arising after the effective date
of the Registration Statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a fundamental change
in the information set forth in the Registration Statement; (iii) to include any
material information with respect to the plan of distribution not previously
disclosed in the Registration Statement or any material change to such
information in the Registration Statement; PROVIDED, HOWEVER, that (a)(1)(i) and
(a)(1)(ii) will not apply if the information required to be included in a
post-effective amendment thereby is contained in periodic reports filed pursuant
to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in this Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new Registration Statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial BONA
FIDE offering hereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered that remain unsold at the termination of
the offering.
(b) That, for purposes of determining any liability under the Securities Act
of 1933, each filing of the Registrant's annual report pursuant to Section 13(a)
or 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each
filing of an employee benefit plan's annual report pursuant to Section 15(d) of
the Securities Exchange Act of 1934) that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial BONA FIDE offering thereof.
II-2
<PAGE>
(c) That insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the provisions described under Item 15
above, or otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities (other than
the payment by the Registrant of expenses incurred or paid by a director,
officer or controlling person of the Registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the Registrant will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of each
issue.
(d) (1) That, for purposes of determining any liability under the Securities
Act of 1933, the information omitted from the form of prospectus filed as part
of this Registration Statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act of 1933 shall be deemed to be a part of this
Registration Statement as of the time it was declared effective.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial BONA FIDE offering hereof.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of New York, New York, on November 17, 1997.
<TABLE>
<S> <C> <C>
CC CREDIT CARD CORPORATION
as originator of the Trust and as Transferor
on behalf of the Trust
By: /s/ BARBARA YASTINE
-----------------------------------------
Name: Barbara Yastine
Title: President
</TABLE>
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Barbara Yastine and Robert Matza, and each of
them, his or her true and lawful attorney-in-fact and agents, with full power of
substitution and resubstitution, for and in his or her own name, place and
stead, in any and all other amendments (including post-effective amendments) to
this Registration Statement and any or all other documents in connection
therewith, and to file the same, with all exhibits thereto, with the Securities
and Exchange Commission, granting unto said authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as might or could be done in
person, hereby ratifying and confirming all said attorney-in-fact and agents or
any of them, or their substitute or substitutes, may lawfully for or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed on November 17, 1997 by the following
persons in the capacities indicated.
SIGNATURE TITLE
- ------------------------------ --------------------------
/s/ BARBARA YASTINE President and Director
- ------------------------------ (Principal Executive
Name: Barbara Yastine Officer)
/s/ ROBERT MATZA Treasurer and Director
- ------------------------------ (Principal Financial
Name: Robert Matza Officer)
Vice President and
/s/ WILLIAM BOZARTH Director (Controller or
- ------------------------------ Principal Accounting
Name: William Bozarth Officer)
/s/ DOUGLAS R. JOHNSON
- ------------------------------ Director
Name: Doug Johnson
II-4
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIAL
EXHIBIT PAGE
NUMBER DESCRIPTION NUMBER
- ----------- ------------------------------------------------------------------------------------------------ ---------------
<C> <S> <C>
1.1 --Form of Underwriting Agreement for the Certificates*..........................................
4.1 --Form of Pooling and Servicing Agreement.......................................................
4.2 --Form of Series Supplement.....................................................................
4.3 --Representative Form of Prospectus Supplement..................................................
5.1 --Opinion of Richards, Layton & Finger, P.A. with respect to legality*..........................
8.1 --Opinion of Orrick, Herrington & Sutcliffe LLP with respect to federal tax matters.............
10.1 --Form of Receivables Transfer Agreement........................................................
23.1 --Consent of Richards, Layton & Finger, P.A. (included in its opinion filed as Exhibit 5.1)*....
23.2 --Consent of Orrick, Herrington & Sutcliffe LLP (included in its opinions filed as Exhibit
8.1)..........................................................................................
24.1 --Powers of Attorney (included in Page II-4)....................................................
</TABLE>
- ------------------------
* To be filed by amendment
<PAGE>
EXHIBIT 4.1
OH&S DRAFT
11/10/97
_____________________________________________________________________________
CC CREDIT CARD CORPORATION,
as Transferor,
THE TRAVELERS BANK,
as Servicer,
and
THE BANK OF NEW YORK,
as Trustee
TRAVELERS BANK CREDIT CARD MASTER TRUST I
POOLING AND SERVICING AGREEMENT
Dated as of __________ ____, 1997
_____________________________________________________________________________
<PAGE>
PAGE
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
Section 1.01 Definitions......................................... 1
Section 1.02. Other Definitional Provisions....................... 21
ARTICLE II
CONVEYANCE OF RECEIVABLES
Section 2.01. Conveyance of Receivables........................... 22
Section 2.02. Acceptance by Trustee............................... 23
Section 2.03 Representations and Warranties of Each Transferor
Relating to Such Transferor......................... 24
Section 2.04. Representations and Warranties of Each Transferor
Relating to the Agreement, the Receivables Transfer
Agreements and Any Supplement and the Receivables... 26
Section 2.05. Reassignment of Ineligible Receivables.............. 28
Section 2.06. Reassignment of Receivables in Trust Portfolio...... 29
Section 2.07. Covenants of the Transferor......................... 30
Section 2.08. Covenants of Each Transferor with Respect to
Receivables Transfer Agreements..................... 33
Section 2.09. Addition of Accounts................................ 34
Section 2.10. Removal of Accounts and Participation Interests..... 38
Section 2.11. Account Allocations................................. 39
Section 2.12. Discount Option..................................... 40
Section 2.13. Security Interest Granted by the Account Owners..... 41
ARTICLE III
ADMINISTRATION AND SERVICING
OF RECEIVABLES
Section 3.01. Acceptance of Appointment and Other Matters Relating to
the Servicer........................................ 42
Section 3.02. Servicing Compensation.............................. 43
Section 3.03. Representations, Warranties and Covenants of the
Servicer............................................ 43
Section 3.04. Reports and Records for the Trustee................. 46
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PAGE
Section 3.05. Annual Certificate of Servicer...................... 47
Section 3.06. Annual Servicing Report of Independent Public
Accountants; Copies of Reports Available............ 47
Section 3.07. Tax Treatment....................................... 47
Section 3.08. Notices to The Travelers Bank....................... 48
Section 3.09. Adjustments......................................... 48
Section 3.10. Reports to the Commission........................... 48
ARTICLE IV
RIGHTS OF CERTIFICATEHOLDERS AND
ALLOCATION AND APPLICATION OF COLLECTIONS
Section 4.01. Rights of Certificateholders........................ 49
Section 4.02. Establishment of Collection Account and Excess Funding
Account............................................. 49
Section 4.03. Collections and Allocations......................... 51
Section 4.04. Shared Collections.................................. 52
Section 4.05. Additional Withdrawals from the Collection Account.. 53
Section 4.06. Allocation of Trust Assets to Series or Groups...... 54
ARTICLE V
DISTRIBUTIONS AND REPORTS TO
CERTIFICATEHOLDERS
ARTICLE VI
THE CERTIFICATES
Section 6.01. The Certificates.................................... 56
Section 6.02. Authentication of Certificates...................... 56
Section 6.03. New Issuances....................................... 56
Section 6.04. Registration of Transfer and Exchange of Certificates..
58
Section 6.05. Mutilated, Destroyed, Lost or Stolen Certificates... 61
Section 6.06. Persons Deemed Owners............................... 61
Section 6.07. Appointment of Paying Agent......................... 62
Section 6.08. Access to List of Registered Certificateholders' Names
and Addresses....................................... 62
Section 6.09. Authenticating Agent................................ 63
Section 6.10. Book-Entry Certificates............................. 64
Section 6.11. Notices to Clearing Agency.......................... 64
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PAGE
Section 6.12. Definitive Certificates............................. 64
Section 6.13. Global Certificate; Exchange Date................... 65
Section 6.14. Meetings of Certificateholders...................... 66
Section 6.15. Uncertificated Classes.............................. 68
ARTICLE VII
OTHER MATTERS RELATING TO THE TRANSFEROR
Section 7.01. Liability of the Transferor......................... 69
Section 7.02. Merger or Consolidation of, or Assumption of the
Obligations of, the Transferor...................... 69
Section 7.03. Limitations on Liability of the Transferor.......... 70
ARTICLE VIII
OTHER MATTERS RELATING TO THE SERVICER
Section 8.01. Liability of the Servicer........................... 71
Section 8.02. Merger or Consolidation of, or Assumption of the
Obligations of, the Servicer........................ 71
Section 8.03. Limitation on Liability of the Servicer and Others.. 71
Section 8.04. Servicer Indemnification of the Trust and the Trustee..
72
Section 8.05. The Servicer Not To Resign.......................... 72
Section 8.06. Access to Certain Documentation and Information
Regarding the Receivables........................... 73
Section 8.07. Delegation of Duties................................ 73
Section 8.08. Examination of Records.............................. 73
ARTICLE IX
PAY OUT EVENTS
Section 9.01. Trust Pay Out Events................................ 74
Section 9.02. Rights Upon the Occurrence of an Insolvency Even.... 74
ARTICLE X
SERVICER DEFAULTS
Section 10.01. Servicer Defaults................................... 75
Section 10.02. Trustee To Act, Appointment of Successor............ 77
Section 10.03. Notification to Certificateholders.................. 78
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<PAGE>
PAGE
ARTICLE XI
THE TRUSTEE
Section 11.01. Duties of Trustee........................................ 79
Section 11.02. Certain Matters Affecting the Trustee.................... 80
Section 11.03. Trustee Not Liable for Recitals in Certificates.......... 81
Section 11.04. Trustee May Own Certificates............................. 82
Section 11.05. The Transferor To Pay Trustee's Fees and Expenses........ 82
Section 11.06. Eligibility Requirements for Trustee..................... 82
Section 11.07. Resignation or Removal of Trustee........................ 82
Section 11.08. Successor Trustee........................................ 83
Section 11.09. Merger or Consolidation of Trustee....................... 83
Section 11.10. Appointment of Co-Trustee or Separate Trustee............ 83
Section 11.11. Tax Returns.............................................. 85
Section 11.12. Trustee May Enforce Claims Without Possession of
Certificates............................................. 85
Section 11.13. Suits for Enforcement.................................... 85
Section 11.14. Rights of Certificateholders To Direct Trustee........... 86
Section 11.15. Representations and Warranties of Trustee................ 86
Section 11.16. Maintenance of Office or Agency.......................... 86
ARTICLE XII
TERMINATION
Section 12.01. Termination of Trust..................................... 87
Section 12.02. Final Distribution....................................... 87
Section 12.03. Transferor's Termination Rights.......................... 88
Section 12.04. Defeasance............................................... 88
Section 12.05. Optional Purchase........................................ 90
ARTICLE XIII
MISCELLANEOUS PROVISIONS
Section 13.01. Amendment; Waiver of Past Defaults....................... 91
Section 13.02. Protection of Right, Title and Interest to Trust......... 92
Section 13.03. Limitation on Rights of Certificateholders............... 93
SECTION 13.04. GOVERNING LAW............................................ 94
Section 13.05. Notices; Payments........................................ 94
Section 13.06. Rule 144A Information.................................... 95
Section 13.07. Severability of Provisions............................... 95
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PAGE
Section 13.08. Assignment............................................... 95
Section 13.09. Certificates Nonassessable and Fully Paid................ 95
Section 13.10. Further Assurances....................................... 95
Section 13.11. Nonpetition Covenant..................................... 95
Section 13.12. No Waiver; Cumulative Remedies........................... 96
Section 13.13. Counterparts............................................. 96
Section 13.14. Third-Party Beneficiaries................................ 96
Section 13.15. Actions by Certificateholders............................ 96
Section 13.16. Merger and Integration................................... 96
Section 13.17. Headings................................................. 96
Section 13.18. Construction of Agreement................................ 97
EXHIBITS
Exhibit A Form of Transferor Certificate
Exhibit B Form of Assignment of Receivables in Additional Accounts
Exhibit C Form of Reassignment of Receivables in Removed Accounts
Exhibit D Form of Annual Servicer's Certificate
Exhibit E-1 Private Placement Legend
Exhibit E-2 Representation Letter
Exhibit E-3 ERISA Legend
Exhibit F-1 Form of Certificate of Foreign Clearing Agency
Exhibit F-2 Form of Alternate Certificate to be delivered to Foreign Clearing
Agency
Exhibit F-3 Form of Certificate to be delivered to Foreign Clearing Agency
Exhibit G-1 Form of Opinion of Counsel with respect to Amendments
Exhibit G-2 Form of Opinion of Counsel with respect to Accounts
Exhibit H Amendment to Section 9.02
SCHEDULES
Schedule 1 List of Accounts [Deemed Incorporated]
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<PAGE>
POOLING AND SERVICING AGREEMENT dated as of __________ __, 1997, among
CC CREDIT CARD CORPORATION, a Delaware corporation, as Transferor, THE TRAVELERS
BANK, a Delaware state-chartered banking corporation, as Servicer, and THE BANK
OF NEW YORK, a New York banking corporation, as Trustee.
In consideration of the mutual agreements herein contained, each party
agrees as follows for the benefit of the other parties, the Certificateholders
and any Series Enhancer (to the extent provided herein and in any Supplement):
ARTICLE I
DEFINITIONS
Section 1.01. DEFINITIONS. Whenever used in this Agreement, the following
words and phrases shall have the following meanings, and the definitions of such
terms are applicable to the singular as well as the plural forms of such terms
and to the masculine as well as to the feminine and neuter genders of such
terms.
"ACCOUNT" shall mean each Initial Account and each Additional Account, but
shall exclude any Account in which all the Receivables are either reassigned or
assigned to the Transferor or its designee or the Servicer in accordance with
the terms of this Agreement. The definition of Account shall include each
account into which an Account is transferred (a "Transferred Account"); provided
that (i) such transfer is made in accordance with the Credit Card Guidelines and
(ii) such Transferred Account can be traced or identified, by reference to or by
way of the computer files or microfiche lists delivered to the Trustee pursuant
to Section 2.01 or 2.09, as an account into which an Account has been
transferred. The term "Account" shall be deemed to refer to an Additional
Account only from and after the Addition Date with respect thereto, and the term
"Account" shall be deemed to refer to any Removed Account only prior to the
Removal Date with respect thereto.
"ACCOUNT OWNER" shall mean The Travelers Bank, The Travelers Bank USA or
any other entity which is the issuer of the credit card relating to an Account
pursuant to a Cardholder Agreement.
"ACCUMULATION PERIOD" shall mean, with respect to any Series, or any Class
within a Series, a period following the Revolving Period, which shall be the
accumulation or other period, including any controlled accumulation period or
rapid accumulation period, in which Collections of Principal Receivables are
accumulated in an account for the benefit of the Investor Certificateholders of
such Series, or a Class within such Series, in each case as defined for such
Series in the related Supplement.
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<PAGE>
"ACT" shall mean the Securities Act of 1933, as amended.
"ADDITION" shall mean the designation of (i) additional Eligible Accounts
to be included as Accounts or (ii) Participation Interests to be included as
Trust Assets pursuant to subsection 2.09(a), (b) or (d).
"ADDITION CUT-OFF DATE" shall mean, with respect to any Additional Accounts
or Participation Interests to be included in the Trust, the date specified in
the related Assignment.
"ADDITION DATE" shall mean (i) with respect to Additional Accounts, the
date on which the Receivables in such Additional Accounts are conveyed to the
Trust pursuant to subsection 2.09(a), (b) or (d) and (ii) with respect to
Participation Interests, the date from and after which such Participation
Interests are to be included as Trust Assets pursuant to subsection 2.09(a) or
(b).
"ADDITIONAL ACCOUNT" shall mean each consumer revolving credit card account
established pursuant to a Cardholder Agreement, which account is designated
pursuant to subsection 2.09(a), (b) or (d) to be included as an Account and is
identified in a computer file or microfiche list delivered to the Trustee by the
Transferor pursuant to Sections 2.01 and 2.09.
"ADDITIONAL TRANSFERORS" shall have the meaning specified in subsection
2.09(e).
"ADVERSE EFFECT" shall mean, with respect to any action, that such action
will (a) result in the occurrence of a Pay Out Event or Reinvestment Event with
respect to any Series or (b) materially adversely affect the amount or timing of
distributions to be made to the Investor Certificateholders of any Series or
Class pursuant to this Agreement and the related Supplement.
"AFFILIATE" shall mean, with respect to any specified Person, any other
Person controlling or controlled by or under common control with such specified
Person. For the purposes of this definition, "control" shall mean the power to
direct the management and policies of a Person, directly or indirectly, whether
through the ownership of voting securities, by contract or otherwise; and the
terms "controlling" and "controlled" have meanings correlative to the foregoing.
"AGGREGATE INVESTOR AMOUNT" shall mean, as of any date of determination,
the sum of (i) the aggregate Investor Amounts of all Series of Certificates
issued and outstanding on such date of determination PLUS (ii) the sum of the
Enhancement Investor Amounts, if any, for all outstanding Series on such date of
determination.
"AGGREGATE SERIES PERCENTAGE" shall mean, with respect to Principal
Receivables, Defaulted Receivables and Finance Charge Receivables as of any date
of determination, the sum of the Series Percentages for such categories of
Receivables for all
2
<PAGE>
outstanding Series on such date of determination; PROVIDED, HOWEVER, that the
Aggregate Series Percentage shall not exceed 100%.
"AGREEMENT" shall mean this Pooling and Servicing Agreement and all
amendments hereof and supplements hereto, including, with respect to any Series
or Class, the related Supplement.
"AMORTIZATION PERIOD" shall mean, with respect to any Series, or any Class
within a Series, a period following the Revolving Period, which shall be the
controlled amortization period, the principal amortization period, the rapid
amortization period, the optional amortization period, the limited amortization
period or other amortization period, in each case as defined with respect to
such Series in the related Supplement.
"APPLICANTS" shall have the meaning specified in Section 6.08.
"ASSIGNMENT" shall have the meaning specified in subsection 2.09(c)(vii).
"AUTHORIZED NEWSPAPER" shall mean any newspaper or newspapers of general
circulation in the Borough of Manhattan, the City of New York, printed in the
English language (and, with respect to any Series or Class, if and so long as
the Investor Certificates of such Series or Class are listed on the Luxembourg
Stock Exchange and such exchange shall so require, in Luxembourg, printed in any
language satisfying the requirements of such exchange) and customarily published
on each business day at such place, whether or not published on Saturdays,
Sundays or holidays.
"AUTOMATIC ADDITIONAL ACCOUNT" shall have the meaning specified in
subsection 2.09(d)(i).
"BEARER CERTIFICATES" shall have the meaning specified in Section 6.01.
"BENEFIT PLAN" shall have the meaning specified in subsection 6.04(c) .
"BOOK-ENTRY CERTIFICATES" shall mean beneficial interests 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" shall mean any day other than (a) a Saturday or Sunday, (b)
any other day on which banks in New York, New York (or, with respect to any
Series, any additional city specified in the related Supplement) or any other
State in which the principal executive offices of the Servicer, the Trustee, The
Travelers Bank, The Travelers Bank USA or other Account Owner, as the case may
be, are located, are authorized or obligated by law, executive order or
governmental decree to be closed, or (c) for purposes of any particular Series,
any other day specified in the applicable Series Supplement.
"CARDHOLDER AGREEMENT" shall mean, with respect to a consumer revolving
credit card account, the agreements between an Account Owner, and the related
Obligor governing the terms and conditions of such account, as such agreements
may be amended,
3
<PAGE>
modified or otherwise changed from time to time and as distributed (including
any amendments and revisions thereto) to holders of such account.
"CASH ADVANCE FEES" shall have the meaning specified in the Cardholder
Agreement applicable to each Account for cash advance fees or similar terms.
"CEDEL" shall mean Cedel Bank, societe anonyme, a professional depository
incorporated under the laws of Luxembourg, and its successors.
"CERTIFICATE" shall mean any one of the Investor Certificates or the
Transferor Certificates.
"CERTIFICATEHOLDER" or "HOLDER" shall mean an Investor Certificateholder or
a Person in whose name any one of the Transferor Certificates is registered.
"CERTIFICATEHOLDERS' INTEREST" shall have the meaning specified in Section
4.01.
"CERTIFICATE OWNER" shall mean, with respect to a Book-Entry Certificate,
the Person who is the owner of such Book-Entry Certificate, as reflected on the
books of the Clearing Agency, or on the books of a Person maintaining an account
with such Clearing Agency (directly or as an indirect participant, in accordance
with the rules of such Clearing Agency).
"CERTIFICATE RATE" shall mean, with respect to any Series or Class, the
certificate rate specified therefor in the related Supplement.
"CERTIFICATE REGISTER" shall mean the register maintained pursuant to
Section 6.04, providing for the registration of the Registered Certificates and
the Transferor Certificates and transfers and exchanges thereof.
"CLASS" shall mean, with respect to any Series, any one of the classes of
Investor Certificates of that Series.
"CLEARING AGENCY" shall mean an organization registered as a "clearing
agency" pursuant to Section 17A of the Securities Exchange Act of 1934, as
amended, and serving as a clearing agency for a Series or Class of Book-Entry
Certificates.
"CLEARING AGENCY PARTICIPANT" shall mean a broker, dealer, bank, other
financial institution or other Person for whom from time to time a Clearing
Agency effects book entry transfers and pledges of securities deposited with the
Clearing Agency.
"CLOSING DATE" shall mean, with respect to any Series, the closing date
specified in the related Supplement.
"CODE" shall mean the Internal Revenue Code of 1986, as amended from time
to time.
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"COLLECTION ACCOUNT" shall have the meaning specified in Section 4.02.
"COLLECTIONS" shall mean all payments by or on behalf of Obligors
(including Insurance Proceeds) received in respect of the Receivables, in the
form of cash, checks (to the extent collected), wire transfers, electronic
transfers, ATM transfers or other form of payment in accordance with the
Cardholder Agreement in effect from time to time. All Recoveries will be
treated as Collections of Finance Charge Receivables. As specified in any
Participation Interest Supplement or Supplement, Collections shall include
amounts received with respect to Participation Interests.
"COMMISSION" shall have the meaning specified in subsection 3.01(b).
"COMPANION SERIES" shall mean (i) each Series which has been paired with
another Series (which Series may be prefunded or partially prefunded), such that
the reduction of the Investor Amount of such Series results in the increase of
the Investor Amount of such other Series, as described in the related
Supplements, and (ii) such other Series.
"CONTRACTUALLY DELINQUENT" with respect to an Account, shall mean an
Account as to which the required minimum payment set forth on the related
billing statement has not been received by the due date thereof.
"CORPORATE TRUST OFFICE" shall mean the principal office of the Trustee at
which at any particular time its corporate trust business shall be administered,
which office at the date of the execution of this Agreement is located at 101
Barclay Street, New York, New York 10286.
"COUPON" shall have the meaning specified in Section 6.01.
"CREDIT CARD GUIDELINES" shall mean the written policies and procedures of
The Travelers Bank, The Travelers Bank USA or any other Account Owner, as the
case may be, relating to the operation of its consumer revolving lending
business, including, without limitation, the written policies and procedures for
determining the creditworthiness of credit card account customers, the extension
of credit to credit card account customers and relating to the maintenance of
credit card accounts and collection of receivables with respect thereto, as such
policies and procedures may be amended, modified, or otherwise changed from time
to time.
"DATE OF PROCESSING" shall mean, with respect to any transaction or receipt
of Collections, the Business Day such transaction or receipt of Collections is
first recorded on the Servicer's computer file of consumer revolving credit card
accounts (without regard to the effective date of such recordation).
"DEFAULTED AMOUNT" shall mean, with respect to any Monthly Period, an
amount (which shall not be less than zero) equal to (a) the amount of Principal
Receivables which became Defaulted Receivables in such Monthly Period, minus (b)
the amount of any Defaulted Receivables included in any Account the Receivables
of which the Transferor or
5
<PAGE>
the Servicer became obligated to accept reassignment or assignment in accordance
with the terms of this Agreement during such Monthly Period; PROVIDED, HOWEVER,
that, if an Insolvency Event occurs with respect to the Transferor, the amount
of such Defaulted Receivables which are subject to reassignment to the
Transferor in accordance with the terms of this Agreement shall not be added to
the sum so subtracted and, if any of the events described in subsection 10.01(d)
occur with respect to the Servicer, the amount of such Defaulted Receivables
which are subject to reassignment or assignment to the Servicer in accordance
with the terms of this Agreement shall not be added to the sum so subtracted.
"DEFAULTED RECEIVABLES" shall mean, with respect to any Monthly Period, all
Principal Receivables which are charged off as uncollectible in such Monthly
Period in accordance with the Credit Card Guidelines and the Servicer's
customary and usual servicing procedures for servicing consumer revolving credit
card and other revolving credit account receivables comparable to the
Receivables. A Principal Receivable shall become a Defaulted Receivable on the
day on which such Principal Receivable is recorded as charged off on the
Servicer's computer master file of consumer revolving credit card accounts but,
in any event, shall be deemed a Defaulted Receivable no later than the day the
related Account becomes ____ days Contractually Delinquent unless the Obligor
cures such default by making a partial payment which satisfies the criteria for
curing delinquencies set forth in the applicable Credit Card Guidelines.
"DEFEASANCE" shall have the meaning specified in subsection 12.04(a).
"DEFEASED SERIES" shall have the meaning specified in subsection 12.04(a).
"DEFINITIVE CERTIFICATES" shall have the meaning specified in Section 6.10.
"DEFINITIVE EURO-CERTIFICATES" shall have the meaning specified in Section
6.13.
"DEPOSITARIES" shall mean the Person specified in the applicable
Supplement, in its capacity as depositary for the respective accounts of any
Clearing Agency or any Foreign Clearing Agencies.
"DEPOSITORY AGREEMENT" shall mean, if applicable with respect to any Series
or Class, the depository agreement among the Transferor, the Trustee and a
Clearing Agency, or as otherwise provided in the related Supplement.
"DETERMINATION DATE" shall mean, unless otherwise specified in the related
Supplement, with respect to any Distribution Date, the third Business Day
preceding such Distribution Date.
"DISCOUNT OPTION COLLECTIONS" shall have the meaning specified in Section
2.12. The aggregate amount of Discount Option Collections on any Date of
Processing occurring on or after each Discount Option Date shall equal the
product of (a) the amount of any Collections of Principal Receivables received
on such Date of Processing and (b) the Discount Percentage.
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<PAGE>
"DISCOUNT OPTION DATE" shall mean each date on which a Discount Percentage
designated by the Transferor pursuant to Section 2.12 takes effect.
"DISCOUNT PERCENTAGE" shall mean the percentages, if any, designated by the
Transferor pursuant to Section 2.12.
"DISTRIBUTION DATE" shall mean, unless otherwise defined in a Supplement
with respect to a Series, the fifteenth day of each calendar month or, if such
fifteenth day is not a Business Day, the next succeeding Business Day.
"DOLLARS", "$" or "U.S. $" shall mean United States Dollars.
"ELIGIBLE ACCOUNT" shall mean a consumer revolving credit card account
owned by The Travelers Bank or The Travelers Bank USA, in the case of the
Initial Accounts, or The Travelers Bank or The Travelers Bank USA or other
Account Owner, in the case of Additional Accounts, which accounts are identified
by The Travelers Bank or The Travelers Bank USA as of the Trust Cut-Off Date
with respect to an Initial Account or by The Travelers Bank, The Travelers Bank
USA or other Account Owner as of the related Addition Cut-Off Date with respect
to an Additional Account as having the following characteristics:
(a) is in existence and maintained by The Travelers Bank or The Travelers
Bank USA, in the case of the Initial Accounts, or The Travelers Bank, The
Travelers Bank USA or other Account Owner in the case of Additional Accounts;
(b) is payable in Dollars;
(c) except as provided below, has not been identified as an account the
credit card or cards with respect to which have been reported to the applicable
Account Owner as having been lost or stolen;
(d) the Obligor of which has provided, as his or her billing address, an
address located in the United States (or its territories or possessions or
military address);
(e) has an Obligor who has not been identified by the applicable Account
Owner as an employee of such Account Owner or any Affiliate thereof;
(f) except as provided below, does not have any Receivables which are
Defaulted Receivables; and
(g) except as provided below, does not have any Receivables which have been
identified by the applicable Account Owner or the relevant Obligor as having
been incurred as a result of fraudulent use of any related credit card.
Eligible Accounts may include Accounts, the Receivables of which have been
written off, or with respect to which the Servicer believes the related Obligor
is bankrupt, or as to which certain Receivables have been identified by the
Obligor as having been incurred
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as a result of fraudulent use of any credit cards, or as to which any credit
cards have been reported to the Account Owner or the Servicer as lost or stolen,
in each case as of the Trust Cut-Off Date, with respect to the Initial Accounts,
and as of the related Addition Cut-Off Date, with respect to Additional
Accounts; provided that (a) the balance of all Receivables included in such
Accounts is reflected on the books and records of the Account Owner (and is
treated for purposes of this Agreement) as "zero," and (b) charging privileges
with respect to all such Accounts have been canceled in accordance with the
relevant Credit Card Guidelines.
"ELIGIBLE DEPOSIT ACCOUNT" shall mean either (a) a segregated account with
an Eligible Institution or (b) a segregated trust account with the corporate
trust department of a depository institution organized under the laws of the
United States or any one of the states thereof, including the District of
Columbia (or any domestic branch of a foreign bank), acting as a trustee for
funds deposited in such account, so long as any of the securities of such
depository institution shall have a credit rating from each Rating Agency in one
of its generic credit rating categories which signifies investment grade.
"ELIGIBLE INSTITUTION" shall mean a depository institution (which may be
the Trustee) organized under the laws of the United States or any one of the
states thereof, including the District of Columbia (or any domestic branch of a
foreign bank) which depository institution at all times (a) has either (i) a
long-term unsecured debt rating of A1 or better by Moody's or (ii) a certificate
of deposit rating of P-1 by Moody's, (b) has either (i) a long-term unsecured
debt rating of AAA by Standard & Poor's or (ii) a certificate of deposit rating
of A-1+ by Standard & Poor's and (c) is a member of the FDIC. Notwithstanding
the previous sentence, any institution the appointment of which satisfies the
Rating Agency Condition shall be considered an Eligible Institution. If so
qualified, the Trustee or the Servicer may be considered an Eligible Institution
for the purposes of this definition.
"ELIGIBLE INVESTMENTS" shall mean book-entry securities, negotiable
instruments or securities represented by instruments in bearer or registered
form which evidence:
(a) direct obligations of, and obligations fully guaranteed as to
timely payment of principal and interest by, the United States of America;
(b) demand deposits, time deposits or certificates of deposit (having
original maturities of no more than 365 days) of depository institutions or
trust companies 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 short-term debt
rating of such depository institution or trust company shall be in the
highest investment category of each Rating Agency;
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(c) commercial paper or other short-term obligations having, at the
time of the Trust's investment or contractual commitment to invest therein,
a rating from each Rating Agency in its highest investment category;
(d) notes or bankers' acceptances (having original maturities of no
more than 365 days) issued by any depository institution or trust company
referred to in (b) above;
(e) investments in money market funds rated in the highest investment
category by each Rating Agency or otherwise approved in writing by each
Rating Agency;
(f) time deposits, other than as referred to in clause (e) above, with
a Person the commercial paper of which has a credit rating from each Rating
Agency in its highest investment category; or
(g) any other investments approved in writing by each Rating Agency.
"ELIGIBLE RECEIVABLE" shall mean each Receivable:
(a) which has arisen under an Eligible Account;
(b) which was created in compliance with all Requirements of Law
applicable to the institution which owned the Receivable at the time of its
creation, the failure to comply with which would have a material adverse
effect on Investor Certificateholders, and pursuant to a Cardholder
Agreement which complies in all material respects with all Requirements of
Law applicable to the Account Owner, the failure to comply with which would
have a material adverse effect on Investor Certificateholders;
(c) with respect to which all material consents, licenses, approvals
or authorizations of, or registrations or declarations with, any
Governmental Authority required to be obtained or given by the Account
Owner, in connection with the creation of such Receivable or the execution,
delivery and performance by the Account Owner of its obligations, if any,
under the related Cardholder Agreement have been duly obtained or given and
are in full force and effect as of such date of creation of such
Receivable;
(d) as to which, at the time of the transfer of such Receivable to the
Trust, the Transferor or the Trust will have good and marketable title
thereto, free and clear of all Liens (other than any Lien for municipal or
other local taxes if such taxes are not then due and payable or if the
Transferor is then contesting the validity thereof in good faith by
appropriate proceedings and has set aside on its books adequate reserves
with respect thereto);
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(e) which has been the subject of either a valid transfer and
assignment from the Transferor to the Trust of all the Transferor's right,
title and interest therein or the grant of a first priority perfected
security interest therein (and in the proceeds thereof), effective until
the termination of the Trust;
(f) which at and after the time of transfer to the Trust is the legal,
valid and binding payment obligation of the Obligor thereon, legally
enforceable against such Obligor in accordance with its terms, except as
such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws, now or hereafter in
effect, affecting the enforcement of creditors' rights in general and
except as such enforceability may be limited by general principles of
equity (whether considered in a suit at law or in equity);
(g) which constitutes either an "account" or a "general intangible"
under and as defined in Article 9 of the UCC;
(h) which, at the time of its transfer to the Trust, has not been
waived or modified except as permitted in accordance with the Credit Card
Guidelines and which waiver or modification is reflected in the Servicer's
computer file of revolving credit card accounts;
(i) which, 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 applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws 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 equity) or as to which the
Servicer is required by Section 3.09 to make an adjustment;
(j) as to which, at the time of its transfer to the Trust, the Account
Owner has satisfied all its obligations required to be satisfied by such
time; and
(k) as to which, at the time of its transfer to the Trust, none of the
Transferor, the Servicer, The Travelers Bank, The Travelers Bank USA or any
other Account Owner, as the case may be, has taken any action which, or
failed to take any action the omission of which, would, at the time of its
transfer to the Trust, impair the rights of the Trust or the
Certificateholders therein.
"ELIGIBLE SERVICER" shall mean the Trustee, or if the Trustee is not acting
as Servicer, an entity which, at the time of its appointment as Servicer, (a) is
servicing a portfolio of revolving credit card accounts, (b) is legally
qualified and has the capacity to service the Accounts, (c) is qualified to use
the software that is then being used to service the
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Accounts or obtains the right to use, or has its own software, which is adequate
to perform its duties under this Agreement, (d) has demonstrated the ability to
professionally and competently service a portfolio of similar accounts in
accordance with high standards of skill and care, and (e) has a net worth of at
least $50,000,000 as of the end of its most recent fiscal quarter.
"ENHANCEMENT AGREEMENT" shall mean any agreement, instrument or document
governing the terms of any Series Enhancement or pursuant to which any Series
Enhancement is issued or outstanding.
"ENHANCEMENT INVESTOR AMOUNT" shall have the meaning, if applicable with
respect to any Series, specified in the related Supplement.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended.
"EUROCLEAR OPERATOR" shall mean Morgan Guaranty Trust Company of New York,
Brussels office, as operator of the Euroclear System.
"EXCESS ALLOCATION SERIES" shall mean a Series that, pursuant to the
Supplement therefor, is entitled to receive certain excess Collections of
Finance Charge Receivables , as more specifically set forth in the Supplement.
"EXCESS FINANCE CHARGE COLLECTIONS" shall have the meaning specified in
subsection 4.04(b).
"EXCESS FUNDING ACCOUNT" shall have the meaning specified in Section 4.02.
"EXCESS FUNDING AMOUNT" shall mean the amount on deposit in the Excess
Funding Account.
"EXCESS SPREAD" with respect to each Series shall have the meaning
specified in the applicable Supplement.
"EXCESS TRANSFEROR FINANCE CHARGE COLLECTIONS" shall have the meaning
specified in subsection 4.04(c).
"EXCHANGE DATE" shall mean, with respect to any Series, any date that is
after the related Closing Date, in the case of Definitive Euro-Certificates in
registered form, or upon presentation of certification of non-United States
beneficial ownership (as described in Section 6.13), in the case of Definitive
Euro-Certificates in bearer form.
"FDIC" shall mean the Federal Deposit Insurance Corporation or any
successor.
"FINANCE CHARGE RECEIVABLES" shall mean all amounts billed to the Obligors
on any Account in respect of (i) Periodic Finance Charges, (ii) annual
membership fees and
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annual service charges, (iii) Late Fees, (iv) Overlimit Fees, (v) Cash Advance
Fees and (vi) all other fees and charges with respect to the Accounts designated
by the Transferor to be included as Finance Charge Receivables. All Recoveries
will be treated as Collections of Finance Charge Receivables. Finance Charge
Receivables shall also include the interest portion of Participation Interests
as shall be determined pursuant to the applicable Participation Interest
Supplement or Supplement.
"FINANCE CHARGE SHORTFALL" shall have the meaning specified in subsection
4.04(b).
"FIRREA" shall mean the Financial Institutions Reform, Recovery and
Enforcement Act of 1989, as amended.
"FOREIGN CLEARING AGENCY" shall mean Cedel and the Euroclear Operator.
"GLOBAL CERTIFICATE" shall have the meaning specified in subsection
6.13(a).
"GOVERNMENTAL AUTHORITY" shall mean the United States of America, any state
or other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"GROUP" shall mean, with respect to any Series, the group of Series, if
any, in which the related Supplement specifies such Series is to be included.
"INELIGIBLE RECEIVABLES" shall have the meaning specified in subsection
2.05(a).
"INITIAL ACCOUNT" shall mean each MasterCard-Registered Trademark- and
VISA-Registered Trademark-(1) account established pursuant to a Cardholder
Agreement between The Travelers Bank or The Travelers Bank USA and any Person,
and identified by account number and by the Receivable balance in a computer
file or microfiche list delivered to the Trustee by the Transferor on or prior
to the Initial Closing Date pursuant to Section 2.01.
"INITIAL CLOSING DATE" shall mean __________ __, 1997.
"INSOLVENCY EVENT" shall have the meaning specified in subsection
9.01(a)(i).
"INSURANCE PROCEEDS" shall mean any amounts recovered by the Servicer
pursuant to any credit insurance policies covering any Obligor with respect to
Receivables under such Obligor's Account.
"INVESTMENT COMPANY ACT" shall mean the Investment Company Act of 1940, as
amended from time to time.
______________
(1) MasterCard and VISA are registered trademarks of MasterCard
International Incorporated and of VISA USA, Inc., respectively.
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"INVESTOR AMOUNT" shall mean, with respect to any Series
and for any date, an amount equal to the Investor Amount specified in the
related Supplement.
"INVESTOR CERTIFICATEHOLDER" shall mean the Person in
whose name a Registered Certificate is registered in the Certificate Register
or the bearer of any Bearer Certificate (or the Global Certificate, as the
case may be) or Coupon.
"INVESTOR CERTIFICATES" shall mean any certificated or
uncertificated interest in the Trust designated as, or deemed to be, an
"Investor Certificate" in the related Supplement.
"LATE FEES" shall have the meaning specified in the
Cardholder Agreement applicable to each Account for late fees or similar
terms.
"LIEN" shall mean any mortgage, deed of trust, pledge,
hypothecation, assignment, participation or equity interest, deposit
arrangement, encumbrance, lien (statutory or other), preference, priority or
other security agreement or preferential arrangement of any kind or nature
whatsoever, including 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,
excluding any lien or filing pursuant to this Agreement; PROVIDED, HOWEVER,
that any assignment or transfer pursuant to subsection 6.03(c) or (d) or
Section 7.02 shall not be deemed to constitute a Lien.
"MANAGER" shall mean the lead manager, manager or
co-manager or Person performing a similar function with respect to an
offering of Definitive Euro-Certificates.
"MASTERCARD" shall mean MasterCard International
Incorporated.
"MONTHLY PERIOD" shall mean, with respect to each
Distribution Date, unless otherwise provided in a Supplement, the period from
and including the first day of the preceding calendar month to and including
the last day of such calendar month; PROVIDED, HOWEVER, that the initial
Monthly Period with respect to any Series will commence on the Closing Date
with respect to such Series.
"MONTHLY SERVICING FEE" shall have the meaning specified
in Section 3.02.
"MOODY'S" shall mean Moody's Investors Service, Inc., or
its successor.
"NOTICES" shall have the meaning specified in subsection
13.05(a).
"OBLIGOR" shall mean, with respect to any Account, the
Person or Persons obligated to make payments with respect to such Account,
including any guarantor thereof, but excluding any merchant.
"OFFICER'S CERTIFICATE" shall mean, unless otherwise
specified in this Agreement, a certificate delivered to the Trustee signed by
the Chairman of the Board,
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President, any Vice President or the Treasurer of the Transferor or the
Servicer, as the case may be.
"OPINION OF COUNSEL" shall mean a written opinion of
counsel, who may be counsel for, or an employee of, the Person providing the
opinion and who shall be reasonably acceptable to the Trustee.
"OVERLIMIT FEES" shall have the meaning specified in the
Cardholder Agreement applicable to each Account for overlimit fees or similar
terms if such fees are provided for with respect to such Account.
"PARTICIPATION INTERESTS" shall have the meaning
specified in subsection 2.09(a)(ii).
"PARTICIPATION INTEREST SUPPLEMENT" shall mean a
Supplement entered into pursuant to subsections 2.09(a)(ii) and 13.01(a) in
connection with the conveyance of Participation Interests to the Trust.
"PARTICIPATING TRANSFEROR" shall have the meaning
specified in subsection 2.09(c)(i).
"PAYING AGENT" shall mean any paying agent and co-paying
agent appointed pursuant to Section 6.07 and shall initially be the Trustee;
PROVIDED, that if the Supplement for a Series so provides, a Paying Agent may
be appointed with respect to such Series.
"PAY OUT EVENT" shall mean, with respect to each Series,
a Trust Pay Out Event or a Series Pay Out Event.
"PERIODIC FINANCE CHARGES" shall have the meaning
specified in the Cardholder Agreement applicable to each Account for finance
charges (due to periodic rate) or any similar term.
"PERSON" shall mean any legal person, including any
individual, corporation, partnership, joint venture, association, joint-stock
company, trust, unincorporated organization, governmental entity or other
entity of similar nature.
"PRINCIPAL RECEIVABLE" shall mean all amounts charged by
Obligors for merchandise and services and cash advances, but shall not
include Finance Charge Receivables or Defaulted Receivables. Principal
Receivables shall also include the principal portion of Participation
Interests as shall be determined pursuant to the applicable Participation
Interest Supplement or Supplement. In calculating the aggregate amount of
Principal Receivables on any day, the amount of Principal Receivables shall
be reduced by the aggregate amount of credit balances in the Accounts on such
day. Any Receivables which the related Transferor is unable to transfer as
provided in Section 2.10 shall not be included in calculating the aggregate
amount of Principal Receivables, except to the extent so provided in Section
2.10.
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"PRINCIPAL SHARING SERIES" shall mean a Series that,
pursuant to the Supplement therefor, is entitled to receive Shared Principal
Collections.
"PRINCIPAL SHORTFALLS" shall have the meaning specified
in subsection 4.04(a).
"PRINCIPAL TERMS" shall mean, with respect to any Series,
(i) the name or designation; (ii) the Initial Investor Amount, the Series
Investor Amount and the Series Invested Amount (or method for calculating
such amounts); (iii) the Certificate Rate (or method for the determination
thereof); (iv) the payment date or dates and the date or dates from which
interest shall accrue; (v) the method for allocating Collections to
Certificateholders of such Series; (vi) the designation of any Series
Accounts and the terms governing the operation of any such Series Accounts;
(vii) the method of calculating the servicing fee with respect thereto;
(viii) the terms of any form of Series Enhancement with respect thereto; (ix)
the terms on which the Investor Certificates of such Series may be exchanged
for Investor Certificates of another Series, repurchased by the Transferor or
remarketed to other investors; (x) the Series Termination Date; (xi) the
number of Classes of Investor Certificates of such Series and, if such Series
consists of more than one Class, the rights and priorities of each such
Class; (xii) the extent to which the Investor Certificates of such Series
will be issuable in temporary or permanent global form (and, in such case,
the depositary for such Global Certificate or Certificates, the terms and
conditions, if any, upon which such Global Certificate may be exchanged, in
whole or in part, for Definitive Certificates, and the manner in which any
interest payable on a temporary or Global Certificate will be paid); (xiii)
whether the Investor Certificates of such Series may be issued as Bearer
Certificates and any limitations imposed thereon; (xiv) the priority of such
Series with respect to any other Series; (xv) the Group, if any, to which
such Series belongs; (xvi) whether or not such Series is a Principal Sharing
Series, whether such Series is an Excess Allocation Series, and whether such
Series is entitled to share Excess Transferor Finance Charge Collections and
Shared Transferor Principal Collections; and (xvii) any other terms of such
Series.
"RATING AGENCY" shall mean, with respect to any
outstanding Series or Class, each statistical rating agency selected by the
Transferor to rate the Investor Certificates of such Series or Class, as
specified in the related Supplement.
"RATING AGENCY CONDITION" shall mean, with respect to any
action, that each Rating Agency shall have notified the Transferor in writing
that such action will not result in a reduction or withdrawal of the rating
of any outstanding Series or Class with respect to which it is a Rating
Agency.
"REASSIGNMENT" shall have the meaning specified in
Section 2.09.
"RECEIVABLE" shall mean all amounts shown on the
Servicer's records as amounts payable by Obligors on any Account from time to
time, including amounts payable for Principal Receivables and Finance Charge
Receivables. Receivables which become Defaulted Receivables will cease to be
included as Receivables as of the day on which they become Defaulted
Receivables.
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"RECEIVABLES TRANSFER AGREEMENTS" shall mean, (i) the
receivables transfer agreement between The Travelers Bank and the Transferor
and (ii) the receivables transfer agreement between The Travelers Bank USA
and the Transferor, each dated as of __________ __, 1997, and in each case as
amended from time to time in accordance with the terms thereof, and (iii) any
receivables transfer agreement, substantially in the form of such agreements
dated as of __________ __, 1997, entered into between the Transferor and an
Account Owner in the future; PROVIDED, that before the Transferor shall enter
into any additional receivables transfer agreement as described in (iii) of
this definition, (A) the Rating Agency Condition is satisfied with respect to
such receivables transfer agreement and (B) the Transferor shall have
delivered to the Trustee an Officer's Certificate to the effect that such
officer reasonably believes that the execution and delivery of such
receivables transfer agreement and the purchase of Receivables from the
Account Owner named therein will not have an Adverse Effect.
"RECORD DATE" shall mean, with respect to any
Distribution Date, the last Business Day of the preceding Monthly Period,
except as otherwise provided with respect to a Series in the related
Supplement.
"RECOVERIES" shall mean all amounts, including Insurance
Proceeds, received by the Servicer with respect to Receivables which have
previously become Defaulted Receivables, net of any out-of-pocket costs and
expenses of collection (including attorneys fees and expenses deducted
therefrom).
"REGISTERED CERTIFICATEHOLDER" shall mean the Holder of a
Registered Certificate.
"REGISTERED CERTIFICATES" shall have the meaning
specified in Section 6.01.
"REINVESTMENT EVENT" shall mean, with respect to any
Series, such event, if any, specified in the Supplement as a Reinvestment
Event with respect to such Series.
"REMOVAL CUT-OFF DATE" shall have the meaning specified
in subsection 2.10(b).
"REMOVAL DATE" shall have the meaning specified in
subsection 2.10(a).
"REMOVAL NOTICE DATE" shall have the meaning specified in
subsection 2.10(a).
"REMOVED ACCOUNTS" shall have the meaning specified in
Section 2.10.
"REQUIRED DESIGNATION DATE" shall have the meaning
specified in subsection 2.09(a).
"REQUIRED PRINCIPAL BALANCE" shall mean, as of any date of
determination, an amount equal to the difference between (a) the sum of the
Series Investor Amounts for each Series outstanding on such date, MINUS (b) the
Excess Funding Amount.
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"REQUIRED TRANSFEROR AMOUNT" shall mean, with respect to
any date, an amount equal to (i) the product of the Required Transferor
Percentage and (ii)(a) the aggregate amount of Principal Receivables times
(b) one minus the Discount Percentage.
"REQUIRED TRANSFEROR PERCENTAGE" shall mean ____%;
PROVIDED, HOWEVER, that the Transferor may reduce the Required Transferor
Percentage upon (x) 30 days' prior notice to the Trustee and each Rating
Agency, (y) satisfaction of the Rating Agency Condition with respect thereto
and (z) delivery to the Trustee of a certificate of a Vice President or more
senior officer of each Transferor stating that such Transferor reasonably
believes that such reduction will not, based on the facts known to such
officer at the time of such certification, then or thereafter have an Adverse
Effect; PROVIDED FURTHER, that the Required Transferor Percentage shall not
at any time be less than 2%.
"REQUIREMENTS OF LAW" with respect to any Person shall
mean the certificate of incorporation or articles of association and by-laws
or other organizational or governing documents of such Person, and any law,
treaty, rule or regulation, or determination of an arbitrator or Governmental
Authority, in each case applicable to or binding upon such Person or to which
such Person is subject, whether Federal, state or local (including, without
limitation, usury laws, the Federal Truth in Lending Act and Regulation Z and
Regulation B of the Board of Governors of the Federal Reserve System).
"RESPONSIBLE OFFICER" shall mean any officer within the
Corporate Trust Office (or any successor group of the Trustee) including any
Vice President, any Assistant Secretary, any Assistant Treasurer, or any
other officer of the Trustee customarily performing functions similar to
those performed by any of the above-designated officers and also, with
respect to a particular matter, any other officer to whom such matter is
referred because of such officer's knowledge of and familiarity with the
particular subject.
"REVOLVING CREDIT AGREEMENT" shall mean the revolving
credit agreement dated as of __________ ____, ____, between the Transferor
and Commercial Credit Company.
"REVOLVING PERIOD" shall mean, with respect to any
Series, the period specified as such in the related Supplement.
"RTC" shall mean the Resolution Trust Corporation or any
successor.
"RULE 144A" shall mean Rule 144A under the Act, as such
Rule may be amended from time to time.
"SERIES" shall mean any series of Investor Certificates
established pursuant to a Supplement.
"SERIES ACCOUNT" shall mean any deposit, trust, escrow or
similar account maintained for the benefit of any Series or Class, as
specified in any Supplement.
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"SERIES ENHANCEMENT" shall mean the rights and benefits
provided to the Investor Certificateholders of any Series or Class pursuant
to any letter of credit, surety bond, cash collateral account, cash
collateral guaranty, spread account, guaranteed rate agreement, maturity
liquidity facility, tax protection agreement, interest rate swap agreement,
interest rate cap agreement or other similar arrangement. The subordination
of any Series or Class to another Series or Class shall be deemed to be a
Series Enhancement.
"SERIES ENHANCER" shall mean the Person or Persons
providing any Series Enhancement, other than the Investor Certificateholders
of any Series or Class which is subordinated to another Series or Class.
"SERIES INVESTED AMOUNT" shall have, with respect to any
Series, the meaning specified in the related Supplement.
"SERIES INVESTOR AMOUNT" shall have, with respect to any
Series, the meaning specified in the related Supplement.
"SERIES PAY OUT EVENT" shall mean, with respect to any
Series, each event, if any, specified in the Supplement as a Series Pay Out
Event with respect to such Series.
"SERIES PERCENTAGE" shall have, with respect to Principal
Receivables, Finance Charge Receivables and Defaulted Receivables, and any
Series of Certificates, the meaning stated in the related Supplement.
"SERIES TERMINATION DATE" shall mean, with respect to any
Series, the termination date for such Series specified in the related
Supplement.
"SERVICER" shall mean initially The Travelers Bank and
its permitted successors and assigns, in its capacity as Servicer pursuant to
this Agreement, and thereafter any Person appointed Successor Servicer as
herein provided.
"SERVICER DEFAULT" shall have the meaning specified in
Section 10.01.
"SERVICING FEE" shall have the meaning specified in
Section 3.02.
"SERVICING FEE RATE" shall mean, with respect to any
Series, the servicing fee rate specified in the related Supplement.
"SERVICING OFFICER" shall mean any officer of the
Servicer, or any attorney-in-fact of the Servicer, involved in, or
responsible for, the administration and servicing of the Receivables whose
name appears on a list of servicing officers furnished to the Trustee by the
Servicer, as such list may from time to time be amended.
"SHARED PRINCIPAL COLLECTIONS" shall have the meaning
specified in subsection 4.04(d).
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"SHARED TRANSFEROR PRINCIPAL COLLECTIONS" shall have the
meaning specified in Section 4.04(d).
"STANDARD & POOR'S" shall mean Standard & Poor's
Corporation or its successor.
"SUCCESSOR SERVICER" shall have the meaning specified in
subsection 10.02(a).
"SUPPLEMENT" shall mean, with respect to any Series, a
Supplement to this Agreement, executed and delivered in connection with the
original issuance of the Investor Certificates of such Series pursuant to
Section 6.03, and all amendments thereof and supplements thereto.
"SUPPLEMENTAL CERTIFICATE" shall have the meaning
specified in subsection 6.03(c).
"TAX OPINION" shall mean, with respect to any action, an
Opinion of Counsel to the effect that, (a) for Federal income tax purposes,
such action will not adversely affect the tax characterization as debt of the
Investor Certificates of any outstanding Series or Class that were
characterized as debt at the time of their issuance, (b) such action will not
cause the Trust to be deemed to be an association (or publicly traded
partnership) taxable as a corporation and (c) such action will not cause or
constitute an event in which gain or loss would be recognized by any Investor
Certificateholder or the Trust.
"TERMINATION NOTICE" shall have the meaning specified in
Section 10.01.
"TRANSFER AGENT AND REGISTRAR" shall have the meaning
specified in Section 6.04.
"TRANSFER DATE" shall mean the Business Day immediately
preceding each Distribution Date.
"TRANSFER RESTRICTION EVENT" shall have the meaning
specified in Section 2.10.
"TRANSFEROR" shall mean (a) CC Credit Card Corporation, a
wholly-owned special purpose subsidiary of Commercial Credit Company and
incorporated in the state of Delaware, or its successor under this Agreement
and (b) any Additional Transferor or Transferors. References to "each
Transferor" shall refer to each entity mentioned in the preceding sentence
and references to "the Transferor" shall refer to all such entities.
"TRANSFEROR AMOUNT" shall mean, on any date of
determination, an amount equal to the difference between (i) the sum of (a)
an amount equal to the product of (x) the aggregate amount of Principal
Receivables at the end of the day immediately prior to such date of
determination times (y) one minus the Discount Percentage, PLUS (b) the
Excess Funding Amount at the end of the day immediately prior to such date of
determination, MINUS (ii) the sum of the Series Invested Amounts for each
Series outstanding on such date at the end of such day.
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"TRANSFEROR CERTIFICATE" shall mean the certificate
executed by the Transferor and authenticated by or on behalf of the Trustee,
substantially in the form of Exhibit A, as the same may be modified in
accordance with subsection 2.09(e).
"TRANSFEROR CERTIFICATES" shall mean, collectively, the
Transferor Certificate and any outstanding Supplemental Certificates.
"TRANSFEROR PERCENTAGE" shall mean, on any date of
determination, when used with respect to Principal Receivables, Finance
Charge Receivables and Defaulted Receivables, a percentage equal to 100%
MINUS the Aggregate Series Percentage with respect to such categories of
Receivables.
"TRANSFEROR'S INTEREST" shall have the meaning specified
in Section 4.01.
"TRANSFERRED ACCOUNT" shall have the meaning set forth in
the definition of "Account."
"THE TRAVELERS BANK" shall mean The Travelers Bank, a
Delaware state-chartered banking corporation, and its successors and assigns.
"THE TRAVELERS BANK USA" shall mean The Travelers Bank
USA, a Delaware state-chartered bank corporation, and its successors and
assigns.
"TRUST" shall mean the Travelers Bank Credit Card Master
Trust I created by this Agreement.
"TRUST ASSETS" shall have the meaning specified in
Section 2.01.
"TRUST CUT-OFF DATE" shall mean __________ __, 1997.
"TRUSTEE" shall mean The Bank of New York, in its
capacity as trustee on behalf of the Trust, or its successor in interest, or
any successor trustee appointed as herein provided.
"TRUST PAY OUT EVENT" shall mean each event specified in
subsection 9.01(a).
"UCC" shall mean the Uniform Commercial Code, as amended
from time to time, as in effect in the State of Delaware or any other state
or states where the filing of a financing statement is required to perfect
the Trust's interest in the Receivables and the proceeds thereof or in any
other specified jurisdiction.
"UNITED STATES" shall mean the United States of America
(including the States and the District of Columbia), its territories, its
possessions and other areas subject to its jurisdiction.
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"VICE PRESIDENT" when used with respect to the Transferor
or the Servicer shall mean any vice president thereof whether or not
designated by a number or word or words added before or after the title "vice
president."
"VISA" shall mean VISA USA, Inc.
Section 1.02. OTHER DEFINITIONAL PROVISIONS.
(a) With respect to any Series, all terms used herein and
not otherwise defined herein shall have meanings ascribed to them in the
related Supplement.
(b) All terms defined in this Agreement shall have the
defined meanings when used in any certificate or other document made or
delivered pursuant hereto unless otherwise defined therein.
(c) As used in this Agreement and in any certificate or
other document made or delivered pursuant hereto or thereto, accounting terms
not defined in this Agreement or in any such certificate or other document,
and accounting terms partly defined in this Agreement or in any such
certificate or other document to the extent not defined, shall have the
respective meanings given to them under generally accepted accounting
principles or regulatory accounting principles, as applicable. To the extent
that the definitions of accounting terms in this Agreement or in any such
certificate or other document are inconsistent with the meanings of such
terms under generally accepted accounting principles or regulatory accounting
principles, the definitions contained in this Agreement or in any such
certificate or other document shall control.
(d) The agreements, representations and warranties of CC
Credit Card Corporation and The Travelers Bank in this Agreement in each of
their respective capacities as Transferor and as Servicer, shall be deemed to
be the agreements, representations and warranties of CC Credit Card
Corporation and The Travelers Bank solely in each such capacity for so long
as CC Credit Card Corporation and The Travelers Bank act in each such
capacity under this Agreement.
(e) The words "hereof," "herein" and "hereunder" and
words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement;
references to any Section, Schedule or Exhibit are references to Sections,
Schedules and Exhibits in or to this Agreement unless otherwise specified;
and the term "including" means "including without limitation."
(f) Unless otherwise specifically provided herein, the
failure of this Agreement to specify the meaning of a term or the
applicability of a provision to any Series shall not preclude the meaning of
such term or the applicability of such provision with respect to such Series
being set forth in the Supplement therefor.
[END OF ARTICLE I]
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ARTICLE II
CONVEYANCE OF RECEIVABLES
Section 2.01. CONVEYANCE OF RECEIVABLES. By execution
of this Agreement, CC Credit Card Corporation as Transferor, does hereby
sell, transfer, assign, set over and otherwise convey to the Trustee, on
behalf of the Trust, for the benefit of the Certificateholders, all its
right, title and interest in, to and under the Receivables existing at the
close of business on the Initial Closing Date, in the case of Receivables
arising in the Initial Accounts, and on each Addition Date, in the case of
Receivables arising in the Additional Accounts, and in each case thereafter
created from time to time until the termination of the Trust, all Recoveries
allocable to the Trust as provided herein, all monies due or to become due
and all amounts received with respect thereto and all proceeds (including
"proceeds" as defined in the UCC) thereof. Such property, together with all
monies on deposit in the Collection Account, the Excess Funding Account, the
Series Accounts and any Series Enhancement shall constitute the assets of the
Trust (the "Trust Assets"). The foregoing does not constitute and is not
intended to result in the creation or assumption by the Trust, the Trustee,
any Investor Certificateholder or any Series Enhancer of any obligation of
The Travelers Bank, The Travelers Bank USA or other Account Owner, or the
Servicer, the Transferor, any Additional Transferor or any other Person in
connection with the Accounts or the Receivables or under any agreement or
instrument relating thereto, including any obligation to Obligors, merchant
banks, merchant clearance systems, VISA, MasterCard or insurers. The
foregoing sale, transfer, assignment, set over and conveyance to the Trust
shall be made to the Trustee, on behalf of the Trust, and each reference in
this Agreement to such sale, transfer, assignment set over and conveyance
shall be construed accordingly.
The Transferor agrees to record and file, at its own
expense, financing statements (and continuation statements 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, and maintain the perfection of,
the sale and assignment of the Receivables to the Trust, and to deliver a
file stamped copy of each such financing statement or other evidence of such
filing (which may, for purposes of this Section 2.01, consist of telephone
confirmation of such filing) to the Trustee on or prior to the Initial
Closing Date, in the case of Receivables arising in the Initial Accounts, and
(if any additional filing is so necessary) the applicable Addition Date, in
the case of Receivables arising in Additional Accounts. The 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
sale and assignment.
The Transferor further agrees, at its own expense, (a) on
or prior to (x) the Initial Closing Date, in the case of the Initial
Accounts, (y) the applicable Addition Date, in the case of Additional
Accounts, and (z) the applicable Removal Date, in the case of Removed
Accounts, to indicate in the appropriate computer files that Receivables
created in connection with the Accounts (other than Removed Accounts) have
been conveyed to the Trust pursuant to this Agreement for the benefit of the
Certificateholders (or conveyed to the
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Transferor or its designee in the case of Removed Accounts) by including (or
deleting in the case of Removed Accounts) in such computer files the code "___,"
(or any other code specified in an Assignment) in the __________ field of such
computer files, and (b) on or prior to the Initial Closing Date, each Addition
Date and each Removal Date, as applicable, to deliver to the Trustee a computer
file or microfiche list containing a true and complete list of all such Accounts
specifying for each such Account, as of the Trust Cut-Off Date, in the case of
the Initial Accounts, the applicable Addition Cut-Off Date, in the case of
Additional Accounts, and the applicable Removal Cut-Off Date, in the case of
Removed Accounts, its account number, the aggregate amount outstanding in such
Account and the aggregate amount of Principal Receivables outstanding in such
Account. Such file or list, as supplemented from time to time to reflect
Additional Accounts and Removed Accounts, shall be marked as Schedule 1 to this
Agreement and is hereby incorporated into and made a part of this Agreement.
The Transferor agrees not to alter the code or field referenced in clause (a)
above with respect to any Account during the term of this Agreement unless and
until such Accounts become Removed Accounts or unless and until (i) the
Transferor shall give written notice of any such alteration to the Trustee, such
written notice to be as of the date of its receipt by the Trustee incorporated
into and made part of this Agreement, and (ii) the Trustee and the Transferor
shall execute and file any UCC financing statement or amendment thereof
necessitated by such alteration.
Section 2.02. ACCEPTANCE BY TRUSTEE.
(a) The Trustee hereby acknowledges its acceptance on
behalf of the Trust of all right, title and interest to the property, now
existing and hereafter created, conveyed to the Trust pursuant to Section
2.01 and declares that it shall maintain such right, title and interest, upon
the trust herein set forth, for the benefit of all Certificateholders. The
Trustee further acknowledges that, prior to or simultaneously with the
execution and delivery of this Agreement, the Transferor delivered to the
Trustee the computer file or microfiche list relating to the Initial Accounts
described in the last paragraph of Section 2.01.
(b) The Trustee hereby agrees not to disclose to any
Person (or to any other department or operating division of the Trustee,
other than the corporate trust department of the Trustee or, if the Trustee
shall be appointed the Successor Servicer, such other departments or
operating divisions of the Trustee as shall be necessary to fulfill its
duties as Servicer), any of the account numbers or other information
contained in the computer files or microfiche lists marked as Schedule 1 or
otherwise delivered to the Trustee from time to time, except (i) to a
Successor Servicer or as required by a Requirement of Law applicable to the
Trustee, (ii) in connection with the performance of the Trustee's duties
hereunder, (iii) in enforcing the rights of Certificateholders, (iv) to bona
fide creditors or potential creditors of any Account Owner, the Servicer or
any Transferor for the limited purpose of enabling any such creditor to
identify Receivables or Accounts subject to this Agreement or the Receivables
Transfer Agreements or (v) after consultation with the Transferor, as
requested by any Person in connection with the financing statements filed
pursuant to this Agreement. The Trustee also agrees not to use any of the
foregoing information for any purpose other than for the purposes provided
for in this Agreement. The Trustee agrees to take such measures as shall be
reasonably requested by the Transferor to protect and maintain the security
and confidentiality of such information and, in connection therewith, will
allow the
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Transferor to inspect the Trustee's security and confidentiality arrangements
from time to time during normal business hours. The Trustee shall provide the
Transferor with notice five Business Days prior to any disclosure pursuant to
this subsection 2.02(b).
(c) The Trustee shall have no power to create, assume or
incur indebtedness or other liabilities in the name of the Trust other than
as contemplated in this Agreement or any Supplement.
Section 2.03. REPRESENTATIONS AND WARRANTIES OF EACH
TRANSFEROR RELATING TO SUCH TRANSFEROR. Each Transferor hereby represents
and warrants to the Trust as of each Closing Date (but only if it was a
Transferor on such date) that:
(a) ORGANIZATION AND GOOD STANDING. Such Transferor is a
corporation duly organized and validly existing in good standing under the
laws of the jurisdiction of its organization or incorporation, and has in all
material respects, 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, to execute, deliver and perform its
obligations under this Agreement, any Receivables Transfer Agreement to which
it is a party and each applicable Supplement and to execute and deliver to
the Trustee the Certificates pursuant hereto.
(b) DUE QUALIFICATION. Such Transferor is duly qualified
to do business and is in good standing as a foreign corporation (or is exempt
from such requirements), and has obtained all necessary licenses and
approvals, in each jurisdiction in which failure to so qualify or to obtain
such licenses and approvals would (i) render any Cardholder Agreement
relating to an Account specified in a Receivables Transfer Agreement with
such Transferor or any Receivable transferred to the Trust by such Transferor
unenforceable by such Transferor, the Servicer or the Trustee or (ii) would
have a material adverse effect on the interests of the Certificateholders
hereunder or under any Supplement; PROVIDED, HOWEVER, that no representation
or warranty is made with respect to any qualification, licenses or approvals
which the Trustee has or may be required at any time to obtain, if any, in
connection with the transactions contemplated hereby.
(c) DUE AUTHORIZATION. The execution, delivery and
performance of this Agreement, each Receivables Transfer Agreement to which
it is a party and each Supplement by such Transferor and the execution and
delivery to the Trustee of the Certificates and the consummation by such
Transferor of the transactions provided for in this Agreement, each
Receivables Transfer Agreement to which it is a party and each Supplement
have been duly authorized by such Transferor by all necessary corporate
action on the part of such Transferor and this Agreement, each Receivables
Transfer Agreement to which it is a party and each Supplement will remain,
from the time of its execution, an official record of such Transferor.
(d) NO CONFLICT. The execution and delivery by such
Transferor of this Agreement, each Receivables Transfer Agreement to which it
is a party, each Supplement and the Certificates, the performance by such
Transferor of the transactions contemplated by this Agreement, each
Receivables Transfer Agreement to which it is a party and each
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Supplement and the fulfillment by such Transferor of the terms hereof and
thereof applicable to such Transferor will not conflict with or violate any
Requirement of Law applicable to such Transferor or conflict with, result in any
breach of any of the material terms and provisions of, or constitute (with or
without notice or lapse of time or both) a material default under, any
indenture, contract, agreement, mortgage, deed of trust, or other instrument to
which such Transferor is a party or by which it or any of its properties are
bound.
(e) NO PROCEEDINGS. There are no proceedings or
investigations pending or, to the best knowledge of such Transferor,
threatened against such Transferor, before any court, regulatory body,
administrative agency, or other tribunal or governmental instrumentality (i)
asserting the invalidity of this Agreement, any Receivables Transfer
Agreement to which it is a party, any Supplement or the Certificates, (ii)
seeking to prevent the issuance of the Certificates or the consummation of
any of the transactions contemplated by this Agreement, any Receivables
Transfer Agreement to which it is a party, any Supplement or the
Certificates, (iii) seeking any determination or ruling that, in the
reasonable judgment of such Transferor, would materially and adversely affect
the performance by such Transferor of its obligations under this Agreement,
any Receivables Transfer Agreement to which it is a party, or any Supplement,
(iv) seeking any determination or ruling that would materially and adversely
affect the validity or enforceability of this Agreement, any Receivables
Transfer Agreement to which it is a party, any Supplement or the Certificates
or (v) seeking to affect adversely the income tax attributes of the Trust
under the United States Federal or any State income or franchise tax systems.
(f) ALL CONSENTS REQUIRED. All approvals,
authorizations, consents, orders or other actions of any Person or of any
governmental body or official required to be obtained, effected or given by
such Transferor in connection with the execution and delivery by such
Transferor of this Agreement, any Receivables Transfer Agreement to which it
is a party, each Supplement and the Certificates, the performance by such
Transferor of the transactions contemplated by this Agreement, each
Receivables Transfer Agreement to which it is a party and each Supplement and
the fulfillment by such Transferor of the terms hereof and thereof, have been
duly obtained, effected or given and are in full force and effect; PROVIDED,
HOWEVER, that such Transferor makes no representation or warranty regarding
state securities or "blue sky" laws in connection with the distribution of
the Certificates.
(g) INSOLVENCY. No Insolvency Event with respect to such
Transferor has occurred and the transfer of the Receivables by such
Transferor to the Trust has not been made in contemplation of the occurrence
thereof.
The representations and warranties of each Transferor set
forth in this Section 2.03 shall survive the transfer and assignment by such
Transferor of the respective Receivables to the Trust. Upon discovery by
such Transferor, the Servicer or the Trustee of a breach of any of the
representations and warranties by such Transferor set forth in this Section
2.03, the party discovering such breach shall give prompt written notice to
the others. Such Transferor agrees to cooperate with the Servicer and the
Trustee in attempting to cure any such breach. For purposes of the
representations and warranties set forth in this
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Section 2.03, each reference to a Supplement shall be deemed to refer only to
those Supplements in effect as of the relevant Closing Date.
Section 2.04. REPRESENTATIONS AND WARRANTIES OF EACH
TRANSFEROR RELATING TO THE AGREEMENT, THE RECEIVABLES TRANSFER AGREEMENTS AND
ANY SUPPLEMENT AND THE RECEIVABLES.
(a) REPRESENTATIONS AND WARRANTIES. Each Transferor hereby
represents and warrants to the Trust as of each Closing Date and, with respect
to Additional Accounts the Receivables in which are being transferred by such
Transferor to the Trust, as of the related Addition Date (but only if, in either
case, it was a Transferor on such date) that:
(i) this Agreement, any Receivables Transfer
Agreement to which it is a party, each Supplement and, in
the case of Additional Accounts, the related Assignment,
each constitutes a legal, valid and binding obligation of
such Transferor enforceable against such 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 generally from time to time in effect or general
principles of equity (whether considered in a suit at law
or in equity);
(ii) as of the Initial Closing Date and as of the
related Addition Date with respect to Additional Accounts,
the portion of Schedule 1 to this Agreement under such
Transferor's name, as supplemented on such date, is an
accurate and complete listing in all material respects of
all the Accounts the Receivables in which were transferred
by such Transferor as of the Trust Cut-Off Date or such
Addition Cut-Off Date, as the case may be, and the
information contained therein with respect to the identity
of such Accounts and the Receivables existing thereunder is
true and correct in all material respects as of the Trust
Cut-Off Date or such Addition Cut-Off Date, as the case may
be;
(iii) each Receivable conveyed to the Trust by
such Transferor has been conveyed to the Trust free and
clear of any Lien of any Person claiming through or under
such Transferor or any of its Affiliates (other than Liens
permitted under subsection 2.07(b)) and in compliance, in
all material respects, with all Requirements of Law
applicable to such Transferor;
(iv) all authorizations, consents, orders or
approvals of or registrations or declarations with any
Governmental Authority required to be obtained, effected or
given by such Transferor in connection with the conveyance
by such Transferor of Receivables to the Trust have been
duly obtained, effected or given and are in full force and
effect;
(v) either this Agreement or, in the case of
Additional Accounts, the related Assignment constitutes a
valid sale, transfer and
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assignment to the Trust of all right, title and interest of
such Transferor in the Receivables conveyed to the Trust by
such Transferor and the proceeds thereof or, if this
Agreement or, in the case of Additional Accounts, the
related Assignment does not constitute a sale of such
property, it constitutes a grant of a "security interest"
(as defined in the UCC) in such property to the Trust,
which, in the case of existing Receivables and the proceeds
thereof, is enforceable upon execution and delivery of this
Agreement or, with respect to then-existing Receivables in
Additional Accounts, as of the applicable Addition Date,
and which will be enforceable with respect to such
Receivables hereafter and thereafter created and the
proceeds thereof upon such creation. Upon the filing of the
financing statements pursuant to Sections 2.01 and 2.09
and, in the case of Receivables hereafter created and the
proceeds thereof, upon the creation thereof, the Trust
shall have a first priority perfected security or ownership
interest in such property and proceeds except for (x) Liens
permitted under subsection 2.07(b), (y) the interests of
the Transferor as Holder of the Transferor Certificate or
any Supplemental Certificate, and (z) the Transferor's
right, if any, to interest accruing on and investment
earnings, if any, in respect of the Collection Account or
any Series Account, as provided in this Agreement or the
related Supplement; PROVIDED, HOWEVER, that such Transferor
makes no representation or warranty with respect to the
effect of Section 9-306 of the UCC on the rights of the
Trustee to proceeds held by such Transferor;
(vi) except as otherwise expressly provided in
this Agreement or any Supplement, neither such Transferor
nor any Person claiming through or under such Transferor
has any claim to or interest in the Collection Account, the
Excess Funding Account, any Series Account or any Series
Enhancement;
(vii) on the Trust Cut-Off Date, each Initial
Account specified in Schedule 1 with respect to such
Transferor is an Eligible Account and, on the applicable
Addition Cut-Off Date, each related Additional Account
specified in Schedule 1 with respect to such Transferor
is an Eligible Account;
(viii) on the Trust Cut-Off Date, each Receivable
then existing and conveyed to the Trust by such Transferor
is an Eligible Receivable and, on the applicable Addition
Cut-Off Date, each Receivable contained in any related
Additional Account and conveyed to the Trust by such
Transferor is an Eligible Receivable;
(ix) as of the date of the creation of any new
Receivable in an Account specified in a Receivables
Transfer Agreement with such Transferor, such Receivable
is an Eligible Receivable; and
(x) no selection procedures believed by such
Transferor to be materially adverse to the interests of
the Investor Certificateholders have been used in selecting
the Initial Accounts or Additional Accounts.
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(b) NOTICE OF BREACH. The representations and warranties
of each Transferor set forth in this Section 2.04 shall survive the transfer
and assignment by such Transferor of Receivables to the Trust. Upon
discovery by such Transferor, the Servicer or the Trustee of a breach of any
of the representations and warranties by such Transferor set forth in this
Section 2.04, the party discovering such breach shall give prompt written
notice to the others. Such Transferor agrees to cooperate with the Servicer
and the Trustee in attempting to cure any such breach. For purposes of the
representations and warranties set forth in this Section 2.04, each reference
to a Supplement shall be deemed to refer only to those Supplements in effect
as of the date of the relevant representations or warranties.
Section 2.05. REASSIGNMENT OF INELIGIBLE RECEIVABLES.
(a) REASSIGNMENT OF RECEIVABLES. In the event (i) any
representation or warranty contained in subsection 2.04(a)(ii), (iii), (iv),
(vii), (viii), (ix) or (x) is not true and correct in any material respect as
of the date specified therein with respect to any Receivable or the related
Account transferred to the Trust by such Transferor and as a result of such
breach any Receivables in the related Account become Defaulted Receivables or
the Trust's rights in, to or under such Receivables or the proceeds of such
Receivables are impaired or such proceeds are not available for any reason to
the Trust free and clear of any Lien, unless cured within 60 days (or such
longer period, not in excess of 150 days, as may be agreed to by the Trustee)
after the earlier to occur of the discovery thereof by such Transferor or
receipt by such Transferor of notice thereof given by the Trustee, or (ii) it
is so provided in subsection 2.07(a) with respect to any Receivables
transferred to the Trust by such Transferor, then such Transferor shall
accept reassignment of all Receivables in the related Account ("Ineligible
Receivables") on the terms and conditions set forth in paragraph (b) below;
PROVIDED, HOWEVER, that such Receivables will not be deemed to be Ineligible
Receivables and will not be reassigned to such Transferor if, on any day
prior to the end of such 60-day or longer period, (x) either (A) in the case
of an event described in clause (i) above the relevant representation and
warranty shall be true and correct in all material respects as if made on
such day or (B) in the case of an event described in clause (ii) above the
circumstances causing such Receivable to become an Ineligible Receivable
shall no longer exist and (y) such Transferor shall have delivered to the
Trustee an Officer's Certificate describing the nature of such breach and the
manner in which the relevant representation and warranty became true and
correct.
(b) PRICE OF REASSIGNMENT. The Servicer shall deduct the
portion of the Ineligible Receivables reassigned to each Transferor which are
Principal Receivables from the aggregate amount of Principal Receivables used
to calculate the Transferor Amount, the Series Percentages and any other
percentage used to allocate within or among Series that is applicable to any
Series. In the event that, following the exclusion of such Principal
Receivables from the calculation of the Transferor Amount, the Transferor
Amount would be less than the Required Transferor Amount, not later than
12:00 noon, New York City time, on the first Distribution Date following the
Monthly Period in which such reassignment obligation arises, the relevant
Transferor shall make a deposit into the Excess Funding Account in
immediately available funds in an amount equal to the amount by which the
Transferor Amount would be reduced below the Required Transferor Amount (up
to the amount of such Principal Receivables).
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Upon the deposit, if any, required to be made to the
Excess Funding Account as provided in this Section and the reassignment of
Ineligible Receivables, the Trustee, on behalf of the Trust, shall
automatically and without further action be deemed to sell, transfer, assign,
set over and otherwise convey to the relevant Transferor or its designee,
without recourse, representation or warranty, all the right, title and
interest of the Trust in and to such Ineligible Receivables, all monies due
or to become due and all amounts received with respect thereto and all
proceeds thereof. The Trustee shall execute such documents and instruments
of transfer or assignment and take such other actions as shall reasonably be
requested by the relevant Transferor to effect the conveyance of Ineligible
Receivables pursuant to this Section. The obligation of each Transferor to
accept reassignment of any Ineligible Receivables, and to make the deposits,
if any, required to be made to the Excess Funding Account as provided in this
Section, shall constitute the sole remedy respecting the event giving rise to
such obligation available to Certificateholders (or the Trustee on behalf of
the Certificateholders).
Section 2.06. REASSIGNMENT OF RECEIVABLES IN TRUST
PORTFOLIO. In the event any representation or warranty of a Transferor set
forth in subsection 2.03(a) or (c) or subsection 2.04(a)(i), (v) or (vi) is
not true and correct in any material respect and such breach has a material
adverse effect on the Certificateholders' Interest in the Receivables
transferred to the Trust by such Transferor, then either the Trustee or the
Holders of Investor Certificates evidencing more than 50% of the Aggregate
Investor Amount, by notice then given to such Transferor and the Servicer
(and to the Trustee if given by the Investor Certificateholders), may direct
such Transferor to accept a reassignment of the Receivables transferred to
the Trust by such Transferor if such breach and any material adverse effect
caused by such breach is not cured within 60 days of such notice (or within
such longer period, not in excess of 150 days, as may be specified in such
notice), and upon those conditions such Transferor shall be obligated to
accept such reassignment on the terms set forth below; PROVIDED, HOWEVER,
that such Receivables will not be reassigned to such Transferor if, on any
day prior to the end of such 60-day or longer period (i) the relevant
representation and warranty shall be true and correct in all material
respects as if made on such day and (ii) such Transferor shall have delivered
to the Trustee a certificate of an authorized officer describing the nature
of such breach and the manner in which the relevant representation and
warranty became true and correct.
The relevant Transferor shall deposit in the Collection
Account in immediately available funds not later than 12:00 noon, New York
City time, on the first Distribution Date following the Monthly Period in
which such reassignment obligation arises, in payment for such reassignment,
an amount equal to the sum of the amounts specified therefor with respect to
each outstanding Series in the related Supplement. Notwithstanding anything
to the contrary in this Agreement, such amounts shall be distributed on such
Distribution Date in accordance with Article IV and the terms of each
Supplement.
Upon the deposit, if any, required to be made to the
Collection Account as provided in this Section and the reassignment of the
Receivables, the Trustee, on behalf of the Trust, shall automatically and
without further action be deemed to sell, transfer, assign, set over and
otherwise convey to the relevant Transferor or its designee, without
recourse, representation or warranty, all the right, title and interest of
the Trust in and to such
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Receivables, all monies due or to become due and all amounts received with
respect thereto and all proceeds thereof. The Trustee shall execute such
documents and instruments of transfer or assignment and take such other
actions as shall reasonably be requested by the relevant Transferor to effect
the conveyance of such Receivables pursuant to this Section. The obligation
of each Transferor to accept reassignment of any Receivables, and to make the
deposits, if any, required to be made to the Collection Account as provided
in this section, shall constitute the sole remedy respecting the event giving
rise to such obligation available to Certificateholders (or the Trustee on
behalf of the Certificateholders) or any Series Enhancer.
Section 2.07. COVENANTS OF THE TRANSFEROR. Each
Transferor hereby covenants as follows:
(a) RECEIVABLES TO BE ACCOUNTS OR GENERAL INTANGIBLES.
Except in connection with the enforcement or collection of a Receivable, such
Transferor will take no action to cause any Receivable transferred by it to
the Trust to be evidenced by any instrument or chattel paper (as defined in
the UCC) and, if any such Receivable is so evidenced, it shall be deemed to
be an Ineligible Receivable in accordance with subsection 2.05(a) and shall
be reassigned to such Transferor in accordance with subsection 2.05(b);
PROVIDED, HOWEVER, that Receivables evidenced by notes taken from Obligors in
the ordinary course of business of the Servicer's collection efforts shall
not be deemed Ineligible Receivables solely as a result thereof.
(b) SECURITY INTERESTS. Except for the conveyances
hereunder, such Transferor will not sell, pledge, assign or transfer to any
other Person, or grant, create, incur, assume or suffer to exist any Lien on
any Receivable transferred by it to the Trust, whether now existing or
hereafter created, or any interest therein; such Transferor will immediately
notify the Trustee of the existence of any Lien on any such Receivable; and
such Transferor shall defend the right, title and interest of the Trust in,
to and under such Receivables, whether now existing or hereafter created,
against all claims of third parties claiming through or under such
Transferor; PROVIDED, HOWEVER, that nothing in this subsection 2.07(b) shall
prevent or be deemed to prohibit such Transferor from suffering to exist upon
any of the Receivables transferred by it to the Trust any Liens for municipal
or other local taxes if such taxes shall not at the time be due and payable
or if such Transferor shall currently be contesting the validity thereof in
good faith by appropriate proceedings and shall have set aside on its books
adequate reserves with respect thereto.
(c) TRANSFEROR'S INTEREST. Except for the conveyances
hereunder, in connection with any transaction permitted by Section 7.02 and
as provided in Sections 2.09(e) and 6.03, such Transferor agrees not to
transfer, assign, exchange or otherwise convey or pledge, hypothecate or
otherwise grant a security interest in the Transferor's Interest represented
by the Transferor Certificate or any Supplemental Certificate and any such
attempted transfer, assignment, exchange, conveyance, pledge, hypothecation
or grant shall be void.
(d) DELIVERY OF COLLECTIONS. In the event that such
Transferor receives Collections, such Transferor agrees to pay the Servicer
all such Collections as soon as
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practicable after receipt thereof but in no event later than two Business
Days after the Date of Processing by the Transferor.
(e) NOTICE OF LIENS. Such Transferor shall notify the
Trustee promptly after becoming aware of any Lien on any Receivable other
than the conveyances hereunder and under the Receivables Transfer Agreements
or Liens permitted under subsection 2.07(b).
(f) AMENDMENT OF THE CERTIFICATE OF INCORPORATION. Such
Transferor will not amend in any material respect its Certificate of
Incorporation without providing the Rating Agency with notice no later than
the fifth Business Day prior to such amendment (unless the right to such
notice is waived by the Rating Agency) and satisfying the Rating Agency
Condition.
(g) OTHER INDEBTEDNESS. Such Transferor shall not incur
any additional debt, unless (i) such debt is incurred pursuant to the
Revolving Credit Agreement or (ii) the Rating Agency is provided with notice
no later than the fifth Business Day prior to the incurrence of such
additional debt (unless the right to such notice is waived by the Rating
Agency) and the Rating Agency Condition is satisfied with respect to the
incurrence of such debt.
(h) SEPARATE CORPORATE EXISTENCE. Such Transferor shall:
(i) Maintain in full effect its existence, rights
and franchises as a corporation under the laws of the state
of its incorporation and will obtain and preserve its
qualification to do business in each jurisdiction in which
such qualification is or shall be necessary to protect the
validity and enforceability of this Agreement and any
Receivables Transfer Agreement to which it is a party and
each other instrument or agreement necessary or appropriate
to proper administration hereof and permit and effectuate
the transactions contemplated hereby.
(ii) Maintain its own deposit account or
accounts, separate from those of any Affiliate of such
Transferor, with commercial banking institutions. The
funds of such Transferor will not be diverted to any other
Person or for other than the corporate use of such
Transferor, and, except as may be expressly permitted by
this Agreement or any Receivables Transfer Agreement to
which it is a party, the funds of such Transferor shall not
be commingled with those of any Affiliate of such
Transferor.
(iii) Ensure that, to the extent that it shares
the same officers or other employees as any of its
stockholders or Affiliates, the salaries of and the
expenses related to providing benefits to such officers and
other employees shall be fairly allocated among such
entities, and each such entity shall bear its fair share of
the salary and benefit costs associated with all such
common officers and employees.
(iv) Ensure that, to the extent that it jointly
contracts with any of its stockholders or Affiliates to do
business with vendors or service
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providers or to share overhead expenses, the costs incurred
in so doing shall be allocated fairly among such entities,
and each such entity shall bear its fair share of such
costs. To the extent that such Transferor contracts or
does business with vendors or service providers where the
goods and services provided are partially for the benefit
of any other Person, the costs incurred in so doing shall be
fairly allocated to or among such entities for whose
benefit the goods and services are provided, and each such
entity shall bear its fair share of such costs. All
material transactions between such Transferor and any of
its Affiliates shall be only on an arm's-length basis and
shall receive the approval of such Transferor's Board of
Directors including at least one Independent Director
(defined below).
(v) Maintain a principal executive and
administrative office through which its business is
conducted and a telephone number separate from those of its
stockholders and Affiliates. To the extent that such
Transferor and any of its stockholders or Affiliates have
offices in contiguous space, there shall be fair and
appropriate allocation of overhead costs among them, and
each such entity shall bear its fair share of such expenses.
(vi) Conduct its affairs strictly in accordance
with its Certificate of Incorporation and observe all
necessary, appropriate and customary corporate formalities,
including, but not limited to, holding all regular and
special stockholders' and directors' meetings appropriate
to authorize all corporate action, keeping separate and
accurate minutes of such meetings, passing all resolutions
or consents necessary to authorize actions taken or to be
taken, and maintaining accurate and separate books, records
and accounts, including, but not limited to, payroll and
intercompany transaction accounts. Regular stockholders'
and directors' meetings shall be held at least annually.
(vii) Ensure that its Board of Directors shall at
all times include at least one Independent Director (for
purposes hereof, "INDEPENDENT DIRECTOR" shall mean any
member of the Board of Directors of such Transferor that is
not and has not at any time during the preceding five years
been (x) a director, officer, consultant, agent, employee,
affiliate or shareholder of any Affiliate of such
Transferor or any affiliate or subsidiary thereof, or of
any major creditor thereof, and who is not the beneficial
owner, at the time of such individual's appointment as an
Independent Director, of more than 1,000 shares in the
aggregate of all classes of common stock of an Affiliate of
such Transferor, or if greater, such number of shares the
value of which constitutes no more than 10% of such
individual's net worth or (y) a member of the immediate
family of any of the foregoing).
(viii) Ensure that decisions with respect to
its business and daily operations shall be independently
made by such Transferor (although the officer making any
particular decision may also be an officer or director of
an
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Affiliate of such Transferor) and shall not be dictated by
an Affiliate of such Transferor.
(ix) Act solely in its own corporate name and
through its own authorized officers and agents, and no
Affiliate of such Transferor shall be appointed to act as
agent of such Transferor, except as expressly contemplated
by this Agreement or any Receivables Agreement to which it
is a party. The Transferor shall at all times use its own
stationery.
(x) Other than as provided in the Revolving Credit
Agreement, ensure that no Affiliate of such Transferor
shall advance funds to such Transferor, and no Affiliate of
such Transferor will otherwise guaranty debts of, such
Transferor; PROVIDED, HOWEVER, that an Affiliate of such
Transferor may provide funds to such Transferor in
connection with the capitalization of such Transferor,
including capital necessary to assure that such Transferor
has "substantial assets" as described in Treasury
Regulation Section 301.7701-2(d)(2).
(xi) Other than organizational expenses and as
expressly provided herein, pay all expenses, indebtedness
and other obligations incurred by it.
(xii) Not enter into any guaranty, or otherwise
become liable, with respect to any obligation of any
Affiliate of such Transferor other than with respect to
Section 7.04, nor shall such Transferor make any loans to
any Person.
(xiii) Ensure that any financial reports required
of such Transferor shall be issued separately from, but may
be consolidated with, any reports prepared for any of its
Affiliates.
(xiv) Ensure that at all times it is adequately
capitalized to engage in the transactions contemplated in
its Certificate of Incorporation.
Section 2.08. COVENANTS OF EACH TRANSFEROR WITH RESPECT
TO RECEIVABLES TRANSFER AGREEMENTS. Each Transferor hereby covenants that it
will at all times enforce the covenants and agreements of the Account Owners
under the terms of the Receivables Transfer Agreements to which it is a
party, including covenants to the effect set forth below:
(a) PERIODIC FINANCE CHARGES AND OTHER FEES. (i) Except
(x) as otherwise required by any Requirements of Law, or (y) as is deemed by
the Account Owner to be necessary in order for it to maintain its credit card
business on a competitive basis based on a good faith assessment by it of the
nature of its competition in the credit card business, it shall not at any
time reduce the annual percentage rate of the Periodic Finance Charges
assessed on the Receivables transferred by it to the Transferor or other fees
charged on any of the Accounts owned by it if, as a result of any such
reduction, either (i) such Account Owner's reasonable expectation is that
such reduction will cause a Pay Out Event or Reinvestment
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Event to occur or (ii) such reduction is not also applied to any comparable
segments of consumer revolving credit card accounts owned by such Account
Owner which have characteristics the same as, or substantially similar to,
such Accounts.
(b) CARDHOLDER AGREEMENTS AND CREDIT CARD GUIDELINES.
Such Account Owner shall comply with and perform its obligations under the
Cardholder Agreements relating to the Accounts owned by it and the Credit
Card Guidelines and all applicable rules and regulations of MasterCard and
VISA or their respective substantial equivalents except insofar as any
failure so to comply or perform would not materially and adversely affect the
rights of the Trust or the Certificateholders hereunder. Subject to
compliance with all Requirements of Law, such Account Owner may change the
terms and provisions of the Cardholder Agreements or the Credit Card
Guidelines with respect to any of the Accounts owned by it in any respect
(including 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
in the reasonable judgment of such Account Owner such change is made
applicable to any comparable segment of the consumer revolving credit card
accounts owned by such Account Owner which have characteristics the same as,
or substantially similar to, such Accounts.
(c) MASTERCARD AND VISA. Such Account Owner, to the
extent applicable to Accounts owned or serviced by such Account Owner, shall
use its best efforts to remain, either directly or indirectly, a member in
good standing of the MasterCard system, the VISA system and any other similar
entity's or organization's system relating to any other type of consumer
revolving credit card accounts included as Accounts.
Each Transferor further covenants that it will not enter
into any amendments to a Receivables Transfer Agreement or enter into a new
Receivables Transfer Agreement unless the Rating Agency Condition has been
satisfied.
Section 2.09. ADDITION OF ACCOUNTS.
(a)ADDITIONAL ACCOUNTS. (i) REQUIRED ADDITIONS. If on any
Determination Date, as of the close of business on the last Business
Day of the preceding Monthly Period, either (x) the Transferor Amount
is less than the Required Transferor Amount or (y) an amount equal to
the product of (A) the aggregate amount of Principal Receivables and
(B) one minus the Discount Percentage is less than the Required
Principal Balance, the Transferor shall on or prior to the close of
business on the 10th Business Day following such Determination Date
(the "Required Designation Date"), unless the Transferor Amount
exceeds the Required Transferor Amount or the aggregate amount of
Principal Receivables exceeds the Required Principal Balance, as the
case may be, in either case as of the close of business on any day
after the last Business Day of such Monthly Period and prior to the
Required Designation Date, cause to be designated additional Eligible
Accounts to be included as Accounts as of the Required Designation
Date or any earlier date in a sufficient amount such that, after
giving effect to such addition, the Transferor Amount as of the close
of business on the applicable Addition Date is at least equal to the
Required Transferor Amount on such date and the aggregate amount of
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Principal Receivables exceeds the Required Principal Balance on such
date. The failure of any condition set forth in paragraph (c) below,
as the case may be, shall not relieve the Transferor of its
obligation pursuant to this paragraph; PROVIDED, HOWEVER, that the
failure of the Transferor to transfer Receivables to the Trust as
provided in this clause (i) solely as a result of the unavailability
of a sufficient amount of Eligible Receivables shall not constitute a
breach of this Agreement; PROVIDED FURTHER, that any such failure
which has not been timely cured may nevertheless result in the
occurrence of a Pay Out Event.
(ii) OPTIONAL PARTICIPATION INTERESTS. In lieu of, or in
addition to, designating Additional Accounts pursuant to clause (i)
above, the Transferor may, subject to the conditions specified in
paragraph (c) below, convey to the Trust participations (including
100% participations) representing undivided interests in a pool of
assets primarily consisting of revolving credit card receivables,
consumer loan receivables (secured and unsecured), and any interests
in any of the foregoing, including securities representing or backed
by such receivables, and other self-liquidating financial assets
(including any "Eligible Assets" as such term is defined in Rule 3a-7
under the Investment Company Act (or any successor to such Rule)) and
collections thereon ("Participation Interests"). The addition of
Participation Interests in the Trust pursuant to this paragraph (a)
or paragraph (b) below shall be effected by a Participation Interest
Supplement, dated the applicable Addition Date and entered into
pursuant to subsection 13.01(a).
(b) RESTRICTED ADDITIONS. Each Transferor may from time
to time, at its sole discretion, subject to the conditions specified below,
designate additional Eligible Accounts to be included as Accounts or
Participation Interests to be included as Trust Assets, in either case as of
the applicable Addition Date.
(c) CONDITIONS TO REQUIRED ADDITIONS, OPTIONAL
PARTICIPATION INTERESTS AND RESTRICTED ADDITIONS. On the Addition Date with
respect to any Additional Accounts or Participation Interests designated
pursuant to subsection 2.09(a) or (b), the Trust shall purchase the
Receivables in such Additional Accounts (and such Additional Accounts shall
be deemed to be Accounts for purposes of this Agreement) or shall purchase
such Participation Interests, in each case as of the close of business on the
applicable Addition Date, subject to the satisfaction of the following
conditions:
(i) on or before the tenth Business Day
immediately preceding the Addition Date, each Transferor
which owns any such Additional Account or is transferring
any such Participation Interest to the Trust (a
"Participating Transferor") shall have given the Trustee
and each Rating Agency written notice that the Additional
Accounts or Participation Interests will be included and
specifying the applicable Addition Date, the Addition
Cut-Off Date, and the approximate number of accounts
expected to be added and the approximate aggregate balances
expected to be outstanding in the accounts to be added (in
the case of Additional Accounts);
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(ii) in the case of Additional Accounts, the
Participating Transferor shall have delivered to the
Trustee copies of UCC-1 financing statements covering such
Additional Accounts, if necessary to perfect the Trust's
interest in the Receivables arising therein;
(iii) as of each of the Addition Cut-Off Date
and the Addition Date, no Insolvency Event with respect to
the Participating Transferor or the Account Owner of the
Additional Accounts shall have occurred nor shall the
transfer of the Receivables arising in the Additional
Accounts or of the Participation Interests to the Trust
have been made in contemplation of the occurrence thereof;
(iv) except in the case of an Addition pursuant
to subsection 2.09(a)(i), the Rating Agency Condition shall
have been satisfied;
(v) each Participating Transferor shall have
delivered to the Trustee an Officer's Certificate, dated
the Addition Date, stating that (x) in the case of
Additional Accounts, as of the applicable Addition Cut-Off
Date, the Additional Accounts are all Eligible Accounts,
(y) to the extent applicable, the conditions set forth in
clauses (ii) through (iv) above have been satisfied and (z)
such Participating Transferor reasonably believes that the
addition by such Participating Transferor of the
Receivables arising in the Additional Accounts or of the
Participation Interests to the Trust will not, based on the
facts known to such officer at the time of such addition,
then or thereafter cause a Pay Out Event or Reinvestment
Event to occur with respect to any Series;
(vi) the Participating Transferors shall have
delivered to the Trustee and each Rating Agency an Opinion
of Counsel, which counsel shall be outside counsel, dated
the Addition Date, in accordance with subsection 13.02(d);
(vii) in the case of designation of Additional
Accounts, Participating Transferors shall have delivered to
the Trustee (x) the computer file or microfiche list
required to be delivered pursuant to Section 2.01 with
respect to such Additional Accounts and (y) a duly
executed, written assignment (including an acceptance by
the Trustee the benefit of the Certificateholders),
substantially in the form of Exhibit B (the
"Assignment"); and
(viii) unless each Rating Agency otherwise
consents, the number of Additional Accounts designated
pursuant to subsection 2.09(a) with respect to any of the
three consecutive Monthly Periods commencing in January,
April, July and October of each calendar year, in January
1998, shall not exceed 15% of the number of Accounts as of
the first day of the calendar year during which such
Monthly Periods commence and the number of Additional
Accounts designated pursuant to subsection 2.09(a)
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during any calendar year shall not exceed 20% of the
number of Accounts as of the first day of such calendar
year.
(d) AUTOMATIC ACCOUNT ADDITIONS.
(i) Each Transferor may from time to time, at its
sole discretion, subject to and in compliance with the
limitations specified in clause (ii) below and the
applicable conditions specified in clauses (iii) through
(vii) below, designate Eligible Accounts ("Automatic
Additional Accounts") to be included as Accounts as of the
applicable Addition Date. For purposes of this paragraph,
Eligible Accounts shall be deemed to include only consumer
revolving credit card accounts of the same nature as those
included as Initial Accounts.
(ii) Unless each Rating Agency otherwise
consents, the number of Automatic Additional Accounts
designated with respect to any of the three consecutive
Monthly Periods commencing in January, April, July and
October of each calendar year, commencing in January 1998,
shall not exceed 15% of the number of Accounts as of the
first day of the calendar year during which such Monthly
Periods commence and the number of Automatic Additional
Accounts designated during any such calendar year shall not
exceed 20% of the number of Accounts as of the first day of
such calendar year.
(iii) Within 30 days after the Addition Date
with respect to any Automatic Additional Accounts, the
relevant Transferor shall have delivered to the Trustee and
each Rating Agency an Opinion of Counsel (which counsel
shall be outside counsel) in accordance with subsection
13.02(d), with respect to the Automatic Additional Accounts
included as Accounts on such Addition Date, confirming the
validity and perfection of the transfer of such Automatic
Additional Accounts. If such Opinion of Counsel with
respect to any Automatic Additional Accounts is not so
received, the ability of such Transferor to designate
Automatic Additional Accounts will be suspended until such
time as each Rating Agency otherwise consents in writing.
If such Transferor is unable to deliver an Opinion of
Counsel with respect to any Automatic Additional Account,
such inability shall be deemed to be a breach of the
representation in subsection 2.04(a)(viii) with respect to
the Receivables in such Automatic Additional Account for
purposes of Section 2.05; PROVIDED, that the cure period
for such breach shall not exceed 30 days.
(iv) Each Participating Transferor shall have
delivered to the Trustee copies of UCC-1 financing
statements covering such Automatic Additional Accounts,
if necessary to perfect the Trust's interest in the
Receivables arising therein.
(v) As of each of the Addition Cut-Off Date and
the Addition Date, no Insolvency Event with respect to any
Participating Transferor or the Account Owner of the
Additional Accounts shall have occurred nor shall the
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transfer of the Receivables arising in the Automatic
Additional Accounts to the Trust have been made in
contemplation of the occurrence thereof.
(vi) Each Participating Transferor shall have
delivered to the Trustee an Officer's Certificate, dated
the Addition Date, stating that (x) as of the applicable
Addition Cut-Off Date, such Automatic Additional Accounts
are all Eligible Accounts, (y) to the extent applicable,
the conditions set forth in clauses (ii) through (v) above
have been satisfied and (z) such Participating Transferor
reasonably believes that the addition by such Participating
Transferor of the Receivables arising in such Automatic
Additional Accounts will not, based on the facts known to
such officer at the time of such addition, then or
thereafter cause a Pay Out Event to occur with respect to
any Series.
(vii) The Participating Transferor shall have
delivered to the Trustee (x) the computer file or
microfiche list required to be delivered pursuant to
Section 2.01 with respect to such Automatic Additional
Accounts and (y) a duly executed Assignment.
(e) ADDITIONAL TRANSFERORS. The Transferor may designate
Affiliates of the Transferor to be included as Transferors ("Additional
Transferors") under this Agreement by an amendment hereto pursuant to
subsection 13.01(a) and, in connection with such designation, the Transferor
shall surrender the Transferor Certificate to the Trustee in exchange for a
newly issued Transferor Certificate modified to reflect such Additional
Transferor's interest in the Transferor's Interest; PROVIDED, HOWEVER, that
prior to any such designation and exchange the conditions set forth in
subsection 6.03(c) or 6.03(d), as applicable, shall have been satisfied with
respect thereto.
Section 2.10. REMOVAL OF ACCOUNTS AND PARTICIPATION
INTERESTS. On any day of any Monthly Period each Transferor shall have the
right to require the reassignment to it or its designee of all the Trust's
right, title and interest in, to and under the Receivables then existing and
thereafter created, all monies due or to become due and all amounts received
with respect thereto and all proceeds thereof in or with respect to the
Accounts specified in a Receivables Transfer Agreement with such Transferor
(the "Removed Accounts") or Participation Interests conveyed to the Trust by
such Transferor upon satisfaction of the following conditions:
(a) on or before the fifth Business Day immediately
preceding the Removal Date (the "Removal Notice Date"), such Transferor shall
have given the Trustee, the Servicer, each Rating Agency and any Series
Enhancer written notice of such removal, specifying the date for removal of
the Removed Accounts or Participation Interests (the "Removal Date");
(b) with respect to Removed Accounts, on or prior to the
date that is ten Business Days after the Removal Date, such Transferor shall
have amended Schedule 1 by delivering to the Trustee a computer file or
microfiche list containing a true and complete list of the Removed Accounts
specifying for each such Account, as of the last day of the Monthly Period
preceding the Removal Notice Date (the "Removal Cut-Off Date"), its
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account number, the aggregate amount outstanding in such Account and the
aggregate amount of Principal Receivables outstanding in such Account;
(c) with respect to Removed Accounts, such Transferor
shall have represented and warranted as of the Removal Date that the list of
Removed Accounts delivered pursuant to paragraph (b) above, as of the Removal
Cut-Off Date, is true and complete in all material respects;
(d) the Rating Agency Condition shall have been satisfied
with respect to such removal;
(e) such Transferor shall have delivered to the Trustee
an Officer's Certificate, dated the Removal Date, to the effect that such
Transferor reasonably believes that (i) such removal will not, based on the
facts known to such officer at the time of such certification, then or
thereafter cause a Pay Out Event or Reinvestment Event to occur with respect
to any Series and (ii) no selection procedure believed by such Transferor to
be materially adverse to the interests of the Investor Certificateholders of
any Series as of the Removal Date have been used in selecting the Removed
Accounts or Participation Interests; and
(f) as of the Removal Cut-Off Date, no more than 10% of
the Receivables outstanding are more than thirty days Contractually
Delinquent.
Upon satisfaction of the above conditions, the Trustee
shall execute and deliver to the relevant Transferor or its designee a
written reassignment in substantially the form of Exhibit C (the
"Reassignment") and shall, without further action, be deemed to sell,
transfer, assign, set over and otherwise convey to such Transferor or its
designee, effective as of the Removal Date, without recourse, representation
or warranty, all the right, title and interest of the Trust in and to the
Participation Interests or Receivables arising in the Removed Accounts, all
monies due and to become due and all amounts received with respect thereto
and all proceeds thereof. In addition, the Trustee shall execute such other
documents and instruments of transfer or assignment and take such other
actions as shall reasonably be requested by the relevant Transferor to effect
the conveyance of Participation Interests or Receivables pursuant to this
Section 2.09.
Section 2.11. ACCOUNT ALLOCATIONS. In the event that
any Transferor is unable for any reason to transfer Receivables to the Trust
in accordance with the provisions of this Agreement, including by reason of
the application of the provisions of Section 9.02 or any order of any
Governmental Authority (a "Transfer Restriction Event"), then, in any such
event, (a) such Transferor and the Servicer agree (except as prohibited by
any such order) to allocate and pay to the Trust, after the date of such
inability, all Collections of Receivables transferred to the Trust by such
Transferor, including Collections of Receivables transferred to the Trust by
such Transferor prior to the occurrence of such event, and all amounts which
would have constituted Collections but for such Transferor's inability to
transfer Receivables (up to an aggregate amount equal to the amount of
Receivables transferred to the Trust by such Transferor in the Trust on such
date), (b) such Transferor and the Servicer agree that such amounts will be
applied as Collections in accordance with Article IV and the terms of
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each Supplement and (c) for so long as the allocation and application of all
Collections and all amounts that would have constituted Collections are made
in accordance with clauses (a) and (b) above, Principal Receivables and all
amounts which would have constituted Principal Receivables but for such
Transferor's inability to transfer Receivables to the Trust which are written
off as uncollectible in accordance with this Agreement shall continue to be
allocated in accordance with Article IV and the terms of each Supplement.
For the purpose of the immediately preceding sentence, such Transferor and
the Servicer shall treat the first received Collections with respect to the
Accounts as allocable to the Trust until the Trust shall have been allocated
and paid Collections in an amount equal to the aggregate amount of Principal
Receivables in the Trust as of the date of the occurrence of such event. If
such Transferor or the Servicer is unable pursuant to any Requirements of Law
to allocate Collections as described above, such Transferor and the Servicer
agree that, after the occurrence of such event, payments on each Account with
respect to the principal balance of such Account shall be allocated first to
the oldest principal balance of such Account and shall have such payments
applied as Collections in accordance with Article IV and the terms of each
Supplement. The parties hereto agree that Finance Charge Receivables,
whenever created, accrued in respect of Principal Receivables which have been
conveyed to the Trust shall continue to be a part of the Trust
notwithstanding any cessation of the transfer of additional Principal
Receivables to the Trust and Collections with respect thereto shall continue
to be allocated and paid in accordance with Article IV and the terms of each
Supplement.
Section 2.12. DISCOUNT OPTION.
(a) The Transferor shall have the option to designate at
any time and from time to time a percentage or percentages, which may be a
fixed percentage or a variable percentage based on a formula (the "Discount
Percentage"), of all or any specified portion of the Collections of Principal
Receivables received after the Discount Option Date to be treated as
Collections of Finance Charge Receivables ("Discount Option Collections").
The Transferor shall also have the option of reducing or withdrawing the
Discount Percentage, at any time and from time to time, on and after such
Discount Option Date. If the Transferor, pursuant to the first Series
Supplement, designates a Discount Percentage to be effective on the Initial
Closing Date, then such Discount Percentage shall be effective as of the
Initial Closing Date and the Initial Closing Date shall be a Discount Option
Date. Thereafter the Transferor shall provide to the Servicer, the Trustee
and any Rating Agency 30 days' prior written notice of any change in the
Discount Percentage and the date on which such change will become effective
and such change will become effective on the designated date (i) unless such
designation in the reasonable belief of the Transferor would cause a Pay Out
Event or Reinvestment Event with respect to any Series to occur, or an event
which, with notice or lapse of time or both, would constitute a Pay Out Event
or Reinvestment Event with respect to any Series and (ii) if such designation
would cause the Discount Percentage to be greater than [3]% or less than [1]
%, only if the Rating Agency Condition shall have been satisfied with respect
to such designation.
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(b) After the Discount Option Date, Discount Option
Collections shall be treated as Collections of Finance Charge Receivables.
Section 2.13. SECURITY INTEREST GRANTED BY THE ACCOUNT
OWNERS. To the extent that any transfer of Receivables or other property by
an Account Owner pursuant to a Receivables Transfer Agreement is determined
to be other than an absolute assignment of such Receivables or other
property, then such Account Owner hereby grants to the Trustee hereunder a
security interest in and to all of its right, title, and interest, in, to and
under (i) the Receivables existing at the close of business on the Initial
Closing Date and thereafter created from time to time and arising in the
Initial Accounts and the Receivables existing on each applicable Addition
Cut-Off Date and thereafter created from time to time and arising in any
Additional Accounts, including the Automatic Additional Accounts, and in each
case, thereafter created from time to time until the termination of the
Trust, (ii) all Recoveries allocable to the foregoing Accounts and all
Recoveries which are identified as relating to specific Defaulted
Receivables, and (iii) all monies due or to become due thereunder and all
amounts received with respect thereto and all proceeds (including, without
limitation, "proceeds" as such term is defined in the UCC) thereof. With
respect to the foregoing collateral, the Trustee shall have all of the rights
the Trustee has hereunder and under the Receivables Transfer Agreements.
[END OF ARTICLE II]
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ARTICLE III
ADMINISTRATION AND SERVICING
OF RECEIVABLES
Section 3.01. ACCEPTANCE OF APPOINTMENT AND OTHER
MATTERS RELATING TO THE SERVICER.
(a) The Travelers Bank agrees to act as the Servicer
under this Agreement and the Certificateholders by their acceptance of
Certificates consent to The Travelers Bank acting as Servicer.
(b) The Servicer shall service and administer the
Receivables, shall collect payments due under the Receivables and shall
charge off as uncollectible Receivables, all in accordance with its customary
and usual servicing procedures for servicing credit card receivables
comparable to the Receivables and in accordance with the Credit Card
Guidelines. The Servicer 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,
subject to Section 10.01 and provided The Travelers Bank is the Servicer, the
Servicer or its designee (rather than the Trustee) is hereby authorized and
empowered (i) to make withdrawals and payments or to instruct the Trustee to
make withdrawals and payments from the Collection Account, the Excess Funding
Account and any Series Account, as set forth in this Agreement or any
Supplement, and (ii) to take any action required or permitted under any
Series Enhancement, as set forth in this Agreement or any Supplement. Without
limiting the generality of the foregoing and subject to Section 10.01, the
Servicer or its designee is hereby authorized and empowered to make any
filings, reports, notices, applications and registrations with, and to seek
any consents or authorizations from, the Securities and Exchange Commission
(the "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 laws or reporting requirements. The Trustee shall furnish the
Servicer with any powers of attorney or other documents necessary or
appropriate to enable the Servicer to carry out its servicing and
administrative duties hereunder.
(c) The Servicer shall not be obligated to use separate
servicing procedures, offices, employees or accounts for servicing the
Receivables from the procedures, offices, employees and accounts used by the
Servicer in connection with servicing other credit card receivables.
(d) The Servicer shall comply with and perform its
servicing obligations with respect to the Accounts and Receivables in
accordance with the Cardholder Agreements relating to the Accounts and the
Credit Card Guidelines and all applicable rules and regulations of VISA,
MasterCard and any other similar entity or organization relating to any other
type of consumer revolving credit card accounts included as Accounts, except
insofar as any failure to so comply or perform would not materially and
adversely affect the Trust or the Investor Certificateholders.
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(e) The Servicer shall pay out of its own funds, without
reimbursement, all expenses incurred in connection with the Trust and the
servicing activities hereunder including expenses related to enforcement of
the Receivables, fees and disbursements of the Trustee, any Paying Agent and
any Transfer Agent and Registrar (including the reasonable fees and expenses
of its counsel) and independent accountants and all other fees and expenses,
including the costs of filing UCC financing and continuation statements and
the costs and expenses relating to obtaining and maintaining the listing of
any Investor Certificates on any stock exchange, that are not expressly
stated in this Agreement to be payable by the Trust or the Transferor (other
than Federal, state, local and foreign income, franchise and other taxes, if
any, or any interest or penalties with respect thereto, assessed on the
Trust).
(f) The Servicer agrees that upon a request by the
Transferor it will use its reasonable best efforts to obtain and maintain the
listing of the Investor Certificates of any Series or Class on any specified
security exchange. If any such request is made, the Servicer shall give
notice to the Transferor and the Trustee on the date on which such Investor
Certificates are approved for such listing and within three Business Days
following receipt of notice by the Servicer of any actual, proposed or
contemplated delisting of such Investor Certificates by any such securities
exchange. The Trustee or the Servicer, each in its sole discretion, may
terminate any listing on any such securities exchange at any time subject to
the notice requirements set forth in the preceding sentence.
Section 3.02. SERVICING COMPENSATION. As full
compensation for its servicing activities hereunder and as reimbursement for
any expense incurred by it in connection therewith, the Servicer shall be
entitled to receive a servicing fee (the "Servicing Fee") with respect to
each Monthly Period, payable monthly on the related Distribution Date, in an
amount equal to one-twelfth of the product of (a) the weighted average of the
Servicing Fee Rates with respect to each outstanding Series (based upon the
Servicing Fee Rate for each Series and the Investor Amount (or such other
amount as specified in the related Supplement) of such Series, in each case
as of the last day of the prior Monthly Period) and (b) the amount of
Principal Receivables on the last day of the prior Monthly Period. The share
of the Servicing Fee allocable to (i) the Certificateholders' Interest of a
particular Series with respect to any Monthly Period (the "Monthly Servicing
Fee") and (ii) the Enhancement Investor Amount, if any, of a particular
Series with respect to any Monthly Period will each be determined in
accordance with the relevant Supplement. The portion of the Servicing Fee
with respect to any Monthly Period not so allocated to the
Certificateholders' Interest or the Enhancement Investor Amount, if any, of a
particular Series shall be paid by the Holders of the Transferor Certificates
on the related Distribution Date and in no event shall the Trust, the
Trustee, the Investor Certificateholders of any Series or any Series Enhancer
be liable for the share of the Servicing Fee with respect to any Monthly
Period to be paid by the Holders of the Transferor Certificates.
Section 3.03. REPRESENTATIONS, WARRANTIES AND COVENANTS
OF THE SERVICER. The Travelers Bank, as initial Servicer, hereby makes, and
any Successor Servicer by its appointment hereunder shall make, on each
Closing Date (and on the date of any such appointment), the following
representations, warranties and covenants:
(a) ORGANIZATION AND GOOD STANDING. The Servicer is a
Delaware state-chartered banking corporation duly organized, validly existing
and in good standing under the laws of its
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state of incorporation, and has full corporate power, authority and legal
right to execute, deliver and perform its obligations under this Agreement
and each Supplement and, in all material respects, to own its properties and
conduct its business as such properties are presently owned and as such
business is presently conducted.
(b) DUE QUALIFICATION. The Servicer is duly qualified to
do business and is in good standing as a foreign corporation (or is exempt
from such requirements), and has obtained all necessary licenses and
approvals in each jurisdiction in which failure to so qualify or to obtain
such licenses and approvals would have a material adverse effect on the
interests of the Investor Certificateholders hereunder or under any
Supplement.
(c) DUE AUTHORIZATION. The execution, delivery, and
performance of this Agreement and each Supplement, and the other agreements
and instruments executed or to be executed by the Servicer as contemplated
hereby, have been duly authorized by the Servicer by all necessary corporate
action on the part of the Servicer and this Agreement and each Supplement
will remain, from the time of its execution, an official record of the
Servicer.
(d) BINDING OBLIGATION. This Agreement and each
Supplement constitutes a legal, valid and binding obligation of the Servicer,
enforceable in accordance with its terms, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws now or hereafter in effect, affecting the enforcement of
creditors' rights in general and the rights of creditors of Delaware
state-chartered banking corporations 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 and each Supplement by the Servicer, the performance of the
transactions contemplated by this Agreement and each Supplement and the
fulfillment of the terms hereof and thereof applicable to the Servicer will
not conflict with, violate, result in any breach of any of the material terms
and provisions of, or constitute (with or without notice or lapse of time or
both) a default under, any Requirement of Law applicable to the Servicer or
any indenture, contract, agreement, mortgage, deed of trust or other
instrument to which the Servicer is a party or by which it or any of its
properties are bound.
(f) NO PROCEEDINGS. There are no proceedings or
investigations pending or, to the best knowledge of the Servicer, threatened
against the Servicer before any court, regulatory body, administrative agency
or other tribunal or governmental instrumentality seeking to prevent the
issuance of the Certificates or the consummation of any of the transactions
contemplated by this Agreement or any Supplement, seeking any determination
or ruling that, in the reasonable judgment of the Servicer, would materially
and adversely affect the performance by the Servicer of its obligations under
this Agreement or any Supplement, or seeking any determination or ruling that
would materially and adversely affect the validity or enforceability of this
Agreement or any Supplement.
(g) COMPLIANCE WITH REQUIREMENTS OF LAW. The Servicer
shall duly satisfy all obligations on its part to be fulfilled under or in
connection with the Receivables and the related Accounts, will maintain in
effect all qualifications required under Requirements of Law in order
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to service the Receivables and the related Accounts properly and will comply
in all material respects with all other Requirements of Law in connection
with servicing the Receivables and the related Accounts, the failure to
comply with which would have a material adverse effect on the interests of
the Certificateholders.
(h) NO RESCISSION OR CANCELLATION. Subject to Section
3.09, the Servicer shall not permit any rescission or cancellation of a
Receivable except as ordered by a court of competent jurisdiction or other
Governmental Authority or in the ordinary course of its business and in
accordance with the Credit Card Guidelines.
(i) PROTECTION OF CERTIFICATEHOLDERS' RIGHTS. The
Servicer shall take no action which, nor omit to take any action the omission
of which, would substantially impair the rights of Certificateholders in any
Receivable or Account, nor shall it, except in the ordinary course of its
business and in accordance with the Credit Card Guidelines, reschedule,
revise or defer Collections due on the Receivables.
(j) RECEIVABLES NOT TO BE EVIDENCED BY PROMISSORY NOTES.
Except in connection with its enforcement or collection of a Receivable, the
Servicer will take no action to cause any Receivable to be evidenced by any
instrument (as defined in the UCC) and, if any Receivable is so evidenced, it
shall be reassigned or assigned to the Servicer as provided in this Section;
PROVIDED, HOWEVER, that Receivables evidenced by notes taken from Obligors in
the ordinary course of business of the Servicer's collection efforts shall
not be deemed Ineligible Receivables solely as a result thereof.
(k) 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 by the Servicer of this Agreement and each Supplement, the
performance by the Servicer of the transactions contemplated by this
Agreement and each Supplement and the fulfillment by the Servicer of the
terms hereof and thereof, have been obtained; PROVIDED, HOWEVER, that the
Servicer makes no representation or warranty regarding state securities or
"blue sky" laws in connection with the distribution of the Certificates.
For purposes of the representations and warranties set
forth in this Section 3.03, each reference to a Supplement shall be deemed to
refer only to those Supplements in effect as of the relevant Closing Date or
the date of appointment of a Successor Servicer, as applicable.
In the event any of the representations, warranties or
covenants of the Servicer contained in paragraph (g), (h), (i) or (j) with
respect to any Receivable or the related Account is breached, and as a result
of such breach the Trust's rights in, to or under any Receivable in the
related Account or the proceeds of such Receivable are impaired or such
proceeds are not available for any reason to the Trust free and clear of any
Lien, then no later than the expiration of 60 days (or such longer period,
not in excess of 150 days, as may be agreed to by the Trustee) from the
earlier to occur of the discovery of such event by the Servicer, or receipt
by the Servicer of notice of such event given by the Trustee, all Receivables
in the Account or Accounts to which such event relates shall be reassigned or
assigned to the Servicer on the terms and conditions set forth below;
PROVIDED, HOWEVER, that such Receivables will not be reassigned or assigned
to the Servicer if, on any day prior to the end of such 60-day or longer
period, (i)
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the relevant representation and warranty shall be true and correct, or the
relevant covenant shall have been complied with, in all material respects and
(ii) the Servicer shall have delivered to the Trustee a certificate of an
authorized officer describing the nature of such breach and the manner in
which such breach was cured.
If The Travelers Bank is the Servicer, such reassignment
or assignment shall be accomplished in the manner set forth in subsection
2.05(b) as if the reassigned or assigned Receivables were Ineligible
Receivables (including the requirement, if applicable, to reduce the
aggregate amount of Principal Receivables used to calculate the Transferor
Amount, the Series Percentages and any other percentage used to allocate
within or among Series applicable to any Series and to make deposits into the
Excess Funding Account). If The Travelers Bank is not the Servicer, the
Servicer shall effect such assignment by making a deposit into the Collection
Account in immediately available funds on the Transfer Date following the
Monthly Period in which such assignment obligation arises in an amount equal
to the amount of such Receivables, which deposit shall be considered a
Collection of Principal Receivables and shall be applied in accordance with
Article IV and the terms of each Supplement.
Upon each such reassignment or assignment to the
Servicer, the Trustee, on behalf of the Trust, shall automatically and
without further action be deemed to sell, transfer, assign, set over and
otherwise convey to the Servicer, without recourse, representation or
warranty, all right, title and interest of the Trust in and to such
Receivables, all monies due or to become due and all amounts received with
respect thereto and all proceeds thereof. The Trustee shall execute such
documents and instruments of transfer or assignment and take such other
actions as shall be reasonably requested by the Servicer to effect the
conveyance of any such Receivables pursuant to this Section. The obligation
of the Servicer to accept reassignment or assignment of such Receivables, and
to make the deposits, if any, required to be made to the Collection Account
or the Excess Funding Account as provided in the preceding paragraph, shall
constitute the sole remedy respecting the event giving rise to such
obligation available to Certificateholders (or the Trustee on behalf of
Certificateholders) or any Series Enhancer.
Section 3.04. REPORTS AND RECORDS FOR THE TRUSTEE.
(a) DAILY RECORDS. On each Business Day, the Servicer,
with prior written notice by the Trustee shall make or cause to be made
available at the office of the Servicer on any Business Day during normal
business hours for inspection by the Trustee a record setting forth (i) the
Collections in respect of Principal Receivables and in respect of Finance
Charge Receivables processed by the Servicer on the second preceding Business
Day in respect of the Accounts and (ii) the amount of Receivables as of the
close of business on the second preceding Business Day. The Servicer shall,
at all times, maintain its computer files with respect to the Accounts in
such a manner so that the Accounts may be specifically identified.
(b) MONTHLY SERVICER'S CERTIFICATE. Not later than the
Determination Date immediately preceding each Distribution Date, the Servicer
shall, with respect to each outstanding Series, deliver to the Trustee, the
Paying Agent and each Rating Agency a certificate of a Servicing Officer in
substantially the form set forth in the related Supplement.
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Section 3.05. ANNUAL CERTIFICATE OF SERVICER. The
Servicer shall deliver to the Trustee and each Rating Agency, on or before
March 31, of each calendar year, beginning with March 31, 1999, an Officer's
Certificate (with appropriate insertions) substantially in the form of
Exhibit D.
Section 3.06. ANNUAL SERVICING REPORT OF INDEPENDENT
PUBLIC ACCOUNTANTS; COPIES OF REPORTS AVAILABLE.
(a) On or before March 31, of each calendar year,
beginning with March 31, 1999, the Servicer shall cause a firm of nationally
recognized independent public accountants (who may also render other services
to the Servicer or the Transferor) to furnish a report (addressed to the
Trustee) to the Trustee, the Servicer and each Rating Agency to the effect
that they have applied certain procedures agreed upon with the Servicer and
examined certain documents and records relating to the servicing of Accounts
under this Agreement and each Supplement and that, on the basis of such
agreed-upon procedures, nothing has come to the attention of such accountants
that caused them to believe that the servicing (including the allocation of
Collections) has not been conducted in compliance with the terms and
conditions set forth in Articles III and IV and Section 8.08 of this
Agreement and the applicable provisions of each Supplement, except for such
exceptions as they believe to be immaterial and such other exceptions as
shall be set forth in such statement. Such report shall set forth the agreed
upon procedures performed.
(b) On or before March 31, of each calendar year,
beginning with March 31, 1999, the Servicer shall cause a firm of nationally
recognized independent public accountants (who may also render other services
to the Servicer or the Transferor) to furnish a report (addressed to the
Trustee) to the Trustee, the Servicer and each Rating Agency to the effect
that they have applied certain procedures agreed upon with the Servicer to
compare the mathematical calculations of certain amounts set forth in the
Servicer's certificates delivered pursuant to subsection 3.04(b) during the
period covered by such report with the Servicer's computer reports which were
the source of such amounts and that on the basis of such agreed-upon
procedures and comparison, such accountants are of the opinion that such
amounts are in agreement, except for such exceptions as they believe to be
immaterial and such other exceptions as shall be set forth in such statement.
(c) A copy of each certificate and report provided
pursuant to subsection 3.04(b), 3.05 or 3.06 may be obtained by any Investor
Certificateholder or Certificate Owner by a request to the Trustee addressed
to the Corporate Trust Office.
Section 3.07. TAX TREATMENT. Unless otherwise specified
in a Supplement with respect to a particular Series, the Transferor has
entered into this Agreement, and the Certificates will be issued, with the
intention that, for Federal, state and local income and franchise tax
purposes only, the Investor Certificates of each Series which are
characterized as indebtedness at the time of their issuance will qualify as
indebtedness secured by the Receivables. The Transferor, by entering into
this Agreement, and each Certificateholder, by the acceptance of any such
Certificate (and each Certificate Owner, by its acceptance of an interest in
the applicable Certificate), agree to treat such Investor Certificates for
Federal, state and local income and franchise tax purposes as indebtedness.
Each Holder of such Investor
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Certificate agrees that it will cause any Certificate Owner acquiring an
interest in a Certificate through it to comply with this Agreement as to
treatment as indebtedness under applicable tax law, as described in this Section
3.07.
Section 3.08. NOTICES TO THE TRAVELERS BANK. In the
event that The Travelers Bank is no longer acting as Servicer, any Successor
Servicer shall deliver to The Travelers Bank each certificate and report
required to be provided thereafter pursuant to subsection 3.04(b), 3.05 or
3.06.
Section 3.09. ADJUSTMENTS.
(a) If the Servicer adjusts downward the amount of any
Receivable because of a rebate, refund, unauthorized charge or billing error
to an account holder, or because such Receivable was created in respect of
merchandise which was refused or returned by an account holder, or if the
Servicer otherwise adjusts downward the amount of any Receivable without
receiving Collections therefor or charging off such amount as uncollectible,
then, in any such case, the amount of Principal Receivables used to calculate
the Transferor Amount, the Series Percentages and any other percentage used
to allocate within or among Series applicable to any Series will be reduced
by the amount of the adjustment. Similarly, the amount of Principal
Receivables used to calculate the Transferor Amount, the Series Percentages
and any other percentage used to allocate within or among Series applicable
to any Series will be reduced by the amount of any Receivable which was
discovered as having been created through a fraudulent or counterfeit charge.
Any adjustment required pursuant to either of the two preceding sentences
shall be made on or prior to the end of the Monthly Period in which such
adjustment obligation arises. In the event that, following the exclusion of
such Principal Receivables from the calculation of the Transferor Amount, the
Transferor Amount would be less than the Required Transferor Amount, not
later than 12:00 noon, New York City time, on the Distribution Date following
the Monthly Period in which such adjustment obligation arises, the Transferor
which transferred such Principal Receivables to the Trust shall make a
deposit into the Excess Funding Account in immediately available funds in an
amount equal to the amount by which the Transferor Amount would be below the
Required Transferor Amount (up to the amount of such Principal Receivables).
(b) If (i) the Servicer makes a deposit into the
Collection Account in respect of a Collection of a Receivable and such
Collection was received by the Servicer in the form of a check which is not
honored for any reason or (ii) the Servicer makes a mistake with respect to
the amount of any Collection and deposits an amount that is less than or more
than the actual amount of such Collection, the Servicer shall appropriately
adjust the amount subsequently deposited into the Collection Account to
reflect such dishonored check or mistake. Any Receivable in respect of
which a dishonored check is received shall be deemed not to have been paid.
Section 3.10. REPORTS TO THE COMMISSION. The Servicer
shall, on behalf of the Trust, cause to be filed with the Commission any
periodic reports required to be filed under the provisions of the Securities
Exchange Act of 1934, as amended, and the rules and regulations of the
Commission thereunder. The Transferor shall, at the expense of the Servicer,
cooperate in any reasonable request of the Servicer in connection with such
filings.
[END OF ARTICLE III]
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ARTICLE IV
RIGHTS OF CERTIFICATEHOLDERS AND
ALLOCATION AND APPLICATION OF COLLECTIONS
Section 4.01. RIGHTS OF CERTIFICATEHOLDERS. The
Investor Certificates shall represent fractional undivided interests in the
Trust, which, with respect to each Series, shall consist of the right to
receive, to the extent necessary to make the required payments with respect
to the Investor Certificates of such Series at the times and in the amounts
specified in the related Supplement, the portion of Collections allocable to
Investor Certificateholders of such Series pursuant to this Agreement and
such Supplement, funds on deposit in the Collection Account and the Excess
Funding Account allocable to Certificateholders of such Series pursuant to
this Agreement and such Supplement, funds on deposit in any related Series
Account and funds available pursuant to any related Series Enhancement
(collectively, with respect to all Series, the "Certificateholders'
Interest"), it being understood that the Investor Certificates of any Series
or Class shall not represent any interest in any Series Account or Series
Enhancement for the benefit of any other Series or Class. The Transferor
Certificates shall represent the ownership interest in the remainder of the
Trust Assets not allocated pursuant to this Agreement or any Supplement to
the Certificateholders' Interest, including the right to receive Collections
with respect to the Receivables and other amounts at the times and in the
amounts specified in this Agreement or any Supplement to be paid to the
Holders of the Transferor Certificates (the "Transferor's Interest");
PROVIDED, HOWEVER, that the Transferor Certificates shall not represent any
interest in the Collection Account, the Excess Funding Account, any Series
Account or any Series Enhancement, except as specifically provided in this
Agreement or any Supplement; PROVIDED FURTHER, that the foregoing shall not
be construed to limit the Trustee's obligations to make payments to the
Holders of the Transferor Certificates, the Transferor and the Servicer as
and when required under this Agreement and any Supplement.
Section 4.02. ESTABLISHMENT OF COLLECTION ACCOUNT AND
EXCESS FUNDING ACCOUNT. The Servicer, for the benefit of the
Certificateholders, shall establish and maintain in the name of the Trustee,
on behalf of the Trust, an Eligible Deposit Account (or Eligible Deposit
Accounts) bearing a designation clearly indicating that the funds deposited
therein are held for the benefit of the Certificateholders (the "Collection
Account"). The Trustee shall possess all right, title and interest in all
funds on deposit from time to time in the Collection Account and in all
proceeds thereof. The Collection Account shall be under the sole dominion
and control of the Trustee for the benefit of the Certificateholders. Except
as expressly provided in this Agreement, the Servicer agrees that it shall
have no right of setoff or banker's lien against, and no right to otherwise
deduct from, any funds held in the Collection Account for any amount owed to
it by the Trustee, the Trust, any Certificateholder or any Series Enhancer.
If, at any time, the Collection Account ceases to be an Eligible Deposit
Account, the Trustee (or the Servicer on its behalf) shall within ten
Business Days (or such longer period, not to exceed 30 calendar days, as to
which each Rating Agency may consent) establish a new Collection Account
meeting the conditions specified above, transfer any cash or any investments
to such new Collection Account and from the date such new Collection Account
is established, it shall be the "Collection Account."
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Unless otherwise agreed to by each Rating Agency, if at
any time neither The Travelers Bank nor any Affiliate of The Travelers Bank
is the Servicer, the Collection Account will be moved from The Travelers Bank
if then maintained there.
Funds on deposit in the Collection Account (other than
amounts deposited pursuant to Section 2.06, 9.02, 10.01 or 12.02) shall at
the direction of the Servicer be invested by the Trustee in Eligible
Investments selected by the Servicer. All such Eligible Investments shall be
held by the Trustee for the benefit of the Certificateholders. The Trustee
shall maintain for the benefit of the Certificateholders possession of the
negotiable instruments or securities, if any, evidencing such Eligible
Investments. Investments of funds representing Collections collected during
any Monthly Period shall be invested in Eligible Investments that will mature
so that funds will be available at the close of business on the Transfer Date
following such Monthly Period. Unless directed by the Servicer, funds
deposited in the Collection Account on a Transfer Date with respect to the
next following Distribution Date are not required to be invested overnight.
For purposes of determining the availability of funds or the balances in the
Collection Account for any reason under this Agreement, all investment
earnings net of investment expenses and losses on such funds shall be deemed
not to be available or on deposit.
The Servicer, for the benefit of the Certificateholders,
shall establish and maintain in the name of the Trustee, on behalf of the
Trust, an Eligible Deposit Account bearing a designation clearly indicating
that the funds deposited therein are held for the benefit of the
Certificateholders (the "Excess Funding Account"). The Trustee shall possess
all right, title and interest in all funds on deposit from time to time in
the Excess Funding Account and in all proceeds thereof. The Excess Funding
Account shall be under the sole dominion and control of the Trustee for the
benefit of the Certificateholders. Except as expressly provided in this
Agreement, the Servicer agrees that it shall have no right of setoff or
banker's lien against, and no right to otherwise deduct from, any funds held
in the Excess Funding Account for any amount owed to it by the Trustee, the
Trust, any Certificateholder or any Series Enhancer. If, at any time, the
Excess Funding Account ceases to be an Eligible Deposit Account, the Trustee
(or the Servicer on its behalf) shall within 10 Business Days (or such longer
period, not to exceed 30 calendar days, as to which each Rating Agency may
consent) establish a new Excess Funding Account meeting the conditions
specified above, transfer any cash or any investments to such new Excess
Funding Account and from the date such new Excess Funding Account is
established, it shall be the "Excess Funding Account."
Unless otherwise agreed to by each Rating Agency, if at
any time neither The Travelers Bank nor any Affiliate of The Travelers Bank
is the Servicer, the Excess Funding Account will be moved from The Travelers
Bank if then maintained there.
Funds on deposit in the Excess Funding Account shall at
the direction of the Servicer be invested by the Trustee in Eligible
Investments selected by the Servicer. All such Eligible Investments shall be
held by the Trustee for the benefit of the Certificateholders. The Trustee
shall maintain for the benefit of the Certificateholders possession of the
negotiable instruments or securities, if any, evidencing such Eligible
Investments. Funds on deposit in the Excess Funding Account on any date
(after giving effect to any withdrawals from the Excess Funding Account on
such date) will be invested in Eligible Investments that will mature so that
funds will be available at the close of business on the Transfer Date
following such date. Unless
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directed by the Servicer, funds deposited in the Excess Funding Account on a
Transfer Date with respect to the next following Distribution Date are not
required to be invested overnight. On each Transfer Date, the Servicer shall
instruct the Trustee to withdraw on the related Distribution Date from the
Excess Funding Account and deposit in the Collection Account all interest and
other investment earnings (net of losses and investment expenses) on funds on
deposit in the Excess Funding Account, for application as Collections of
Finance Charge Receivables with respect to the prior Monthly Period.
Interest (including reinvested interest) and other investment income and
earnings on funds on deposit in the Excess Funding Account shall not be
considered part of the Excess Funding Amount for purposes of this Agreement.
On any Transfer Date on which no Series is in an Accumulation Period or
Amortization Period, the Servicer shall determine the amount by which the
Transferor Amount exceeds the Required Transferor Amount on such date and
shall instruct the Trustee to withdraw such amount from the Excess Funding
Account on the related Distribution Date and pay such amount to the Holders
of the Transferor Certificates. On any Transfer Date on which one or more
Series is in an Accumulation Period or Amortization Period, the Servicer
shall determine the aggregate amount of Principal Shortfalls, if any, with
respect to each such Series that is a Principal Sharing Series (after giving
effect to the allocation and payment provisions in the Supplement with
respect to each such Series), and the Servicer shall instruct the Trustee to
withdraw such amount (up to the Excess Funding Amount) from the Excess
Funding Account on the succeeding Distribution Date and allocate such amount
among each such Series as Shared Principal Collections as specified herein
and in each related Supplement.
Section 4.03. COLLECTIONS AND ALLOCATIONS.
(a) COLLECTIONS. The Servicer will apply or will
instruct the Trustee to apply all funds on deposit in the Collection Account
as described in this Article IV and in each Supplement. Except as otherwise
provided below or as expressly provided in any Supplement with respect to
Collections allocated to the related Series, the Servicer shall deposit
Collections into the Collection Account no later than the second Business Day
following the Date of Processing of such Collections. Subject to the express
terms of any Supplement, but notwithstanding anything else in this Agreement
to the contrary, for so long as The Travelers Bank remains the Servicer and
(x) The Travelers Bank maintains a certificate of deposit rating of A-1 or
better by Standard & Poor's and P-1 by Moody's (or such other rating below
A-1 or P-1, as the case may be, which is satisfactory to each Rating Agency),
(y) Commercial Credit Company has a commercial paper rating of at least A-1
and P-1 by Standard & Poor's and Moody's, The Travelers Bank remains a direct
or indirect majority-owned Travelers Group Inc. subsidiary and certain other
arrangements are made satisfactory to each Rating Agency or (z) any other
arrangement that satisfies the Rating Agency Condition, the Servicer need not
make daily deposits of collections into the Collection Account, but may make
a single monthly deposit into the Collection Account in immediately available
funds. Subject to the express terms of any Supplement, but notwithstanding
anything else in this Agreement to the contrary, with respect to any Monthly
Period, whether the Servicer is required to make deposits of Collections
pursuant to the first or the second preceding sentence, (i) the Servicer will
only be required to deposit Collections into the Collection Account up to the
aggregate amount of Collections required to be deposited into any Series
Account or, without duplication, distributed on or prior to the related
Distribution Date to Investor Certificateholders or to any Series Enhancer
pursuant to the terms of any Supplement or Enhancement Agreement and (ii) if
at any time prior to such
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Distribution Date the amount of Collections deposited in the Collection
Account exceeds the amount required to be deposited pursuant to clause (i)
above, the Servicer will be permitted to withdraw the excess from the
Collection Account.
(b) ALLOCATIONS FOR THE TRANSFEROR CERTIFICATES.
Throughout the existence of the Trust, unless otherwise stated in any
Supplement, the Servicer shall allocate to the Holders of the Transferor
Certificates an amount equal to the product of (A) the Transferor Percentage
and (B) the aggregate amount of such Collections allocated to Principal
Receivables and Finance Charge Receivables, respectively, in respect of each
Monthly Period. Notwithstanding anything in this Agreement to the contrary,
unless otherwise stated in any Supplement, the Servicer need not deposit this
amount or any other amounts so allocated to the Transferor Certificates
pursuant to any Supplement into the Collection Account and shall pay, or be
deemed to pay, such amounts as collected to the Holders of the Transferor
Certificates.
The payments to be made to the Holders of the Transferor
Certificates pursuant to this subsection 4.03(b) do not apply to deposits to
the Collection Account or other amounts that do not represent Collections,
including payment of the purchase price for Receivables pursuant to Section
2.06 or 10.01, proceeds from the sale, disposition or liquidation of
Receivables pursuant to Section 9.02 or 12.02 or payment of the purchase
price for the Certificateholders' Interest of a specific Series pursuant to
the related Supplement.
Section 4.04. SHARED COLLECTIONS.
(a) On each Distribution Date, (i) the Servicer shall
allocate Shared Principal Collections to each Principal Sharing Series, pro
rata, in proportion to the Principal Shortfalls, if any, with respect to each
such Series and (ii) the Servicer shall withdraw from the Collection Account
and pay to the Holders of the Transferor Certificates an amount equal to the
excess, if any, of (x) the aggregate amount for all outstanding Series of
Collections of Principal Receivables which the related Supplements or this
Agreement specify are to be treated as "Shared Principal Collections" for
such Distribution Date over (y) the aggregate amount for all outstanding
Principal Sharing Series which the related Supplements specify are "Principal
Shortfalls" for such Distribution Date; PROVIDED, HOWEVER, that if, on any
Distribution Date the Transferor Amount is less than or equal to the Required
Transferor Amount or if an amount equal to the product of (i) the aggregate
amount of Principal Receivables and (ii) one minus the Discount Percentage is
less than the Required Principal Balance, the Servicer will not distribute to
the Holders of the Transferor Certificates any Shared Principal Collections
that otherwise would be distributed to the Holders of the Transferor
Certificates but shall deposit such funds in the Excess Funding Account.
(b) On each Distribution Date, (i) the Servicer shall
allocate Excess Finance Charge Collections (as described below) to each
Excess Allocation Series pro rata, in proportion to the Finance Charge
Shortfalls (as described below), if any, with respect to each such Series and
(ii) the Servicer shall withdraw from the Collection Account and pay to the
Holders of the Transferor Certificates an amount equal to the excess, if any,
of (x) the aggregate amount for all outstanding Series of Collections of
Finance Charge Receivables 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 Series which the related
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Supplements specify are "Finance Charge Shortfalls" for such Series and such
Distribution Date; PROVIDED, HOWEVER, that the sharing of Excess Finance
Charge Collections among Series will continue only until such time, if any,
at which the Transferror shall deliver to the Trustee an Officer's
Certificate to the effect that, in the reasonable belief the Transferor the
continued sharing of Excess Finance Charge Collections among Series would
have adverse regulatory implications with respect to the Transferor.
Following the delivery by the Transferor of such an Officer's Certificate to
the Trustee there will not be any further sharing of Excess Finance Charge
Collections among Series.
(c) The Servicer will determine the amount of
Collections of Finance Charge Receivables for any Monthly Period allocated to
the Transferor's Interest but not due to the Holder of any Supplemental
Certificate and other amounts otherwise payable to the Transferor with
respect to Collections of Finance Charge Receivables regardless of whether
such collections were initially allocated to the Transferor or any Series
(the "Excess Transferor Finance Charge Collections") and such Excess
Transferor Finance Charge Collections shall be applied to cover any Finance
Charge Shortfalls in each Series entitled to Excess Transferor Finance Charge
Collections, pro rata, based upon the amount of the Finance Charge Shortfall,
if any of each such Series (in each case after giving effect to the
application of Excess Finance Charge Collections, if any, to such Series).
In all cases, any Excess Transferor Finance Charge Collections remaining
after covering shortfalls with respect to all designated Series will be
treated as Shared Transferor Principal Collections.
(d) The Servicer will determine the amount of
Collections of Principal Receivables for any Monthly Period allocated to the
Transferor's Interest but not due to the Holder of any Supplemental
Certificate and other amounts payable to the Transferor with respect to
collections of Principal Receivables, regardless of whether such Collections
were initially allocated to the Transferor or any Series, plus the amount of
Excess Transferor Finance Charge Collections remaining after application to
each Series to cover Finance Charge Shortfalls as provided in subsection
4.04(c) above (collectively, "Shared Transferor Principal Collections"). The
Servicer will allocate the Shared Transferor Principal Collections to cover
any Principal Shortfalls that have not been covered out of the Shared
Principal Collections allocated to each Series that has been designated in
the applicable Supplement as being entitled to receive Shared Transferor
Principal Collections. If Principal Shortfalls remaining after the
application of Shared Principal Collections exceed Shared Transferor
Principal Collections for any Monthly Period, Shared Transferor Principal
Collections will be allocated pro rata among each Series which in accordance
with the Supplement for such Series is designated as being entitled to
received Shared Transferor Principal Collections, and the balance will be
paid to the Holder of the Transferor Certificate.
Section 4.05. ADDITIONAL WITHDRAWALS FROM THE COLLECTION
ACCOUNT. On or before the Determination Date with respect to any Monthly
Period, the Servicer shall determine the amounts payable to The Travelers
Bank, The Travelers Bank USA or any other Account Owner with respect to such
Monthly Period under the applicable Receivables Transfer Agreement in respect
of amounts on deposit in the Collection Account that were not transferred to
the Transferor under such Receivables Transfer Agreement, and the Servicer
shall withdraw such amounts from the Collection Account and pay such amount
to The Travelers Bank, The Travelers Bank USA or other Account Owner, as
applicable.
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Section 4.06. ALLOCATION OF TRUST ASSETS TO SERIES OR
GROUPS. To the extent so provided in the Supplement for any Series or in an
amendment to the Pooling and Servicing Agreement executed pursuant to
subsection 13.01(a), Receivables conveyed to the Trust pursuant to Section
2.01 and Receivables or Participation Interests conveyed to the Trust
pursuant to Section 2.09 or any Participation Interest Supplement, and all
Collections received with respect to such Receivables or Participation
Interests, may be allocated in whole or in part to one or more Series or
Groups as may be provided in such Supplement or amendment, PROVIDED, HOWEVER,
that any such allocation 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 the 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 the
Trustee an Officer's Certificate, dated the date of such
allocation, to the effect that the Servicer reasonably
believes that such allocation will not have an Adverse
Effect.
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) that 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.
[END OF ARTICLE IV]
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ARTICLE V
DISTRIBUTIONS AND REPORTS TO
CERTIFICATEHOLDERS
Distributions shall be made to, and reports shall be
provided to, Certificateholders as set forth in the applicable Supplement.
[END OF ARTICLE V]
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ARTICLE VI
THE CERTIFICATES
Section 6.01. THE CERTIFICATES. The Investor
Certificates of any Series or Class may be issued in bearer form ("Bearer
Certificates") with attached interest coupons and any other applicable coupon
(collectively, the "Coupons") or in fully registered form ("Registered
Certificates") and shall be substantially in the form of the exhibits with
respect thereto attached to the applicable Supplement. The Transferor
Certificate will be issued in registered form, substantially in the form of
Exhibit A, and shall upon issuance be executed and delivered by The Travelers
Bank to the Trustee for authentication and redelivery as provided in Section
6.02. Except as otherwise provided in Section 6.03 or in any Supplement,
Bearer Certificates shall be issued in minimum denominations of $100,000 and
Registered Certificates shall be issued in minimum denominations of $1,000
and in integral multiples of $1,000 in excess thereof. If specified in any
Supplement, the Investor Certificates of any Series or Class shall be issued
upon initial issuance as a single certificate evidencing the aggregate
original principal amount of such Series or Class as described in Section
6.13. The Transferor Certificate shall be a single certificate and shall
initially represent the entire Transferor's Interest. Each Certificate shall
be executed by manual or facsimile signature on behalf of The Travelers Bank
by its respective President or any Vice President. Certificates bearing the
manual or facsimile signature of an individual who was, at the time when such
signature was affixed, authorized to sign on behalf of The Travelers Bank
shall not be rendered invalid, notwithstanding that such individual 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 Certificates shall be entitled to any benefit under this Agreement, or be
valid for any purpose, unless there appears on such Certificate a certificate
of authentication substantially in the form provided for herein executed by
or on behalf of the Trustee by the manual signature of a duly authorized
signatory, and such certificate upon any Certificate shall be conclusive
evidence, and the only evidence, that such Certificate has been duly
authenticated and delivered hereunder. Bearer Certificates shall be dated
the related Closing Date. All Registered Certificates and Transferor
Certificates shall be dated the date of their authentication.
Section 6.02. AUTHENTICATION OF CERTIFICATES. The
Trustee shall authenticate and deliver the Investor Certificates of each
Series and Class that are issued upon original issuance to or upon the order
of the Transferor against payment to the Transferor of the purchase price
therefor. The Trustee shall authenticate and deliver the Transferor
Certificate to the Transferor simultaneously with its delivery of the
Investor Certificates of the first Series to be issued hereunder. If
specified in the related Supplement for any Series or Class, the Trustee
shall authenticate and deliver outside the United States the Global
Certificate that is issued upon original issuance thereof.
Section 6.03. NEW ISSUANCES.
(a) The Transferor may from time to time direct the
Trustee, on behalf of the Trust, to authenticate one or more new Series of
Investor Certificates. The Investor Certificates of all outstanding Series
shall be equally and ratably entitled as provided herein to the benefits
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of this Agreement without preference, priority or distinction, all in
accordance with the terms and provisions of this Agreement and the applicable
Supplement except, with respect to any Series or Class, as provided in the
related Supplement.
(b) On or before the Closing Date relating to any new
Series, the parties hereto will execute and deliver a Supplement which will
specify the Principal Terms of such new Series. The terms of such Supplement
may modify or amend the terms of this Agreement solely as applied to such new
Series. The obligation of the Trustee to authenticate the Investor
Certificates of such new Series and to execute and deliver the related
Supplement is subject to the satisfaction of the following conditions:
(i) on or before the fifth day immediately
preceding the Closing Date, the Transferor shall have given
the Trustee and the Servicer notice of such issuance and
the Closing Date; and on or before the tenth day
immediately preceding the Closing Date, the Transferor
shall have given each Rating Agency notice of such issuance;
(ii) the Transferor shall have delivered to the
Trustee the related Supplement, in form satisfactory to the
Trustee, executed by each party thereto;
(iii) the Transferor shall have delivered to the
Trustee any related Enhancement Agreement executed by each
of the parties thereto, other than the Trustee;
(iv) the Rating Agency Condition shall have been
satisfied with respect to such issuance;
(v) the Transferor shall have delivered to the
Trustee an Officer's Certificate, dated the Closing Date,
to the effect that the Transferor reasonably believes that
such issuance will not, based on the facts known to such
officer at the time of such certification, then or
thereafter cause a Pay Out Event or a Reinvestment Event to
occur with respect to any Series; and
(vi)the Transferor shall have delivered to the
Trustee and each Rating Agency a Tax Opinion, dated the
Closing Date, with respect to such issuance.
Upon satisfaction of the above conditions, the Trustee shall execute the
Supplement and authenticate the Investor Certificates of such Series upon
execution thereof by the Transferor.
(c) The Transferor may surrender the Transferor
Certificate to the Trustee in exchange for a newly issued Transferor
Certificate and one or more additional certificates (each a "Supplemental
Certificate"), the terms of which shall be defined in a supplement to this
Agreement (which supplement shall be subject to subsection 13.01(a) only to
the extent that it amends any of the terms of this Agreement), to be
delivered to or upon the order of the 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:
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(i) The Transferor shall have given written
notice to each Rating Agency of such exchange;
(ii) the Transferor Amount (excluding the interest
represented by any Supplemental Certificate) shall not be
less than 2% of the total amount of Principal Receivables
as of the date of, and after giving effect to, such
exchange; and
(iii) if any Series of Investor Certificates are
outstanding that were characterized as debt at the time of
their issuance, the Transferor shall have delivered to the
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 clause (ii) above.
(d) The Transferor Certificate (or any interest therein)
may be transferred to a Person which is a member of the "affiliated group" of
which Commercial Credit Company is the "common parent" (as such terms are
defined in Section 1504(a) of the Code); provided that (i) if any Series of
Investor Certificates are outstanding that were characterized as debt at the
time of their issuance, the Transferor shall have delivered to the Trustee
and each Rating Agency a Tax Opinion, dated the date of such transfer, with
respect thereto, and (ii) any such transferee shall be deemed to be a
"Transferor" for purposes of Sections 7.04 and 9.02.
Section 6.04. REGISTRATION OF TRANSFER AND EXCHANGE OF
CERTIFICATES.
(a)The Trustee shall cause to be kept at the office or
agency to be maintained 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, a transfer agent and registrar (which may be
the Trustee) (the "Transfer Agent and Registrar") shall provide for the
registration of the Registered Certificates and of transfers and exchanges of
the Registered Certificates as herein provided. The Transfer Agent and
Registrar shall initially be the Trustee and any co-transfer agent and
co-registrar chosen by the Transferor and acceptable to the Trustee,
including, if and so long as any Series or Class is listed on the Luxembourg
Stock Exchange and such exchange shall so require, a co-transfer agent and
co-registrar in Luxembourg. Any reference in this Agreement to the Transfer
Agent and Registrar shall include any co-transfer agent and co-registrar
unless the context requires otherwise.
The Trustee may revoke such appointment and remove any
Transfer Agent and Registrar if the Trustee determines in its sole discretion
that such Transfer Agent and Registrar failed to perform its obligations
under this Agreement in any material respect. Any Transfer Agent and
Registrar shall be permitted to resign as Transfer Agent and Registrar upon
30 days' notice to the Transferor, the Trustee and the Servicer; PROVIDED,
HOWEVER, that such resignation shall not be effective and such Transfer Agent
and Registrar shall continue to perform its duties as Transfer Agent and
Registrar until the Trustee has appointed a successor Transfer Agent and
Registrar reasonably acceptable to the Transferor.
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Subject to paragraph (c) below, upon surrender for
registration of transfer of any Registered Certificate at any office or
agency of the Transfer Agent and Registrar maintained for such purpose, one
or more new Registered Certificates (of the same Series and Class) in
authorized denominations of like aggregate fractional undivided interests in
the Certificateholders' Interest shall be executed, authenticated and
delivered, in the name of the designated transferee or transferees.
At the option of a Registered Certificateholder,
Registered Certificates (of the same Series and Class) may be exchanged for
other Registered Certificates of authorized denominations of like aggregate
fractional undivided interests in the Certificateholders' Interest, upon
surrender of the Registered Certificates to be exchanged at any such office
or agency; Registered Certificates, including Registered Certificates
received in exchange for Bearer Certificates, may not be exchanged for Bearer
Certificates. At the option of the Holder of a Bearer Certificate, subject
to applicable laws and regulations, Bearer Certificates may be exchanged for
other Bearer Certificates or Registered Certificates (of the same Series and
Class) of authorized denominations of like aggregate fractional undivided
interests in the Certificateholders' Interest, 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 shall have attached thereto all
unmatured Coupons; provided that any Bearer Certificate, so surrendered after
the close of business on the Record Date preceding the relevant payment date
after the expected final payment date need not have attached the Coupon
relating to such payment date (in each case, as specified in the applicable
Supplement).
Whenever any Investor Certificates are so surrendered for
exchange, the Transferor shall execute, the Trustee shall authenticate and
the Transfer Agent and Registrar shall deliver (in the case of Bearer
Certificates, outside the United States) the Investor Certificates which the
Investor Certificateholder making the exchange is entitled to receive. Every
Investor Certificate presented or surrendered for registration of transfer or
exchange shall be accompanied by a written instrument of transfer in a form
satisfactory to the Trustee or the Transfer Agent and Registrar duly executed
by the Investor Certificateholder or the attorney-in-fact thereof duly
authorized in writing.
No service charge shall be made for any registration of
transfer or exchange of Investor 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 such transfer
or exchange.
All Investor Certificates (together with any Coupons)
surrendered for registration of transfer and exchange or for payment shall be
canceled and disposed of in a manner satisfactory to the Trustee. The
Trustee shall cancel and destroy any Global Certificate upon its exchange in
full for Definitive Euro-Certificates and shall deliver a certificate of
destruction to the Transferor. Such certificate shall also state that a
certificate or certificates of a Foreign Clearing Agency to the effect
referred to in Section 6.13 was received with respect to each portion of the
Global Certificate exchanged for Definitive Euro-Certificates.
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The Travelers Bank shall execute and deliver to the
Trustee Bearer Certificates and Registered Certificates in such amounts and
at such times as are necessary to enable the Trustee to fulfill its
responsibilities under this Agreement, each Supplement and the Certificates.
(b) The Transfer Agent and Registrar will maintain at its
expense in each of the Borough of Manhattan, the City of New York, and, if
and so long as any Series or Class is listed on the Luxembourg Stock
Exchange, Luxembourg, an office or agency where Investor Certificates may be
surrendered for registration of transfer or exchange (except that Bearer
Certificates may not be surrendered for exchange at any such office or agency
in the United States).
(c)(i) Registration of transfer of Investor Certificates containing
a legend substantially to the effect set forth on Exhibit E-1 shall
be effected only if such transfer (x) is made pursuant to an
effective registration statement under the Act, or is exempt from the
registration requirements under the Act, and (y) is made to a Person
which is not an employee benefit plan, trust or account, including an
individual retirement account, that is subject to ERISA or that is
described in Section 4975(e)(1) of the Code or an entity whose
underlying assets include plan assets by reason of a plan's
investment in such entity (a "Benefit Plan"). In the event that
registration of a transfer is to be made in reliance upon an
exemption from the registration requirements under the Act, the
transferor or the transferee shall deliver, at its expense, to the
Transferor, the Servicer and the Trustee, an investment letter from
the transferee, substantially in the form of the investment and ERISA
representation letter attached hereto as Exhibit E-2, and no
registration of transfer shall be made until such letter is so
delivered.
Investor Certificates issued upon registration or transfer
of, or Investor Certificates issued in exchange for, Investor
Certificates bearing the legend referred to above shall also bear
such legend unless the Transferor, the Servicer, the Trustee and the
Transfer Agent and Registrar receive an Opinion of Counsel,
satisfactory to each of them, to the effect that such legend may be
removed.
Whenever an Investor Certificate containing the legend
referred to above is presented to the Transfer Agent and Registrar
for registration of transfer, the Transfer Agent and Registrar shall
promptly seek instructions from the Servicer regarding such transfer
and shall be entitled to receive instructions signed by a Servicing
Officer prior to registering any such transfer. The Transferor
hereby agrees to indemnify the Transfer Agent and Registrar and the
Trustee and to hold each of them harmless against any loss, liability
or expense incurred without negligence or bad faith on their part
arising out of or in connection with actions taken or omitted by them
in relation to any such instructions furnished pursuant to this
clause (i).
(ii) Registration of transfer of Investor Certificates
containing a legend to the effect set forth on Exhibit E-3 shall be
effected only if such transfer is made to a Person which is not a
Benefit Plan. By accepting and holding any
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such Investor Certificate, an Investor Certificateholder shall be
deemed to have represented and warranted that it is not a Benefit
Plan. By acquiring any interest in a Book-Entry Certificate which
contains such legend, a Certificate Owner shall be deemed to have
represented and warranted that it is not a Benefit Plan.
(iii) If so requested by the Transferor, the Trustee will
make available to any prospective purchaser of Investor Certificates
who so requests, a copy of a letter provided to the Trustee by or on
behalf of the Transferor relating to the transferability of any
Series or Class to a Benefit Plan.
Section 6.05. MUTILATED, DESTROYED, LOST OR STOLEN
CERTIFICATES. If (a)any mutilated Certificate (together, in the case of
Bearer Certificates, with all unmatured Coupons (if any) appertaining
thereto) is surrendered to the Transfer Agent and Registrar, or the Transfer
Agent and Registrar receives evidence to its satisfaction of the destruction,
loss or theft of any Certificate and (b) there is delivered to the Transfer
Agent and Registrar and the Trustee such security or indemnity as may be
required by them to save each of them harmless, then, in the absence of
notice to the Trustee that such Certificate has been acquired by a bona fide
purchaser, the Transferor shall execute, the Trustee shall authenticate and
the Transfer Agent and Registrar shall deliver (in the case of Bearer
Certificates, outside the United States), in exchange for or in lieu of any
such mutilated, destroyed, lost or stolen Certificate, a new Certificate of
like tenor and aggregate fractional undivided interest. In connection with
the issuance of any new Certificate under this Section, the Trustee or the
Transfer Agent and Registrar may require the payment by the Certificateholder
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto and any other expenses (including the fees and
expenses of the Trustee and Transfer Agent and Registrar) connected
therewith. Any duplicate Certificate issued pursuant to this Section 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 6.06. PERSONS DEEMED OWNERS. The Trustee, the
Paying Agent, the Transfer Agent and Registrar and any agent of any of them
may (a) prior to due presentation of a Registered Certificate for
registration of transfer, treat the Person in whose name any Registered
Certificate is registered as the owner of such Registered Certificate for the
purpose of receiving distributions pursuant to the terms of the applicable
Supplement and for all other purposes whatsoever, and (b) 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 the terms of
the applicable Supplement and for all other purposes whatsoever; and, in any
such case, neither the Trustee, the Paying Agent, the Transfer Agent and
Registrar nor any agent of any of them shall be affected by any notice to the
contrary. Notwithstanding the foregoing, in determining whether the Holders
of the requisite Investor Certificates have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Certificates
owned by any of the Transferor, the Servicer, any other Holder of a
Transferor Certificate, the Trustee or any Affiliate thereof, shall be
disregarded and deemed not to be outstanding, except that, in determining
whether the Trustee shall be protected in relying upon any such request,
demand, authorization, direction, notice, consent or waiver, only
Certificates which the Trustee actually knows to be so owned shall be so
disregarded. Certificates so owned which have been pledged in good faith
shall not be disregarded and may be regarded as outstanding if the pledgee
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establishes to the satisfaction of the Trustee the pledgee's right so to act
with respect to such Certificates and that the pledgee is not the Transferor,
the Servicer, any other Holder of a Transferor Certificate or any Affiliate
thereof.
Section 6.07. APPOINTMENT OF PAYING AGENT. The Paying
Agent shall make distributions to Investor Certificateholders from the
Collection Account or any applicable Series Account pursuant to the
provisions of the applicable Supplement and shall report the amounts of such
distributions to the Trustee. Any Paying Agent shall have the revocable power
to withdraw funds from the Collection Account or any applicable Series
Account for the purpose of making the distributions referred to above. The
Trustee may revoke such power and remove the Paying Agent if the Trustee
determines in its sole discretion that the Paying Agent shall have failed to
perform its obligations under this Agreement or any Supplement in any
material respect. The Paying Agent shall initially be the Trustee and any
co-paying agent chosen by the Transferor and acceptable to the Trustee,
including, if and so long as any Series or Class is listed on the Luxembourg
Stock Exchange and such exchange so requires, a co-paying agent in Luxembourg
or another western European city. Any Paying Agent shall be permitted to
resign as Paying Agent upon 30 days' notice to the Trustee. In the event
that any Paying Agent shall resign, the Trustee shall appoint a successor to
act as Paying Agent. The Trustee shall cause each successor or additional
Paying Agent to execute and deliver to the Trustee an instrument in which
such successor or additional Paying Agent shall agree with the Trustee that
it will hold all sums, if any, held by it for payment to the Investor
Certificateholders in trust for the benefit of the Investor
Certificateholders entitled thereto until such sums shall be paid to such
Investor Certificateholders. The Paying Agent shall return all unclaimed
funds to the Trustee and upon removal shall also return all funds in its
possession to the Trustee. The provisions of Sections 11.01, 11.02, 11.03
and 11.05 shall apply to the Trustee also in its role as Paying Agent, for so
long as the Trustee shall act as Paying Agent. Any reference in this
Agreement to the Paying Agent shall include any co-paying agent unless the
context requires otherwise.
Section 6.08. ACCESS TO LIST OF REGISTERED
CERTIFICATEHOLDERS' NAMES AND ADDRESSES. The Trustee will furnish or cause
to be furnished by the Transfer Agent and Registrar to the Servicer or the
Paying Agent, within five Business Days after receipt by the Trustee of a
request therefor, a list in such form as the Servicer or the Paying Agent may
reasonably require, of the names and addresses of the Registered
Certificateholders. If any Holder or group of Holders of Investor
Certificates of any Series or all outstanding Series, as the case may be,
evidencing not less than 10% of the aggregate unpaid principal amount of such
Series or all outstanding Series, as applicable (the "Applicants"), apply to
the Trustee, and such application states that the Applicants desire to
communicate with other Investor Certificateholders with respect to their
rights under this Agreement or any Supplement or under the Investor
Certificates and is accompanied by a copy of the communication which such
Applicants propose to transmit, then the Trustee, after having been
adequately indemnified by such Applicants for its costs and expenses, shall
afford or shall cause the Transfer Agent and Registrar to afford such
Applicants access during normal business hours to the most recent list of
Registered Certificateholders of such Series or all outstanding Series, as
applicable, held by the Trustee, 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.
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Every Registered Certificateholder, by receiving and
holding a Registered Certificate, agrees with the Trustee that neither the
Trustee, the Transfer Agent and Registrar, nor any of their respective
agents, shall be held accountable by reason of the disclosure of any such
information as to the names and addresses of the Registered
Certificateholders hereunder, regardless of the sources from which such
information was derived.
Section 6.09. AUTHENTICATING AGENT. (a) The Trustee may
appoint one or more authenticating agents with respect to the Certificates
which shall be authorized to act on behalf of the Trustee in authenticating
the Certificates in connection with the issuance, delivery, registration of
transfer, exchange or repayment of the Certificates. Whenever reference is
made in this Agreement to the authentication of Certificates by the Trustee
or the Trustee's certificate of authentication, such reference shall be
deemed to include authentication on behalf of the Trustee by an
authenticating agent and certificate of authentication executed on behalf of
the Trustee by an authenticating agent. Each authenticating agent must be
acceptable to the Transferor and the Servicer.
(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 power or any further act on the
part of the Trustee or such authenticating agent. An authenticating agent
may at any time resign by giving notice of resignation to the Trustee and to
the Transferor. The Trustee may at any time terminate the agency of an
authenticating agent by giving notice of termination to such authenticating
agent and to the Transferor. Upon receiving such a notice of resignation or
upon such a termination, or in case at any time an authenticating agent shall
cease to be acceptable to the Trustee or the Transferor, the Trustee promptly
may appoint a successor authenticating agent. Any successor authenticating
agent upon acceptance of its appointment hereunder shall become vested with
all the rights, powers and duties of its predecessor hereunder, with like
effect as if originally named as an authenticating agent. No successor
authenticating agent shall be appointed unless acceptable to the Trustee and
the Transferor. The Transferor agrees to pay to each authenticating agent
from time to time reasonable compensation for its services under this
Section. The provisions of Sections 11.01, 11.02 and 11.03 shall be
applicable to any authenticating agent.
(c) Pursuant to an appointment made under this Section,
the Certificates may have endorsed thereon, in lieu of the Trustee's
certificate of authentication, an alternate certificate of authentication in
substantially the following form:
This is one of the Certificates described in the Pooling and Servicing
Agreement.
____________________________
____________________________
as Authenticating Agent
for the Trustee,
by____________________________
Authorized Officer
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Section 6.10. BOOK-ENTRY CERTIFICATES. Unless otherwise specified
in the related Supplement for any Series or Class, the Investor Certificates,
upon original issuance, shall be issued in the form of one or more typewritten
Investor Certificates representing the Book-Entry Certificates, to be delivered
to the Clearing Agency, by, or on behalf of, the Transferor. The Investor
Certificates shall initially be registered on the Certificate Register in the
name of the Clearing Agency or its nominee, and no Certificate Owner will
receive a definitive certificate representing such Certificate Owner's interest
in the Investor Certificates, except as provided in Section 6.12. Unless and
until definitive, fully registered Investor Certificates ("Definitive
Certificates") have been issued to the applicable Certificate Owners pursuant to
Section 6.12 or as otherwise specified in any such Supplement:
(a) the provisions of this Section shall be in full force and effect;
(b) the Transferor, the Servicer and the Trustee may deal with the
Clearing Agency and the Clearing Agency Participants for all purposes (including
the making of distributions) as the authorized representatives of the respective
Certificate Owners;
(c) to the extent that the provisions of this Section conflict with
any other provisions of this Agreement, the provisions of this Section shall
control; and
(d) the rights of the respective Certificate Owners shall be
exercised only through the Clearing Agency and the Clearing Agency Participants
and shall be limited to those established by law and agreements between such
Certificate Owners and the Clearing Agency or the Clearing Agency Participants.
Pursuant to the Depository Agreement, unless and until Definitive Certificates
are issued pursuant to Section 6.12, the Clearing Agency will make book-entry
transfers among the Clearing Agency Participants and receive and transmit
distributions of principal and interest on the related Investor Certificates to
such Clearing Agency Participants.
For purposes of any provision of this Agreement requiring or
permitting actions with the consent of, or at the direction of, Investor
Certificateholders evidencing a specified percentage of the aggregate unpaid
principal amount of Investor Certificates, such direction or consent may be
given by Certificate Owners (acting through the Clearing Agency and the Clearing
Agency Participants) owning Investor Certificates evidencing the requisite
percentage of principal amount of Investor Certificates.
Section 6.11. NOTICES TO CLEARING AGENCY. Whenever any notice or
other communication is required to be given to Investor Certificateholders of
any Series or Class with respect to which Book-Entry Certificates have been
issued, unless and until Definitive Certificates shall have been issued to the
related Certificate Owners, the Trustee shall give all such notices and
communications to the applicable Clearing Agency.
Section 6.12. DEFINITIVE CERTIFICATES. If Book Entry Certificates
have been issued with respect to any Series or Class and (a) the Transferor
advises the Trustee that the Clearing Agency is no longer willing or able to
discharge properly its responsibilities under the Depository Agreement with
respect to such Series or Class and the Trustee or the Transferor are
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unable to locate a qualified successor,(b) the Transferor, at its option,
advises the Trustee that it elects to terminate the book-entry system with
respect to such Series or Class through the Clearing Agency or (c) after the
occurrence of a Servicer Default, Certificate Owners of such Series or Class
evidencing more than 50% of the aggregate unpaid principal amount of such Series
or Class advise the Trustee and the Clearing Agency through the Clearing Agency
Participants that the continuation of a book-entry system with respect to the
Investor Certificates of such Series or Class through the Clearing Agency is no
longer in the best interests of the Certificate Owners with respect to such
Certificates, then the Trustee shall notify all Certificate Owners of such
Certificates, through the Clearing Agency, of the occurrence of any such event
and of the availability of Definitive Certificates to Certificate Owners
requesting the same. Upon surrender to the Trustee of any such Certificates by
the Clearing Agency, accompanied by registration instructions from the Clearing
Agency for registration, the Transferor shall execute and the Trustee shall
authenticate and deliver such Definitive Certificates. Neither the Transferor
nor the Trustee shall be liable for any delay in delivery of such instructions
and may conclusively rely on, and shall be protected in relying on, such
instructions. Upon the issuance of such Definitive Certificates, all references
herein to obligations imposed upon or to be performed by the Clearing Agency
shall be deemed to be imposed upon and performed by the Trustee, to the extent
applicable with respect to such Definitive Certificates, and the Trustee shall
recognize the Holders of such Definitive Certificates as Investor
Certificateholders hereunder.
Section 6.13. GLOBAL CERTIFICATE; EXCHANGE DATE.
(a) If specified in the related Supplement for any Series or Class,
the Investor Certificates for such Series or Class will initially be issued in
the form of a single temporary global Certificate (the "Global Certificate") in
bearer form, without interest coupons, in the denomination of the entire
aggregate principal amount of such Series or Class and substantially in the form
set forth in the exhibit with respect thereto attached to the related
Supplement. The Global Certificate will be executed by the Transferor and
authenticated by the Trustee upon the same conditions, in substantially the same
manner and with the same effect as the Definitive Certificates. The Global
Certificate may be exchanged as described below for Bearer or Registered
Certificates in definitive form (the "Definitive Euro-Certificates").
(b) The Manager shall, upon its determination of the date of
completion of the distribution of the Investor Certificates of such Series or
Class, so advise the Trustee, the Transferor, the Depositaries, and each Foreign
Clearing Agency forthwith. Without unnecessary delay, but in any event not
prior to the Exchange Date, the Transferor will execute and deliver to the
Trustee at its London office or its designated agent outside the United States
definitive Bearer Certificates in an aggregate principal amount equal to the
entire aggregate principal amount of such Series or Class. All Bearer
Certificates so issued and delivered will have Coupons attached. The Global
Certificate may be exchanged for an equal aggregate principal amount of
Definitive Euro-Certificates only on or after the Exchange Date. An
institutional investor that is a U.S. Person may exchange the portion of the
Global Certificate beneficially owned by it only for an equal aggregate
principal amount of Registered Certificates bearing the applicable legend set
forth in the form of Registered Certificates attached to the related Supplement
and having a minimum denomination of $500,000, which may be in temporary form if
the Transferor so elects. The Transferor may waive the $500,000 minimum
denomination
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requirement if it so elects. Upon any demand for exchange for Definitive
Euro-Certificates in accordance with this paragraph, the Transferor shall cause
the Trustee to authenticate and deliver the Definitive Euro-Certificates to the
Holder (x) outside the United States, in the case of Bearer Certificates, and
(y) according to the instructions of the Holder, in the case of Registered
Certificates, but in either case only upon presentation to the Trustee of a
written statement substantially in the form of Exhibit F-1 with respect to the
Global Certificate or portion thereof being exchanged, signed by a Foreign
Clearing Agency and dated on the Exchange Date or a subsequent date, to the
effect that it has received in writing or by tested telex a certification
substantially in the form of (i) in the case of beneficial ownership of the
Global Certificate or a portion thereof being exchanged by a United States
institutional investor pursuant to the second preceding sentence, the
certificate in the form of Exhibit F-2 signed by the Manager which sold the
relevant Certificates or (ii) in all other cases, the certificate in the form of
Exhibit F-3, the certificate referred to in this clause (ii) being dated on the
earlier of the first actual payment of interest in respect of such Certificates
and the date of the delivery of such Certificate in definitive form. Upon
receipt of such certification, the Trustee shall cause the Global Certificate to
be endorsed in accordance with paragraph (d) below. Any exchange as provided in
this Section shall be made free of charge to the Holders and the beneficial
owners of the Global Certificate and to the beneficial owners of the Definitive
Euro-Certificates issued in exchange, except that a person receiving Definitive
Euro-Certificates must bear the cost of insurance, postage, transportation and
the like in the event that such person does not receive such Definitive
Euro-Certificates in person at the offices of a Foreign Clearing Agency.
(c) The delivery to the Trustee by a Foreign Clearing Agency of any
written statement referred to above may be relied upon by the Transferor and the
Trustee as conclusive evidence that a corresponding certification or
certifications has or have been delivered to such Foreign Clearing Agency
pursuant to the terms of this Agreement.
(d) Upon any such exchange of all or a portion of the Global
Certificate for a Definitive Euro-Certificate or Certificates, such Global
Certificate shall be endorsed by or on behalf of the Trustee to reflect the
reduction of its principal amount by an amount equal to the aggregate principal
amount of such Definitive Euro-Certificate or Certificates. Until so exchanged
in full, such Global Certificate shall in all respects be entitled to the same
benefits under this Agreement as Definitive Euro-Certificates authenticated and
delivered hereunder except that the beneficial owners of such Global Certificate
shall not be entitled to receive payments of interest on the Certificates until
they have exchanged their beneficial interests in such Global Certificate for
Definitive Euro-Certificates.
Section 6.14. MEETINGS OF CERTIFICATEHOLDERS.
(a) If at the time any Bearer Certificates are issued and outstanding
with respect to any Series or Class to which any meeting described below
relates, the Servicer or the Trustee may at any time call a meeting of Investor
Certificateholders of any Series or Class or of all Series, to be held at such
time and at such place as the Servicer or the Trustee, as the case may be, shall
determine, for the purpose of approving a modification of or amendment to, or
obtaining a waiver of any covenant or condition set forth in, this Agreement,
any Supplement or the Investor Certificates or of taking any other action
permitted to be taken by Investor Certificateholders hereunder or under any
Supplement. Notice of any meeting of Investor
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Certificateholders, setting forth the time and place of such meeting and in
general terms the action proposed to be taken at such meeting, shall be given in
accordance with Section 13.05, the first mailing and publication to be not less
than 20 nor more than 180 days prior to the date fixed for the meeting. To be
entitled to vote at any meeting of Investor Certificateholders a person shall be
(i) a Holder of one or more Investor Certificates of the applicable Series or
Class or (ii) a person appointed by an instrument in writing as proxy by the
Holder of one or more such Investor Certificates. The only persons who shall be
entitled to be present or to speak at any meeting of Investor Certificateholders
shall be the persons entitled to vote at such meeting and their counsel and any
representatives of the Transferor, the Servicer and the Trustee and their
respective counsel.
(b) At a meeting of Investor Certificateholders, persons entitled to
vote Investor Certificates evidencing a majority of the aggregate unpaid
principal amount of the applicable Series or Class or all outstanding Series, as
the case may be, shall constitute a quorum. No business shall be transacted in
the absence of a quorum, unless a quorum is present when the meeting is called
to order. In the absence of a quorum at any such meeting, the meeting may be
adjourned for a period of not less than 10 days; in the absence of a quorum at
any such meeting, such adjourned meeting may be further adjourned for a period
of not less than 10 days; at the reconvening of any meeting further adjourned
for lack of a quorum, the persons entitled to vote Investor Certificates
evidencing at least 25% of the aggregate unpaid principal amount of the
applicable Series or Class or all outstanding Series, as the case may be, shall
constitute a quorum for the taking of any action set forth in the notice of the
original meeting. Notice of the reconvening of any adjourned meeting shall be
given as provided above except that such notice must be given not less than five
days prior to the date on which the meeting is scheduled to be reconvened.
Notice of the reconvening of an adjourned meeting shall state expressly the
percentage of the aggregate principal amount of the outstanding applicable
Investor Certificates which shall constitute a quorum.
(c) Any Investor Certificateholder who has executed an instrument in
writing appointing a person as proxy shall be deemed to be present for the
purposes of determining a quorum and be deemed to have voted; provided that such
Investor Certificateholder shall be considered as present or voting only with
respect to the matters covered by such instrument in writing. Subject to the
provisions of Section 13.01, any resolution passed or decision taken at any
meeting of Investor Certificateholders duly held in accordance with this Section
shall be binding on all Investor Certificateholders whether or not present or
represented at the meeting.
(d) The holding of Bearer Certificates shall be proved by the
production of such Bearer Certificates or by a certificate, satisfactory to the
Servicer, executed by any bank, trust company or recognized securities dealer,
wherever situated, satisfactory to the Servicer. Each such certificate shall be
dated and shall state that on the date thereof a Bearer Certificate bearing a
specified serial number was deposited with or exhibited to such bank, trust
company or recognized securities dealer by the Person named in such certificate.
Any such certificate may be issued in respect of one or more Bearer Certificates
specified therein. The holding by the Person named in any such certificate of
any Bearer Certificate specified therein shall be presumed to continue for a
period of one year from the date of such certificate unless at the time of any
determination of such holding (i) another certificate bearing a later date
issued in respect of the same Bearer Certificate shall be produced, (ii) the
Bearer Certificate specified in such
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certificate shall be produced by some other Person or (iii) the Bearer
Certificate specified in such certificate shall have ceased to be outstanding.
The appointment of any proxy shall be proved by having the signature of the
Person executing the proxy guaranteed by any bank, trust company or recognized
securities dealer satisfactory to the Trustee.
(e) The Trustee shall appoint a temporary chairman of the meeting. A
permanent chairman and a permanent secretary of the meeting shall be elected by
vote of the Holders of Investor Certificates evidencing a majority of the
aggregate unpaid principal amount of Investor Certificates of the applicable
Series or Class or all outstanding Series, as the case may be, represented at
the meeting. No vote shall be cast or counted at any meeting in respect of any
Investor Certificate challenged as not outstanding and ruled by the chairman of
the meeting to be not outstanding. The chairman of the meeting shall have no
right to vote except as an Investor Certificateholder or proxy. Any meeting of
Investor Certificateholders duly called at which a quorum is present may be
adjourned from time to time, and the meeting may be held as so adjourned without
further notice.
(f) The vote upon any resolution submitted to any meeting of Investor
Certificateholders shall be by written ballot on which shall be subscribed the
signatures of Investor Certificateholders or proxies and on which shall be
inscribed the serial number or numbers of the Investor Certificates held or
represented by them. The permanent chairman of the meeting shall appoint two
inspectors of votes who shall count all votes cast at the meeting for or against
any resolution and who shall make and file with the secretary of the meeting
their verified written reports in duplicate of all votes cast at the meeting. A
record in duplicate of the proceedings of each meeting of Investor
Certificateholders shall be prepared by the secretary of the meeting and there
shall be attached to said record the original reports of the inspectors of votes
on any vote by ballot taken thereat and affidavits by one or more persons having
knowledge of the facts setting forth a copy of the notice of the meeting and
showing that said notice was published as provided above. The record shall be
signed and verified by the permanent chairman and secretary of the meeting and
one of the duplicates shall be delivered to the Servicer and the other to the
Trustee to be preserved by the Trustee, the latter to have attached thereto the
ballots voted at the meeting. Any record so signed and verified shall be
conclusive evidence of the matters therein stated.
Section 6.15. UNCERTIFICATED CLASSES. Notwithstanding anything to
the contrary contained in this Article VI or in Article XII, unless otherwise
specified in any Supplement, any provisions contained in this Article VI and in
Article XII relating to the registration, form, execution, authentication,
delivery, presentation, cancellation and surrender of Certificates shall not be
applicable to any uncertificated Certificates.
[END OF ARTICLE VI]
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ARTICLE VII
OTHER MATTERS RELATING TO THE TRANSFEROR
Section 7.01. LIABILITY OF THE TRANSFEROR. Each Transferor
(including any Additional Transferors) shall be severally and not jointly liable
for the obligations, covenants, representations and warranties of such
Transferor arising under or related to this Agreement or any Supplement. Each
Transferor shall be liable only to the extent of the obligations specifically
undertaken by it in its capacity as a Transferor.
Section 7.02. MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE
OBLIGATIONS OF, THE TRANSFEROR.
(a) No Transferor shall consolidate with or merge into any other
corporation or convey or transfer its properties and assets substantially as an
entirety to any Person unless:
(i)(x) the corporation formed by such consolidation or into
which such Transferor is merged or the Person which acquires by
conveyance or transfer the properties and assets of such Transferor
substantially as an entirety shall be, if such Transferor is not the
surviving entity, organized and existing under the laws of the United
States of America or any State or the District of Columbia, and shall
be a savings and loan association, a national banking association, a
bank or other entity which is not subject to Title 11 of the United
States Code or is a special purpose corporation whose powers and
activities are limited to substantially the same degree as provided
in the Certificate of Incorporation of CC Credit Card Corporation
and, if such Transferor is not the surviving entity, shall expressly
assume, by an agreement supplemental hereto, executed and delivered
to the Trustee, in form satisfactory to the Trustee, the performance
of every covenant and obligation of such Transferor hereunder; and
(y) such Transferor or the surviving entity as the case may be has
delivered to the Trustee (with a copy to each Rating Agency) an
Officer's Certificate and an Opinion of Counsel each stating that
such consolidation, merger, conveyance or transfer and such
supplemental agreement comply with this Section, that such
supplemental agreement is a valid and binding obligation of such
surviving entity enforceable against such surviving entity in
accordance with its terms, or enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting creditors' rights generally from time to
time in effect or general principles of equity (whether considered in
a suit at law or in equity), and that all conditions precedent herein
provided for relating to such transaction have been complied with;
(ii) the Rating Agency Condition shall have been satisfied
with respect to such consolidation, merger, conveyance or
transfer; and
(iii) if any Series of Investor Certificates are
outstanding that were characterized as debt at the time of their
issuance, the relevant Transferor shall
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have delivered to the Trustee and each Rating Agency a Tax Opinion,
dated the date of such consolidation, merger, conveyance or transfer,
with respect thereto.
(b) The obligations, of the Transferor hereunder shall not be
assignable nor shall any Person succeed to such obligations or rights of the
Transferor hereunder except in each case in accordance with the provisions of
the foregoing paragraph.
Section 7.03. LIMITATIONS ON LIABILITY OF THE TRANSFEROR. Subject
to Section 7.01, neither the Transferor nor any of its directors, officers,
employees, incorporators or agents acting in such capacities shall be under any
liability to the Trust, the Trustee, the Certificateholders, the Certificate
Owners, any Series Enhancer, any other Transferor or any other Person for any
action taken or for refraining from the taking of any action in good faith in
such capacities pursuant to this Agreement, it being expressly understood that
such liability is expressly waived and released as a condition of, and
consideration for, the execution of this Agreement and any Supplement and the
issuance of the Certificates; PROVIDED, HOWEVER, that this provision shall not
protect any Transferor or any such Person against any liability which would
otherwise be imposed by reason of willful misfeasance, bad faith or gross
negligence in the performance of duties or by reason of reckless disregard of
obligations and duties hereunder. Each Transferor and any director, officer,
employee or agent of such Transferor may rely in good faith on any document of
any kind prima facie properly executed and submitted by any Person (other than
such Transferor) respecting any matters arising hereunder.
[END OF ARTICLE VII]
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ARTICLE VIII
OTHER MATTERS RELATING TO THE SERVICER
Section 8.01. LIABILITY OF THE SERVICER. The Servicer shall be
liable under this Article only to the extent of the obligations specifically
undertaken by the Servicer in its capacity as Servicer.
Section 8.02. MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE
OBLIGATIONS OF, THE SERVICER. The Servicer shall not consolidate with or merge
into any other corporation or convey or transfer its properties and assets
substantially as an entirety to any Person, unless:
(a)(i) the corporation formed by such consolidation or
into which the Servicer is merged or the Person which acquires by
conveyance or transfer the properties and assets of the Servicer
substantially as an entirety shall be, if the Servicer is not the
surviving entity, a corporation organized and existing under the laws
of the United States of America or any State or the District of
Columbia and, if the Servicer is not the surviving entity, such
corporation shall expressly assume, by an agreement supplemental
hereto, executed and delivered to the Trustee, in form satisfactory
to the Trustee, the performance of every covenant and obligation of
the Servicer hereunder;
(ii) the Servicer has delivered to the Trustee an
Officer's Certificate and an Opinion of Counsel each stating that
such consolidation, merger, conveyance or transfer and such
supplemental agreement comply with this Section, that such
supplemental agreement is a valid and binding obligation of such
surviving entity enforceable against such surviving entity in
accordance with its terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting creditors' rights
generally from time to time in effect and except as such
enforceability may be limited by general principles of equity
(whether considered in a suit at law or in equity), and that all
conditions precedent herein provided for relating to such transaction
have been complied with;
(b) the Rating Agency Condition shall have been satisfied with
respect to such assignment and succession; and
(c) the corporation formed by such consolidation or into which the
Servicer is merged or the Person which acquires by conveyance or transfer the
properties and assets of the Servicer substantially as an entirety shall be an
Eligible Servicer.
Section 8.03. LIMITATION ON LIABILITY OF THE SERVICER AND OTHERS.
Except as provided in Section 8.04, neither the Servicer nor any of the
directors, officers, employees or agents of the Servicer in its capacity as
Servicer shall be under any liability to the Trust, the Trustee, the
Certificateholders, any Series Enhancer or any other Person for any action taken
or for refraining from the taking of any action in good faith in its capacity as
Servicer pursuant
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to this Agreement; PROVIDED, HOWEVER, that this provision shall not protect the
Servicer or any such Person 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. The Servicer and any director, officer, employee or agent of
the Servicer may rely in good faith on any document of any kind prima facie
properly executed and submitted by any Person (other than the Servicer)
respecting any matters arising hereunder. The Servicer shall not be under any
obligation to appear in, prosecute or defend any legal action which is not
incidental to its duties as Servicer in accordance with this Agreement and which
in its reasonable judgment may involve it in any expense or liability. The
Servicer may, in its sole discretion, undertake any such legal action which it
may deem necessary or desirable for the benefit of the Certificateholders with
respect to this Agreement and the rights and duties of the parties hereto and
the interests of the Certificateholders hereunder.
Section 8.04. SERVICER INDEMNIFICATION OF THE TRUST AND THE TRUSTEE.
The Servicer shall indemnify and hold harmless the Trust and the Trustee from
and against any loss, liability, expense, damage or injury suffered or sustained
by reason of any acts or omissions of the Servicer with respect to the Trust
pursuant to this Agreement, including any judgment, award, settlement,
reasonable attorneys' fees and other costs or expenses incurred in connection
with the defense of any action, proceeding or claim; PROVIDED, HOWEVER, that the
Servicer shall not indemnify the Trustee if such acts, omissions or alleged acts
or omissions constitute or are caused by fraud, negligence, or willful
misconduct by the Trustee; PROVIDED FURTHER, that the Servicer shall not
indemnify the Trust, the Investor Certificateholders or the Certificate Owners
for any liabilities, costs or expenses of the Trust with respect to any action
taken by the Trustee at the request of the Investor Certificateholders; PROVIDED
FURTHER, that the Servicer shall not indemnify the Trust, the Investor
Certificateholders or the Certificate Owners as to any losses, claims or damages
incurred by any of them in their capacities as investors, including without
limitation losses incurred as a result of Defaulted Receivables; and PROVIDED
FURTHER, that the Servicer shall not indemnify the Trust, the Investor
Certificateholders or the Certificate Owners for any liabilities, costs or
expenses of the Trust, the Investor Certificateholders or the Certificate Owners
arising under any tax law, including without limitation, any Federal, state,
local or foreign income or franchise taxes or any other tax imposed on or
measured by income (or any interest or penalties with respect thereto or arising
from a failure to comply therewith) required to be paid by the Trust, the
Investor Certificateholders or the Certificate Owners in connection herewith to
any taxing authority. Indemnification pursuant to this Section shall not be
payable from the Trust Assets. The provisions of this indemnity shall run
directly to and be enforceable by an injured party subject to the limitations
hereof.
Section 8.05. THE SERVICER NOT TO RESIGN. The Servicer shall not
resign from the obligations and duties hereby imposed on it except upon
determination that (i) the performance of its duties hereunder is no longer
permissible under any Requirement of Law and (ii) there is no reasonable action
which the Servicer could take to make the performance of its duties hereunder
permissible under any such Requirements of Law. Any determination permitting
the resignation of the Servicer shall be evidenced by an Opinion of Counsel to
such effect delivered to the Trustee. No resignation shall become effective
until the Trustee or a Successor Servicer shall have assumed the
responsibilities and obligations of the Servicer in accordance with Section
10.02. If within 120 days of the date of the determination that the
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Servicer may no longer act as Servicer the Trustee is unable to appoint a
Successor Servicer, the Trustee shall serve as Successor Servicer.
Notwithstanding the foregoing, the Trustee shall, if it is legally unable so to
act, petition a court of competent jurisdiction to appoint any established
institution that is an Eligible Servicer as the Successor Servicer hereunder.
The Trustee shall give prompt notice to each Rating Agency upon the appointment
of a Successor Servicer.
Section 8.06. ACCESS TO CERTAIN DOCUMENTATION AND INFORMATION
REGARDING THE RECEIVABLES. The Servicer shall provide to the Trustee access to
the documentation regarding the Accounts and the Receivables in such cases where
the Trustee is required in connection with the enforcement of the rights of
Certificateholders or by applicable statutes or regulations to review such
documentation, such access being afforded without charge but only (a) upon
reasonable request, (b) during normal business hours, (c) subject to the
Servicer's normal security and confidentiality procedures and (d) at reasonably
accessible offices in the continental United States designated by the Servicer.
Nothing in this Section shall derogate from the obligation of the Transferor,
the Trustee and the Servicer to observe any applicable law prohibiting
disclosure of information regarding the Obligors and the failure of the Servicer
to provide access as provided in this Section as a result of such obligation
shall not constitute a breach of this Section.
Section 8.07. DELEGATION OF DUTIES. In the ordinary course of
business, the Servicer may at any time delegate any duties hereunder to any
Person who agrees to conduct such duties in accordance with the Credit Card
Guidelines and this Agreement; PROVIDED, HOWEVER, in the case of significant
delegation to a Person other than to an Account Owner or any Affiliate of an
Account Owner, (i) at least 30 days prior written notice shall be given to the
Trustee and each Rating Agency of such delegation and (ii) at or prior to the
end of such 30-day period the Servicer shall have determined that the Rating
Agency Condition has been met. Any such delegations shall not relieve the
Servicer of its liability and responsibility with respect to such duties, and
shall not constitute a resignation within the meaning of Section 8.05.
Section 8.08. EXAMINATION OF RECORDS. The Servicer shall clearly
and unambiguously indicate in its computer files or other records that the
Receivables arising in the Accounts have been conveyed to the Trustee, on behalf
of the Trust, pursuant to this Agreement for the benefit of the
Certificateholders. The Servicer shall, prior to the sale or transfer to a
third party of any receivable held in its custody, examine its computer and
other records to determine that such receivable is not a Receivable.
[END OF ARTICLE VIII]
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ARTICLE IX
PAY OUT EVENTS
Section 9.01. TRUST PAY OUT EVENTS. If any one of the following
events shall occur with respect to the Trust ("Trust Pay Out Events"):
(i) any Transferor or any of the Account Owners 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 such Transferor
or Account Owner 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 liquidation of its affairs,
shall have been entered against such Transferor or Account Owner; or
any Transferor or Account Owner 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 (any such event, an
"Insolvency Event");
(ii) the Trust shall become subject to regulation by the
Commission as an "investment company" within the meaning of the
Investment Company Act; or
(iii) a Transfer Restriction Event shall occur;
then, a Pay Out Event shall occur with respect to each Series without any notice
or other action on the part of the Trustee or the Investor Certificateholders,
immediately upon the occurrence of such event.
Section 9.02. RIGHTS UPON THE OCCURRENCE OF AN INSOLVENCY EVENT. If
the Transferor causes an Insolvency Event to occur with respect to the
Transferor or if an Insolvency Event otherwise occurs with respect to the
Transferor, the Transferor shall on the day any such Insolvency Event occurs
immediately cease to transfer Principal Receivables to the Trust and shall
promptly give notice to the Trustee thereof. Notwithstanding any cessation of
the transfer to the Trust of additional Principal Receivables transferred to the
Trust prior to the occurrence of such Insolvency Event and Collections in
respect of such Principal Receivables and Finance Charge Receivables, whenever
created, accrued in respect of such Principal Receivables shall continue to be a
part of the Trust Assets.
[END OF ARTICLE IX]
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ARTICLE X
SERVICER DEFAULTS
Section 10.01. SERVICER DEFAULTS. If any one of the following
events (a "Servicer Default") shall occur and be continuing:
(a) any failure by the Servicer to make any payment, transfer or
deposit or to give instructions or notice to the Trustee pursuant to the terms
of this Agreement or any Supplement on or before the date occurring five
Business Days after the date such payment, transfer or deposit or such
instruction or notice is required to be made or given, as the case may be, under
the terms of this Agreement or any Supplement;
(b) failure on the part of the Servicer duly to observe or perform in
any material respect any other covenants or agreements of the Servicer set forth
in this Agreement or any Supplement which has a material adverse effect on the
interests hereunder of the Investor Certificateholders of any Series or Class
and which continues unremedied for a period of 60 days after the date on which
written notice of such failure, requiring the same to be remedied, shall have
been given to the Servicer by the Trustee, or to the Servicer and the Trustee by
Holders of Investor Certificates evidencing more than 50% of the Aggregate
Investor Amount (or, with respect to any such failure that does not relate to
all Series, 50% of the aggregate Investor Amount of all Series to which such
failure relates); or the Servicer shall delegate its duties under this
Agreement, except as permitted by Section 8.02 or 8.07, a Responsible Officer of
the Trustee has actual knowledge of such delegation and such delegation
continues unremedied for 15 days after the date on which written notice thereof,
requiring the same to be remedied, shall have been given to the Servicer by the
Trustee, or to the Servicer and the Trustee by Holders of Investor Certificates
evidencing more than 50% of the Aggregate Investor Amount;
(c) any representation, warranty or certification made by the
Servicer in this Agreement or any Supplement or in any certificate delivered
pursuant to this Agreement or any Supplement shall prove to have been incorrect
when made, which has a material adverse effect on the rights of the Investor
Certificateholders of any Series or Class and which continues to be incorrect in
any material respect for a period of 60 days after the date on which written
notice of such failure, requiring the same to be remedied, shall have been given
to the Servicer by the Trustee, or to the Servicer and the Trustee by the
Holders of Investor Certificates evidencing more than 50% of the Aggregate
Investor Amount (or, with respect to any such representation, warranty or
certification that does not relate to all Series, 50% of the aggregate Investor
Amount of all Series to which such representation, warranty or certification
relates); or
(d) the 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 the Servicer or
of or relating to all or substantially all of its property, or a decree or order
of a court or agency or supervisory authority having jurisdiction in the
premises for the appointment of a conservator or receiver or liquidator in any
insolvency, readjustment of debt, marshaling of assets and liabilities or
similar proceedings, or for the winding-up or liquidation of its affairs, shall
have been entered against the Servicer, and such decree or order shall have
remained in force undischarged or unstayed for a period of 60 days;
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or the Servicer shall admit in writing its inability to pay its debts generally
as they become due, file a petition to take advantage of any applicable
insolvency or reorganization statute, make any assignment for the benefit of its
creditors or voluntarily suspend payment of its obligations; then, in the event
of any Servicer Default, so long as the Servicer Default shall not have been
remedied, either the Trustee or the Holders of Investor Certificates evidencing
more than 50% of the Aggregate Investor Amount, by notice then given to the
Servicer (and to the Trustee if given by the Investor Certificateholders) (a
"Termination Notice"), may terminate all but not less than all the rights and
obligations of the Servicer as Servicer under this Agreement and in and to the
Receivables and the proceeds thereof; PROVIDED, HOWEVER, if within 60 days of
receipt of a Termination Notice the Trustee does not receive any bids from
Eligible Servicers in accordance with subsection 10.02(c) to act as a Successor
Servicer and receives an Officer's Certificate of the Servicer to the effect
that the Servicer cannot in good faith cure the Servicer Default which gave rise
to the Termination Notice, the Trustee shall offer the Transferor the right at
its option to purchase the Certificateholders' Interest on the Distribution Date
next succeeding 60 days after the receipt by the Servicer of a Termination
Notice.
The purchase price for the Certificateholders' Interest shall be
equal to the sum of the amounts specified therefor with respect to each
outstanding Series in the related Supplement. The Transferor shall notify the
Trustee prior to the Record Date for the Distribution Date of the purchase if it
is exercising such option. If the Transferor exercises such option, the
Transferor shall (x) if the Transferor's short-term deposits or long-term
unsecured debt obligations are not rated at the time at least P-3 or Baa3,
respectively, by Moody's, deliver to the Trustee an Opinion of Counsel (which
must be an independent outside counsel) to the effect that, in reliance on
certain certificates to the effect that the Receivables constitute fair value
for consideration paid therefor and as to the solvency of the Transferor, the
purchase would not be considered a fraudulent conveyance and (y) deposit the
purchase price into the Collection Account not later than 12:00 noon, New York
City time, on such Distribution Date in immediately available funds. The
purchase price shall be allocated and distributed to Investor Certificateholders
in accordance with Article IV and the terms of each Supplement.
After receipt by the Servicer of such Termination Notice, and on the
date that a Successor Servicer shall have been appointed by the Trustee pursuant
to Section 10.02, all authority and power of the Servicer under this Agreement
shall pass to and be vested in a Successor Servicer; and, without limitation,
the Trustee is hereby authorized and empowered (upon the failure of the Servicer
to cooperate) to execute and deliver, on behalf of the Servicer, as
attorney-in-fact or otherwise, all documents and other instruments upon the
failure of the Servicer to execute or deliver such documents or instruments, and
to do and accomplish all other acts or things necessary or appropriate to effect
the purposes of such transfer of servicing rights. The Servicer agrees to
cooperate with the Trustee and such Successor Servicer in effecting the
termination of the responsibilities and rights of the Servicer to conduct
servicing hereunder including, without limitation, the transfer to such
Successor Servicer of all authority of the Servicer to service the Receivables
provided for under this Agreement, including, without limitation, all authority
over all Collections which shall on the date of transfer be held by the Servicer
for deposit, or which have been deposited by the Servicer, in the Collection
Account, 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. The Servicer shall promptly transfer its electronic records relating
to the Receivables to the Successor Servicer in
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such electronic form as the Successor Servicer may reasonably request and shall
promptly transfer to the Successor Servicer all other records, correspondence
and documents necessary for the continued servicing of the Receivables in the
manner and at such times as the Successor Servicer shall reasonably request. To
the extent that compliance with this Section 10.01 shall require the Servicer to
disclose to the Successor Servicer information of any kind which the Servicer
reasonably deems to be confidential, the Successor Servicer shall be required to
enter into such customary licensing and confidentiality agreements as the
Servicer shall deem necessary to protect its interests.
Notwithstanding the foregoing, any delay in or failure of performance
under subsection 10.01(a) for a period of 5 Business Days or under subsections
10.01(b) or (c) for a period of 60 days (in addition to any period provided in
subsections 10.01(a), (b) or (c)) shall not constitute a Servicer Default until
the expiration of such additional 5 Business Days or 60 days, respectively, if
such delay or failure could not be prevented by the exercise of reasonable
diligence by the Servicer and such delay or failure was caused by an act of God
or the public enemy, acts of declared or undeclared war, terrorism, public
disorder, rebellion or sabotage, epidemics, landslides, lightning, fire,
hurricanes, earthquakes, floods or similar causes. The preceding sentence shall
not relieve the Servicer from using its best efforts to perform its respective
obligations in a timely manner in accordance with the terms of this Agreement
and any Supplement and the Servicer shall provide the Trustee, each Rating
Agency, the Holders of the Transferor Certificates and the Investor
Certificateholders with an Officer's Certificate giving prompt notice of such
failure or delay by it, together with a description of its efforts to so perform
its obligations.
Section 10.02. TRUSTEE TO ACT, APPOINTMENT OF SUCCESSOR.
(a) On and after the receipt by the Servicer of a Termination Notice
pursuant to Section 10.01, the Servicer shall continue to perform all servicing
functions under this Agreement until the date specified in the Termination
Notice or otherwise specified by the Trustee or until a date mutually agreed
upon by the Servicer and Trustee. The Trustee shall as promptly as possible
after the giving of a Termination Notice appoint an Eligible Servicer as a
successor servicer (the "Successor Servicer"), and such Successor Servicer shall
accept its appointment by a written assumption in a form acceptable to the
Trustee. In the event that a Successor Servicer has not been appointed or has
not accepted its appointment at the time when the Servicer ceases to act as
Servicer, the Trustee without further action shall automatically be appointed
the Successor Servicer. The Trustee may delegate any of its servicing
obligations to an Affiliate of the Trustee or agent in accordance with Sections
3.01(b) and 8.07. Notwithstanding the foregoing, the Trustee shall, if it is
legally unable so to act, petition a court of competent jurisdiction to appoint
any established institution qualifying as an Eligible Servicer as the Successor
Servicer hereunder. The Trustee shall give prompt notice to each Rating Agency
upon the appointment of a Successor Servicer.
(b) Upon its appointment, the Successor Servicer shall be the
successor to the Servicer with respect to servicing functions under this
Agreement and shall be subject to all the responsibilities, duties and
liabilities relating thereto placed on the Servicer by the terms and provisions
hereof, and all references in this Agreement to the Servicer shall be deemed to
refer to the Successor Servicer.
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(c) In connection with any Termination Notice, the Trustee will
review any bids which it obtains from Eligible Servicers and shall be permitted
to appoint any Eligible Servicer submitting such a bid as a Successor Servicer
for servicing compensation not in excess of the aggregate Servicing Fees for all
Series; PROVIDED, HOWEVER, that the Holders of the Transferor Certificates shall
be responsible for payment of the Transferor's portion of such aggregate
Servicing Fees and that no such monthly compensation paid out of Collections
shall be in excess of such aggregate Servicing Fees. Each Holder of a
Transferor Certificate agrees that, if the Travelers Bank (or any Successor
Servicer) is terminated as Servicer hereunder, the portion of the Collections in
respect of Finance Charge Receivables that such Holders are entitled to receive
pursuant to this Agreement or any Supplement shall be reduced by an amount
sufficient to pay such Holders' share (determined by reference to the
Supplements with respect to any outstanding Series) of the compensation of the
Successor Servicer.
(d) All authority and power granted to the Successor Servicer under
this Agreement shall automatically cease and terminate upon termination of the
Trust pursuant to Section 12.01 and shall pass to and be vested in the
Transferor and, without limitation, the Transferor is hereby authorized and
empowered to execute and deliver, on behalf of the Successor Servicer, as
attorney-in-fact or otherwise, all documents and other instruments, and to do
and accomplish all other acts or things necessary or appropriate to effect the
purposes of such transfer of servicing rights. The Successor Servicer agrees to
cooperate with the Transferor in effecting the termination of the
responsibilities and rights of the Successor Servicer to conduct servicing on
the Receivables. The Successor Servicer shall transfer its electronic records
relating to the Receivables to the Transferor in such electronic form as the
Transferor may reasonably request and shall transfer all other records,
correspondence and documents to the Transferor in the manner and at such times
as the Transferor shall reasonably request. To the extent that compliance with
this Section 10.02 shall require the Successor Servicer to disclose to the
Transferor information of any kind which the Successor Servicer deems to be
confidential, the Transferor shall be required to enter into such customary
licensing and confidentiality agreements as the Successor Servicer shall deem
necessary to protect its interests.
Section 10.03. NOTIFICATION TO CERTIFICATEHOLDERS. Within two
Business Days after the Servicer becomes aware of any Servicer Default, the
Servicer shall give notice thereof to the Trustee and each Rating Agency and the
Trustee shall give notice to the Investor Certificateholders. Upon any
termination or appointment of a Successor Servicer pursuant to this Article, the
Trustee shall give prompt notice thereof to the Investor Certificateholders.
[END OF ARTICLE X]
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ARTICLE XI
THE TRUSTEE
Section 11.01. DUTIES OF TRUSTEE.
(a) The Trustee, prior to the occurrence of a Servicer Default and
after the curing of all Servicer Defaults which may have occurred, undertakes to
perform such duties and only such duties as are specifically set forth in this
Agreement. If a Responsible Officer has received written notice that a Servicer
Default has occurred (which has not been cured or waived) the Trustee shall
exercise such of the rights and powers vested in it by this Agreement, and use
the same degree of care and skill in its exercise, as a prudent person would
exercise or use under the circumstances in the conduct of such person's own
affairs.
(b) The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments furnished
to the Trustee that are specifically required to be furnished pursuant to any
provision of this Agreement, shall examine them to determine whether they
substantially conform to the requirements of this Agreement.
(c) Subject to subsection 11.01(a), no provision of this Agreement
shall be construed to relieve the Trustee from liability for its own negligent
action, its own negligent failure to act or its own misconduct; PROVIDED,
HOWEVER, that:
(i) the Trustee shall not be personally liable for an error
of judgment made in good faith by a Responsible Officer or
Responsible Officers of the Trustee, unless it shall be proved that
the Trustee was negligent in ascertaining the pertinent facts;
(ii) the Trustee shall not be personally liable with
respect to any action taken, suffered or omitted to be taken by it in
good faith in accordance with the direction of the Holders of
Investor Certificates evidencing more than 50% of the Investor Amount
of any Series relating to the time, method and place of conducting
any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred upon the Trustee in relation to such
Series, under this Agreement; and
(iii) the Trustee shall not be charged with knowledge of
any failure by the Servicer referred to in clauses (a) and (b) of
Section 10.01 unless a Responsible Officer of the Trustee obtains
actual knowledge of such failure or the Trustee receives written
notice of such failure from the Servicer or any Holders of Investor
Certificates evidencing not less than 10% of the Investor Amount of
any Series adversely affected thereby.
(d) The Trustee shall not be required to expend or risk its own
funds or otherwise incur financial liability in the performance of any of its
duties hereunder or in the exercise of any of its rights or powers, if there is
reasonable ground for believing that the
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repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it, and none of the provisions contained in this
Agreement shall in any event require the Trustee to perform, or be responsible
for the manner of performance of, any of the obligations of the Servicer under
this Agreement except during such time, if any, as the Trustee shall be the
successor to, and be vested with the rights, duties, powers and privileges of,
the Servicer in accordance with the terms of this Agreement.
(e) Except for actions expressly authorized by this Agreement, the
Trustee shall take no action reasonably likely to (i) impair the interests of
the Trust in any Receivable now existing or hereafter created or (ii) impair the
value of any Receivable now existing or hereafter created.
(f) The Trustee shall have no power to vary the corpus of the Trust,
except as expressly provided in this Agreement.
(g) In the event that the Paying Agent or the Transfer Agent and
Registrar shall fail to perform any obligation, duty or agreement in the manner
or on the day required to be performed by the Paying Agent or the Transfer Agent
and Registrar, as the case may be, under this Agreement, the Trustee shall be
obligated as soon as possible upon knowledge of a Responsible Officer thereof
and receipt of appropriate records, if any, to perform such obligation, duty or
agreement in the manner so required.
(h) If the Transferor has agreed to transfer any of its consumer
revolving credit card receivables (other than the Receivables) to another
Person, upon the written request of the Transferor, the Trustee will enter into
such intercreditor agreements with the transferee of such receivables as are
customary and necessary to separately identify the rights, if any, of the Trust
and such other Person in the Transferor's consumer revolving credit card
receivables; PROVIDED, that the Trustee shall not be required to enter into any
intercreditor agreement which could adversely affect the interests of the
Certificateholders and, upon the request of the Trustee, the Transferor will
deliver an Opinion of Counsel on any matters relating to such intercreditor
agreement, reasonably requested by the Trustee.
Section 11.02. CERTAIN MATTERS AFFECTING THE TRUSTEE. Except as
otherwise provided in Section 11.01:
(a) the Trustee may rely on and shall be protected in acting on, or
in refraining from acting in accord with, any Assignment, the initial report,
the annual Servicer's certificate, the monthly payment instructions and
notification to the Trustee, the monthly Certificateholder's statement, any
resolution, Officer's Certificate, certificate of auditors or any other
certificate, statement, instrument, opinion, report, notice, request, consent,
order, appraisal, bond or other paper or document believed by it to be genuine
and to have been signed or presented to it pursuant to this Agreement by the
proper party or parties;
(b) the Trustee may consult with counsel, and any advice or Opinion
of Counsel shall be full and complete authorization and protection in respect of
any action taken or suffered or omitted by it hereunder in good faith and in
accordance with such advice or Opinion of Counsel;
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(c) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Agreement or any Enhancement Agreement, or
to institute, conduct or defend any litigation hereunder or in relation hereto,
at the request, order or direction of any of the Certificateholders, or any
Enhancement Provider, pursuant to the provisions of this Agreement or any
Enhancement Agreement, unless such Certificateholders or any Enhancement
Provider shall have offered to the Trustee reasonable security or indemnity
against the costs, expenses and liabilities which may be incurred therein or
thereby; nothing contained herein shall, however, relieve the Trustee of the
obligations, upon the occurrence of any Servicer Default (which has not been
cured), to exercise such of the rights and powers vested in it by this Agreement
and any Series Enhancement, and to use the same degree of care and skill in its
exercise as a prudent person would exercise or use under the circumstances in
the conduct of person's own affairs;
(d) the Trustee shall not be personally liable for any action taken,
suffered or omitted by it in good faith and believed by it to be authorized or
within the discretion or rights or powers conferred upon it by this Agreement;
(e) the Trustee shall not be bound to make any investigation into
the facts of matters stated in any Assignment, the initial report, the annual
Servicer's certificate, the monthly payment instructions and notification to the
Trustee, the monthly Certificateholder'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 more than 50% of the Investor
Amount of any Series which could be adversely affected if the Trustee does not
perform such acts;
(f) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys or a custodian, and the Trustee shall not be responsible for any
misconduct or negligence on the part of any such agent, attorney or custodian
appointed with due care by it hereunder; and
(g) except as may be required by subsection 11.01(a) hereof, the
Trustee shall not be required to make any initial or periodic examination of any
documents or records related to the Receivables or the Accounts for the purpose
of establishing the presence or absence of defects, the compliance by the
Transferor with its representations and warranties or for any other purpose.
Section 11.03. TRUSTEE NOT LIABLE FOR RECITALS IN CERTIFICATES. The
Trustee assumes no responsibility for the correctness of the recitals contained
herein and in the certificates (other than the certificate of authentication on
the Certificates). Except as set forth in Section 11.15, the Trustee makes no
representations as to the validity or sufficiency of this Agreement or any
Supplement or of the Certificates (other than the certificate of authentication
on the Certificates) or of any Receivable or related document. The Trustee
shall not be accountable for the use or application by the Transferor of any of
the Certificates or of the proceeds of such Certificates, or for the use or
application of any funds paid to the Transferor or the Holders of the Transferor
Certificates in respect of the Receivables or deposited in or withdrawn from the
Collection Account, the Excess Funding Account or any Series Account by the
Servicer.
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Section 11.04. TRUSTEE MAY OWN CERTIFICATES. Subject to Section
6.06, the Trustee in its individual or any other capacity may become the owner
or pledgee of Investor Certificates or Supplemental Certificates with the same
rights as it would have if it were not the Trustee.
Section 11.05. THE TRANSFEROR TO PAY TRUSTEE'S FEES AND EXPENSES.
The Transferor covenants and agrees to pay to the Trustee from time to time, and
the Trustee shall be entitled to receive, reasonable compensation (which shall
not be limited by any provision of law in regard to the compensation of a
trustee of an express trust) for all services rendered by it in the execution of
the trust hereby created and in the exercise and performance of any of the
powers and duties hereunder of the Trustee, and the Transferor will pay or
reimburse the Trustee (without reimbursement from the Collection Account or
otherwise) upon its request for all reasonable expenses, disbursements and
advances (if any) incurred or made by the Trustee (including the fees and
expenses of Trustee's counsel) in accordance with any of the provisions of this
Agreement except any such expense, disbursement or advance as may arise from its
own negligence or bad faith and except as provided in the following sentence.
If the Trustee is appointed Successor Servicer pursuant to Section 10.02, the
provisions of this Section 11.05 shall not apply to expenses, disbursements and
advances made or incurred by the Trustee in its capacity as Successor Servicer.
The obligations of the Transferor under this Section 11.05 shall survive the
termination of the Trust and the resignation or removal of the Trustee.
Section 11.06. ELIGIBILITY REQUIREMENTS FOR TRUSTEE. The Trustee
hereunder shall at all times be a bank or a corporation organized and doing
business under the laws of the United States of America or any state thereof and
subject to supervision or examination by Federal or state authority and
authorized under such laws to exercise corporate trust powers that either (x)
has a long-term unsecured debt rating of at least Baa3 by Moody's and BBB- by
Standard & Poor's and, 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, a combined capital and surplus of at least $50,000,000 or (y)
shall otherwise be acceptable to each Rating Agency. If such bank or
corporation publishes reports of condition at least annually, pursuant to law or
to the requirements of the aforesaid supervising or examining authority, then
for the purpose of this Section 11.06, the combined capital and surplus of such
bank or corporation shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. In case at any
time the Trustee shall cease to be eligible in accordance with the provisions of
this Section 11.06, the Trustee shall resign immediately in the manner and with
the effect specified in Section 11.07.
Section 11.07. RESIGNATION OR REMOVAL OF TRUSTEE.
(a) The Trustee may at any time resign and be discharged from the
trust hereby created by giving written notice thereof to the Servicer. Upon
receiving such notice of resignation, the Servicer shall promptly appoint a
successor trustee by written instrument, in duplicate, one copy of which
instrument shall be delivered to the resigning Trustee and one copy to the
successor trustee. If no successor trustee shall have been so appointed and
have accepted within 30 days after the giving of such notice of resignation, the
resigning Trustee may petition any court of competent jurisdiction for the
appointment of a successor trustee.
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(b) If at any time the Trustee shall cease to be eligible in
accordance with the provisions of Section 11.06 and shall fail to resign after
written request therefor by the Servicer or the Transferor, or if at any time
the Trustee shall be legally unable to act, or shall be adjudged a bankrupt or
insolvent, or a receiver of the Trustee or of its property shall be appointed,
or any public officer shall take charge or control of the Trustee or of its
property or affairs for the purpose of rehabilitation, conservation or
liquidation, then the Servicer or Transferor may, but shall not be required to,
remove the Trustee and promptly appoint a successor trustee by written
instrument, in duplicate, one copy of which instrument shall be delivered to the
Trustee so removed and one copy to the successor trustee.
(c) Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section 11.07 shall
not become effective until acceptance of appointment by the successor trustee as
provided in Section 11.08 and any liability of the Trustee arising hereunder
shall survive such appointment of a successor trustee.
Section 11.08. SUCCESSOR TRUSTEE.
(a) Any successor trustee appointed as provided in Section 11.07
shall execute, acknowledge and deliver to the Transferor, to the Servicer and to
its predecessor Trustee an instrument accepting such appointment hereunder, and
thereupon the resignation or removal of the predecessor Trustee shall become
effective and such successor trustee, without any further act, deed or
conveyance, shall become fully vested with all the rights, powers, duties and
obligations of its predecessor hereunder, with the like effect as if originally
named as Trustee herein. The predecessor Trustee shall deliver to the successor
trustee all documents and statements held by it hereunder, and the Transferor
and the predecessor Trustee shall execute and deliver such instruments and do
such other things as may reasonably be required for fully and certainly vesting
and confirming in the successor trustee all such rights, powers, duties and
obligations.
(b) No successor trustee shall accept appointment as provided in
this Section 11.08 unless at the time of such acceptance such successor trustee
shall be eligible under the provisions of Section 11.06.
(c) Upon acceptance of appointment by a successor trustee as
provided in this Section 11.08, such successor trustee shall provide notice of
such succession hereunder to all Investor Certificateholders and the Servicer
shall provide such notice to each Rating Agency and any Series Enhancer entitled
thereto pursuant to the relevant Supplement.
Section 11.09. MERGER OR CONSOLIDATION OF TRUSTEE. Any Person into
which the Trustee may be merged or converted or with which it may be
consolidated, or any Person resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any Person succeeding to
the corporate trust business of the Trustee, shall be the successor of the
Trustee hereunder, provided such corporation shall be eligible under the
provisions of Section 11.06, 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.
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(a) Notwithstanding any other provisions of this Agreement, at any
time, for the purpose of meeting any legal requirements of any jurisdiction in
which any part of the Trust may at the time be located, the Trustee shall have
the power and may execute and deliver all instruments to appoint one or more
Persons to act as a co-trustee or co-trustees, or separate trustee or separate
trustees, of all or any part of the Trust, and to vest in such Person or
Persons, in such capacity and for the benefit of the Certificateholders, such
title to the Trust, or any part thereof, and, subject to the other provisions of
this Section 11.10, such powers, duties, obligations, rights and trusts as the
Trustee may consider necessary or desirable; PROVIDED, HOWEVER, that the Trustee
shall exercise due care in the appointment of any co-trustee. No co-trustee or
separate trustee hereunder shall be required to meet the terms of eligibility as
a successor trustee under Section 11.06 and no notice to Certificateholders of
the appointment of any co-trustee or separate trustee shall be required under
Section 11.08.
(b) Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) all rights, powers, duties and obligations conferred
or imposed upon the Trustee shall be conferred or imposed upon and
exercised or performed by the Trustee and such separate trustee or
co-trustee jointly (it being understood that such separate trustee or
co-trustee is not authorized to act separately without the Trustee
joining in such act) except to the extent that under any laws of any
jurisdiction in which any particular act or acts are to be performed
(whether as Trustee hereunder or as successor to the Servicer
hereunder) the Trustee shall be incompetent or unqualified to perform
such act or acts, in which event such rights, powers, duties and
obligations (including the holding of title to the Trust or any
portion thereof in any such jurisdiction) shall be exercised and
performed singly by such separate trustee or co-trustee, but solely
at the direction of the Trustee;
(ii) no trustee hereunder shall be personally liable by
reason of any act or omission of any other trustee hereunder; and
(iii) the Trustee may at any time accept the resignation
of or remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the Trustee shall
be deemed to have been given to each of the then-separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement and
the conditions of this Article XI. Each separate trustee and co-trustee, upon
its acceptance of the trusts conferred, shall be vested with the estates or
property specified in its instrument of appointment, either jointly with the
Trustee or separately, as may be provided therein, subject to all the provisions
of this Agreement, specifically including every provision of this Agreement
relating to the conduct of, affecting the liability of, or affording protection
to, the Trustee. Every such instrument shall be filed with the Trustee and a
copy thereof given to the Servicer.
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(d) Any separate trustee or co-trustee may at any time constitute
the Trustee as its agent or attorney-in-fact with full power and authority, to
the extent not prohibited by law, to do any lawful act under or in respect to
this Agreement on its behalf and in its name. If any separate trustee or
co-trustee shall die, become incapable of acting, resign or be removed, all of
its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
Section 11.11. TAX RETURNS. In the event the Trust shall be
required to file tax returns, the Servicer, as soon as practicable after it is
made aware of such requirement, shall prepare or cause to be prepared any tax
returns required to be filed by the Trust and, to the extent possible, shall
file such returns at least five days before such returns are due to be filed.
The Trustee is hereby authorized to sign any such return on behalf of the Trust.
The Servicer shall prepare or shall cause to be prepared all tax information
required by law to be distributed to Certificateholders and shall deliver such
information to the Trustee at least five days prior to the date it is required
by law to be distributed to Certificateholders. The Servicer, upon request,
will furnish the Trustee with all such information known to the Servicer as may
be reasonably required in connection with the preparation of all tax returns of
the Trust. In no event shall the Trustee or the Servicer be liable for any
liabilities, costs or expenses of the Trust, the Investor Certificateholders or
the Certificate Owners arising under any tax law, including without limitation
federal, state, local or foreign income or excise taxes or any other tax imposed
on or measured by income (or any interest or penalty with respect thereto or
arising from a failure to comply therewith).
Section 11.12. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF
CERTIFICATES. All rights of action and claims under this Agreement or any
Series of Certificates may be prosecuted and enforced by the Trustee without the
possession of any of the Certificates or the production thereof in any
proceeding relating thereto, and any such proceeding instituted by the Trustee
shall be brought in its own name as trustee. Any recovery of judgment shall,
after provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of any Series of Certificates in respect of which such judgment
has been obtained.
Section 11.13. SUITS FOR ENFORCEMENT.
(a) If a Servicer Default shall occur and be continuing, the
Trustee, in its discretion may, subject to the provisions of Sections 10.01 and
11.14, proceed to protect and enforce its rights and the rights of any Series of
Certificates under this Agreement by a suit, action or proceeding in equity or
at law or otherwise, whether for the specific performance of any covenant or
agreement contained in this Agreement or in aid of the execution of any power
granted in this Agreement or for the enforcement of any other legal, equitable
or other remedy as the Trustee, being advised by counsel, shall deem most
effectual to protect and enforce any of the rights of the Trustee or any Series
of Certificates.
(b) Nothing herein contained shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any
Certificateholder any plan of reorganization, arrangement, adjustment or
composition affecting the Certificates or the rights
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of any Holder thereof, or to authorize the Trustee to vote in respect of the
claim of any Certificateholder in any such proceeding.
Section 11.14. RIGHTS OF CERTIFICATEHOLDERS TO DIRECT TRUSTEE.
Holders of Investor Certificates evidencing more than 50% of the Aggregate
Investor Amount (or, with respect to any remedy, trust or power that does not
relate to all Series, 50% of the aggregate Investor Amount of all Series to
which such remedy, trust or power relates) shall have the right to direct the
time, method, and place of conducting any proceeding for any remedy available to
the Trustee, or exercising any trust or power conferred on the Trustee;
PROVIDED, HOWEVER, that, subject to Section 11.01, the Trustee shall have the
right to decline to follow any such direction if the Trustee being advised by
counsel determines that the action so directed may not lawfully be taken, or if
the Trustee in good faith shall, by a Responsible Officer or Responsible
Officers of the Trustee, determine that the proceedings so directed would be
illegal or involve it in personal liability or be unduly prejudicial to the
rights of Certificateholders not parties to such direction; and PROVIDED
FURTHER, that nothing in this Agreement shall impair the right of the Trustee to
take any action deemed proper by the Trustee and which is not inconsistent with
such direction of such Holders of Investor Certificates.
Section 11.15. REPRESENTATIONS AND WARRANTIES OF TRUSTEE. The
Trustee represents and warrants as of each Closing Date that:
(a) the Trustee is a banking corporation organized, existing and
authorized to engage in the business of banking under the laws of the State of
New York.
(b) the Trustee has full power, authority and right to execute,
deliver and perform this Agreement and each Supplement, and has taken all
necessary action to authorize the execution, delivery and performance by it of
this Agreement and each Supplement; and
(c) this Agreement and each Supplement has been duly executed and
delivered by the Trustee.
Section 11.16. MAINTENANCE OF OFFICE OR AGENCY. The Trustee will
maintain at its expense an office or agency (the "Corporate Trust Office") where
notices and demands to or upon the Trustee in respect of the Certificates and
this Agreement may be served (a) in the Borough of Manhattan, the City of New
York, in the case of Registered Certificates and Holders thereof, and (b) in
London or Luxembourg, in the case of Bearer Certificates and Holders thereof, if
and for so long as any Bearer Certificates are outstanding. The Corporate Trust
Office shall initially be located at 101 Barclay Street, New York, New York
10286. The Trustee will give prompt notice to the Servicer and to Investor
Certificateholders of any change in the location of the Certificate Register or
any such office or agency.
[END OF ARTICLE XI]
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ARTICLE XII
TERMINATION
Section 12.01. TERMINATION OF TRUST. The Trust and the respective
obligations and responsibilities of the Transferor, the Servicer and the Trustee
created hereby (other than the obligation of the Trustee to make payments to
Investor Certificateholders as hereinafter set forth) shall terminate, except
with respect to the duties described in Sections 7.04, 8.04 and 12.02(b), upon
the earliest of (i) January 1, 2044, (ii) the day following the payment date on
which the Investor Amount and the Enhancement Investor Amount, if any, for each
Series is zero (provided that the Transferor has delivered a written notice to
the Trustee electing to terminate the Trust) and (iii) the time provided in
subsection 9.02(b).
Section 12.02. FINAL DISTRIBUTION.
(a) The Servicer shall give the Trustee at least 30 days' prior
notice of the payment date on which the Investor Certificateholders of any
Series or Class may surrender their Investor Certificates for payment of the
final distribution on and cancellation of such Investor Certificates (or, in the
event of a final distribution resulting from the application of Sections 2.06,
9.02 or 10.01, notice of such payment date promptly after the Servicer has
determined that a final distribution will occur, if such determination is made
less than 30 days prior to such payment date). Such notice shall be accompanied
by an Officer's Certificate setting forth the information specified in Section
3.05 covering the period during the then-current calendar year through the date
of such notice. Not later than the fifth day of the month in which the final
distribution in respect of such Series or Class is payable to Investor
Certificateholders, the Trustee shall provide notice to Investor
Certificateholders of such Series or Class specifying (i) the date upon which
final payment of such Series or Class will be made upon presentation and
surrender of Investor Certificates of such Series or Class at the office or
offices therein designated, (ii) the amount of any such final payment and (iii)
that the Record Date otherwise applicable to such payment date is not
applicable, payments being made only upon presentation and surrender of such
Investor Certificates at the office or offices therein specified (which, in the
case of Bearer Certificates, shall be outside the United States). The Trustee
shall give such notice to the Transfer Agent and Registrar and the Paying Agent
at the time such notice is given to Investor Certificateholders.
(b) Notwithstanding a final distribution to the Investor
Certificateholders of any Series or Class (or the termination of the Trust),
except as otherwise provided in this paragraph, all funds then on deposit in the
Collection Account and any Series Account allocated to such Investor
Certificateholders shall continue to be held in trust for the benefit of such
Investor Certificateholders and the Paying Agent or the Trustee shall pay such
funds to such Investor Certificateholders upon surrender of their Investor
Certificates (and any excess shall be paid in accordance with the terms of any
relevant Enhancement Agreement). In the event that all such Investor
Certificateholders shall not surrender their Investor Certificates for
cancellation within six months after the date specified in the notice from the
Trustee described in paragraph (a), the Trustee shall give a second notice to
the remaining such Investor Certificateholders to surrender their Investor
Certificates for cancellation and receive the final distribution with respect
thereto
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(which surrender and payment, in the case of Bearer Certificates, shall be
outside the United States). If within one year after the second notice all such
Investor Certificates shall not have been surrendered for cancellation, the
Trustee may take appropriate steps, or may appoint an agent to take appropriate
steps, to contact the remaining such Investor Certificateholders concerning
surrender of their Investor Certificates, and the cost thereof shall be paid out
of the funds in the Collection Account or any Series Account held for the
benefit of such Investor Certificateholders. The Trustee and the Paying Agent
shall pay to the Transferor any monies held by them for the payment of principal
or interest that remains unclaimed for two years. After payment to the
Transferor, Investor Certificateholders entitled to the money must look to the
Transferor for payment as general creditors unless an applicable abandoned
property law designates another Person.
(c) In the event that the Investor Amount with respect to any Series
is greater than zero on its Series Termination Date or such earlier date as is
specified in the related Supplement (after giving effect to deposits and
distributions otherwise to be made on such date), the Trustee will sell or cause
to be sold on such Series Termination Date, in accordance with the procedures
and subject to the conditions described in such Supplement, Principal
Receivables and the related Finance Charge Receivables (or interests therein) in
an amount equal to 100% of the Investor Amount and accrued and unpaid interest
thereon with respect to such Series on such date (after giving effect to such
deposits and distributions; PROVIDED, HOWEVER, that in no event shall such
amount exceed such Series' Percentages of Receivables on such Series Termination
Date). The proceeds from any such sale shall be allocated and distributed in
accordance with the terms of the applicable Supplement.
Section 12.03. TRANSFEROR'S TERMINATION RIGHTS. Upon the
termination of the Trust pursuant to Section 12.01 and the surrender of the
Transferor Certificates, the Trustee shall sell, assign and convey to the
Holders of the Transferor Certificates or their designee, without recourse,
representation or warranty, all right, title and interest of the Trust in the
Receivables, whether then existing or thereafter created, all monies due or to
become due and all amounts received with respect thereto and all proceeds
thereof, except for amounts held by the Trustee pursuant to subsection 12.02(b).
The Trustee shall execute and deliver such instruments of transfer and
assignment, in each case without recourse, as shall be reasonably requested by
the Transferor to vest in the Holders of the Transferor Certificates or any of
their designees all right, title and interest which the Trust had in the
Receivables and such other related assets.
Section 12.04. DEFEASANCE. Notwithstanding anything to the contrary
in this Agreement or any Supplement:
(a) The Transferor may at its option be discharged from its
obligations hereunder with respect to any Series or all outstanding Series (the
"Defeased Series") on the date the applicable conditions set forth in subsection
12.04(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 the Holders of Investor Certificates of the Defeased Series to
receive, solely from the trust fund provided for in subsection 12.04(c),
payments in respect of principal of and interest on such Investor Certificates
when such payments are due; (ii) the Transferor's obligations with respect
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to such Certificates under Sections 6.04 and 6.05; (iii) the rights, powers,
trusts, duties, and immunities of the Trustee, the Paying Agent and the
Registrar hereunder; and (iv) this Section 12.04.
(b) Subject to subsection 12.04(c), the Transferor at its option may
cause Collections allocated to the Defeased Series and available to purchase
additional Receivables to be applied to purchase Eligible Investments rather
than additional Receivables.
(c) The following shall be the conditions to Defeasance under
subsection 12.04(a):
(i) the Transferor irrevocably shall have deposited or
caused to be deposited with the Trustee (such deposit to be made from
other than the Transferor's or any Affiliate of the Transferor's
funds), under the terms of an irrevocable trust agreement in form and
substance satisfactory to the Trustee, as trust funds in trust for
making the payments described below, (A) Dollars in an amount, or (B)
Eligible 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 (without
relying on income or gain from reinvestment of such amount), and
which shall be applied by the Trustee to pay and discharge, all
remaining scheduled interest and principal payments on all
outstanding Investor Certificates of the Defeased Series on the dates
scheduled for such payments in this Agreement and the applicable
Supplements and all amounts owing to the Series Enhancers with
respect to the Defeased Series;
(ii) a statement from a firm of nationally recognized
independent public accountants (who may also render other services to
the Transferor) to the effect that such deposit is sufficient to pay
the amounts specified in clause (i) above;
(iii) prior to its first exercise of its right pursuant to
this Section 12.04 with respect to a Defeased Series to substitute
money or Eligible Investments for Receivables, if any Series of
Investor Certificates are outstanding that were characterized as debt
at the time of their issuance, the Transferor shall have delivered to
the Trustee an Opinion of Counsel to the effect that such deposit and
termination of obligations will not cause the Trust to be an
association or publicly traded partnership taxable as a corporation,
and (in any case) an Opinion of Counsel to the effect that (A) 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 (B) if the Transferor's
short-term deposit or long-term unsecured debt obligations are not
rated at least P-3 or Baa3, respectively, by Moody's, such deposit
and termination of obligations would not be a fraudulent conveyance
(based in reliance on certain certificates to the effect that the
Receivables and termination of obligations constitute fair value for
consideration paid therefor and as to the solvency of the
Transferor);
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(iv) the Transferor shall have delivered to the Trustee an
Officer's Certificate of the Transferor stating the 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 cause a Pay Out Event or Reinvestment Event
with respect to any Series or any event that, with the giving of
notice or the lapse of time, would result in the occurrence of a Pay
Out Event with respect to any Series; and
(v) the Rating Agency Condition shall have been satisfied
and the Transferor shall have delivered copies of such written notice
to the Servicer and the Trustee.
Section 12.05. OPTIONAL PURCHASE.
(a) If so provided in any Supplement, the Transferor may, but shall
not be obligated to, cause a final distribution to be made in respect of the
related Series of Investor Certificates on a specified Distribution Date or when
the Investor Amount reaches a specified level or under any circumstances
specified in such Supplement by depositing into the Collection Account or the
applicable Series Account, not later than the Transfer Date preceding such
Distribution Date, for application in accordance with Section 12.02, the amount
specified in such Supplement; PROVIDED, HOWEVER that if the short-term deposits
or long-term unsecured debt obligations of the Transferor are not rated at the
time of such purchase of Receivables at least P-3 or Baa3, respectively, by
Moody's, no such event shall occur unless the Transferor shall deliver an
Opinion of Counsel reasonably acceptable to the Trustee that such deposit into
the Collection Account or any Series Account as provided in the related
Supplement would not constitute a fraudulent conveyance of the Transferor (based
in reliance on certificates to the effect that the Receivables constitute fair
value for consideration paid therefor and as to the solvency of the Transferor).
(b) The amount deposited pursuant to subsection 12.05(a) shall be
paid to the Investor Certificateholders of the related Series pursuant to
Section 12.02 on the related Distribution Date following the date of such
deposit. All Certificates of a Series which are purchased by the Transferor
pursuant to subsection 12.05(a) shall be delivered by the Transferor upon such
purchase to, and be cancelled by, the Transfer Agent and Registrar and be
disposed of in a manner satisfactory to the Trustee and the Transferor. The
Investor Amount of each Series which is purchased by the Transferor pursuant to
subsection 12.05(a) shall, for the purposes of the definitions of "Series
Invested Amount" and "Transferor Amount," be deemed to be equal to zero on the
Distribution Date following the making of the deposit, and the Transferor Amount
shall thereupon be deemed to have been increased by the Series Invested Amount
of such Series.
[END OF ARTICLE XII]
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ARTICLE XIII
MISCELLANEOUS PROVISIONS
Section 13.01. AMENDMENT; WAIVER OF PAST DEFAULTS.
(a) This Agreement or any Supplement may be amended from time to time
(including in connection with (x) the provision of additional Series Enhancement
for the benefit of the Certificateholders of any Series (or the reduction of
such Series Enhancement), (y) the addition of a Participation Interest to the
Trust or (z) the designation of an Additional Transferor) by the Servicer, the
Transferor (including, if applicable, any Additional Transferor being
designated) and the Trustee without the consent of any of the
Certificateholders, PROVIDED that (i) the Transferor shall have delivered to the
Trustee an Officer's Certificate to the effect that the Transferor reasonably
believes that such action will not have an Adverse Effect and (ii) the Rating
Agency Condition shall have been satisfied with respect to any such amendment.
In addition, this Agreement or any Supplement may be amended from time to time
under this subsection 13.01(a) by the parties hereto if the provisions set forth
in clause (i) of the preceding sentence are satisfied, but without notice to or
the consent of the Certificateholders and without satisfaction of the Rating
Agency Condition, for any one or more of the following purposes: (A) to enable
all or a portion of the Trust to qualify as, and to permit an election to be
made to cause the Trust to be treated as a "financial asset securitization
investment trust" under the 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), (B) to enable the Trust to
qualify as a partnership for purposes of any state tax laws (including any
amendment to Section 9.02 to read in its entirety substantially as set forth in
Exhibit H hereto),
(b) This Agreement or any Supplement may also be amended from time to
time by the Servicer, the Transferor and the Trustee, with the consent of the
Holders of Investor Certificates evidencing not less than 66-2/3% of the
aggregate Investor Amount of the Investor Certificates of all adversely affected
Series, 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 of
modifying in any manner the rights of the Certificateholders; PROVIDED, HOWEVER,
that no such amendment shall (i) reduce in any manner the amount of or delay the
timing of any distributions to be made to Investor Certificateholders or
deposits of amounts to be so distributed or the amount available under any
Series Enhancement without the consent of each affected Certificateholder, (ii)
change the definition of or the manner of calculating the interest of any
Investor Certificateholder without the consent of each affected Investor
Certificateholder, (iii) reduce the aforesaid percentage required to consent to
any such amendment without the consent of each Investor Certificateholder or
(iv) adversely affect the rating of any Series or Class by each Rating Agency
without the consent of the Holders of Investor Certificates of such Series or
Class evidencing not less than 66-2/3% of the aggregate Investor Amount of the
Investor Certificates of such Series or Class. Any amendment to be effected
pursuant to this paragraph shall be deemed not to adversely affect any
outstanding Series with respect to which the Transferor shall deliver an Opinion
of Counsel, addressed and delivered to the Trustee, that such action will not,
in such counsel's reasonable opinion, have an Adverse Effect with respect to
such Series. The Trustee may, but shall not be obligated to,
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enter into any such amendment which affects the Trustee's rights, duties or
immunities under this Agreement or otherwise.
(c) Promptly after the execution of any such amendment or consent
(other than an amendment pursuant to paragraph (a)), the Trustee shall furnish
notification of the substance of such amendment to each Investor
Certificateholder, and the Servicer shall furnish notification of the substance
of such amendment to each Rating Agency.
(d) It shall not be necessary for the consent of Investor
Certificateholders under this Section 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 Certificateholders shall be
subject to such reasonable requirements as the Trustee may prescribe.
(e) Any Supplement executed in accordance with the provisions of
subsection 6.03(b) shall not be considered an amendment to this Agreement for
the purposes of this Section.
(f) The Holders of Investor Certificates evidencing more than
66-2/3% of the aggregate Investor Amount of the Investor Certificates of each
Series, or with respect to any Series with two or more Classes, of each Class
(or with respect to any default that does not relate to all Series, 66-2/3% of
the aggregate Investor Amount of the Investor Certificates of each Series to
which such default relates or, with respect to any such Series with two or more
Classes, of each Class) may, on behalf of all Certificateholders, waive any
default by the Transferor or the Servicer in the performance of their
obligations hereunder and its consequences, except the failure to make any
distributions required to be made to Investor Certificateholders or to make any
required deposits of any amounts to be so distributed. 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 thereto except to the extent expressly so waived.
Section 13.02. PROTECTION OF RIGHT, TITLE AND INTEREST TO TRUST.
(a) The Servicer shall cause this Agreement, all amendments and
supplements hereto and all financing statements and continuation statements and
any other necessary documents covering the Certificateholders' and the Trustee's
right, title and interest to the Trust to be promptly recorded, registered and
filed, and at all times to be kept recorded, registered and filed, all in such
manner and in such places as may be required by law fully to preserve and
protect the right, title and interest of the Certificateholders and the Trustee
hereunder to all property comprising the Trust. The Servicer shall deliver to
the Trustee file-stamped copies of, or filing receipts for, any document
recorded, registered or filed as provided above, as soon as available following
such recording, registration or filing. The Transferor shall cooperate fully
with the Servicer in connection with the obligations set forth above and will
execute any and all documents reasonably required to fulfill the intent of this
paragraph.
(b) Within 30 days after any Transferor makes any change in its name,
identity or corporate structure which would make any financing statement or
continuation statement filed
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in accordance with paragraph (a) seriously misleading within the meaning of
Section 9-402(7) (or any comparable provision) of the UCC, such Transferor shall
give the Trustee notice of any such change and shall file such financing
statements or amendments as may be necessary to continue the perfection of the
Trust's security interest in the Receivables and the proceeds thereof.
(c) Each Transferor and the Servicer will give the Trustee prompt
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 perfect or to continue
the perfection of the Trust's security interest in the Receivables and the
proceeds thereof. Each Transferor and the Servicer will at all times maintain
each office from which it services Receivables and its principal executive
offices within the United States.
(d) The Servicer will deliver to the Trustee: (i) upon the execution
and delivery of each amendment of this Agreement or any Supplement, an Opinion
of Counsel to the effect specified in Exhibit G-1; (ii) on each Addition Date on
which any Additional Accounts (other than Automatic Additional Accounts) are to
be designated as Accounts pursuant to subsections 2.09(a) or (b) and on each
date specified in subsection 2.09(d)(iii) with respect to the designation of
Automatic Additional Accounts as Accounts, an Opinion of Counsel substantially
in the form of Exhibit G-2, and on each Addition Date on which any Participation
Interests are to be included in the Trust pursuant to subsections 2.09(a) or
(b), an Opinion of Counsel covering the same substantive legal issues addressed
by Exhibit G-2 but conformed to the extent appropriate to relate to
Participation Interests; and (iii) on or before March 31, of each year,
beginning with March 31, 1999, an Opinion of Counsel substantially in the form
of Exhibit G-2.
Section 13.03. LIMITATION ON RIGHTS OF CERTIFICATEHOLDERS.
(a) The death or incapacity of any Certificateholder shall not
operate to terminate this Agreement or the Trust, nor shall such death or
incapacity entitle such Certificateholders' 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 Investor Certificateholder shall have any right to vote
(except as expressly provided in this Agreement) 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 Investor
Certificateholders from time to time as partners or members of an association,
nor shall any Investor Certificateholder be under any liability to any third
person by reason of any action taken by the parties to this Agreement pursuant
to any provision hereof.
(c) No Investor Certificateholder shall have any right by virtue of
any provisions of this Agreement to institute any suit, action or proceeding in
equity or at law upon or under or with respect to this Agreement, unless such
Investor Certificateholder previously shall have
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made, and unless the Holders of Investor Certificates evidencing more than 50%
of the aggregate unpaid principal amount of all Investor Certificates (or, with
respect to any such action, suit or proceeding that does not relate to all
Series, 50% of the aggregate unpaid principal amount of the Investor
Certificates of all Series to which such action, suit or proceeding relates)
shall have made, a request to the Trustee to institute such action, suit or
proceeding in its own name as Trustee hereunder and shall have offered to the
Trustee such reasonable indemnity as it may require against the costs, expenses
and liabilities to be incurred therein or thereby, and the Trustee, for 60 days
after such 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 Investor Certificateholder with every
other Investor Certificateholder and the Trustee, that no one or more Investor
Certificateholders shall have any 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 Investor
Certificates, or to obtain or seek to obtain priority over or preference to any
other such Investor Certificateholder, or to enforce any right under this
Agreement, except in the manner herein provided and for the equal, ratable and
common benefit of all Investor Certificateholders except as otherwise expressly
provided in this Agreement. For the protection and enforcement of the
provisions of this Section, each and every Investor Certificateholder and the
Trustee shall be entitled to such relief as can be given either at law or in
equity.
SECTION 13.04. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 13.05. NOTICES; PAYMENTS.
(a) All demands, notices, instructions, directions and communications
(collectively, "Notices") under this Agreement shall be in writing and shall be
deemed to have been duly given if personally delivered at, mailed by registered
mail, return receipt requested, or sent by facsimile transmission (i) in the
case of the Transferor or the Servicer, to
____________________________________________________________, (ii) in the case
of the Trustee, to The Bank of New York, 101 Barclay Street, 21 West, New York,
New York 10286, Attention: Corporate Trust Department -- Trustee, (iii) in the
case of Moody's, to 99 Church Street, New York, New York 10007, Attn: ABS
Monitoring Department, 4th Floor (facsimile no. 212-553-4600), (iv) in the case
of Standard & Poor's, to 26 Broadway, New York, New York 10004, Attn: Asset
Backed Group, 15th Floor (facsimile no. 212-412-0323), (v) in the case of the
Paying Agent or the Transfer Agent and Registrar, to
__________________________________________________ and (vi) to any other Person
as specified in any Supplement; or, as to each party, at such other address or
facsimile number as shall be designated by such party in a written notice to
each other party.
(b) Any Notice required or permitted to be given to a Holder of
Registered Certificates shall be given by first-class mail, postage prepaid, at
the address of such Holder as shown in the Certificate Register. No Notice
shall be required to be mailed to a Holder of Bearer Certificates or Coupons but
shall be given as provided below. Any Notice so mailed
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within the time prescribed in this Agreement shall be conclusively presumed to
have been duly given, whether or not the Investor Certificateholder receives
such Notice. In addition, (a) if and so long as any Series or Class is listed
on the Luxembourg Stock Exchange and such Exchange shall so require, any Notice
to Investor Certificateholders shall be published in an Authorized Newspaper of
general circulation in Luxembourg within the time period prescribed in this
Agreement and (b) in the case of any Series or Class with respect to which any
Bearer Certificates are outstanding, any Notice required or permitted to be
given to Investor Certificateholders of such Series or Class shall be published
in an Authorized Newspaper within the time period prescribed in this Agreement.
Section 13.06. RULE 144A INFORMATION. For so long as any of the
Investor Certificates of any Series or Class are "restricted securities" within
the meaning of Rule 144(a)(3) under the Act, each of the Transferor, the
Trustee, the Servicer and any Series Enhancer agree to cooperate with each other
to provide to any Investor Certificateholders of such Series or Class and to any
prospective purchaser of Certificates designated by such an Investor
Certificateholder, upon the request of such Investor Certificateholder or
prospective purchaser, any information required to be provided to such holder or
prospective purchaser to satisfy the condition set forth in Rule 144A(d)(4)
under the Act.
Section 13.07. 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 provisions shall be deemed
severable from the remaining provisions of this Agreement and shall in no way
affect the validity or enforceability of the remaining provisions or of the
Certificates or the rights of the Certificateholders.
Section 13.08. ASSIGNMENT. Notwithstanding anything to the contrary
contained herein, except as provided in Section 8.02, this Agreement may not be
assigned by the Servicer without the prior consent of Holders of Investor
Certificates evidencing not less than 66-2/3% of the Aggregate Investor Amount.
Section 13.09. CERTIFICATES NONASSESSABLE AND FULLY PAID. It is the
intention of the parties to this Agreement that the Certificateholders shall not
be personally liable for obligations of the Trust, that the interests in the
Trust represented by the Certificates shall be nonassessable for any losses or
expenses of the Trust or for any reason whatsoever and that Certificates upon
authentication thereof by the Trustee pursuant to Section 6.02 are and shall be
deemed fully paid.
Section 13.10. FURTHER ASSURANCES. The Transferor and the Servicer
agree to do and perform, from time to time, any and all acts and to execute any
and all further instruments required or reasonably requested by the Trustee more
fully to effect the purposes of this Agreement, including 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 13.11. NONPETITION COVENANT. Notwithstanding any prior
termination of this Agreement, the Servicer, the Trustee, each Transferor, each
Series Enhancer and each Holder of a Transferor Certificate shall not, prior to
the date which is one year and one day
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after the termination of this Agreement with respect to the Trust, acquiesce,
petition or otherwise invoke or cause the Trust to invoke the process of any
Governmental Authority for the purpose of commencing or sustaining a case
against the Trust under any Federal or state bankruptcy, insolvency or similar
law or appointing a receiver, liquidator, assignee, trustee, custodian,
sequestrator or other similar official of the Trust or any substantial part of
its property or ordering the winding-up or liquidation of the affairs of the
Trust.
Section 13.12. NO WAIVER; CUMULATIVE REMEDIES. No failure to
exercise and no delay in exercising, on the part of the Trustee or the
Certificateholders, any right, remedy, power or privilege under this Agreement
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right, remedy, power or privilege under this Agreement preclude any other or
further exercise thereof or the exercise of any other right, remedy, power or
privilege. The rights, remedies, powers and privileges provided under this
Agreement are cumulative and not exhaustive of any rights, remedies, powers and
privileges provided by law.
Section 13.13. 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 13.14. THIRD-PARTY BENEFICIARIES. This Agreement will inure
to the benefit of and be binding upon the parties hereto, the
Certificateholders, any Series Enhancer (to the extent provided in this
Agreement and the related Supplement) and their respective successors and
permitted assigns. Except as otherwise expressly provided in this Agreement, no
other Person will have any right or obligation hereunder.
Section 13.15. ACTIONS BY CERTIFICATEHOLDERS. (a) Wherever in
this Agreement a provision is made that an action may be taken or a Notice
given by Certificateholders, such action or Notice may be taken or given by
any Certificateholder, unless such provision requires a specific percentage
of Certificateholders.
(b) Any Notice, request, authorization, direction, consent, waiver or
other act by the Holder of a Certificate shall bind such Holder and every
subsequent Holder of such Certificate and of any Certificate issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof in
respect of anything done or omitted to be done by the Trustee or the Servicer in
reliance thereon, whether or not notation of such action is made upon such
Certificate.
Section 13.16. MERGER AND INTEGRATION. Except as specifically
stated otherwise herein, this Agreement sets forth the entire understanding of
the parties relating to the subject matter hereof, and all prior understandings,
written or oral, are superseded by this Agreement. This Agreement may not be
modified, amended, waived or supplemented except as provided herein.
Section 13.17. HEADINGS. The headings herein are for purposes of
reference only and shall not otherwise affect the meaning or interpretation of
any provision hereof.
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<PAGE>
Section 13.18. CONSTRUCTION OF AGREEMENT. The Transferor hereby
grants a security interest to (i) the Trustee for the benefit of the
Certificateholders and (ii) any Series Enhancer to the extent of the Enhancement
Investor Amount, if any, provided for in the relevant Supplement (which
interest, in the case of any Series Enhancer will be subordinated to the
interest of the Investor Certificateholders), in all of the Transferor's right,
title and interest in, to and under the Receivables now existing and hereafter
created, all monies due or to become due and all amounts received with respect
thereto and all "proceeds" thereof and any other Trust Assets, to secure all the
Transferor's and Servicer's obligations hereunder, including, without
limitation, the Transferor's obligation to sell or transfer Receivables
hereafter created to the Trust and the Servicer's obligation to remit
Collections hereunder (collectively, the "Obligations"). This Agreement shall
constitute a security agreement under applicable law.
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<PAGE>
IN WITNESS WHEREOF, the Transferor, the Servicer and the Trustee have
caused this Agreement to be duly executed by their respective officers as of the
day and year first above written.
CC CREDIT CARD CORPORATION,
Transferor,
by ____________________________
Name:
Title:
THE TRAVELERS BANK,
Servicer,
by _____________________________
Name:
Title:
THE BANK OF NEW YORK,
Trustee,
by _____________________________
Name:
Title:
[Signature page to the Pooling and Servicing Agreement]
<PAGE>
Exhibit H
AMENDED PROVISIONS FOR SECTION 9.02
Section 9.02. RIGHTS UPON THE OCCURRENCE OF AN INSOLVENCY EVENT.
(a) If the Transferor causes an Insolvency Event to occur with
respect to the Transferor or if an Insolvency Event otherwise occurs with
respect to the Transferor, the Transferor shall on the day any such Insolvency
Event occurs (the "APPOINTMENT DATE") immediately cease to transfer Principal
Receivables to the Trust and shall promptly give notice to the Trustee thereof.
Notwithstanding any cessation of the transfer to the Trust of additional
Principal Receivables transferred to the Trust prior to the occurrence of such
Insolvency event and Collections in respect of such Principal Receivables and
Finance Charge Receivables, whenever created, accrued in respect of such
Principal receivables shall continue to be a part of the Trust Assets. Upon the
Appointment Date, this Agreement and the Trust shall terminate, subject to the
liquidation, winding-up, insolvency, bankruptcy, reorganization and dissolution
procedures described below. Within 15 days of the Appointment Date, the Trustee
shall (i) publish a notice in an Authorized Newspaper that an Insolvency Event
has occurred, that the Trust has terminated and that the Trustee intends to
sell, dispose of or otherwise liquidate the Receivables on commercially
reasonable terms and in a commercially reasonable manner and (ii) give notice to
Certificateholders describing the provisions of this Section and requesting
instructions from such Holders. Unless the Trustee shall have received
instructions within 90 days from the date notice pursuant to clause (i) above is
first published from (x) Holders of Investor Certificates evidencing more than
50% of the aggregate unpaid principal amount of each Series or, with respect to
any Series with two or more Classes, of each Class, (y) each Transferor (other
than a Transferor that is the subject of such Insolvency Event), including any
Additional Transferor and any Holder of a Supplemental Certificate and any
permitted assignee or successor under Section 7.02, and (z) any other Person
specified in any related Supplement to the effect that such Persons disapprove
of the liquidation of the Receivables and wish to reconstitute the Trust
pursuant to the terms of this Agreement (as amended in connection with such
reconstitution), the Trustee shall promptly sell, dispose of or otherwise
liquidate the Receivables in a commercially reasonable manner and on
commercially reasonable terms, which may include the solicitation of competitive
bids. The Trustee may obtain a prior determination from any such conservator,
receiver or liquidator of a Transferor that the terms and manner of any proposed
sale, disposition or liquidation are commercially reasonable. The provisions of
this Section 9.02 and any provisions in a Supplement regarding an Insolvency
Event shall not be deemed to be mutually exclusive.
(b) The proceeds from the sale, disposition or liquidation of the
Receivables and any Participation Interests pursuant to paragraph (a)
("INSOLVENCY PROCEEDS") shall be immediately deposited in the Collection
Account. The Trustee shall determine conclusively the amount of the Insolvency
Proceeds which are deemed to be Finance Charge Receivables and Principal
Receivables, allocating Insolvency Proceeds to Finance Charge Receivables and
Principal Receivables in the same proportion as the amount of Finance Charge
Receivables and Principal Receivables bear to one another on the prior
Determination Date. The Insolvency Proceeds shall
H-1
<PAGE>
be allocated and distributed to Investor Certificateholders in accordance with
the terms of each Supplement.
H-2
<PAGE>
Exhibit 4.2
OH&S DRAFT
11/13/97
[FORM OF SERIES SUPPLEMENT]
---------------------------------------------------------
CC CREDIT CARD CORPORATION
Transferor
THE TRAVELERS BANK
Servicer
and
THE BANK OF NEW YORK
Trustee
on behalf of the Series [__________] Holders
SERIES [__________] SUPPLEMENT
Dated as of __________ ____, 19____
to
POOLING AND SERVICING AGREEMENT
Dated as of __________ ____, 19____
TRAVELERS BANK CREDIT CARD MASTER TRUST I
SERIES [__________]
--------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I
Creation of the Series [__________] Certificates
Section 1.1 Designation............................................... 1
ARTICLE II
Definitions
Section 2.1. Definitions............................................... 2
ARTICLE III
Servicer and Trustee
Section 3.1. Servicing Compensation.................................... 17
ARTICLE IV
Rights of Series [__________] Certificateholders and Class C Interest
Holder and Allocation and Application of Collections
Section 4.1. Collections and Allocations............................... 17
Section 4.2 Determination of Monthly Interest......................... 20
Section 4.3. Determination of Monthly Principal........................ 21
Section 4.4. Required Amount........................................... 22
Section 4.5. Application of Class A Available Funds, Class B Available
Funds, Class C Available Funds and Available Investor
Principal Collections..................................... 24
Section 4.6. Default Amounts; Investor Charge-Offs..................... 26
Section 4.7. Excess Finance Charge Collections......................... 27
Section 4.8. Reallocated Principal Collections......................... 28
Section 4.10. Shared Principal Collections and Shared Transferor
Principal Collections..................................... 29
[Section 4.11. Determination of [LIBOR].................................. 30
Section 4.12. Principal Funding Account................................. 30
Section 4.13. Class A Accumulation Period............................... 32
Section 4.14. Reserve Account........................................... 32
[Section 4.15. Pre-Funding Account....................................... 34
[Section 4.16. Increases in Invested Amount.............................. 35
Section 4.18. Designation of Class C Interest Terms; Sale of Class C
Interests................................................. 35
i-
<PAGE>
TABLE OF CONTENTS
(continued)
Page
ARTICLE V
Distributions and Reports to Series [__________] Certificateholders
Section 5.1. Distributions............................................. 36
Section 5.2. Certificates and Statements............................... 37
ARTICLE VI
Additional Pay Out Events
Section 6.1. Additional Pay Out Events................................. 38
ARTICLE VII
Optional Repurchase; Series Termination
Section 7.1. Optional Repurchase....................................... 39
Section 7.2. Series Termination........................................ 39
ARTICLE VIII
Final Distributions
Section 8.1. Sale of Receivables or Certificateholders' Interest Pursuant to
Section 2.06 or 10.01 of the Agreement.................... 40
ARTICLE IX
Certificates
Section 9.1. Book-Entry Certificates................................... 41
Section 9.2. Uncertificated Securities................................. 41
ARTICLE X
Miscellaneous Provisions
Section 10.1. Ratification of Agreement................................. 42
Section 10.2. Counterparts.............................................. 42
Section 10.3. Governing Law............................................. 42
Section 10.4. Notices................................................... 42
Section 10.5. Amendments................................................ 42
ii-
<PAGE>
SERIES [__________] SUPPLEMENT, dated as of __________ ____, 199__ (the
"Supplement"), among CC CREDIT CARD CORPORATION, a Delaware corporation, as
Transferor, (the "Transferor"), THE TRAVELERS BANK, a Delaware state-chartered
banking corporation, as Servicer (the "Servicer"), and The Bank of New York, a
New York banking corporation, as Trustee (together with its sucessors in trust
thereunder as provided in the Pooling and Servicing Agreement referred to below,
the "Trustee") under the Pooling and Servicing Agreement dated as of __________
____, 199__ (the "Agreement") among the Transferor, the Servicer and the
Trustee.
PRELIMINARY STATEMENT
Pursuant to the Agreement, the Transferor has created the Travelers
Bank Master Credit Card Trust I (the "Trust"). Section 6.03 of the Agreement
provides that the Transferor may from timeto time direct the Trustee to
authenticate one or more new Series of Investor Certificates representing
fractional undivided interests in the Trust. The Principal Terms of any new
Series are due to be set forth in a Supplement to the Agreement.
Pursuant to this Supplement, the Transferor and the Trustee shall
create a new Series of Investor Certificates and specify the Principal Terms
thereof.
ARTICLE I
Creation of the Series [__________] Certificates
Section 1.1 Designation.
(a) There is hereby created a Series of Investor Certificates to be issued
pursuant to the Agreement and this Supplement to be known as "Travelers Bank
Credit Card Master Trust I, Series [__________]." The Series of Investor
Certificates created hereby shall be issued in three Classes. The first Class
shall be known as the "Class A [____%][Floating-Rate] Asset Backed Certificates,
Series [__________]," the second Class shall be known as the "Class B
[____%][Floating-Rate] Asset Backed Certificates, Series [__________]" and the
third Class shall be known as the "Class C [____%] [Floating-Rate] Asset Backed
Interests, Series [__________.]" Except as expressly provided herein, the Class
C Interests shall be deemed to be "Investor Certificates" for all purposes under
the Agreement and this Supplement and shall be in uncertificated form.
Notwithstanding anything to the contrary in the Agreement, (i) none of the Class
B Certificateholders or the Class C Interest Holders shall be considered a
Series Enhancer for Series [__________].
(b) Series [__________] shall be included in Group [One]. Series
[__________] shall be a Principal Sharing Series. Series [__________] shall be
an Excess Allocation Series with respect to Group [One] only. [Series
[__________] shall be entitled to share Excess Transferor Finance Charge
Collections and Shared Transferor Principal Collections.] Series [__________]
shall not be subordinated to any other Series. Notwithstanding any provision in
the Agreement or in this Supplement to the contrary, the first Distribution Date
with respect to Series [__________] shall be the _________ 1998 Distribution
Date, and references herein to the
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Monthly Period relating to the __________ 1998 Distribution Date shall mean the
period from the Closing Date through the end of ___________ 1998.
(c) In the event that any term or provision contained herein shall
conflict with or be inconsistent with any term or provision contained in the
Agreement, the terms and provisions of this Supplement shall govern.
(d) The Class C Interest Holders, as holder of an "Investor Certificate"
under the Agreement, shall be entitled to the benefits of the Agreement and this
Supplement. Notwithstanding the foregoing, except as expressly provided herein,
the provisions of Article VI and Article XII of the Agreement relating to the
registration, authentication, delivery, presentation, cancellation and surrender
of Registered Certificates and clauses (a) and (c) of the definition of "Tax
Opinion" in Section 1.01 of the Agreement shall not be applicable to the Class C
Interests.
ARTICLE II
Definitions
Section 2.1. Definitions
(a) Whenever used in this Supplement, the following words and phrases
shall have the following meanings, and the definitions of such terms are
applicable to the singular as well as the plural forms of such terms and the
masculine as well as the feminine and neuter genders of such terms.
"Additional Interest" shall mean, at any time of determination, the Class A
Additional Interest and the Class B Additional.
"Available Investor Principal Collections" shall mean, with respect to any
Monthly Period, an amount equal to the sum of (a) (i) an amount equal to the
Principal Allocation Percentage of all Collections of Principal Receivables
received during such Monthly Period, minus (ii) the amount of Reallocated
Principal Collections with respect to such Monthly Period which pursuant to
Section 4.8 are required to fund any deficiency in the amount to be distributed
pursuant to subsections 4.5(a)(i), (ii) and (iii) or subsectioins 4.5(b)(i) and
(ii) and subsection 4.7(d) for the related Distribution Date, plus (b) any
Shared Principal Collections with respect to other Principal Sharing Series [and
any Shared Transferor Principal Collections] that are allocated to Series
[__________] in accordance with Section 4.04 of the Agreement and subsection
4.10(a) hereof, plus (c) any other amounts which pursuant to subsection
4.5(a)(iii) (including any amounts allocated with respect thereto pursuant to
subsection 4.7(a)) and subsections 4.7(b), (d), (e), (h) and (i) hereof are to
be treated as Available Investor Principal Collections with respect to the
related Distribution Date or subsections 4.5(b)(i) and (ii) and subsection
4.7(d).
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<PAGE>
"Average Principal Balance" shall mean, for any Monthly Period in which an
Addition Date or Removal Date occurs, the weighted average of the sum of (i) the
product of the Principal Receivables in the Trust and one minus the Discount
Percentage and (ii) the principal amount on deposit in the Excess Funding
Account at the end of the day on the last day of the prior Monthly Period and
the sum of (i) the product of the Principal Receivables in the Trust and one
minus the Discount Percentage and (ii) the principal amount on deposit in the
Excess Funding Account at the end of the day on the related Addition Date or
Removal Date, weighted, respectively, by a fraction, the numerator of which is
the number of days from and including the first day of such Monthly Period, to
but excluding the related Addition Date or Removal Date, and the denominator of
which is the number of days in such Monthly Period, and by a fraction, the
numerator of which is the number of days from and including the related Addition
Date or Removal Date to and including the last day of such Monthly Period, and
the denominator of which is the number of days in such Monthly Period.
"Base Rate" shall mean, with respect to any Monthly Period, the annualized
percentage equivalent of a fraction, the numerator of which is equal to the sum
of the Class A Monthly Interest, the Class B Monthly Interest, the Class C
Monthly Interest and the Monthly Servicing Fee with respect to the related
Distribution Date and the denominator of which is the Investor Amount as of the
last day of the preceding Monthly Period.
"Book-Entry Register" shall mean the register maintained by the Trustee
providing for the registration of the Class C Interests and transfers thereof.
"Class A Accumulation Period" shall mean, unless a Pay Out Event with
respect to Series [__________] shall have occurred prior thereto, the period
commencing on the Controlled Accumulation Date or such later date as is
determined in accordance with Section 4.13 and ending on the first to occur of
(a) the commencement of the Rapid Amortization Period, (b) the payment in full
to the Class A Certificateholders of the Class A Investor Amount or (c) the
Series Termination Date.
"Class A Accumulation Period Length" shall have the meaning specified in
Section 4.13.
"Class A Additional Interest" shall have the meaning specified in
subsection 4.2(a).
"Class A Available Funds" shall mean, with respect to any Monthly Period,
an amount equal to the sum of (a) the Class A Floating Percentage of the
Collections of Finance Charge Receivables allocated to Series [__________]
(including any [investment earnings on amounts on deposit in the Pre-Funding
Account and any other] amounts that are to be treated as Collections of Finance
Charge Receivables in accordance with the Agreement), (b) the amount of
Principal Funding Investment Proceeds, if any, with respect to such Distribution
Date, and (c) the amount of funds, if any, to be withdrawn from the Reserve
Account which, pursuant to Section 4.14, are required to be included in Class A
Available Funds with respect to such Distribution Date.
"Class A Certificate Rate" shall mean, [____% of per annum] [from the
Closing Date through __________ ____, 199____, from __________ ____, 199____,
through __________
3
<PAGE>
____, 199____ and with respect to each Interest Period thereafter, a per annum
rate equal to [LIBOR] as determined on the related [LIBOR] Determination Date
for such Interest Period plus the Class A Certificate Rate Spread].
["Class A Certificate Rate Spread" shall mean ___% per annum.]
"Class A Certificateholder" shall mean the Person in whose name a Class A
Certificate is registered in the Certificate Register.
"Class A Certificates" shall mean any one of the Certificates executed by
the Transferor and authenticated by or on behalf of the Trustee, substantially
in the form of Exhibit A-1.
"Class A Expected Final Distribution Date" shall mean the _______ _____
Distribution Date.
"Class A Floating Percentage" shall mean, with respect to any Monthly
Period, the percentage equivalent (which percentage shall never exceed 100%) of
a fraction, the numerator of which is equal to the Class A Invested Amount as of
the close of business on the last day of the preceding Monthly Period and the
denominator of which is equal to the Invested Amount as of such day; provided,
however, that with respect to the first Monthly Period, the Class A Floating
Percentage shall mean the percentage equivalent of a fraction, the numerator of
which is the Class A Initial Invested Amount and the denominator of which is the
Initial Invested Amount.
"Class A Initial Invested Amount" shall mean $____________.
"Class A Initial Investor Amount" shall mean the aggregate initial
principal balance of the Class A Certificates, which is $_____________.
"Class A Interest Shortfall" shall have the meaning specified in subsection
4.2(a).
"Class A Invested Amount" shall mean, on any date of determination, an
amount equal to (a) the Class A Initial Invested Amount, [plus (b) the amount of
any increases in the Class A Invested Amount during the Funding Period pursuant
to Section 4.16 on or prior to such date,] minus (c) the aggregate amount of
principal payments [(other than principal payments made from amounts on deposit
in the Pre-Funding Account on the first Distribution Date following the end of
the Funding Period)] made to the Class A Certificateholders on or prior to such
date, minus (d) the excess, if any, of the aggregate amount of Class A Investor
Charge-Offs for all prior Distribution Dates over the aggregate amount of Class
A Investor Charge-Offs reimbursed pursuant to subsection 4.6(a) prior to such
date minus (e) the Principal Funding Account Balance.
"Class A Investor Amount" shall mean, on any date of determination, an
amount equal to the sum of (a) the Class A Invested Amount, [(b) the Class A
Floating Percentage of the Pre-Funded Amount] and (c) the Principal Funding
Account Balance.
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<PAGE>
"Class A Investor Charge-Off" shall have the meaning specified in
subsection 4.6(a).
"Class A Investor Default Amount" shall mean, with respect to each
Distribution Date, an amount equal to the product of (i) the Investor Default
Amount for the related Monthly Period and (ii) the Class A Floating Percentage
for such Monthly Period.
"Class A Monthly Interest" shall have the meaning specified in subsection
4.2(a).
"Class A Monthly Principal" shall have the meaning specified in subsection
4.3(a).
"Class A Penalty Rate" shall mean the sum of the Class A Certificate Rate
and ___% per annum.
"Class A Principal Percentage" shall mean, with respect to any Monthly
Period (i) during the Revolving Period, the percentage equivalent (which
percentage shall never exceed 100%) of a fraction, the numerator of which is the
Class A Invested Amount as of the last day of the immediately preceding Monthly
Period and the denominator of which is the Invested Amount as of such day and
(ii) during the Controlled Accumulation Period or the Rapid Amortization Period,
the percentage equivalent (which percentage shall never exceed 100%) of a
fraction, the numerator of which is the Class A Invested Amount as of the last
day of the Revolving Period, and the denominator of which is the Invested Amount
as of such last day; provided, however, that with respect to the first Monthly
Period, the Class A Principal Percentage shall mean the percentage equivalent of
a fraction, the numerator of which is the Class A Initial Invested Amount and
the denominator of which is the Initial Invested Amount.
"Class A Required Amount" shall have the meaning specified in subsection
4.4(a).
"Class A Servicing Fee" shall have the meaning specified in Section 3.1.
"Class B Accumulation Period" shall mean, unless a Pay Out Event with
respect to Series [__________] shall have occurred prior thereto, the period
commencing on the first day of the Monthly Period immediately preceding the
Class B Principal Commencement Date and ending on the first to occur thereafter
of (a) the commencement of the Rapid Amortization Period, (b) the payment in
full to the Class B Certificateholders of the Class B Invested Amount or (c) the
Series Termination Date.
"Class B Additional Interest" shall have the meaning specified in
subsection 4.2(b).
"Class B Available Funds" shall mean, with respect to any Monthly Period,
an amount equal to the Class B Floating Percentage of the Collections of Finance
Charge Receivables allocated to Series [__________] (including any [investment
earnings on amounts on deposit in the Pre-Funding Account and any other] amounts
that are to be treated as Collections of Finance Charge Receivables in
accordance with the Agreement).
"Class B Certificate Rate" shall mean, [___% per annum] [from the Closing
Date through __________ ____, 199____, from __________ ____, 199____ through
__________ _____,
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199____, and with respect to each Interest Period thereafter, a per annum rate
equal to [LIBOR] as determined on the related [LIBOR] Determination Date for
such Interest Period plus the Class B Certificate Rate Spread].
["Class B Certificate Rate Spread" shall mean ___% per annum.]
"Class B Certificateholder" shall mean the Person in whose name a Class B
Certificate is registered in the Certificate Register.
"Class B Certificates" shall mean any one of the Certificates executed by
the Transferor and authenticated by or on behalf of the Trustee, substantially
in the form of Exhibit A-2.
"Class B Expected Final Distribution Date" shall mean the _________ _____
Distribution Date.
"Class B Floating Percentage" shall mean, with respect to any Monthly
Period, the percentage equivalent (which percentage shall never exceed 100%) of
a fraction, the numerator of which is equal to the Class B Invested Amount as of
the close of business on the last day of the preceding Monthly Period and the
denominator of which is equal to the Invested Amount as of such day; provided,
however, that with respect to the first Monthly Period, the Class B Floating
Percentage shall mean the percentage equivalent of a fraction, the numerator of
which is the Class B Initial Invested Amount and the denominator of which is the
Initial Invested Amount.
"Class B Initial Invested Amount" shall mean $__________.
["Class B Initial Investor Amount" shall mean the aggregate initial
principal balance of the Class B Certificates, which is $___________.]
"Class B Interest Shortfall" shall have the meaning specified in subsection
4.2(b).
"Class B Invested Amount" shall mean, on any date of determination, an
amount equal to (a) the Class B Initial Invested Amount, [plus (b) the amount of
any increases in the Class B Invested Amount during the Funding Period pursuant
to Section 4.16 on or prior to such date,] minus (c) the aggregate amount of
principal payments [(other than principal payments made from amounts on deposit
in the Pre-Funding Account on the first Distribution Date following the end of
the Funding Period)] made to the Class B Certificateholders prior to such date
minus (d) the excess, if any, of the aggregate amount of Class B Investor
Charge-Offs for all prior Distribution Dates over the aggregate amount of any
reimbursement of Class B Investor Charge-Offs pursuant to subsection 4.6(b) for
all Distribution Dates preceding such date, minus (e) the amount of Reallocated
Principal Collections allocated on all prior Distribution Dates pursuant to
subsection 4.8(a) (excluding any Reallocated Principal Collections that have
resulted in a reduction in the Class C Invested Amount pursuant to subsection
4.6(c)), minus (f) an amount equal to the amount by which the Class B Invested
Amount has been reduced on all prior Distribution Dates pursuant to subsection
4.6(a) and plus (g) the amount of Excess Finance Charge Collections allocated
and available on all prior Distribution Dates pursuant to subsection
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4.7(e) for the purpose of reimbursing amounts deducted pursuant to the foregoing
clauses (d), (e) and (f); provided, however, that the Class B Invested Amount
shall not be reduced below zero.
["Class B Investor Amount" shall mean, for any date of determination, an
amount equal to the sum of (a) the Class B Invested Amount and (b) the Class B
Floating Percentage of the Pre-Funded Amount.]
"Class B Investor Charge-Off" shall have the meaning specified in
subsection 4.6(b).
"Class B Investor Default Amount" shall mean, with respect to each
Distribution Date, an amount equal to the product of (i) the Investor Default
Amount for the related Monthly Period and (ii) the Class B Floating Percentage
for such Monthly Period.
"Class B Monthly Interest" shall have the meaning specified in subsection
4.2(b).
"Class B Monthly Principal" shall have the meaning specified in subsection
4.3(b).
"Class B Penalty Rate" shall mean the sum of the Class B Certificate Rate
and ____% per annum.
"Class B Principal Commencement Date" shall mean the Distribution Date on
which the Class A Investor Amount is paid in full or on which the Principal
Funding Account Balance is equal to the Class A Investor Amount; provided, that
if the Class A Investor Amount is paid in full on the Class A Expected Final
Distribution Date and the Rapid Amortization Period has not commenced, the Class
B Principal Commencement Date shall mean the Class B Expected Final Distribution
Date.
"Class B Principal Percentage" shall mean, with respect to any Monthly
Period (i) during the Revolving Period, the percentage equivalent (which
percentage shall never exceed 100%) of a fraction, the numerator of which is the
Class B Invested Amount as of the last day of the immediately preceding Monthly
Period and the denominator of which is the Invested Amount as of such day and
(ii) during the Controlled Accumulation Period or the Rapid Amortization Period,
the percentage equivalent (which percentage shall never exceed 100%) of a
fraction, the numerator of which is the Class B Invested Amount as of the last
day of the Revolving Period, and the denominator of which is the Invested Amount
as of such last day; provided, however, that with respect to the first Monthly
Period, the Class B Principal Percentage shall mean the percentage equivalent of
a fraction, the numerator of which is the Class B Initial Invested Amount and
the denominator of which is the Initial Invested Amount.
"Class B Required Amount" shall have the meaning specified in subsection
4.4(b).
"Class B Servicing Fee" shall have the meaning specified in Section 3.1.
"Class C Available Funds" shall mean, with respect to any Monthly Period,
an amount equal to the Class C Floating Percentage of the Collections of Finance
Charge Receivables allocated to Series [__________] (including any [investment
earnings on amounts on deposit in
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<PAGE>
the Pre-Funding Account and any other] amounts that are to be treated as
Collections of Finance Charge Receivables in accordance with the Agreement).
"Class C Floating Percentage" shall mean, with respect to any Monthly
Period, the percentage equivalent (which percentage shall never exceed 100%) of
a fraction, the numerator of which is the Class C Invested Amount as of the
close of business on the last day of the preceding Monthly Period and the
denominator of which is equal to the Invested Amount as of such day; provided,
however, that with respect to the first Monthly Period, the Class C Floating
Percentage shall mean the percentage equivalent of a fraction, the numerator of
which is the Class C Initial Invested Amount and the denominator of which is the
Initial Invested Amount.
"Class C Initial Invested Amount" shall mean $__________.
["Class C Initial Investor Amount" shall mean the aggregate initial
principal balance of the Class C Interest, which is $__________.]
"Class C Interests" shall mean a fractional undivided interest in the Trust
which shall consist of the right to receive, to the extent necessary to make the
required payments to the Class C Interest Holder under this Supplement the
portion of Collections allocable thereto under the Agreement and this
Supplement, funds on deposit in the Collection Account allocable thereto
pursuant to the Agreement and this Supplement [and, funds on deposit in the
Pre-Funding Account].
"Class C Interest Holder" shall mean the Person in whose name a Class C
Interest is registered in the Book-Entry Register, which initially shall be the
Transferor.
"Class C Interest Rate" shall mean, with respect to each Interest Period, a
per annum rate equal to 0%; provided, however, that such interest rate may be
increased pursuant to the terms of a supplemental agreement entered into in
acordance with Section 4.17.
"Class C Invested Amount" shall mean, for any date of determination, an
amount equal to (a) the Class C Initial Invested Amount, [plus (b) the amount of
any increases in the Class C Invested Amount during the Funding Period pursuant
to Section 4.16 on or prior to such date,] minus (c) an amount equal to the
amount by which the Class C Invested Amount has been reduced on all prior
Distribution Dates pursuant to Section 4.6, minus (d) the aggregate amount paid
pursuant to subsections 4.5(d)(i) and 4.5(e)(iii) prior to such date, and plus
(e) the aggregate amount of Excess Finance Charge Collections allocated and
available on all prior Distribution Dates pursuant to subsection 4.7(i) for the
purpose of reimbursing amounts deducted pursuant to the foregoing clause (c);
provided, however, that the Class C Invested Amount shall not be reduced below
zero.
["Class C Investor Amount" shall mean, for any date of determination, an
amount equal to the sum of (a) the Class C Invested Amount and (b) the Class C
Floating Percentage of the Pre-Funded Amount.]
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<PAGE>
"Class C Investor Default Amount" shall mean, with respect to each
Distribution Date, an amount equal to the product of (i) the Investor Default
Amount for the related Monthly Period and (ii) the Class C Floating Percentage
for such Monthly Period.
"Class C Monthly Interest" shall mean the interest, if any, distributable
in respect of the Class C Interest as such interest may be calculated in a
supplemental agreement entered into in accordance with Section 4.17.
"Class C Monthly Principal" shall have the meaning specified in subsection
4.3(c).
"Class C Principal Percentage" shall mean, with respect to any Monthly
Period, a percentage (which shall never exceed 100% or be less than 0%) equal to
the difference between 100% and the sum of the Class A Principal Percentage and
the Class B Principal Percentage for such Monthly Period.
"Class C Servicing Fee" shall have the meaning specified in Section 3.1.
"Closing Date" shall mean __________ ____, 199____.
"Controlled Accumulation Amount" shall mean (a) for any Distribution Date
with respect to the Class A Accumulation Period, the maximum Class A Invested
Amount during the Revolving Period divided by twelve; provided, however, that,
if the Class A Accumulation Period is modified pursuant to Section 4.13, (i) the
Controlled Accumulation Amount for each Distribution Date with respect to the
Class A Accumulation Period shall mean the amount determined in accordance with
Section 4.13 on the date on which the Class A Accumulation Period has most
recently been modified and (ii) the sum of the Controlled Accumulation Amounts
for all Distribution Dates with respect to the modified Class A Accumulation
Period shall not be less than the maximum Class A Invested Amount during the
Revolving Period and (b) for any Distribution Date with respect to the Class B
Accumulation Period, the maximum Class B Invested Amount during the Revolving
Period.
"Controlled Accumulation Date" shall mean the close of business on
_____________ __, ________.
"Controlled Accumulation Period" shall mean the Class A Accumulation Period
and the Class B Accumulation Period.
""Controlled Deposit Amount" shall mean, for any Distribution Date with
respect to the Controlled Accumulation Period, an amount equal to the sum of the
Controlled Accumulation Amount for such Distribution Date and any Deficit
Controlled Accumulation Amount for the immediately preceding Distribution Date.
"Covered Amount" shall mean for any Distribution Date with respect to the
Class A Accumulation Period or the first Special Payment Date, if such Special
Payment Date occurs prior to the Class B Principal Commencement Date, an amount
equal to the product of (i) (A) a fraction, the numerator of which is the actual
number of days in the period from and including
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<PAGE>
the preceding Distribution Date to but excluding such Distribution Date and the
denominator of which is 360, times (B) the Class A Certificate Rate and (ii) the
Principal Funding Account Balance, if any, as of the preceding Distribution
Date.
"Deficit Controlled Accumulation Amount" shall mean (a) on the first
Distribution Date with respect to the Class A Accumulation Period or the Class B
Accumulation Period, the excess, if any, of the Controlled Accumulation Amount
for such Distribution Date over the amount distributed from the Collection
Account as Class A Monthly Principal or Class B Monthly Principal, as the case
may be, for such Distribution Date and (b) on each subsequent Distribution Date
with respect to the Class A Accumulation Period or the Class B Accumulation
Period, the excess, if any, of the Controlled Deposit Amount for such subsequent
Distribution Date over the amount distributed from the Collection Account as the
case may be, for such subsequent Distribution Date.
["Designated Maturity" shall mean, for any [LIBOR] Determination Date, one
month[; provided, that [LIBOR] for the initial Interest Period will be
determined by straight-line interpolation (based on the actual number of days in
the initial Interest Period) between the rates determined as described in
Section 4.11 for a Designated Maturity of one month and a Designated Maturity of
two months].]
"Excess finance Charge Collections" shall mean, for Series [____________]
and any Distribution Date, the sum of Excess Spread for such Distribution Date
and Excess Finance Charges [and Excess Transferor Finance Charge Collections]
allocated to Series [____________] for such Distribution Date.
"Excess Finance Charges" shall mean, for Series [__________] and any
Distribution Date, amounts allocated pursuant to Section 4.04 of the Agreement
to Series [__________] for such Distribution Date.
"Excess Spread" shall mean, with respect to any Distribution Date, the sum
of the amounts, if any, specified pursuant to subsections 4.5(a)(iv),
4.5(b)(iii) and 4.5(c)(ii) with respect to such Distribution Date.
"Finance Charge Shortfall" shall have the meaning specified in subsection
4.9(a).
"Fitch" shall mean Fitch Investors Service, L.P., or its successors.
"Floating Allocation Percentage" shall mean, with respect to any Monthly
Period, the percentage equivalent (which percentage shall never exceed 100%) of
a fraction, the numerator of which is the Invested Amount as of the last day of
the preceding Monthly Period (or with respect to the first Monthly Period, the
Initial Invested Amount) and the denominator of which is the greater of (1) the
sum of (x) the product of the total amount of Principal Receivables in the Trust
at the end of the day on such date (or with respect to the first Monthly Period,
at the end of the day on the Closing Date) and one minus the Discount Percentage
and (y) the principal amount on deposit in the Excess Funding Account as of the
end of the day on such date and (2) the sum of the numerators used to calculate
the Series Percentages (as such term is defined in the
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<PAGE>
Agreement) with respect to Finance Charge Receivables or Defaulted Receivables,
as applicable, for all Series then outstanding; provided, however, that, with
respect to any Monthly Period in which an Addition Date or a Removal Date occurs
and the Servicer need not make daily deposits of Collections into the Collection
Account, the denominator in (x) above shall be the Average Principal Balance;
provided further, however, that with respect to any Monthly Period in which an
Addition Date or a Removal Date occurs and the Servicer is required to make
daily deposits of Collections into the Collection Account, the denominator in
(x) above shall be (1) for the period from and including the first day of such
Monthly Period to but excluding the related Addition Date or Removal Date, the
aggregate amount of Principal Receivables in the Trust at the end of the day on
the last day of the prior Monthly Period and (2) for the period from and
including the related Addition Date or Removal Date to and including the last
day of such Monthly Period, the aggregate amount of Principal Receivables in the
Trust at the end of the day on the related Addition Date or Removal Date.
["Funding Period" shall mean the period commencing on the Closing Date and
ending upon the first to occur of (x) the commencement of the Rapid Amortization
Period, (y) the date on which the Invested Amount shall first equal the Initial
Investor Amount and (z) ________ __, 199____.]
"Group [One]" shall mean Series [_________] and each other Series hereafter
specified in the related Supplement to be included in Group [One].
"Initial Invested Amount" shall mean the sum of the Class A Initial
Invested Amount, the Class B Initial Invested Amount and the Class C Initial
Invested Amount.
"Initial Investor Amount" shall mean the sum of the Class A Initial
Investor Amount, the Class B Initial Investor Amount and the Class C Initial
Investor Amount.
["Initial Pre-Funded Amount" shall mean $___________.]
"Initial Servicing Fee" shall have the meaning specified in Section 3.1.
"Interest Period" shall mean, with respect to any Distribution Date, the
period from and including the Distribution Date immediately preceding such
Distribution Date (or, in the case of the first Distribution Date, from and
including the Closing Date) to but excluding such Distribution Date.
"Invested Amount" shall mean, as of any date of determination, an amount
equal to the sum of (a) the Class A Invested Amount as of such date, (b) the
Class B Invested Amount as of such date and (c) the Class C Invested Amount as
of such date.
"Investor Amount" shall mean, as of any date of determination, an amount
equal to the sum of (a) the Invested Amount, (b) [the Pre-Funded Amount and
(c)]the Principal Funding Account Balance.
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<PAGE>
"Investor Charge-Offs" shall mean Class A Investor Charge-Offs and Class B
Investor Charge-Offs.
"Investor Default Amount" shall mean, with respect to any Distribution
Date, an amount equal to the product of (a) the Defaulted Amount for the related
Monthly Period and (b) the Floating Allocation Percentage for such Monthly
Period.
["LIBOR" shall mean an interest rate per annum determined by the Trustee
for each Interest Period in accordance with the provisions of Section 4.11.]
["[LIBOR] Determination Date" shall mean __________ ____, 199____ with
respect to the period from the Closing Date through __________ 15, 199____; and,
with respect to each Interest Period thereafter, the [second London Business
Day] prior to every Distribution Date on which such Interest Period begins
commencing with the ___________ 199____ Distribution Date.]
["London Business Day" shall mean a Business Day on which dealings in
deposits in United States dollars are transacted in the London interbank
market.]
"Monthly Interest" means, with respect to any Distribution Date, the Class
A Monthly Interest, the Class B Monthly Interest and the Class C Monthly
Interest for such Distribution Date.
"Monthly Servicing Fee" shall have the meaning specified in Section 3.1.
"Net Portfolio Yield" shall mean, with respect to any Monthly Period, the
annualized percentage equivalent of a fraction, the numerator of which is equal
to (a) an amount equal to the product obtained by multiplying the Floating
Allocation Percentage with respect to such Monthly Period and the amount of
Collections of Finance Charge Receivables with respect to such Monthly Period
(including any other amounts that are to be treated as Collections of Finance
Charge Receivables in accordance with the Agreement), [plus (b) any investment
earnings on amounts on deposit in the Pre-Funding Account,] plus (c) the amount
of any Principal Funding Investment Proceeds for the related Distribution Date,
plus (d) the amount of funds, if any, to be withdrawn from the Reserve Account
which, pursuant to Section 4.14, are required to be included in Class A
Available Funds with respect to such Distribution Date, minus (e) the Investor
Default Amount for the Distribution Date with respect to such Monthly Period,
and the denominator of which is the Investor Amount as of the last day of the
preceding Monthly Period.
"Percentage Allocation" shall have the meaning specified in subsection
4.1(b)(ii).
["Pre-Funded Amount" shall mean, as of any date of determination, the
amount on deposit in the Pre-Funding Account (net of all interest and other
investment income).]
["Pre-Funding Account" shall have the meaning set forth in subsection
4.15(a).]
"Principal Allocation Percentage" shall mean, with respect to any Monthly
Period:
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(a) during the Revolving Period, the percentage equivalent (which
percentage shall never exceed 100%) of a fraction, (x) the numerator of which is
the Invested Amount as of the last day of the immediately preceding Monthly
Period (or, in the case of the first Monthly Period, the Closing Date) and (y)
the denominator of which is the greater of (i) the sum of (A) the product of the
total amount of Principal Receivables in the Trust as of the last day of the
immediately preceding Monthly Period and one minus the Discount Percentage and
(B) the principal amount on deposit in the Excess Funding Account as of such
last day (or, in the case of the first Monthly Period, the Closing Date) and
(ii) the sum of the numerators used to calculate the Series Percentages
applicable to Principal Receivables for all Series outstanding as of the date as
to which such determination is being made;
(b) during the Controlled Accumulation Period or the Rapid Amortization
Period, the percentage equivalent (which percentage shall never exceed 100%) of
a fraction, (x) the numerator of which is the Invested Amount as of the last day
of the Revolving Period and (y) the denominator of which is the greater of (i)
the sum of (A) the product of the total amount of Principal Receivables in the
Trust as of the last day of the immediately preceding Monthly Period and one
minus the Discount Percentage and (B) the principal amount on deposit in the
Excess Funding Account as of such last day and (ii) the sum of the numerators
used to calculate the Series Percentages applicable to Principal Receivables for
all Series outstanding as of the date as to which such determination is being
made;
provided however, that with respect to any Monthly Period in which an
Addition Date or a Removal Date occurs and the Servicer need not make daily
deposits of Collections into the Collection Account, the amount in clause (y)
(i) of paragraphs (a) and (b) above shall be the Average Principal Balance;
provided further, however, that with respect to any Monthly Period in which an
Addition Date or a Removal Date occurs and the Servicer is required to make
daily deposits of Collections into the Collection Account, the amount in clause
(y) (i) of paragraphs (a) and (b) above shall be (1) for the period from and
including the first day of such Monthly Period to but excluding the related
Addition Date or Removal Date, the sum of (x) the product of the aggregate
amount of Principal Receivables in the Trust at the end of the day on the last
day of the prior Monthly Period and one minus the Discount Percentage and (y)
the principal amount on deposit in the Excess Funding Account as of such last
day and (2) for the period from and including the related Addition Date or
Removal Date to and including the last day of such Monthly Period, the sum of
(x) the product of the aggregate amount of Principal Receivables in the Trust at
the end of the day on the related Addition Date or Removal Date and one minus
the Discount Percentage and (y) the principal amount on deposit in the Excess
Funding Account at the end of the day on the related Addition Date or Removal
Date.
"Principal Funding Account" shall have the meaning set forth in subsection
4.12(a)(i).
"Principal Funding Account Balance" shall mean, with respect to any date of
determination during the Controlled Accumulation Period, the principal amount,
if any, on deposit in the Principal Funding Account on such date of
determination.
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"Principal Funding Investment Proceeds" shall have the meaning specified in
subsection 4.12(a)(ii).
"Principal Shortfall" shall have the meaning specified in Section 4.10.
"Rapid Amortization Period" shall mean, (a) if on the day on which a Pay
Out Event with respect to Series [__________] is deemed to have occurred the
Servicer need not make daily deposits into or withdrawals from the Collection
Account pursuant to subsection 4.03(a) of the Agreement, the period commencing
at the close of business on the Business Day immediately preceding the first day
of the Monthly Period in which such Pay Out Event is deemed to have occurred or
(b) otherwise, the period commencing at the close of business on the Business
Day immediately preceding the day on which a Pay Out Event with respect to
Series [__________] is deemed to have occurred, and ending on the first to occur
of (i) the payment in full to the Class A Certificateholders and the Class B
Certificateholders of the Class A Investor Amount and the Class B Invested
Amount, respectively, and the payment in full to the Class C Interest Holder of
the Class C Invested Amount, if any, or (ii) the Series Termination Date.
"Reallocated Principal Collections" shall mean, with respect to any Monthly
Period, the product of (a) the Principal Allocation Percentage with respect to
such Monthly Period, (b) the aggregate amount of Collections in respect of
Principal Receivables for such Monthly Period and (c) the sum of the Class B
Principal Percentage and the Class C Principal Percentage with respect to such
Monthly Period.
"Reassignment Amount" shall mean, with respect to any Distribution Date,
after giving effect to any deposits and distributions otherwise to be made on
such Distribution Date, the sum of (i) the Invested Amount on such Distribution
Date, plus (ii) Monthly Interest for such Distribution Date and any Monthly
Interest previously due but not distributed to the Series [__________] Holders
on a prior Distribution Date, plus (iii) the amount of Additional Interest, if
any, for such Distribution Date and any Additional Interest previously due but
not distributed to the Series [__________] Holders on a prior Distribution Date.
["Reference Banks" shall mean ____________________, _________________ and
_____________________ or such other major banks in the London interbank market
selected by the Servicer from time to time.]
"Required Class C Invested Amount" shall mean, with respect to any
Distribution Date, the greater of (i) the product of (a) the sum of (I) [the sum
of] the Class A Invested Amount [and the Class A Floating Percentage of the
Pre-Funded Amount] and (II) [the sum of the Class B Invested Amount] [and the
Class B Floating Percentage of the Pre-Funded Amount,] each as of such
Distribution Date after taking into account all distributions made on such
Distribution Date, and (b) a fraction, the numerator of which is __% and the
denominator of which is the excess of 100% over __% and (ii) the product of (A)
$___________ and (B) ___%; provided, however, that (i) if there are any
reductions in the Class C Invested Amount pursuant to clause [(b)][(c)] of the
definition of such amount, or a Pay Out Event occurs with respect to Series
[__________], then the Required Class C Invested Amount for any Distribution
Date shall equal the Required Class C Invested Amount on the Distribution Date
immediately preceding such reduction or Pay
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<PAGE>
Out Event, (ii) in no event shall the Required Class C Invested Amount exceed
the sum of the Class A Invested Amount and the Class B Invested Amount on any
such date, and (iii) the Required Class C Invested Amount may be reduced without
the consent of the Series [__________] Holders, if the Transferors shall have
received written notice from each Rating Agency (with a copy delivered to the
Trustee) that such reduction will not result in the reduction or withdrawal of
the then current rating of the Series [__________] Certificates and the
Transferor shall have delivered to the Trustee an Officer's Certificate to the
effect that, based on the facts known to such officer at such time, in the
reasonable belief of the Transferor, such reduction will not cause a Pay Out
Event or an event that, after the giving of notice or the lapse of time, would
constitute a Pay Out Event, to occur with respect to Series [__________].
"Required Reserve Account Amount" shall mean, with respect to any
Distribution Date prior to the Reserve Account Funding Date, $0, and on or after
the Reserve Account Funding Date, an amount equal to (a) the product of (i)
____% of the Class A Investor Amount as of the preceding Distribution Date
(after giving effect to all changes therein on such date) and (ii) a fraction,
the numerator of which is the number of Monthly Periods scheduled to be included
in the Class A Accumulation Period as of such date and the denominator of which
is twelve (except that if such numerator is one, the Required Reserve Account
Amount determined pursuant to this clause (a) shall be $0) or (b) any other
amount designated by the Transferor, provided that, if such designation is of a
lesser amount, the Transferor (i) shall have received written notice from each
Rating Agency that such designation will not result in the reduction or
withdrawal of the rating of the Series [__________] Certificates and shall have
delivered copies of each such written notice to the Servicer and the Trustee,
and (ii) shall have delivered to the Trustee a certificate of an authorized
officer to the effect that, based on the facts known to such officer at such
time, in the reasonable belief of the Transferor, such designation will not
cause a Pay Out Event or an event that, after the giving of notice or the lapse
of time, would cause a Pay Out Event, to occur with respect to Series
[__________].
"Reserve Account" shall have the meaning specified in subsection 4.14(a).
"Reserve Account Funding Date" shall mean the Distribution Date with
respect to the Monthly Period which commences three months prior to the Monthly
Period in which, as of the related Determination Date, the Controlled
Accumulation Period is scheduled to commence.
"Reserve Account Surplus" shall mean, as of any date of determination, the
amount, if any, by which the amount on deposit in the Reserve Account exceeds
the Required Reserve Account Amount.
"Reserve Draw Amount" shall have the meaning specified in subsection
4.14(c).
"Revolving Period" shall mean the period beginning on the Closing Date and
ending on the earlier of (a) the close of business on the day preceding the
commencement of the Controlled Accumulation Period and (b) the close of business
on the day preceding the commencement of the Rapid Amortization Period.
"Series Invested Amount" shall mean the Invested Amount.
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<PAGE>
"Series Investor Amount" shall mean, as of any date of determination, an
amount equal to the numerator of the Principal Allocation Percentage on such
date.
"Series [__________]" shall mean the Series of Investor Certificates, the
terms of which are specified in this Supplement, and shall include the Class A
Certificates, the Class B Certificates and the Class C Interests.
"Series [__________] Certificateholder" shall mean a Class A
Certificateholder or a Class B Certificateholder.
"Series [__________] Certificate" shall mean a Class A Certificate or a
Class B Certificate.
"Series [__________] Holder" shall mean a Class A Certificateholder, a
Class B Certificateholder or a Class C Interest Holder.
"Series Percentage" shall mean with respect to Finance Charge Receivables
and Defaulted Receivables, the Floating Allocation Percentage, and with respect
to Principal Receivables, the Principal Allocation Percentage.
"Series Termination Date" shall mean the earlier to occur of (i) the
_______ ____ Distribution Date and (ii) the termination of the Trust pursuant to
Section 12.01 of the Agreement.
"Servicing Base Amount" shall have the meaning specified in Section 3.1.
"Servicing Fee Rate" shall mean ____%.
"Special Payment Date" shall mean each Distribution Date with respect to
the Rapid Amortization Period.
"Subordinate Principal Collections" shall have the meaning specified in
subsection 4.1(a)(ii).
["Telerate Page 3750" shall mean the display page currently so designated
on the Dow Jones Telerate Service (or such other page as may replace such page
on such service for the purpose of displaying comparable rates or prices).]
(b) Notwithstanding anything to the contrary in this Supplement
or the Agreement, the term "Rating Agency" shall mean, whenever used in this
Supplement or the Agreement with respect to Series [__________], [Moody's and
Standard & Poor's].
(c) All capitalized terms used herein and not otherwise defined
herein have the meanings ascribed to them in the Agreement.
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<PAGE>
(d) The words "hereof," "herein" and "hereunder" and words of
similar import when used in this Supplement shall refer to this Supplement as a
whole and not to any particular provision of this Supplement; references to any
Article, Section or Exhibit are references to Articles, Sections and Exhibits in
or to this Supplement unless otherwise specified; and the term "including" means
"including without limitation."
(e) Unless the context otherwise requires, references in this
Supplement to the Transferor shall initially mean CC Credit Corporation in its
capacity as Transferor; and from and after the date any Additional Transferor is
designated pursuant to subsection 2.09(e) of the Agreement, such references
shall mean CC Credit Card Corporation in its capacity as Transferor and any such
Additional Transferor(s).
ARTICLE III
Servicer and Trustee
Section 3.1. Servicing Compensation.
The share of the Servicing Fee allocable to the Series [__________] Holders
with respect to any Distribution Date (the "Monthly Servicing Fee"), shall be
equal to one-twelfth the product of (i) the Servicing Fee Rate and (ii) the
Invested Amount, if any, as of the last day of the Monthly Period preceding such
Distribution Date (the amount calculated pursuant to this clause (ii) is
referred to as the "Servicing Base Amount"); provided, however, with respect to
the December 1996 Distribution Date, the Monthly Servicing Fee (the "Initial
Servicing Fee") shall be $________.
The share of the Monthly Servicing Fee allocable to the Class A
Certificateholders with respect to any Distribution Date (the "Class A Servicing
Fee"), shall be equal to one-twelfth of the product of (a) the Class A Floating
Percentage, (b) the Servicing Fee Rate and (c) the Servicing Base Amount;
provided, however, that with respect to the ___________ 199____ Distribution
Date, the Class A Servicing Fee shall be $_________. The share of the Monthly
Servicing Fee allocable to the Class B Certificateholders with respect to any
Distribution Date (the "Class B Servicing Fee"), shall be equal to one-twelfth
of the product of (a) the Class B Floating Percentage, (b) the Servicing Fee
Rate and (c) the Servicing Base Amount; provided, however, that with respect to
the __________ 199____ Distribution Date, the Class B Servicing Fee shall be
$________. The share of the Monthly Servicing Fee allocable to the Class C
Interest Holder with respect to any Distribution Date (the "Class C Servicing
Fee"), shall be equal to one-twelfth of the product of (a) the Class C Floating
Percentage, (b) the Servicing Fee Rate and (c) the Servicing Base Amount;
provided, however, that with respect to the __________ 199____ Distribution
Date, the Class C Servicing Fee shall be $_________. The remainder of the
Servicing Fee shall be paid by the Holders of the Transferor Certificates or the
Certificateholders of other Series (as provided in the related Supplements) and
in no event shall the Trust, the Trustee, the Series [__________] Holders be
liable for the share of the Servicing Fee to be paid by the Holders of the
Transferor Certificates or the Certificateholders of any other Series. The
Class A Servicing Fee shall be payable to the Servicer solely to the extent
amounts are available for distribution in respect thereof pursuant to subsection
4.5(a)(ii), 4.7(a) or 4.8(a);
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the Class B Servicing Fee shall be payable solely to the extent amounts are
available for distribution in respect thereof pursuant to subsection 4.5(b)(ii),
4.7(c) or 4.8(b); and the Class C Servicing Fee shall be payable solely to the
extent amounts are available for distribution in respect thereof pursuant to
subsection 4.5(c)(i) or 4.7(g).
ARTICLE IV
Rights of Series [__________] Certificateholders and Class C Interest
Holder and Allocation and Application of Collections
Section 4.1. Collections and Allocations The Servicer will apply, or
will instruct the Trustee to apply, all collections and other funds on deposit
in the Collection Account that are allocated to the Series [__________] Holders
as follows:
(a) Daily Allocations During the Revolving Period. During the
Revolving Period, the Servicer shall, on or prior to the close of business on
the second Business Day following any Date of Processing, allocate the
following amounts as set forth below:
(i) Allocate to the Series [__________] Holders the product of
(x) the Floating Allocation Percentage on such Date of Processing and (y)
the aggregate amount of Collections of Finance Charge Receivables on such
Date of Processing, and of that allocation, deposit and retain in the
Collection Account [(A) prior to the [LIBOR] Determination Date occurring
in such Monthly Period, an amount equal to the product of (v) the
Floating Allocation Percentage on such Date of Processing and (w) the
aggregate amount of Collections of Finance Charge Receivables on such
Date of Processing and (B) on and after such [LIBOR] Determination Date,]
an amount equal to the difference between (1) Monthly Interest for the
related Distribution Date (plus, if The Travelers Bank is not the
Servicer, the Monthly Servicing Fee for such Monthly Period) and (2) the
amounts previously deposited in the Collection Account with respect to
such Monthly Period pursuant to this subsection (a)(i);
(ii) Allocate to the Series [__________] Holders an amount equal
to the product of (A) the Principal Allocation Percentage on such Date of
Processing and (B) the aggregate amount of Collections of Principal
Receivables on such Date of Processing, which amount shall be first, if
any other Principal Sharing Series is outstanding and in its Amortization
Period or Accumulation Period (as such terms are defined in the
Agreement), retained in the Collection Account for application, to the
extent necessary, as Shared Principal Collections in accordance with
Section 4.04 of the Agreement to other Series on the related Distribution
Date, and second paid to the Holders of the Transferor Certificates;
provided however, that the amount to be paid to the Holders of the
Transferor Certificates pursuant to this subsection 4.1(a)(ii) on any
Date of Processing shall be paid to such Holders only if the Transferor
Amount on such Date of Processing is greater than the Required Transferor
Amount and an amount equal to the product of (I) the aggregate amount of
Principal Receivables and (II) one minus the Discount Percentage is
greater than the Required Principal Balance (after giving effect to
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all Principal Receivables transferred to the Trust on such day and any
amounts deposited in the Excess Funding Account on such day) and
otherwise shall be deposited in the Excess Funding Account until the
Transferor Amount is greater than the Required Transferor Amount and an
amount equal to the product of (I) the aggregate amount of Principal
Receivables and (II) one minus the Discount Percentage is greater than
the Required Principal Balance and applied in accordance with Section
4.02 of the Agreement and the remainder shall be paid to the Holders of
the Transferor Certificates; provided further, however, that if and for
so long as the Class C Invested Amount is less than the Required Class C
Invested Amount during a Monthly Period, an amount equal to the sum of
(x) the Class C Principal Percentage of the product of the Principal
Allocation Percentage and the aggregate amount of Collections of
Principal Receivables and (y) the Class B Principal Percentage of the
product of the Principal Allocation Percentage and the aggregate amount
of Collections of Principal Receivables ("Subordinate Principal
Collections") on each Date of Processing with respect to such Monthly
Period shall be deposited and retained in the Collection Account during
such Monthly Period.
(b) Daily Allocations During the Controlled Accumulation Period. During
the Controlled Accumulation Period, the Servicer shall, prior to the close of
business on the second Business Day following any Date of Processing, allocate
the following amounts as set forth below:
(i) Allocate to the Series [__________] Holders and deposit and
retain in the Collection Account an amount equal to the product of (A)
the Floating Allocation Percentage on such Date of Processing and (B) the
aggregate amount of Collections of Finance Charge Receivables on such
Date of Processing.
(ii) Allocate to the Series [__________] Holders and deposit and
retain in the Collection Account an amount equal to the product of
(x) the Principal Allocation Percentage on such Date of Processing and
(y) the aggregate amount of Collections of Principal Receivables on such
Date of Processing (for any such date, a "Percentage Allocation");
provided, however, that if the sum of such Percentage Allocations with
respect to the same Monthly Period exceeds the Controlled Deposit Amount
for the related Distribution Date, then such excess shall not be treated
as a Percentage Allocation and shall be first, if any other Principal
Sharing Series is outstanding and in its Amortization Period or
Accumulation Period (as such terms are defined in the Agreement),
retained in the Collection Account for application, to the extent
necessary, as Shared Principal Collections in accordance with Section
4.04 of the Agreement to other Series on the related Distribution Date,
and second paid to the Holders of the Transferor Certificates only if the
Transferor Amount on such Date of Processing is greater than the Required
Transferor Amount and an amount equal to the productof (I) the aggregate
amount of Principal Receivables and (II) one minus the Discount
Percentage is greater than the Required Principal Balance (after giving
effect to all Principal Receivables transferred to the Trust on such day
and any amounts deposited in the Excess Funding Account on such day) and
otherwise shall be deposited in the Excess Funding Account until the
Transferor Amount is greater than the Required Transferor Amount and an
amount equal to the product of (I) the aggregate amount of Principal
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Receivables and (II) one minus the Discount Percentage is greater than
the Required Principal Balance and applied in accordance with Section
4.02 of the Agreement and the remainder shall be paid to the Holders of
the Transferor Certificates; provided further, however, that if and for
so long as the Class C Invested Amount is less than the Required Class C
Invested Amount for a Monthly Period, Subordinate Principal Collections
with respect to each Date of Processing with respect to such Monthly
Period shall be retained in the Collection Account during such Monthly
Period.
(c) Daily Allocations During the Rapid Amortization Period. During the
Rapid Amortization Period, the Servicer shall, prior to the close of business on
the second Business Day following any Date of Processing, allocate the following
amounts as set forth below:
(i) Allocate to the Series [__________] Holders and deposit and
retain in the Collection Account an amount equal to the product of (A)
the Floating Allocation Percentage on such Date of Processing and (B) the
aggregate amount of Collections of Finance Charge Receivables on such
Date of Processing.
(ii) Allocate to the Series [__________] Holders and deposit and
retain in the Collection Account an amount equal to the product of (A)
the Principal Allocation Percentage on such Date of Processing and (B)
the aggregate amount of Collections of Principal Receivables on such Date
of Processing; provided, however, that after the date on which an amount
of such Collections equal to the Investor Amount has been deposited into
the Collection Account and allocated to the Series [__________] Holders,
the amount determined in accordance with this subparagraph (ii) in excess
thereof shall be first, if any other Principal Sharing Series is
outstanding and in its Amortization Period or Accumulation Period (as
such terms are defined in the Agreement), retained in the Collection
Account for application, to the extent necessary, as Shared Principal
Collections in accordance with Section 4.04 of the Agreement to other
Series on the related Distribution Date, and second paid to the Holders
of the Transferor Certificates only if the Transferor Amount on such Date
of Processing is greater than the Required Transferor Amount and an
amount equal to the product of (I) the aggregate amount of Principal
Receivables and (II) one minus the Discount Percentage is greater than
the Required Principal Balance (after giving effect to all Principal
Receivables transferred to the Trust on such day and any amounts
deposited in the Excess Funding Account on such day) and otherwise shall
be deposited in the Excess Funding Account until the Transferor Amount is
greater than the Required Transferor Amount and an amount equal to the
product of (I) the aggregate amount of Principal Receivables and (II) one
minus the Discount Percentage is greater than the Required Principal
Balance and applied in accordance with Section 4.02 of the Agreement and
the remainder shall be paid to the Holders of the Transferor Certificates.
(d) Notwithstanding the foregoing, the Servicer need not make daily
deposits of Collections into the Collection Account at any time when the
requirements of Section 4.03 of the Agreement are satisfied.
Section 4.2 Determination of Monthly Interest.
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(a) The amount of monthly interest ("Class A Monthly Interest")
distributable from the Collection Account with respect to the Class A
Certificates on each Distribution Date shall be an amount equal to the
[one -twelfth of] product of (i) [(A) a fraction, the numerator of which is
the actual number of days in the related Interest Period and the denominator of
which is 360, times (B)] the Class A Certificate Rate and (ii) the outstanding
principal amount of the Class A Certificates as of the close of business on the
preceding Record Date; provided, however, with respect to the ___________
199____ Distribution Date, Class A Monthly Interest shall be equal to the
interest accrued on the Class A Initial Investor Amount at the applicable
Class A Certificate Rate for the period from the Closing Date to but
excluding __________ 15, 199____.
On the Determination Date preceding each Distribution Date, the Servicer
shall determine the excess, if any (the "Class A Interest Shortfall"), of (x)
the Class A Monthly Interest for such Distribution Date over (y) the aggregate
amount of funds allocated and available to pay such Class A Monthly Interest on
such Distribution Date. If the Class A Interest Shortfall with respect to any
Distribution Date is greater than zero, an additional amount ("Class C
Additional Interest") equal to [one-twelfth of] the product of (i) [(A) a
fraction, the numerator of which is the actual number of days from and including
the preceding Distribution Date to but excluding such Distribution Date and the
denominator of which is 360, times (B)] the Class A Penalty Rate and (ii) such
Class A Interest Shortfall (or the portion thereof which has not been paid to
the Class A Certificateholders) shall be payable as provided herein with respect
to the Class A Certificates on each Distribution Date following such
Distribution Date to and including the Distribution Date on which such Class A
Interest Shortfall is paid to the Class A Certificateholders. Notwithstanding
anything to the contrary herein, Class A Additional Interest shall be payable or
distributed to Class A Certificateholders only to the extent permitted by
applicable law.
(b) The amount of monthly interest ("Class B Monthly Interest")
distributable from the Collection Account with respect to the Class B
Certificates on each Distribution Date shall be an amount equal to [one-twelfth
of] the product of (i) [(A) a fraction, the numerator of which is the actual
number of days in the related Interest Period and the denominator of which is
360, times (B)] the Class B Certificate Rate and (ii) the outstanding principal
amount of the Class B Certificates as of the close of business on the preceding
Record Date; provided, however, with respect to the ___________ 199____
Distribution Date, Class B Monthly Interest shall be equal to the interest
accrued on the Class B Initial Investor Amount at the applicable Class B
Certificate Rate for the period from the Closing Date to but excluding _________
15, 199____.
On the Determination Date preceding each Distribution Date, the Servicer
shall determine the excess, if any (the "Class B Interest Shortfall"), of (x)
the Class B Monthly Interest for such Distribution Date over (y) the aggregate
amount of funds allocated and available to pay such Class B Monthly Interest on
such Distribution Date. If the Class B Interest Shortfall with respect to any
Distribution Date is greater than zero, an additional amount ("Class B
Additional Interest") equal to [one-twelfth of] the product of (i) [(A) a
fraction, the numerator of which is the actual number of days in the period from
and including the preceding Distribution Date to but excluding such Distribution
Date and the denominator of which is 360, times (B)] the Class B Penalty Rate
and (ii) such Class B Interest Shortfall (or the portion thereof which has not
been
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paid to the Class B Certificateholders) shall be payable as provided herein with
respect to the Class B Certificates on each Distribution Date following such
Distribution Date to and including the Distribution Date on which such Class B
Interest Shortfall is paid to the Class B Certificateholders. Notwithstanding
anything to the contrary herein, Class B Additional Interest shall be payable or
distributed to Class B Certificateholders only to the extent permitted by
applicable law.
Section 4.3. Determination of Monthly Principal.
(a) The amount of monthly principal ("Class A Monthly Principal")
distributable from the Collection Account with respect to the Class A
Certificates on each Distribution Date, beginning with the first Distribution
Date with respect to the Class A Accumulation Period or the Rapid Amortization
Period, shall be equal to the least of (x) the Available Investor Principal
Collections on deposit in the Collection Account with respect to such
Distribution Date, (y) for each Distribution Date with respect to the Class A
Accumulation Period (and on or prior to the Class A Expected Final Distribution
Date), the Controlled Deposit Amount for such Distribution Date and (z) the
Class A Invested Amount on such Distribution Date.
(b) The amount of monthly principal ("Class B Monthly Principal")
distributable from the Collection Account with respect to the Class B
Certificates on each Distribution Date, beginning with the Class B Principal
Commencement Date, shall be equal to the least of (x) the Available Investor
Principal Collections on deposit in the Collection Account with respect to such
Distribution Date (minus the portion of such Available Investor Principal
Collections applied to Class A Monthly Principal on such Distribution Date), (y)
for each Distribution Date with respect to the Class B Accumulation Period on or
prior to the Class B Expected Final Distribution Date, the Controlled Deposit
Amount for such Distribution Date and (z) the Class B Invested Amount on such
Distribution Date.
(c) The amount, if any, of monthly principal ("Class C Monthly Principal")
distributable with respect to the Class C Invested Amount on each Distribution
Date shall equal the following amounts:
(i) on any Distribution Date prior to the Distribution Date on
which the Class B Invested Amount is paid in full, shall be an amount
equal to the lesser of (A) Available Investor Principal Collections not
applied to Class A Monthly Principal or Class B Monthly Principal on such
Distribution Date and (B) the positive excess, if any, of the Class C
Invested Amount over the Required Class C Invested Amount for such
Distribution Date (calculated after giving effect to all distributions on
such Distribution Date but before giving effect to the payment of Class C
Monthly Principal on such Distribution Date); and
(ii) for each Distribution Date beginning on the Distribution
Date on which the Class B Invested Amount is paid in full, shall be an
amount equal to the Available Investor Principal Collections with respect
to such Distribution Date (minus the portion of such Available Investor
Principal Collections applied to Class A Monthly Principal and Class B
Monthly Principal on such Distribution Date);
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provided, however, with respect to any Distribution Date, Class C Monthly
Principal shall not exceed the Class C Invested Amount.
Section 4.4. Required Amount.
(a) With respect to each Distribution Date, on the related Determination
Date, the Servicer shall determine the amount (the "Class A Required Amount"),
if any, by which (a) the sum of (i) Class A Monthly Interest for such
Distribution Date, (ii) any Class A Monthly Interest previously due but not paid
to the Class A Certificateholders on a prior Distribution Date, (iii) any Class
A Additional Interest for such Distribution Date and any Class A Additional
Interest previously due but not paid to the Class A Certificateholders on a
prior Distribution Date, (iv) the Class A Servicing Fee for such Distribution
Date, (v) any Class A Servicing Fee previously due but not paid to the Servicer
and (vi) the Class A Investor Default Amount, if any, for such Distribution Date
exceeds (b) the Class A Available Funds. In the event that the Class A Required
Amount for such Distribution Date is greater than zero, the Servicer shall give
written notice to the Trustee of such positive Class A Required Amount on the
date of computation and all or a portion of the Excess Finance Charge
Collections allocable to Series [__________] with respect to the related Monthly
Period in an amount equal to the Class A Required Amount for such Distribution
Date shall be distributed from the Collection Account on such Distribution Date
pursuant to subsection 4.7(a). In the event that the Class A Required Amount
for such Distribution Date exceeds the amount of Excess Finance Charge
Collections allocable to Series [__________] with respect to the related Monthly
Period, all or a portion of the Reallocated Principal Collections with respect
to such Monthly Period in an amount equal to such excess shall be distributed
from the Collection Account on such Distribution Date pursuant to subsection
4.8(a).
(b) With respect to each Distribution Date on the related Determination
Date, the Servicer shall determine the amount (the "Class B Required Amount")
equal to the sum of (I) the amount, if any, by which (a) the sum of (i) Class B
Monthly Interest for such Distribution Date, (ii) any Class B Monthly Interest
previously due but not paid to the Class B Certificateholders on a prior
Distribution Date, (iii) any Class B Additional Interest for such Distribution
Date and any Class B Additional Interest previously due but not paid to the
Class B Certificateholders on a prior Distribution Date, (iv) the Class B
Servicing Fee for such Distribution Date and (v) any Class B Servicing Fee
previously due but not paid to the Servicer exceeds (b) the Class B Available
Funds plus (II) the Class B Investor Default Amount for such Distribution Date.
In the event that the Class B Required Amount for such Distribution Date is
greater than zero, the Servicer shall give written notice to the Trustee of such
positive Class B Required Amount on the date of computation and all or a portion
of Excess Finance Charge Collections allocable to Series [__________] (other
than Excess Finance Charge Collections applied pursuant to subsections 4.7(a)
and (b) with respect to such Distribution Date) with respect to the related
Monthly Period shall be applied to fund the Class B Required Amount. In the
event that the Class B Required Amount for such Distribution Date exceeds the
amount of Excess Finance Charge Collections allocable to Series [__________]
with respect to such Monthly Period and available to fund the Class B Required
Amount as provided in the preceding sentence, all or a portion of the
Reallocated Principal Collections allocable to the Class C Invested Amount
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available therefor with respect to such Monthly Period in an amount equal to
such excess shall be distributed from the Collection Account on such
Distribution Date pursuant to subsection 4.8(b).
(c) With respect to each Distribution Date, on the related Determination
Date, the Servicer shall determine the amount (the "Class C Required Amount"),
if any, equal to the amount by which the sum of (x) the current and overdue
Class C Servicing Fee for such Distribution Date, plus (y) the sum of (i) Class
C Monthly Interest for such Distribution Date and (ii) any Class C Monthly
Interest previously due but not paid to the Class C Interest Holders on a prior
Distribution Date, plus (z) the Class C Investor Default Amount, if any, for
such Distribution Date exceeds the amount of Class C Available Funds and Excess
Finance Charge Collections available to pay such amounts pursuant to subsection
4.5(c)(i) and subsections 4.7(f), (g) and (h). In the event that the Class C
Required Amount for such Distribution Date is greater than zero, the Servicer
shall give written notice to the Trustee of such positive Class C Required
Amount on the date of computation.
Section 4.5. Application of Class A Available Funds, Class B Available
Funds, Class C Available Funds and Available Investor Principal Collections.
The Servicer shall apply or shall cause the Trustee to apply, on each
Distribution Date, Class A Available Funds, Class B Available Funds, Class C
Available Funds and Available Investor Principal Collections for the Monthly
Period with respect to such Distribution Date to make the following
distributions:
(a) On each Distribution Date, an amount equal to the Class A Available
Funds with respect to such Distribution Date will be distributed in the
following priority:
(i) an amount equal to Class A Monthly Interest for such
Distribution Date, plus the amount of any Class A Monthly Interest
previously due but not distributed to the Class A Certificateholders on a
prior Distribution Date, plus the amount of any Class A Additional
Interest for such Distribution Date and any Class A Additional Interest
previously due but not distributed to the Class A Certificateholders on
a prior Distribution Date, shall be distributed to the Paying Agent for
payment to the Class A Certificateholders;
(ii) an amount equal to the Class A Servicing Fee for such
Distribution Date, plus the amount of any Class A Servicing Fee
previously due but not distributed to the Servicer on a prior
Distribution Date, shall be distributed to the Servicer;
(iii) an amount equal to the Class A Investor Default Amount for
such Distribution Date shall be treated as a portion of Available
Investor Principal Collections for such Distribution Date; and
(iv) the balance, if any, shall constitute Excess Spread and shall
be allocated and distributed as set forth in Section 4.7.
(b) On each Distribution Date, an amount equal to the Class B Available
Funds with respect to such Distribution Date will be distributed in the
following priority:
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(i) an amount equal to Class B Monthly Interest for such
Distribution Date, plus the amount of any Class B Monthly Interest
previously due but not distributed to the Class B Certificateholders on a
prior Distribution Date, plus the amount of any Class B Additional Interest
for such Distribution Date and any Class B Additional Interest previously
due but not distributed to the Class B Certificateholders on a prior
Distribution Date, shall be distributed to the Paying Agent for payment to
the Class B Certificateholders;
(ii) an amount equal to the Class B Servicing Fee for such
Distribution Date, plus the amount of any Class B Servicing Fee previously
due but not distributed to the Servicer on a prior Distribution Date, shall
be distributed to the Servicer; and
(iii) the balance, if any, shall constitute Excess Spread and
shall be allocated and distributed as set forth in Section 4.7.
(c) On each Distribution Date, an amount equal to the Class C Available
Funds with respect to such Distribution Date will be distributed in the
following priority:
(i) if The Travelers Bank or the Trustee is no longer the
Servicer, an amount equal to the Class C Servicing Fee for such
Distribution Date, plus the amount of any Class C Servicing Fee previously
due but not distributed to the Servicer on a prior Distribution Date, shall
be distributed to the Servicer; and
(ii) the balance, if any, shall constitute Excess Spread and
shall be allocated and distributed as set forth in Section 4.7.
(d) On each Distribution Date with respect to the Revolving Period, an
amount equal to the Available Investor Principal Collections for the related
Monthly Period shall be distributed in the following order of priority:
(i) an amount equal to Class C Monthly Principal for such
Distribution Date, up to the Class C Invested Amount on such Distribution
Date, shall be distributed to the Class C Interest Holder; and
(ii) the balance, if any, shall be treated as a portion of Shared
Principal Collections and applied in accordance with Section 4.04 of the
Agreement.
(e) On each Distribution Date with respect to the Controlled
Accumulation Period or the Rapid Amortization Period, an amount equal to the
Available Investor Principal Collections for the related Monthly Period shall
be distributed in the following priority:
(i) an amount equal to Class A Monthly Principal for such
Distribution Date, up to the Class A Invested Amount, on such Distribution
Date, shall be deposited in the Principal Funding Account for payment to
the Class A Certificateholders by the Paying Agent on the earlier to occur
of the Class A Expected Final Distribution Date or the first Special
Payment Date;
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(ii) for each Distribution Date beginning on the Class B
Principal Commencement Date, an amount equal to Class B Monthly Principal
for such Distribution Date, up to the Class B Invested Amount on such
Distribution Date, shall be distributed to the Paying Agent for payment to
the Class B Certificateholders;
(iii) an amount equal to Class C Monthly Principal for such
Distribution Date, up to the Class C Invested Amount on such Distribution
Date, shall be distributed to the Class C Interest Holder; and
(iv) for each Distribution Date, after giving effect to
paragraphs (i), (ii) and (iii) above, an amount equal to the balance, if
any, of such Available Investor Principal Collections then on deposit in
the Collection Account shall be treated as Shared Principal Collections and
applied in accordance with Section 4.04 of the Agreement.
Section 4.6. Default Amounts; Investor Charge-Offs.
(a) On each Determination Date commencing with the Determination Date
relating to the _________ 199____ Distribution Date, the Servicer shall
calculate the Class A Investor Default Amount, if any, for the related
Distribution Date. If, on any Distribution Date, the Class A Required Amount
for the related Monthly Period exceeds the sum of (x) the amount of
Reallocated Principal Collections with respect to such Monthly Period and (y)
the amount of Excess Finance Charge Collections allocable to Series
[__________] with respect to such Distribution Date, the Class C Invested
Amount shall be reduced by the amount of such excess, but not by more than
the excess of the Class A Investor Default Amount for such Distribution Date
over the amount of Reallocated Principal Collections and Excess Finance
Charge Collections. In the event that such reduction would cause the Class C
Invested Amount to be a negative number, the Class C Invested Amount shall be
reduced to zero and the Class B Invested Amount shall be reduced by the
amount by which the Class C Invested Amount would have been reduced below
zero, but not by more than the excess, if any, of the Class A Investor
Default Amount for such Distribution Date over the amount of such reduction,
if any, of the Class C Invested Amount with respect to such Distribution Date
and the amount of Reallocated Principal Collections and Excess Finance Charge
Collections used to fund the Class A Investor Default Amount for such
Distribution Date. In the event that such reduction would cause the Class B
Invested Amount to be a negative number, the Class B Invested Amount shall be
reduced to zero, and the Class A Invested Amount shall be reduced by the
amount by which the Class B Invested Amount would have been reduced below
zero, but not by more than the excess, if any, of the Class A Investor
Default Amount for such Distribution Date over the aggregate amount of the
reductions, if any, of the Class C Invested Amount and the Class B Invested
Amount for such Distribution Date and the amount of Reallocated Principal
Collections and Excess Finance Charge Collections used to fund the Class A
Investor Default Amount for such Distribution Date (a "Class A Investor
Charge-Off"). Class A Investor Charge-Offs shall thereafter be reimbursed and
the Class A Invested Amount increased (but not by an amount in excess of the
aggregate unreimbursed Class A Investor Charge-Offs) on any Distribution Date
by the amount of Excess Finance Charge Collections allocated and available
for that purpose pursuant to subsection 4.7(b).
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(b) On each Determination Date, the Servicer shall calculate the Class B
Required Amount, if any, for the related Distribution Date. If, on any
Distribution Date, the Class B Required Amount for such Distribution Date
exceeds the sum of (x) the amount of Excess Finance Charge Collections
allocated to Series [__________] with respect to the related Monthly Period
which are not used to fund the Class A Required Amount and Class A Investor
Charge-Offs on the related Distribution Date and (y) the amount of
Reallocated Principal Collections allocable to the Class C Invested Amount
which are available to fund the Class B Required Amount on such Distribution
Date pursuant to subsection 4.8(b), then the Class C Invested Amount shall be
reduced by the amount of such excess, but not by more than the excess of the
Class B Investor Default Amount for such Distribution Date over the amount of
Reallocated Principal Collections and Excess Finance Charge Collections used
to fund the Class B Investor Default Amount for such Distribution Date. In
the event that such reduction would cause the Class C Invested Amount to be a
negative number, the Class C Invested Amount shall be reduced to zero, and
the Class B Invested Amount shall be reduced by the amount by which the Class
C Invested Amount would have been reduced below zero, but not by more than
the excess, if any, of the Class B Investor Default Amount for such
Distribution Date over the amount of such reduction, if any, of the Class C
Invested Amount with respect to such Distribution Date and the amount of
Reallocated Principal Collections and Excess Finance Charge Collections used
to fund the Class B Investor Default Amount for such Distribution Date (a
"Class B Investor Charge-Off"). Class B Investor Charge-Offs shall thereafter
be reimbursed and the Class B Invested Amount increased (but not by an amount
in excess of the aggregate unreimbursed Class B Investor Charge-Offs) on any
Distribution Date by the amount of Excess Finance Charge Collections
allocated and available for that purpose pursuant to subsection 4.7(e).
(c) If, on any Distribution Date, Reallocated Principal Collections for
such Distribution Date are applied pursuant to subsection 4.8(a) or (b), the
Class C Invested Amount shall be reduced by the amount of such Reallocated
Principal Collections. In the event that such reduction would cause the
Class C Invested Amount to be a negative number, the Class C Invested Amount
shall be reduced to zero, and the Class B Invested Amount shall be reduced by
the amount by which the Class C Invested Amount would have been reduced below
zero.
(d) If, on any Distribution Date, the Class C Investor Default Amount
exceeds the amount of Excess Finance Charge Collections available to fund the
Class C Investor Default Amount pursuant to subsection 4.7(h) on such
Distribution Date, then the Class C Invested Amount shall be reduced by the
amount of such excess.
Section 4.7. Excess Finance Charge Collections. The Servicer shall
apply or shall cause the Trustee to apply, on each Distribution Date, Excess
Finance Charge Collections for such Distribution Date to make the following
distributions in the following priority:
(a) an amount equal to the Class A Required Amount, if any, with respect
to such Distribution Date shall be distributed by the Trustee to fund any
deficiency pursuant to subsections 4.5(a)(i), (ii) and (iii), in that order
of priority;
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(b) an amount equal to the aggregate amount of Class A Investor
Charge-Offs which have not been previously reimbursed as provided in
subsection 4.6(a) (after giving effect to the allocation on such Distribution
Date of any amount for that purpose pursuant to subsection 4.6(a)) shall be
treated as a portion of Available Investor Principal Collections for such
Distribution Date;
(c) an amount up to the Class B Required Amount, if any, with respect to
such Distribution Date shall be distributed by the Trustee to fund any
deficiency pursuant to subsections 4.5(b)(i) and (ii), in that order of
priority;
(d) an amount equal to the Class B Investor Default Amount for such
Distribution Date shall be treated as a portion of Available Investor
Principal Collections for such Distribution Date;
(e) an amount equal to the aggregate amount by which the Class B
Invested Amount has been reduced pursuant to clauses [(d), (e) and (f)] of
the definition of "Class B Invested Amount" in Section 2.1 of this Supplement
(but not in excess of the aggregate amount of such reductions which have not
been previously reimbursed) shall be treated as a portion of Available
Investor Principal Collections for such Distribution Date;
(f) an amount equal to the Class C Monthly Interest, if any, for such
Distribution Date, plus the amount of any Class C Monthly Interest previously
due but not distributed to the Class C Interest Holder on a prior
Distribution Date distributed to the Class C Interest Holder;
(g) an amount equal to the Class C Servicing Fee for such Distribution
Date (or if The Travelers Bank or the Trustee is no longer the Servicer, the
portion of the Class C Servicing Fee for such Distribution Date not paid
pursuant to subsection 4.5(c)(i)), plus the amount of any Class C Servicing
Fee previously due but not distributed to the Servicer on a prior
Distribution Date, shall be distributed to the Servicer;
(h) an amount equal to the Class C Investor Default Amount for such
Distribution Date shall be treated as a portion of Available Investor
Principal Collections with respect to such Distribution Date;
(i) an amount equal to the aggregate amount by which the Class C
Invested Amount has been reduced pursuant to clause [(c)] of the definition
of "Class C Invested Amount" (but not in excess of the aggregate amount of
such reductions which have not been previously reimbursed) shall be treated
as a portion of Available Investor Principal Collections with respect to such
Distribution Date;
(j) an amount up to the excess, if any, of the Required Reserve Account
Amount over the amount on deposit therein, shall be deposited into the
Reserve Account;
(k) the balance, if any, shall constitute a portion of "Excess Finance
Charges" available for allocation to other Series in Group [One] or to the
Holders of the Transferor Certificates for such Distribution Date as
described in Section 4.04 of the Agreement.
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Section 4.8. Reallocated Principal Collections. The Servicer shall
apply or shall cause the Trustee to apply on each Distribution Date,
Reallocated Principal Collections (applying all such Collections with respect
to the Class C Invested Amount prior to applying any such Collections with
respect to the Class B Invested Amount and applying no such Collections with
respect to the Class B Invested Amount pursuant to clause (b) below) with
respect to such Distribution Date, to make the following distributions 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 Distribution Date over (ii) the amount
of Excess Finance Charge Collections allocated to Series [__________] with
respect to the related Monthly Period shall be distributed by the Trustee to
fund any deficiency pursuant to subsections 4.5(a)(i), (ii) and (iii), in
that order of priority;
(b) an amount equal to the excess, if any, of (i) the Class B Required
Amount, if any, with respect to such Distribution Date over (ii) the amount
of Excess Finance Charge Collections allocated and available to the Class B
Certificates pursuant to subsections 4.7(c) and (d) on such Distribution Date
shall be distributed by the Trustee to fund any deficiency pursuant to
subsections 4.5(b)(i) and (ii) and subsection 4.7(d), in that order of
priority; and
(c) the balance, if any, of such Reallocated Principal Collections shall
be treated as a portion of Available Investor Principal Collections.
Section 4.9. Excess Finance Charges [and Excess Transferor Finance Charge
Collections].
(a) Subject to subsection 4.04(b) of the Agreement, Excess Finance
Charges with respect to the Series in Group [One] for any Distribution Date
will be allocated to Series [__________] in an amount equal to the product of
(x) the aggregate amount of Excess Finance Charges with respect to all the
Series in Group [One] for such Distribution Date and (y) a fraction, the
numerator of which is the Finance Charge Shortfall for Series [__________]
for such Distribution Date and the denominator of which is the aggregate
amount of Finance Charge Shortfalls (as defined in the related Supplements)
for all the Series in Group [One] for such Distribution Date. The "Finance
Charge Shortfall" for Series [__________] for any Distribution Date shall be
equal to the excess, if any, of (a) the full amount required to be paid,
without duplication, pursuant to subsections 4.5(a), 4.5(b) and 4.5(c) and
4.7 (except for subsection 4.7(n)) on such Distribution Date over (b) the sum
of Class A Available Funds, Class B Available Funds and Class C Available
Funds with respect to the related Monthly Period.
[(b) Subject to subsection 4.04(c) of the Agreement, Excess Transferor
Finance Charge Collections for any Distribution Date will be allocated to
Series [__________] in an amount equal to the product of (x) the Excess
Transferor Finance Charge Collections for such Distribution Date and (y) a
fraction, the numerator of which is the Finance Charge Shortfall for Series
[__________] for such Distribution Date and the denominator of which is the
aggregate amount of Finance Charge Shortfalls (as defined in the related
Supplements) for all Series entitled to receive Excess Transferor Finance
Charge Collections for such Distribution Date, in
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each case after applying Excess Finance Charges, if any, to each such Series
(including Series [__________]).]
Section 4.10. Shared Principal Collections and Shared Transferor
Principal Collections.
(a) Subject to subsection 4.04(a) of the Agreement, Shared Principal
Collections for any Distribution Date will be allocated to Series [__________]
in an amount equal to the product of (x) the aggregate amount of Shared
Principal Collections with respect to all Principal Sharing Series for such
Distribution Date and (y) a fraction, the numerator of which is the Principal
Shortfall for Series [__________] for such Distribution Date and the
denominator of which is the aggregate amount of Principal Shortfalls for all
the Series that are Principal Sharing Series for such Distribution Date. The
"Principal Shortfall" for Series [__________] shall be equal to (a) for any
Distribution Date with respect to the Revolving Period, zero, (b) for any
Distribution Date with respect to the Controlled Accumulation Period (on or
prior to the Class B Expected Final Distribution Date), the excess, if any,
of the Controlled Deposit Amount with respect to such Distribution Date over
the amount of Available Investor Principal Collections for such Distribution
Date (excluding any portion thereof attributable to Shared Principal
Collections [or Shared Transferor Principal Collections]) and (c) for each
Distribution Date with respect to the Rapid Amortization Period or the
Controlled Accumulation Period after the Class B Expected Final Distribution
Date, the excess, if any, of the Invested Amount over the amount of Available
Investor Principal Collections for such Distribution Date (excluding any
portion thereof attributable to Shared Principal Collections
[or Shared Transferor Principal Collections]).
[(b) Subject to subsection 4.04(d) of the Agreement, Shared Transferor
Principal Collections for any Distribution Date will be allocated to Series
[__________] in an amount equal to the product of (x) Shared Transferor
Principal Collections and (y) a fraction, the numerator of which is the
Principal Shortfall for Series [__________] and the denominator of which is
the aggregate amount of Principal Shortfalls (as defined in the related
Supplements) for all Series entitled to receive Shared Transferor Principal
Collections for such Distribution Date, in each case after applying Shared
Principal Collections, if any, to each such Series (including Series
[__________]).]
[Section 4.11. Determination of [LIBOR].
(a) On each [LIBOR] Determination Date, the Trustee shall determine
[LIBOR] based on the rate for deposits in United States dollars for a period
of the Designated Maturity which appears on Telerate Page 3750 as of
[11:00 A.M. (London Time)] on such date.
(b) If such rate does not appear on Telerate Page 3750, the Trustee will
determine [LIBOR] on the basis of quotations of the offered rates for
deposits in United States dollars provided by the Reference Banks at
approximately [11:00 A.M. (London time)] on such [LIBOR] Determination Date
to prime banks in the [London interbank market] for a period of the
Designated Maturity. If at least two such quotations are provided, [LIBOR]
will be the arithmetic mean of such quotations.
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(c) If, on the [LIBOR] Determination Date, such rate does not appear on
Telerate Page 3750 and only one or none of the Reference Banks provides such
offered quotations, [LIBOR] will be the rate per annum that the Trustee
determines to be the arithmetic mean of the offered quotations that three
major banks in the City of New York selected by the Servicer are quoting at
approximately [11:00 A.M. (New York City time)] on that day for loans in
United States dollars to leading European banks for a period of the
Designated Maturity.
(d) The Class A Certificate Rate or Class B Certificate Rate applicable
to the then-current and the immediately preceding Interest Periods may be
obtained by any Series [__________] Certificateholder by telephoning the
Trustee at its Corporate Trust Office at (____) ____-____.]
Section 4.12. Principal Funding Account.
(a) (i) The Servicer, for the benefit of the Series
[__________] Certificateholders, shall establish and maintain in the
name of the Trustee, on behalf of the Trust, an Eligible Deposit
Account (the "Principal Funding Account"), bearing a designation
clearly indicating that the funds deposited therein are held for the
benefit of the Series [__________] Certificateholders. The Principal
Funding Account shall initially be established with The Bank of New
York.
(ii) At the direction of the Servicer, funds on deposit in the
Principal Funding Account shall be invested by the Trustee in Eligible
Investments selected by the Servicer. All such Eligible Investments shall
be held by the Trustee for the benefit of the Series [__________]
Certificateholders; provided that on each Distribution Date all interest
and other investment income (net of losses and investment expenses)
("Principal Funding Investment Proceeds") on funds on deposit
therein shall be applied as set forth in paragraph (iii) below. Funds on
deposit in the Principal Funding Account shall be invested in Eligible
Investments that will mature so that such funds will be available at the
close of business on the Transfer Date preceding the following Distribution
Date. No Eligible Investment shall be disposed of prior to its maturity;
provided, however, that the Trustee may sell, liquidate or dispose of an
Eligible Investment before its maturity, if so directed in writing by the
Servicer, the Servicer having reasonably determined that the interest of
the Series [__________] Certificateholders may be adversely affected if such
Eligible Investment is held to its maturity. Unless the Servicer directs
otherwise, funds deposited in the Principal Funding Account on a Transfer
Date (which immediately precedes a Distribution Date) upon the maturity of
any Eligible Investments are not required to be invested overnight.
(iii) On each Distribution Date, the Servicer shall direct the
Trustee to withdraw from the Principal Funding Account and deposit into the
Collection Account all Principal Funding Investment Proceeds then on
deposit in the Principal Funding Account, and such Principal Funding
Investment Proceeds shall be treated as a portion of Class A Available
Funds for such Distribution Date.
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(iv) Reinvested interest and other investment income on funds
deposited in the Principal Funding Account shall not be considered to be
principal amounts on deposit therein for purposes of this Supplement.
(b) (i) The Trustee shall possess all right, title and interest
in all funds on deposit from time to time in the Principal Funding Account
and in all proceeds thereof. The Principal Funding Account shall be under
the sole dominion and control of the Trustee for the benefit of the
Series [__________] Certificateholders. If, at any time, the Principal
Funding Account ceases to be an Eligible Deposit Account, the Trustee shall
within 10 Business Days (or such longer period, not to exceed 30 calendar
days, as to which each Rating Agency may consent) establish a new Principal
Funding Account meeting the conditions specified in paragraph (a) (i) above
as an Eligible Deposit Account and shall transfer any cash and/or any
investments to such new Principal Funding Account.
(ii) Pursuant to the authority granted to the Servicer in
subsection 3.01(b) of the Agreement, the Servicer shall have the power,
revocable by the Trustee, to make withdrawals and payments or to instruct
the Trustee to make withdrawals and payments from the Principal Funding
Account for the purposes of carrying out the Servicer's or Trustee's duties
hereunder. Pursuant to the authority granted to the Paying Agent in Section
5.01 of this Supplement and Section 6.07 of the Agreement, the Paying Agent
shall have the power, revocable by the Trustee, to withdraw funds from the
Principal Funding Account for the purpose of making distributions to the
Series [__________] Certificateholders.
Section 4.13. Class A Accumulation Period. The Class A Accumulation
Period is scheduled to commence on the Controlled Accumulation Date;
provided, however, that if the Class A Accumulation Period Length on any
Determination Date (determined as described below) is less than twelve
months, upon notice to the Trustee, the Transferor and each Rating Agency,
the Servicer, at its option, may elect to modify the date on which the Class
A 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 Expected Final
Distribution Date occurs at least equal to the Class A Accumulation Period
Length (so that, as a result, the number of Monthly Periods in the Class A
Accumulation Period will at least equal the Class A Accumulation Period
Length); provided, however, that (i) the length of the Class A Accumulation
Period will not be less than one month; and (ii) notwithstanding any other
provision of this Supplement to the contrary, no election to postpone the
commencement of the Class A Accumulation Period shall be made after a Pay Out
Event (as defined in the related Supplement) shall have occurred and is
continuing with respect to any other Series. On each Determination Date, the
Servicer will determine the "Class A Accumulation Period Length," which will
mean a number of months such that the amount available for distribution of
principal on the Class A Certificates on the Class A Expected Final
Distribution Date will equal or exceed the Class A Investor Amount, assuming
for this purpose that (1) the payment rate with respect to Collections of
Principal Receivables remains constant at the lowest level of such payment
rate during the twelve preceding Monthly Periods (or such lower payment rate
as the Servicer may select), (2) the total amount of Principal Receivables in
the Trust (and the principal amount on deposit in the Excess
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Funding Account, if any) and the Discount Percentage 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 the Servicer electing to modify the commencement of
the Class A Accumulation Period pursuant to this Section 4.13 shall specify
(i) the Class A Accumulation Period Length, (ii) the commencement date of the
Class A Accumulation Period and (iii) the Controlled Accumulation Amount with
respect to each Monthly Period during the Class A Accumulation Period.
Section 4.14. Reserve Account.
(a) The Servicer shall establish and maintain, in the name of the Trustee,
on behalf of the Trust, for the benefit of the Series [__________] Holders, an
Eligible Deposit Account (the "Reserve Account") bearing a designation clearly
indicating that the funds deposited therein are held for the benefit of the
Series [__________] Holders. The Reserve Account shall initially be established
with The Bank of New York. The Trustee shall possess all right, title and
interest in all funds on deposit from time to time in the Reserve Account and in
all proceeds thereof. The Reserve Account shall be under the sole dominion and
control of the Trustee for the benefit of the Series [__________] Holders. If
at any time the Reserve Account ceases to be an Eligible Deposit Account, the
Trustee (or the Servicer on its behalf) shall within 10 Business Days (or such
longer period, not to exceed 30 calendar days, as to which each Rating Agency
may consent) establish a new Reserve Account meeting the conditions specified
above as an Eligible Deposit Account, and shall transfer any cash and/or any
investments to such new Reserve Account. The Trustee, at the direction of the
Servicer, shall (i) make withdrawals from the Reserve Account from time to time
for the purposes set forth in this Supplement, and (ii) on each Distribution
Date (from and after the Reserve Account Funding Date) prior to the termination
of the Reserve Account make a deposit into the Reserve Account in the amount
specified in, and otherwise in accordance with, subsection 4.7(j).
(b) Funds on deposit in the Reserve Account shall be invested at the
written direction of the Servicer by the Trustee in Eligible 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 immediately succeeding
Transfer Date. The Trustee shall maintain for the benefit of the Series
[__________]Holders possession of the negotiable instruments or securities,
if any, evidencing such Eligible Investments. No Eligible Investment shall
be disposed of prior to its maturity; provided, however, that the Trustee may
sell, liquidate or dispose of an Eligible Investment before its maturity, if
so directed by the Servicer in writing, the Servicer having reasonably
determined that the interest of the Series [__________] Holders may be
adversely affected if such Eligible Investment is held to its maturity. On
each Distribution Date, all interest and earnings (net of losses and
investment expenses) accrued since the preceding Distribution Date on funds
on deposit in the Reserve Account shall be retained in the Reserve Account
(to the extent that the amount on deposit in the Reserve Account is less than
the Required Reserve Account Amount) and the balance, if any, shall be
deposited in the Collection Account and treated as Collections of Finance
Charge Receivables allocable to Series [__________]. For purposes of
determining the availability of funds or the balance in the
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Reserve Account for any reason under this Supplement, except as otherwise
provided in the preceding sentence, investment earnings on such funds shall
be deemed not to be available or on deposit.
(c) On the Determination Date preceding each Distribution Date with
respect to the Controlled Accumulation Period (prior to the Class B Expected
Final Distribution Date) and the first Special Payment Date, the Servicer
shall calculate the "Reserve Draw Amount" which shall be equal to the excess,
if any, of the Covered Amount with respect to such Distribution Date or
Special Payment Date over the Principal Funding Investment Proceeds with
respect to such Distribution Date or Special Payment Date; provided, that
such amount will be reduced to the extent that funds otherwise would be
available for deposit in the Reserve Account under subsection 4.7(j) with
respect to such Distribution Date.
(d) In the event that for any Distribution Date the Reserve Draw Amount
is greater than zero, the Reserve Draw Amount, up to the amount on deposit in
the Reserve Account, shall be withdrawn from the Reserve Account on the
related Transfer Date by the Trustee (acting in accordance with the
instructions of the Servicer), deposited into the Collection Account and
included in Class A Available Funds for such Distribution Date.
(e) In the event that the Reserve Account Surplus on any Distribution
Date, after giving effect to all deposits to and withdrawals from the Reserve
Account with respect to such Distribution Date, is greater than zero, the
Trustee, acting in accordance with the instructions of the Servicer, shall
withdraw from the Reserve Account, and pay to the Holders of the Transferor
Certificates or their designee an amount equal to such Reserve Account
Surplus.
(f) Upon the earliest to occur of (i) the termination of the Trust
pursuant to Article XII of the Agreement, (ii) the day on which the Class A
Investor Amount is paid in full to the Class A Certificateholders, (iii) if
the Controlled Accumulation Period has not commenced, the occurrence of a Pay
Out Event with respect to Series [__________] and (iv) if the Controlled
Accumulation Period has commenced, the earlier of the first Special Payment
Date and the Class A Expected Final Distribution Date, the Trustee, acting in
accordance with the written instructions of the Servicer, after the prior
payment of all amounts owing to the Series [__________] Certificateholders
which are payable from the Reserve Account as provided herein, shall withdraw
from the Reserve Account and pay to the Holders of the Transferor
Certificates or their designee all amounts, if any, on deposit in the Reserve
Account and the Reserve Account shall be deemed to have terminated for
purposes of this Supplement.
[Section 4.15. Pre-Funding Account.
(a) Establishment of the Pre-Funding Account. The Servicer hereby
directs the Trustee, for the benefit of the Series [__________] Holders, to
establish and maintain or cause to be established and maintained in the name
of the Trustee, on behalf of the Series [__________] Holders, an Eligible
Deposit Account (the "Pre-Funding Account"), bearing a designation clearly
indicating that the funds deposited therein are held for the benefit of the
Series [__________] Holders. The Transferor does hereby transfer, assign,
set over and otherwise convey to the Trustee for the benefit of the Series
[__________]Holders, without recourse, all of its right, title
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and interest in, to and under the Pre-Funding Account, any Eligible
Investments on deposit therein and any proceeds of the foregoing. The
Pre-Funding Account shall be under the sole dominion and control of the
Trustee for the benefit of the Series [__________]Holders. If, at any time,
the Pre-Funding Account ceases to be an Eligible Deposit Account, the
Servicer shall direct the Trustee to establish within ten Business Days a new
Pre-Funding Account meeting the conditions specified above, transfer any cash
or any investments from the old Pre-Funding Account to such new Pre-Funding
Account and from the date such new Pre-Funding Account is established, it
shall be the "Pre-Funding Account." In addition, after five days' notice to
the Trustee, the Servicer may direct the Trustee to establish a new
Pre-Funding Account meeting the conditions specified above, transfer any cash
or investments from the old Pre-Funding Account to such new Pre-Funding
Account and from the date such new Pre-Funding Account is established, it
shall be the "Pre-Funding Account." The Trustee, at the direction of the
Servicer, shall make withdrawals and payments from the Pre-Funding Account
from time to time for the purposes set forth in this Supplement.
(b) Administration of Pre-Funding Account. The Trustee shall on the
Closing Date deposit into the Pre-Funding Account the Initial Pre-Funded
Amount from the proceeds of the sale of the Series [__________] Certificates
and the Class C Interests. On the Business Day preceding each Transfer Date,
the Trustee, acting in accordance with written instructions from the
Servicer, shall withdraw from the Pre-Funding Account and deposit into the
Collection Account all interest and other investment income on the Pre-Funded
Amount with respect to the prior Monthly Period. Such investment income shall
be deemed to be Collections of Finance Charge Receivables allocated to Series
[__________]. Interest (including reinvested interest) and other investment
income on funds on deposit in the Pre-Funding Account shall not be considered
part of the Pre-Funded Amount for purposes of this Supplement.
(c) Investment of Funds in Pre-Funding Account. Funds on deposit in the
Pre-Funding Account shall be invested in Eligible Investments by the Trustee
(or, at the direction of the Trustee, by the Servicer on behalf of the
Trustee) selected at the written direction of the Servicer. Funds on deposit
in the Pre-Funding Account on the Closing Date and thereafter shall be
invested in Eligible Investments that will mature so that such funds will be
available for withdrawal on the Business Day next succeeding the next
increase in the Invested Amount pursuant to Section 4.16 or, if earlier, on
the next succeeding Transfer Date.
(d) Principal Payments from Pre-Funding Account. In the event that the
Pre-Funded Amount exceeds zero at the end of the Funding Period, on the first
Distribution Date on or after the last day of the Funding Period the Servicer
shall apply or shall cause the Trustee to apply the Pre-Funded Amount to the
payment by the Paying Agent of principal on the Class A Certificates, the
Class B Certificates and the Class C Interests on a pro rata basis based on
the Class A Invested Amount, the Class B Invested Amount and the Class C
Invested Amount.]
[Section 4.16. Increases in Invested Amount. On the last day of each
Monthly Period during the Funding Period, commencing ___________ __, 199____,
the Invested Amount shall increase to the extent that the Transferor Amount on
such day exceeds the product of (A) the sum of____% and the Required Transferor
Percentage on such date and (B) the sum of (i) the product of the aggregate
amount of Principal Receivables in the Trust and one minus the
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Discount Percentage and (ii) amounts on deposit in the Excess Funding Account
on such day; provided, however, that the Invested Amount shall in no event
exceed $__________ or increase pursuant to this Section 4.16 by an amount in
excess of the Pre-Funded Amount immediately prior to giving effect to such
increase. Such increase in the Invested Amount shall be allocated to the
Class A Certificates, the Class B Certificates and the Class C Interests on a
pro rata basis based on the Class A Invested Amount, the Class B Invested
Amount and the Class C Invested Amount immediately prior to such increase.
Upon any increase in the Invested Amount pursuant to this Section 4.16, the
Servicer shall instruct the Trustee in writing to withdraw from the
Pre-Funding Account and pay to Holders of the Transferor Certificates no
later than the next succeeding Business Day an amount equal to the amount of
such increase in the Invested Amount.]
Section 4.18. Designation of Class C Interest Terms; Sale of Class C
Interests. The Transferor may at any time, without the consent of the
Investor Certificateholders, (i) sell or transfer all or a portion of the
Class C Interest and (ii) in connection with any such sale or transfer, enter
into a supplemental agreement with the Trustee pursuant to which the
Transferor and the Trustee may amend the Class C Interest Rate, set forth the
calculation of the Class C Monthly Interest, provide for the payment of
additional amounts with respect to any Monthly Interest and provide for such
other provisions with respect to the Class C Interests as may be specified in
such supplemental agreement, provided that in each case (A) the Transferor
shall have given notice to the Trustee, the Servicer and the Rating Agencies
of such proposed sale or transfer of the Class C Interest and such
supplemental agreement at least five Business Days prior to the consummation
of such sale or transfer and the execution of such proposed supplemental
agreement; (B) the Rating Agency Condition shall have been satisfied; (C) no
Pay Out Event shall have occurred prior to the consumation of such proposed
sale or transfer of Class C Interests or the execution of such supplemental
agreement; (D) the Transferor shall have delivered an Officer's Certificate,
dated the date of the consummation of such sale or transfer and the
effectiveness of such supplemental agreement, to the effect that, in the
reasonable belief of the Transferor, such action will not, based on the facts
known to such officer at the time of such certification, cause a Pay Out
Event to occur with respect to any Series, and (E) the Transferor will have
delivered a Tax Opinion, dated the date of such certificate with respect to
such action; provided further, (i) as a condition to the sale or transfer of
all or a portion of the Class C Interest the transferee shall be required to
agree not to institute against, or join any other Person in instituting
against, the Trust or the Transferor any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceeding, or other proceeding under
any federal or state bankruptcy or similar law, for one year and one day
after all Investor Certificates are paid in full and (ii) the Class C
Interests may not be sold or transferred, in whole or in part, to The
Travelers Bank or The Travelers Bank USA.
ARTICLE V
Distributions and Reports to Series [__________] Certificateholders
Section 5.1. Distributions.
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(a) On each Distribution Date, the Paying Agent shall distribute to each
Class A Certificateholder of record on the related Record Date (other than as
provided in Section 12.02 of the Agreement) such Class A Certificateholder's
pro rata share of the amounts that are allocated and available on such
Distribution Date to pay interest on the Class A Certificates pursuant to
this Supplement.
(b) On each Distribution Date, commencing with the first to occur of the
Class A Expected Final Payment Date and the first Special Payment Date, the
Paying Agent shall distribute to each Class A Certificateholder of record on
the related Record Date (other than as provided in Section 12.02 of the
Agreement) such Class A Certificateholder's pro rata share of the amounts
that are allocated and available on such date to pay principal of the Class A
Certificates pursuant to this Supplement up to a maximum amount on any such
date equal to the Class A Investor Amount on such date (unless there has been
an optional repurchase of the Certificateholders' Interest pursuant to
Section 10.01 of the Agreement, in which event the foregoing limitation will
not apply).
(c) On each Distribution Date, the Paying Agent shall distribute to each
Class B Certificateholder of record on the related Record Date (other than as
provided in Section 12.02 of the Agreement) such Class B Certificateholder's
pro rata share of the amounts that are allocated and available on such
Distribution Date to pay interest on the Class B Certificates pursuant to
this Supplement.
(d) On each Distribution Date, commencing with the Class B Principal
Commencement Date, the Paying Agent shall distribute to each Class B
Certificateholder of record on the related Record Date (other than as
provided in Section 12.02 of the Agreement) such Class B Certificateholder's
pro rata share of the amounts that are allocated and available on such date
to pay principal of the Class B Certificates pursuant to this Supplement up
to a maximum amount on any such date equal to the Class B Investor Amount on
such date (unless there has been an optional repurchase of the
Certificateholders' Interest pursuant to Section 10.01 of the Agreement, in
which event the foregoing limitation will not apply).
(e) The distributions to be made pursuant to this Section 5.1 are
subject to the provisions of Sections 2.06, 9.02, 10.01 and 12.02 of the
Agreement and Sections 8.1 and 8.2 of this Supplement.
(f) Except as provided in Section 12.02 of the Agreement with respect to
a final distribution in respect of the Class A Certificates or the Class B
Certificates, distributions to Series [__________] Holders hereunder shall be
made by check mailed to each Series [__________] Holder at such Series
[__________] Holder's address appearing in the Certificate Register or the
Book-Entry Register, as applicable, without presentation or surrender of any
Series [__________] Certificate or the making of any notation thereon;
provided, however, that with respect to Series [__________] Certificates
registered in the name of a Clearing Agency, such distributions shall be made
to such Clearing Agency in immediately available funds.
Section 5.2. Certificates and Statements.
37
<PAGE>
(a) Not later than each Determination Date, the Servicer shall deliver
to the Trustee, the Paying Agent and each Rating Agency, a certificate
substantially in the form of Exhibit B prepared by the Servicer.
(b) On each Distribution Date, the Paying Agent, on behalf of the
Trustee, shall forward to each Series [__________] Holder a statement
substantially in the form of Exhibit C prepared by the Servicer.
(c) A copy of each statement or certificate provided pursuant to
paragraph (a) or (b) may be obtained by any Series [__________] Holder or any
Certificate Owner thereof by a request in writing to the Servicer.
(d) On or before January 31 of each calendar year, beginning with
calendar year 199____, the Paying Agent, on behalf of the Trustee, shall
furnish or cause to be furnished to each Person who at any time during the
preceding calendar year was a Series [__________] Holder, a statement
prepared by the Servicer containing the information which is required to be
contained in the statement to Series [__________] Holders, as set forth in
paragraph (b) above, aggregated for such calendar year or the applicable
portion thereof during which such Person was a Series [__________] Holder,
together with other information as is required to be provided by an issuer of
indebtedness under the Internal Revenue Code. Such obligation of the Servicer
shall be deemed to have been satisfied to the extent that substantially
comparable information shall be provided by the Paying Agent pursuant to any
requirements of the Internal Revenue Code as from time to time in effect.
ARTICLE VI
Additional Pay Out Events
Section 6.1. Additional Pay Out Events. If any one of the following
events shall occur with respect to Series [__________]:
(a) failure on the part of the Transferor (A) to make any payment or
deposit required by the terms of the Agreement on or before the date
occurring five Business Days after the date such payment or deposit is
required to be made herein or (B) duly to observe or perform in any material
respect any other covenants or agreements of the Transferor set forth in the
Agreement which has a material adverse effect on the Series [__________]
Certificateholders (which determination shall be made, for so long as the
Class C Invested Amount is greater than zero, without reference to whether
any funds are available pursuant to Series Enhancement) and continues
unremedied for a period of 60 days after the date on which written notice of
such failure, requiring the same to be remedied, shall have been given to the
Transferor by the Trustee, or to the Transferor and the Trustee by Series
[__________] Certificateholders aggregating not less than 50% of the sum of
the outstanding principal balance of the Series [__________] Certificates;
(b) any representation or warranty made by the Transferor in the
Agreement or any information contained in a computer file or microfiche list
required to be delivered by the
38
<PAGE>
Servicer on behalf of the Transferor pursuant to Section 2.01 or 2.09 of the
Agreement (A) shall prove to have been incorrect in any material respect when
made or when delivered, which continues to be incorrect in any material
respect for a period of 60 days after the date on which written notice of
such failure, requiring the same to be remedied, shall have been given to the
Transferor by the Trustee, or to the Transferor and the Trustee by Series
[__________] Certificateholders aggregating not less than 50% of the sum of
the outstanding principal balance of the Series [__________] Certificates and
(B) as a result of which the interests of the Series [__________]
Certificateholders are materially and adversely affected (which determination
shall be made, for so long as the Class C Invested Amount is greater than
zero, without reference to whether any funds are available pursuant to any
Series Enhancement); provided, however, that a Pay Out Event pursuant to this
subparagraph (b) shall not be deemed to occur hereunder if the Transferor
shall have accepted reassignment of the related Receivable, or all of such
Receivables, if applicable, during such period (or such longer period as the
Trustee may specify) in accordance with the provisions hereof and of the
Agreement;
(c) (1)with respect to the last day of any prior Monthly Period during
which the Transferor Amount is less than the Required Transferor Amount, the
failure of the Transferor to convey on or prior to the Required Designation
Date Receivables in Additional Accounts to the Trust such that the Transferor
Amount shall be at least equal to the Required Transferor Amount as of the
close of business on the applicable Addition Date; or (2) with respect to the
last day of any prior Monthly Period during which the product of the
aggregate amount of Principal Receivables and one minus the Discount
Percentage is less than the Required Principal Balance as of such day, the
failure of the Transferor to convey on or prior to the Required Designation
Date Receivables in Additional Accounts to the Trust such that the product of
the aggregate amount of the Principal Receivables and one minus the Discount
Percentage shall be at least equal to the Required Principal Balance as of
the close of business on the applicable Addition Date;
(d) the Net Portfolio Yield averaged over three consecutive Monthly
Periods is less than the Base Rate averaged over such period;
(e) any Servicer Default shall occur which would have a material adverse
effect on the Series [__________] Certificateholders (which determination
shall be made, for so long as the Class C Invested Amount is greater than
zero, without reference to whether any funds are available pursuant to any
Series Enhancement); or
(f) the Class A Investor Amount shall not be paid in full on the Class A
Expected Final Distribution Date or the Class B Invested Amount shall not be
paid in full on the Class B Expected Final Distribution Date;
then, in the case of any event described in subparagraph (a), (b) or (e),
after the applicable grace period, if any, set forth in such subparagraphs,
either the Trustee or the holders of Series [__________] Certificates
evidencing more than 50% of the aggregate unpaid principal amount of the
Series [__________] Certificates by notice then given in writing to the
Transferor and the Servicer (and to the Trustee if given by the Holders of
the Series [__________] Certificates may declare that a Pay Out Event has
occurred with respect to Series [__________]
39
<PAGE>
as of the date of such notice, and, in the case of any event described in
subparagraph (c), (d) or (f) a Pay Out Event shall occur with respect to
Series [__________] without any notice or other action on the part of the
Trustee or Holders of Series [__________] Certificates immediately upon the
occurrence of such event.
ARTICLE VII
Optional Repurchase; Series Termination
Section 7.1. Optional Repurchase. On any day occurring on or after the
date on which the Investor Amount is reduced to [10]% or less of the Initial
Investor Amount, the Transferor shall have the option to purchase the
interest of the Series [__________] Certificateholders (including the Class C
Interests), at a purchase price equal to (i) if such day is a Distribution
Date, the Reassignment Amount for such Distribution Date or (ii) if such day
is not a Distribution Date, the Reassignment Amount for the Distribution Date
following such day.
Section 7.2. Series Termination.
(a) If, on the ________ ______ Distribution Date, the Investor Amount
(after giving effect to all changes therein on such date) would be greater
than zero, the Servicer, on behalf of the Trustee, shall, within the 40-day
period which begins on such Distribution Date, solicit bids for the sale of
Principal Receivables and the related Finance Charge Receivables (or
interests therein) in an amount equal to the Investor Amount and accrued and
unpaid interest thereon at the close of business on the last day of the
Monthly Period preceding the Series Termination Date (after giving effect to
all distributions required to be made on the Series Termination Date, except
pursuant to this Section 7.2; provided, however that in no event shall such
amount exceed the Series Percentage of Receivables on the Series Termination
Date). Such bids shall require that such sale shall (subject to subsection
7.2(b)) occur on the Series Termination Date. The Transferor shall be
entitled to participate in, and to receive from the Trustee a copy of each
other bid submitted in connection with, such bidding process.
(b) The Servicer, on behalf of the Trustee, shall sell such Receivables
(or interests therein) on the Series Termination Date to the bidder who made
the highest cash purchase offer. The proceeds of any such sale shall be
treated as Collections on the Receivables allocated to Series [__________]
pursuant to the Agreement and this Supplement; provided, however, that the
Servicer shall determine conclusively the amount of such proceeds which are
allocable to Finance Charge Receivables and the amount of such proceeds which
are allocable to Principal Receivables. During the period from the ________
_______ Distribution Date to the Series Termination Date, the Servicer shall
continue to collect payments on the Receivables and allocate and deposit such
collections in accordance with the provisions of the Agreement and the
Supplements.
ARTICLE VIII
Final Distributions
40
<PAGE>
Section 8.1. Sale of Receivables or Certificateholders' Interest
Pursuant to Section 2.06 or 10.01 of the Agreement.
(a) Purchase Price. The amount to be paid with respect to Series
[__________] in connection with (i) a reassignment of Receivables to the
Transferor pursuant to Section 2.06 of the Agreement or (ii) a repurchase of
the Certificateholders' Interest pursuant to Section 10.01 of the Agreement
shall equal the Reassignment Amount for the first Distribution Date following
the Monthly Period in which the reassignment obligation arises under the
Agreement.
(b) Distributions Pursuant to Section 7.01 or 7.02 of this Supplement
and Section 10.01 of the Agreement. With respect to the Reassignment Amount
deposited into the Collection Account pursuant to Section 7.1 or 8.1(a)(ii)
or any amounts allocable to Series [__________] deposited into the Collection
Account pursuant to Section 7.2, the Trustee shall, not later than 3:00 p.m.
New York City time, on the related Distribution Date, make deposits or
distributions of the following amounts (in the priority set forth below and,
in each case, after giving effect to any deposits and distributions otherwise
to be made on such date) in immediately available funds: (i) (x) the Class A
Investor Amount on such Distribution Date will be distributed to the Paying
Agent for payment to the Class A Certificateholders and (y) an amount equal
to the sum of (A) Class A Monthly Interest for such Distribution Date, (B)
any Class A Monthly Interest previously due but not distributed to the Class
A Certificateholders on a prior Distribution Date and (C) the amount of Class
A Additional Interest, if any, for such Distribution Date and any Class A
Additional Interest previously due but not distributed to the Class A
Certificateholders on any prior Distribution Date, will be distributed to the
Paying Agent for payment to the Class A Certificateholders, (ii) (x) the
Class B Invested Amount on such Distribution Date will be distributed to the
Paying Agent for payment to the Class B Certificateholders and (y) an amount
equal to the sum of (A) Class B Monthly Interest for such Distribution Date,
(B) any Class B Monthly Interest previously due but not distributed to the
Class B Certificateholders on a prior Distribution Date and (C) the amount of
Class B Additional Interest, if any, for such Distribution Date and any Class
B Additional Interest previously due but not distributed to the Class B
Certificateholders on any prior Distribution Date, will be distributed to the
Paying Agent for payment to the Class B Certificateholders and (iii) (x) the
Class C Invested Amount on such Distribution Date will be distributed to the
Class C Interest Holder and (y) an amount equal to the sum of (A) Class C
Monthly Interest, if any, for such Distribution Date and (B) any Class C
Monthly Interest previously due but not distributed to the Class C Interest
Holders on a prior Distribution Date shall be distributed to the Class C
Interest Holder.
(c) Distributions Pursuant to Section 2.06 of the Agreement. With
respect to any amounts deposited into the Collection Account pursuant to
subsection 8.1(a)(i), the Trustee shall, not later than 3:00 p.m., New York
City time, on the related Distribution Date, deposit the principal portion of
such amounts that are allocable to the Series [__________] Holders into the
Collection Account.
(d) Notwithstanding anything to the contrary in this Supplement or the
Agreement, all amounts distributed to the Paying Agent pursuant to subsection
8.1(b) for payment to the Series [__________] Certificateholders shall be
deemed distributed in full to the Series [__________] Certificateholders on
the date on which such funds are distributed to the Paying Agent pursuant
41
<PAGE>
to this Section and shall be deemed to be a final distribution pursuant to
Section 12.02 of the Agreement.
ARTICLE IX
Certificates
Section 9.1. Book-Entry Certificates. The Class A Certificates and the
Class B Certificates shall be delivered as Book-Entry Certificates. The
Clearing Agency for the Class A Certificates and the Class B Certificates
shall be The Depository Trust Company, and the Class A Certificates and the
Class B Certificates shall be initially registered in the name of Cede & Co.,
its nominee.
Section 9.2. Uncertificated Securities. The Class C Interests shall be
delivered in uncertificated form.
ARTICLE X
Miscellaneous Provisions
Section 10.1. Ratification of Agreement. As supplemented by this
Supplement, the Agreement is in all respects ratified and confirmed and the
Agreement as so supplemented by this Supplement shall be read, taken and
construed as one and the same instrument.
Section 10.2. Counterparts. This Supplement 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.
Section 10.3. Governing Law. THIS SUPPLEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, INCLUDING THE UCC AS IN
EFFECT IN THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW
PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER
SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 10.4. Notices. All directions, notices and instructions to the
Trustee shall be in writing (which may be facsimile).
Section 10.5. Amendments. This Supplement may be amended by the
Transferor without the consent of the Servicer, the Trustee or any Investor
Certificateholder if the Transferor provides the Trustee with (i) an Opinion
of Counsel to the effect that such amendment or modification would reduce the
risk that the Trust would be treated as taxable as a publicly traded
partnership pursuant to Code section 7704 and (ii) an Officer's Certificate
that such amendment or modification would not materially and adversely affect
any Investor Certificateholder, provided that no such amendment shall be
deemed effective without (i) the Trustee's consent, if the Trustee's rights,
duties and obligations hereunder are thereby modified
42
<PAGE>
and (ii) the Trustee having obtained written assurance that such amendment or
modification will not, by itself, lower the then-current ratings on the
Series [__________] Certificates. The Transferor shall provide the Rating
Agencies with prior written notice of any such amendment or modification.
43
<PAGE>
IN WITNESS WHEREOF, the undersigned have caused this Supplement to be
duly executed and delivered by their respective duly authorized officers on
the day and year first above written.
CC CREDIT CARD CORPORATION
Transferor,
By-------------------------------------
Name:
Title:
THE TRAVELERS BANK,
Servicer,
By-------------------------------------
Name:
Title:
THE BANK OF NEW YORK,
Trustee
By-------------------------------------
Name:
Title:
[Signature Page for Series [__________] Supplement]
<PAGE>
Exhibit 4.3
REPRESENTATIVE FORM OF PROSPECTUS SUPPLEMENT
PROSPECTUS SUPPLEMENT
(To Prospectus Dated , 199 )
-------- -- --
TRAVELERS BANK CREDIT CARD MASTER TRUST I
$ CLASS A[FLOATING-RATE] [ %] ASSET-BACKED CERTIFICATES,
------------ ----
SERIES 19 -
-- --
$ CLASS B [FLOATING-RATE] [ %] ASSET-BACKED CERTIFICATES,
-------- ---
SERIES 199 -
- --
CC CREDIT CARD CORPORATION
TRANSFEROR
The Travelers Bank
Servicer
----------------
Each Class A [Floating-Rate] [ %] Asset-Backed Certificate, Series
--
199 - (collectively, the "Class A Certificates") and each Class B
- --
[Floating-Rate][ %] Asset-Backed Certificate, Series 199 -
-- - ----
(collectively, the "Class B Certificates" and, together with the Class A
Certificates, the "Certificates") will represent an undivided interest in the
assets of the Travelers Bank Credit Card Master Trust I (the "Trust") formed
pursuant to a Pooling and Servicing Agreement among CC Credit Card
Corporation, as Transferor (the "Transferor"), The Travelers Bank, as
Servicer (the "Servicer"), and The Bank of New York, as Trustee (the
"Trustee"). (CONTINUED ON NEXT PAGE)
---------------
THERE CURRENTLY IS NO SECONDARY MARKET FOR THE CERTIFICATES, AND THERE IS
NO ASSURANCE THAT ONE WILL DEVELOP. THE UNDERWRITER[S] EXPECT, BUT ARE NOT
OBLIGATED, TO MAKE A MARKET IN THE CERTIFICATES. THERE IS NO ASSURANCE THAT
ANY SUCH MARKET WILL DEVELOP OR CONTINUE. POTENTIAL INVESTORS SHOULD
CONSIDER, AMONG OTHER THINGS, THE INFORMATION SET FORTH IN "RISK FACTORS"
COMMENCING ON PAGE HEREIN AND ON PAGE IN THE PROSPECTUS.
---- --
THE CERTIFICATES REPRESENT INTERESTS IN THE TRUST AND DO NOT REPRESENT
INTERESTS IN OR OBLIGATIONS OF TRAVELERS GROUP INC., COMMERCIAL CREDIT
COMPANY, CC CREDIT CARD CORPORATION, THE TRAVELERS BANK, THE TRAVELERS BANK
USA OR ANY AFFILIATE THEREOF, EXCEPT TO THE LIMITED EXTENT DESCRIBED HEREIN.
A CERTIFICATE IS NOT A DEPOSIT AND IS NOT INSURED BY THE FEDERAL DEPOSIT
INSURANCE CORPORATION (THE "FDIC"). THE RECEIVABLES ARE NOT INSURED OR
GUARANTEED BY THE FDIC OR ANY OTHER GOVERNMENTAL AGENCY OR INSTRUMENTALITY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
PRICE TO UNDERWRITING PROCEEDS TO THE
PUBLIC(1) DISCOUNT TRUST(1)
--------- ------------ ---------------
Per Class A Certificate.... % % %
---- ---- ----
Per Class B Certificate.... % % %
---- ---- ----
Total...................... $ $ $
-------- -------- ---------
-------- -------- ---------
(1) Plus accrued interest, if any, at the rate of , as applicable, from
----
, .
- -------- -- ----
---------------
The Certificates are offered by the Underwriter[s] when, as and if issued
by the Trust and accepted by the Underwriter[s] and subject to the
Underwriter['s][s'] right to reject orders in whole or in part. It is
expected that the Certificates will be offered globally and delivered in
book-entry form on or about , 1997, through the facilities of The
-------- --
Depository Trust Company,
[Cedel Bank, socite anonyme and the Euroclear System.]
---------------
[UNDERWRITER[S]]
The date of this Prospectus Supplement is , 199
------- -- --
<PAGE>
(CONTINUED FROM PREVIOUS PAGE)
The property of the Trust includes a portfolio of VISA-Registered
Trademark-* and MasterCard-Registered Trademark- credit card receivables (the
"Receivables") generated or to be generated from time to time in the ordinary
course of business in a portfolio of consumer revolving credit card accounts
(the "Accounts"), all monies due in payment of the Receivables and certain
other property, as described more fully herein, [including the benefits of
monies on deposit in certain accounts of the Trust and earnings thereon.]
Concurrently with the issuance of the Certificates, the Trust will issue
$ Class C Asset-Backed Interests, Series 199 - (the "Class C
------------ - --
Interests"), which will be subordinated to the Certificates as described
herein. Only the Class A Certificates and the Class B Certificates are
offered hereby. [The Transferor will initially retain the Class C Interest.].
The Certificates offered hereby constitute a separate Series of Certificates
being offered by the Transferor from time to time pursuant to the Prospectus
dated , 199 . This Prospectus Supplement does not contain complete
------ -- --
information about the offering of the Certificates. Additional information
is contained in the Prospectus and investors are urged to read both this
Prospectus Supplement and the Prospectus in full. Sales of the Certificates
may not be consummated unless the purchaser has received both this Prospectus
Supplement and the Prospectus. The Receivables arise in accounts which are
owned either by The Travelers Bank or The Travelers Bank USA. The Travelers
Bank will service the Receivables. The Certificateholders will be entitled to
certain assets of the Trust, including the right to receive a varying
percentage of each month's collections with respect to the Receivables at the
times and in the manner described herein. The Transferor owns the remaining
undivided interest in the Trust not represented by the Certificates, the
Class C Interest or the certificates of any other Series and any other
certificated or uncertificated interests in the Trust issued as Series
Enhancement. The Trust [has offered and may offer from time to time]
[may offer from time to time] other Series of certificates that represent
undivided interests in certain assets of the Trust, which may have terms
significantly different from the Certificates.
Interest on the Class A Certificates will accrue from _____________
[at the rate of ___%] [at a floating-rate determined as
follows ________________________________]. Interest will be distributed on
the Class A Certificates on the _________ day of each month,
commencing __________ , 199_. Interest on the Class B Certificates will
accrue from _________ [at the rate of ___%] [at a floating-rate determined
as follows ________________________________]. Interest will be distributed
on the Class B Certificates on the _________ day of each month,
commencing ___________ , 199_.
The Certificates initially will be represented by certificates which will
be registered in the name of Cede & Co., the nominee of The Depository Trust
Company. The interests of holders of beneficial interests in the Certificates
("Certificate Owners") will be represented by book-entries on the records of
The Depository Trust Company and participating members thereof. Definitive
Certificates will be available to Certificate Owners only under the limited
circumstances described in the Prospectus. See "Description of the
Certificates -- Definitive Certificates" in the Prospectus.
[Application will be made to list the Certificates on the [Luxembourg Stock
Exchange; however, no assurance can be given that such listing will be
obtained. Certificateholders should consult with , the Luxembourg
--------
listing agent for the Certificates , phone
-------------------
number , for the status of such listing.] [other exchanges].]
-----------
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITER[S] MAY OVER-ALLOT OR
EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE
CERTIFICATES AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
- ----------------------
* MasterCard-Registered Trademark- and VISA-Registered
Trademark- are federally registered servicemarks of MasterCard International
Inc. and Visa U.S.A., Inc., respectively.
S-2
<PAGE>
The Certificates offered hereby constitute a separate Series of
Certificates being offered by the Transferor from time to time pursuant to
the Prospectus dated , 199 . This Prospectus Supplement does not
------- -- --
contain complete information about the offering of the Certificates.
Additional information is contained in the Prospectus and investors are urged
to read both this Prospectus Supplement and the Prospectus in full. Sales of
the Certificates may not be consummated unless the purchaser has received
both this Prospectus Supplement and the Prospectus.
S-3
<PAGE>
SUMMARY OF TERMS
The following is qualified in its entirety by reference to the detailed
information appearing elsewhere in this Prospectus Supplement and the
accompanying Prospectus. Certain capitalized terms used herein are defined
elsewhere in this Prospectus Supplement and the accompanying Prospectus. A
listing of the pages on which some of such terms are defined is found in the
"Index of Principal Terms" in this Prospectus Supplement and the accompanying
Prospectus. Other Series which may be issued pursuant to other similar
prospectus supplements and prospectuses or disclosure documents may also use
such capitalized terms in such prospectuses or documents. However, in such
cases, reference to such terms will, unless the context otherwise requires,
only be made in the context of such other Series.
TRUST....................... The Travelers Bank Credit Card Master Trust I (the
"Trust").
THE CERTIFICATES AND THE
CLASS C INTEREST............ Each of the Class A [Floating-Rate] [ %]
---
Asset-Backed Certificates, Series 199 - (the
- --
"Class A Certificates") and the Class B
[Floating-Rate] [ %] Asset-Backed Certificates,
---
Series 199 - (the "Class B Certificates,"
-- ---
together with the Class A Certificates, the
"Certificates") offered hereby, together with the
Class C Asset-Backed Interests, Series 199 -
- --
(the "Class C Interests") represent a specified
undivided interest in the Trust Assets allocated
to the Certificates (the "Investor Interest"). The
term "Class A Certificateholders" refers to
holders of the Class A Certificates, the term
"Class B Certificateholders" refers to holders of
the Class B Certificates, the term
"Certificateholders" refers to holders of the
Certificates, and the term "Series" refers to any
series of certificates issued by the Trust,
including the series designated as Series
199 - ("Series 199 - ") of which the
-- --- -- --
Certificates form a part. The Certificates will be
issued pursuant to the Pooling and Servicing
Agreement dated as of , 1997 (the
-------- --
"Master Pooling and Servicing Agreement"), among
CC Credit Card Corporation ("the Corporation"), as
Transferor (in such capacity, the "Transferor"),
The Travelers Bank, as servicer (in such capacity,
the "Servicer"), and The Bank of New York as
trustee (the "Trustee"), and a related supplement
thereto (the "Supplement" and, together with the
Master Pooling and Servicing Agreement, the
"Pooling and Servicing Agreement" (unless the
context otherwise requires)). See "Description
of the Certificates." The Class C Interests will
initially be retained by the Transferor and will
constitute the Series Enhancement for the
Certificates.
The Certificates will be available for
purchase in minimum denominations of $1,000
and in integral multiples of $1,000 in excess
thereof. Except in certain limited
circumstances as described in the Prospectus
under "Description of the Certificates --
Definitive Certificates," the Certificates
will only be available in book-entry form.
The Trust Assets will be allocated among the
Investor Interest, the Class C Interest, the
interests of the holders of
S-4
<PAGE>
other Series and the interest of the holders
of the Transferor Certificates (the
"Transferor's Interest"), as described below.
The aggregate amount of Principal Receivables
and amounts, if any, on deposit in the Excess
Funding Account allocated to the
Certificateholders the Class C Interest (the
"Invested Amount") will be $ on the
--------
Closing Date (the "Initial Invested Amount").
The Invested Amount will, except as otherwise
provided herein, [increase up to a maximum
amount of $ during the Funding
--------
Period,] remain fixed during the remainder of
the Revolving Period and decline thereafter
during the Controlled Accumulation Period or
Rapid Amortization Period as principal is
deposited into the Principal Funding Account
or paid on the Certificates. [The Invested
Amount is subject to increase during the
Funding Period to the extent amounts are
withdrawn from the Pre-Funding Account and
paid to the Transferor in connection with an
increase in the amount of Principal
Receivables in the Trust.] The aggregate
amount of Principal Receivables and amounts,
if any, on deposit in the Excess Funding
Account allocated to the Class A
Certificateholders (the "Class A Invested
Amount") will be $ on the Closing
--------
Date (the "Class A Initial Invested Amount").
The aggregate amount of Principal Receivables
and amounts, if any, on deposit in the Excess
Funding Account allocated to the Class B
Certificateholders (the "Class B Invested
Amount") will be $ on the Closing
---------
Date (the "Class B Initial Invested Amount").
The aggregate amount of Principal Receivables
and amounts, if any, on deposit in the Excess
Funding Account allocated to the Class C
Interest (the "Class C Invested Amount") will
be $ on the Closing Date (the "Class
--------
C Initial Invested Amount"). [During the
Funding Period, the Class A Invested Amount,
the Class B Invested Amount and the Class C
Invested Amount may increase under certain
conditions as the Transferor's Interest is
increased until the Class A Invested Amount
is equal to $ , the Class B Invested
--------
Amount is equal to $ and the Class C
--------
Invested Amount is equal to $ .]
--------
Thereafter, the Class A Invested Amount will
remain, prior to the commencement of the
Controlled Accumulation Period or Rapid
Amortization Period, fixed at [the Class A
Initial Invested Amount] [such] Class A
Invested Amount, except if there are
unreimbursed Class A Investor Charge-Offs or
if a Pay Out Event or a Trust Pay Out Event
occurs. In addition, the Class B Invested
Amount will decline in certain circumstances
as a result of (a) the allocation to the
Class B Certificates of Defaulted Amounts,
including such amounts otherwise allocable to
the Class A Certificates, and (b) the
reallocation of collections of Principal
Receivables otherwise allocable to the Class
B Certificates to fund certain payments in
respect of the Class A Certificates. Any such
reductions in the Class B Invested Amount may
be reimbursed out of Excess Spread, if any,
Excess Finance Charges allocable to Series
199 - , the
- --
S-5
<PAGE>
reallocation of certain amounts allocable to
the Class C Interest.
The Transferor Amount will fluctuate as the
amount of Principal Receivables in the Trust,
the invested amount of each Series, the
Discount Percentage and the amounts on
deposit in the Excess Funding Account and the
Principal Funding Account change from time to
time. The Transferor's Interest will
represent the right to the assets of the
Trust not allocated to the Investor Interest,
the Class C Interest or the holders of
investor certificates of other Series (the
Investor Interest, the Class C Interest and
the interest in the assets of the Trust held
by the holders of investor certificates of
other Series is referred to herein as the
"Certificateholders' Interest").
The Class A Certificates will represent the
right to receive from the Trust Assets allocated
to the Investor Interest and the Class C
Interest funds up to (but not in excess of)
the amounts required to make payments of
interest on the Class A Certificates from the
Closing Date at [the rate of %] [a
---
floating-rate determined as follows
] (such rate, the "Class A
----------------
Certificate Rate"), and payment of principal
on the Distribution Date or, in
-------- ----
certain limited circumstances, monthly
payments of principal during the Rapid
Amortization Period, to the extent of the
Class A Invested Amount. See "Description of
the Certificates -- General," "-- Interest
Payments" and "-- Principal Payments."
The Class B Certificates will represent the
right to receive from the Trust Assets
allocated to the Investor Interest and the
Class C Interest funds up to (but not in
excess of) the amounts required to make
payments of interest on the Class B
Certificates from the Closing Date at the
[rate of %] [a floating-rate determined as
---
follows ] (such rate, the "Class
------------
B Certificate Rate"), and [monthly payments
of principal,] following the payment in full
of the Class A Investor Amount, during the
Class B Accumulation Period or the Rapid
Amortization Period to the extent of the
Class B Invested Amount. See "Description of
the Certificates -- General," "-- Interest
Payments" and "-- Principal Payments."
The Certificates represent beneficial
interests in the Trust Assets only and do not
represent interests in or obligations of
Travelers Group Inc., Commercial Credit
Company, CC Credit Corporation, either of the
Banks or any affiliate thereof except to the
limited extent provided herein. None of the
Certificates, the Class C Interest, the
Accounts or the Receivables are insured or
guaranteed by the Federal Deposit Insurance
Corporation (the "FDIC") or any other
governmental agency or instrumentality.
RECEIVABLES................. The aggregate amount of Principal Receivables
and Finance Charge Receivables in the
Accounts as of
S-6
<PAGE>
, 199 equaled $ and
---------- -- - --------
$ , respectively. The aggregate
----------
undivided interest in the Principal
Receivables and amounts on deposit in the
Excess Funding Account, if any, evidenced by
the Certificates and the Class C Interest
will never exceed the sum of the Class A
Invested Amount, the Class B Invested Amount
and the Class C Invested Amount, regardless
of the total amount of Principal Receivables
in the Trust and amounts on deposit in the
Excess Funding Account, if any, at any time.
See "The Receivables."
REGISTRATION OF
CERTIFICATES................ The Certificates initially will be
represented by certificates registered in the
name of Cede & Co. ("Cede"), as the nominee
of The Depository Trust Company ("DTC"). No
person acquiring a beneficial interest in the
Certificates (a "Certificate Owner") will be
entitled to receive a definitive certificate
representing such person's interest (a
"Definitive Certificate"), except in the
event that Definitive Certificates are issued
under the limited circumstances described
herein. Certificateholders may elect to hold
their Certificates through DTC (in the United
States) or Cedel or Euroclear (in Europe).
See "Description of the Certificates --
Definitive Certificates" in the Prospectus.
TRANSFEROR.................. CC Credit Card Corporation a Delaware
corporation and a wholly-owned subsidiary of
Commercial Credit Company.
SERVICER.................... The Travelers Bank. The principal executive
offices of the Servicer are located at
Christiana Corporate Center, 100 Commerce Drive,
Newark, Delaware 19713.
ACCOUNT OWNERS.............. The Travelers Bank and The Travelers Bank
USA.
COLLECTIONS................. All collections of Receivables will be
allocated by the Servicer between amounts
collected on Principal Receivables and
amounts collected on Finance Charge
Receivables. All such amounts will then be
allocated in accordance with the respective
interests of the Class A Certificateholders,
the Class B Certificateholders, the Class C
Interest Holder, the holders of the
Transferor Certificates and the holders of
certificates and uncertificated interests of
other Series, if any, in the Principal
Receivables and in the Finance Charge
Receivables. Subject to certain exceptions,
the Servicer will deposit all collections of
Receivables distributable to
Certificateholders, the Class C Interest
Holder and to holders of certificates and
uncertificated interests of other Series, if
any, in the Collection Account no later than
the day prior to the applicable Distribution
Date. See "Description of the Certificates --
Allocation Percentages." The Transferor may
from time to time elect that a certain
percentage of the collections of Principal
Receivables will be designated as "Discount
Option Collections" and such Discount Option
Collections will be treated as Finance Charge
collections.
S-7
<PAGE>
See "The Pooling and Servicing Agreement
Generally --Discount Option" in the
Prospectus.
INTEREST.................... Interest on the Certificates for each
Interest Period will be distributed on the
day of each month or, if any such day is
----
not a Business Day, on the next succeeding
Business Day (each, a "Distribution Date"),
commencing , 199 in an amount
-------- -- --
equal to [one-twelfth of] the product of (i)
[(a) the actual number of days in the related
Interest Period divided by [360][365], times
(b)] the Class A Certificate Rate or Class B
Certificate Rate, as applicable, and (ii) the
outstanding principal amount of the Class A
Certificates or the outstanding principal
amount of the Class B Certificates, as
applicable, as of the preceding Record Date
(or, in the case of the
-------- ----
Distribution Date, as of the Closing Date).
The "Interest Period," with respect to any
Distribution Date, will be the period from
the previous Distribution Date through the
day preceding such Distribution Date, except
the initial Interest Period will be the
period from the Closing Date through
--------
, 199 , the day preceding the initial
-- --
Distribution Date. The term "Business Day"
means any day other than a Saturday, Sunday
or a day on which banking institutions in New
York, New York, , or
-------- -------
Delaware, (or, with respect to the
determination of LIBOR, London, England) or
any other state in which the principal
executive offices of CC Credit Card
Corporation or any Additional Transferor or
the Trustee are located, are authorized or
obligated by law, executive order or
governmental decree to be closed. The
"Monthly Period," with respect to any
Distribution Date will be the period from and
including the first day of the preceding
calendar month to and including the last day
of such calendar month (other than the
initial Monthly Period, which will commence
on the Closing Date and end on ,
-------- --
199 ). See "Description of the Certificates
--
-- Interest Payments."
ADDITIONAL AMOUNTS
AVAILABLE TO
CERTIFICATEHOLDERS.......... If Class A Available Funds are less than the
sum of (i) current and overdue Class A
Monthly Interest, (ii) current and overdue
Class A Additional Interest, (iii) current
and overdue Class A Servicing Fee and (iv)
the Class A Investor Default Amount, with
respect to the related Distribution Date,
Excess Spread and Excess Finance Charges [and
Excess Transferor Finance Charge Collections]
allocable to Series 199 - will be applied
- --
to fund the deficiency (the "Class A Required
Amount"). "Excess Spread" for any
Distribution Date will equal the sum of (a)
the excess of Class A Available Funds over
the sum of the amounts referred to in clauses
(i), (ii), (iii) and (iv) above, (b) the
excess of Class B Available Funds over the
sum of (i) current and overdue Class B
Monthly Interest, (ii) current and overdue
Class B Additional Interest and (iii) current
and overdue Class B Servicing Fee
S-8
<PAGE>
and (c) the Class C Available Funds not used,
if The Travelers Bank or the Trustee is no
longer the Servicer, to pay current and
overdue Class C Servicing Fee. If Excess
Spread and Excess Finance Charges and Excess
Transferor Finance Charge Collections
allocable to Series 199 - with respect to
- --
such Distribution Date are less than the
Class A Required Amount, Reallocated
Principal Collections allocable first to the
Class C Invested Amount and then the Class B
Invested Amount with respect to the related
Monthly Period will be used to fund the
remaining Class A Required Amount. If
Reallocated Principal Collections with
respect to such Monthly Period are
insufficient to fund the remaining Class A
Required Amount for the related Distribution
Date, then a portion of the Class C Invested
Amount will be reduced by the amount of such
deficiency (but not by more than the Class A
Investor Default Amount for such Monthly
Period). If such reduction would cause the
Class C Invested Amount to be reduced below
zero, the Class B Invested Amount will be
reduced by the amount by which the Class C
Invested Amount would have been reduced below
zero (but not by more than the excess of the
Class A Investor Default Amount for such
Monthly Period over the amount of such
reduction in the Class C Invested Amount) to
avoid a charge-off with respect to the Class
A Certificates. If the Class B Invested
Amount is reduced to zero, the Class A
Invested Amount will be reduced by the amount
by which the Class A Required Amount for any
Distribution Date exceeds the sum of (i)
Excess Spread and Excess Finance Charges and
Excess Transferor Finance Charge Collections
allocated to Series 199 - , and (ii)
- --
Reallocated Principal Collections for the
related Monthly Period, but not by more than
the excess of the Class A Investor Default
Amount for such Monthly Period over the
aggregate reductions in the Class C Invested
Amount and the Class B Invested Amount with
respect to such Monthly Period, and the Class
A Certificateholders will bear directly the
credit and other risks associated with their
undivided interest in the Trust. See
"Description of the Certificates --
Reallocation of Cash Flows" and "--
Allocation of Investor Default Amount."
If Class B Available Funds are less than the
sum of (i) current and overdue Class B
Monthly Interest, (ii) current and overdue
Class B Additional Interest and (iii) current
and overdue Class B Servicing Fee and (iv)
the Class B Investor Default Amount, if any,
with respect to the related Distribution
Date, Excess Spread and Excess Finance
Charges and Excess Transferor Finance Charge
Collections allocable to Series 199 - and
- --
not required to pay the Class A Required
Amount will be applied to fund the deficiency
(the "Class B Required Amount"). If Excess
Spread and Excess Finance Charges and Excess
Transferor Finance Charge Collections
allocable to Series 199 - with respect to
- --
such Distribution Date not required to pay
the Class A Required Amount are less than the
Class B
S-9
<PAGE>
Required Amount, Reallocated Principal
Collections allocable to the Class C Invested
Amount for the related Monthly Period not
required to fund the Class A Required Amount
will then be used to fund the remaining Class
B Required Amount. If Reallocated Principal
Collections allocable to the Class C Invested
Amount with respect to such Monthly Period
are insufficient to fund the remaining Class
B Required Amount for the related
Distribution Date, then the Class C Invested
Amount will be reduced by the amount of such
deficiency (but not by more than the Class B
Investor Default Amount for such Monthly
Period). If such reduction would cause the
Class C Invested Amount to be reduced below
zero, the Class B Invested Amount will be
reduced by the amount by which the Class B
Required Amount for any Distribution Date
exceeds the sum of Excess Spread and Excess
Finance Charges and Excess Transferor Finance
Charge Collections allocated to Series
199 - and not required to pay the Class A
-- --
Required Amount and Reallocated Principal
Collections not required to pay the Class A
Required Amount for the related Monthly
Period, but not by more than the excess of
the Class B Investor Default Amount for such
Monthly Period over the reduction in the
Class C Invested Amount with respect thereto,
for such Monthly Period. In the event of a
reduction of the Class A Invested Amount, the
Class B Invested Amount or the Class C
Invested Amount, the amount of principal and
interest available to fund payments with
respect to the Class A Certificates and the
Class B Certificates will be decreased. See
"Description of the Certificates --
Reallocation of Cash Flows" and "--
Allocation of Investor Default Amount."
EXCESS FINANCE CHARGES...... "Excess Finance Charges" means amounts
designated by another Series for allocation
to Series within [Group One] and which,
pursuant to the Master Pooling and Servicing
Agreement and any related supplement, are
allocable to Series 199 - . [Series
-- --
199 - will be included in a group of
-- --
Series ("Group One") expected to be issued by
the Trust from time to time.]
REQUIRED CLASS C
INVESTOR AMOUNT............. The "Required Class C Investor Amount" with
respect to any Distribution Date means,
subject to certain limitations more fully
described herein, the greater of (i) the
product of (a) the sum of (I) [the sum of]
the Class A Invested Amount [and the Class A
Floating Percentage of the Pre-Funded Amount]
and (II) [the sum of] the Class B Invested
Amount [and the Class B Floating Percentage
of the Pre-Funded Amount], each as of such
Distribution Date after taking into account
distributions made on such Distribution Date,
and (b) a fraction, the numerator of which is
% and the denominator of which is the
--
excess of 100% over % and (ii) the product
--
of (I) $ and (II) %. With respect
-------- --
to any Distribution Date, if the Class C
Investor Amount is less than the Required
Class C Investor Amount, certain Excess
Spread and Excess Finance
S-10
<PAGE>
Charges allocable to Series 199 - will be
- --
used to increase the Class C Invested Amount
to the extent of any prior unreimbursed
reductions in the Class C Invested Amount.
See "Description of the Certificates --
Application of Collections -- Excess Spread;
Excess Finance Charges." On any Distribution
Date, to the extent that the Class C
Investor Amount exceeds the Required Class C
Investor Amount, such excess may be paid to
the Class C Interest Holder and if paid will
not be available to the Certificateholders.
[FUNDING PERIOD............. During the period from and including the
Closing Date to but excluding the earlier of
(i) the commencement of the Rapid
Amortization Period, (ii) the date on which
the Invested Amount first equals $
--------
and (iii) , (the "Funding
---- -- ----
Period"), the Pre-Funded Amount will be
maintained in a trust account to be
established with the Trustee (the
"Pre-Funding Account"). The "Pre-Funded
Amount" means the principal amount on deposit
in the Pre-Funding Account, which initially
will equal $ . Funds on deposit in the
--------
Pre-Funding Account will be invested by the
Trustee in Eligible Investments.]
[During the Funding Period, funds on deposit
in the Pre-Funding Account will be withdrawn
on a monthly basis to the extent of any
increases in the Invested Amount as a result
of an increase in the amount of Principal
Receivables in the Trust to the extent that
the Transferor Amount on the last day of a
Monthly Period during the Funding Period
exceeds the product of (A) the sum of % and
--
the Required Transferor Percentage on such
date and (B) the sum of the aggregate amount
of Principal Receivables in the Trust and
amounts on deposit in the Excess Funding
Account on such day; PROVIDED, HOWEVER, that
the Invested Amount will in no event exceed
$ or increase by an amount in excess
--------
of the Pre-Funded Amount immediately prior to
giving effect to such increase.
Certificateholders will have no further right
to or interest in such funds upon their
withdrawal from the Pre-Funding Account in
connection with such increases in the
Invested Amount. Should the Pre-Funded Amount
be greater than zero at the end of the
Funding Period, the amounts remaining on
deposit in the Pre-Funding Account will be
payable pro rata to the Class A
Certificateholders, the Class B
Certificateholders and the Class C Interest
Holder on the next succeeding Distribution
Date and result in a reduction of the Class A
Investor Amount, the Class B Investor Amount
and the Class C Investor Amount. See
"Description of the Certificates --
Pre-Funding Account."]
REVOLVING PERIOD............ No principal will be payable to or for the
benefit of Certificateholders during the
period (the "Revolving Period") from and
including the Closing Date to but not
including the earlier of (i) the commencement
of the controlled Accumulation Period and
(ii) the commencement of the Rapid
Amortization Period. The
S-11
<PAGE>
controlled accumulation period with respect
to the Certificates (the "Controlled
Accumulation Period"), which includes
separate controlled accumulation periods for
the Class A Certificates and the Class B
Certificates, is scheduled to begin at the
close of business on , .
---------- -- ----
Subject to the conditions set forth herein
under "Description of the Certificates --
Postponement of Controlled Accumulation
Period," the day on which the Revolving
Period ends and the Controlled Accumulation
Period begins may be delayed to no later than
the end of the day on , .
-------- -- ----
During the Revolving Period, collections of
Principal Receivables allocated to the
Certificates and the Class C Interest (other
than Reallocated Principal Collections that
are used to pay any deficiency in the Class A
Required Amount or the Class B Required
Amount) will generally be paid from the Trust
to the holders of the Transferor Certificates
or to amortizing or accumulating Series in
[Group One] or deposited into the Excess
Funding Account. See "Description of the
Certificates -- Principal Payments."
CONTROLLED ACCUMULATION
PERIOD; PRINCIPAL PAYMENTS.. Unless a Pay Out Event shall have occurred,
(a) the Class A controlled accumulation
period (the "Class A Controlled Accumulation
Period") will begin at the end of the day on
the last day of the Revolving Period and will
end on the earliest of (i) the commencement
of the Rapid Amortization Period, (ii) the
payment in full to the Class A
Certificateholders of the Class A Investor
Amount, and (iii) the Series 199 -
- --
Termination Date, and (b) the Class B
controlled accumulation period (the "Class B
Accumulation Period") will commence on the
first day of the Monthly Period immediately
preceding the Class B Principal Commencement
Date and end on the earliest of (i) the
commencement of the Rapid Amortization
Period, (ii) the payment in full to the Class
B Certificateholders of the Class B Invested
Amount and (iii) the Series 199 -
- --
Termination Date. During the Controlled
Accumulation Period, the Available Investor
Principal Collections will no longer be paid
to the holders of the Transferor Certificates
or to amortizing or accumulating Series in
[Group One] or deposited into the Excess
Funding Account as described above but
instead will be deposited monthly, along with
certain other amounts constituting Available
Investor Principal Collections, on each
Distribution Date beginning with the
Distribution Date in the month following the
commencement of the Controlled Accumulation
Period in a trust account established by the
Servicer for the benefit of
Certificateholders (the "Principal Funding
Account") to be accumulated for payment to
the Certificateholders as provided herein,
first to the Class A Certificateholders,
which payment is anticipated to be on the
Class A Expected Final Distribution Date, and
then (following payment in full of the Class
A Investor Amount) to the Class B
Certificateholders, which payment is
anticipated to be on the Class B Expected
Final Distribution Date. With
S-12
<PAGE>
respect to any Distribution Date, during either
the Rapid Amortization Period or the Controlled
Accumulation Period, until the Class B Invested
Amount is paid in full and subject to certain
other exceptions, "Class C Monthly Principal"
shall mean an amount equal to the lesser of (A)
Available Investor Principal Collections not
applied to Class A Monthly Principal or Class B
Monthly Principal and (B) the excess of (i) the
Class C Investor Amount over (ii) the Required
Class C Investor Amount. During the Controlled
Accumulation Period or the Rapid Amortization
Period, collections of Principal Receivables
generally will be allocated to the Invested
Amount in a ratio the numerator of which is the
Invested Amount as of the last day of the
Revolving Period and the denominator of which is
the greater of (x) the sum of (I) the product of
the aggregate amount of Principal Receivables
and one minus the Discount Percentage and (II)
the principal amount on deposit in the Excess
Funding Account as of the last day of the prior
Monthly Period and (y) the sum of the numerators
used to calculate the Series Percentages
applicable to Principal Receivables for all
Series outstanding; PROVIDED, HOWEVER, that such
ratio is subject to adjustment to give effect to
designations of Additional Accounts. See
"Description of the Certificates--Allocation
Percentages," "--Application of Collections" and
"--Principal Payments."
With respect to any Distribution Date
relating to the Controlled Accumulation
Period, if Available Investor Principal
Collections in the prior Monthly Period are
equal to or greater than the sum of (i) the
Controlled Accumulation Amount on such
Distribution Date and (ii) the existing
Deficit Controlled Accumulation Amount (as
defined below), if any, from the immediately
preceding Distribution Date (such sum for
such Distribution Date, the "Controlled
Deposit Amount," provided that the Controlled
Deposit Amount on any Distribution Date after
the payment in full of the Class A
Certificates shall not exceed the Class B
Invested Amount), then the Controlled Deposit
Amount will be deposited into the Principal
Funding Account, and the excess of such
Available Investor Principal Collections over
the Controlled Deposit Amount and any amounts
thereof applied as Class C Monthly Principal
will be paid from the Trust to the holders of
the Transferor Certificates or to other
amortizing or accumulating Series in [Group
One] or deposited into the Excess Funding
Account. The existing "Deficit Controlled
Accumulation Amount" means, on any
Distribution Date, the excess, if any, of the
Controlled Deposit Amount from the prior
Distribution Date over the Available Investor
Principal Collections.
If the Available Investor Principal
Collections in the prior Monthly Period are
less than the Controlled Deposit Amount, such
remaining Available Investor Principal
Collections will be deposited into the
Principal Funding Account, and the excess of
the Controlled Deposit Amount
S-13
<PAGE>
over such Available Investor Principal
Collections will be the Deficit Controlled
Accumulation Amount for the succeeding
Monthly Period. See "Description of the
Certificates -- Application of Collections."
All amounts in the Principal Funding Account
will be invested at the direction of the
Servicer by the Trustee in certain Eligible
Investments. Investment earnings (net of
investment losses and expenses) on funds on
deposit in the Principal Funding Account (the
"Principal Funding Investment Proceeds")
during the Controlled Accumulation Period
will be included in Class A Available Funds
with respect to each Distribution Date.
Funds on deposit in the Principal Funding
Account will be available to pay the Class A
Certificateholders in respect of the Class A
Investor Amount on the Class A Expected Final
Distribution Date. If the aggregate principal
amount of deposits made to the Principal
Funding Account are insufficient to pay in
full the Class A Investor Amount on the Class
A Expected Final Distribution Date, the Rapid
Amortization Period will commence as
described below and on each Distribution Date
thereafter until the Class A Investor Amount
is paid in full the Class A
Certificateholders will receive distributions
of Class A Monthly Principal. Although it is
anticipated that during the Class A
Accumulation Period, funds will be deposited
in the Principal Funding Account in an amount
equal to the applicable Controlled
Accumulation Amount with respect to each
Distribution Date and that scheduled
principal will be available for distribution
to the Class A Certificateholders on the
Class A Expected Final Distribution Date, no
assurance can be given in that regard. See
"Maturity Assumptions" herein.
On the Class B Expected Final Distribution
Date, provided that the Class A Investor
Amount is paid in full on the Class A
Expected Final Distribution Date and the
Rapid Amortization Period has not commenced,
Available Investor Principal Collections will
be used to pay the Class B Invested Amount as
described herein. If the Available Investor
Principal Collections are insufficient to pay
the Class B Invested Amount on the Class B
Expected Final Distribution Date, the Rapid
Amortization Period will commence as
described below and on each Distribution Date
thereafter following the payment in full of
the Class A Certificates until the Class B
Invested Amount is paid in full, the Class B
Certificateholders will receive distributions
of Class B Monthly Principal. Although it is
anticipated that scheduled principal will be
available for distribution to the Class B
Certificateholders on the Class B Expected
Final Distribution Date, no assurance can be
given in that regard. See "Maturity
Assumptions" herein.
If a Pay Out Event occurs during the
Controlled Accumulation Period, the Rapid
Amortization Period will
S-14
<PAGE>
commence and any amount on deposit in the
Principal Funding Account will be paid to the
Class A Certificateholders on the
Distribution Date following the Monthly
Period in which the Rapid Amortization Period
commences.
CLASS A EXPECTED FINAL
DISTRIBUTION DATE........... The Distribution Date.
-------- ----
CLASS B EXPECTED FINAL
DISTRIBUTION DATE........... The Distribution Date.
-------- -----
RAPID AMORTIZATION PERIOD;
PRINCIPAL PAYMENTS.......... During the period beginning with the
occurrence of any Pay Out Event and ending
on the earlier of (i) the payment in full to
the Certificateholders of the Class A
Investor Amount and the Class B Invested
Amount and payment in full to the Class C
Interest Holder of the Class C Invested
Amount and (ii) the Series 199 -
- --
Termination Date (the "Rapid Amortization
Period"), Available Investor Principal
Collections will no longer be paid from the
Trust to the holders of the Transferor
Certificates or to amortizing or accumulating
Series in [Group One] or deposited into the
Excess Funding Account as described above but
instead will be distributed on each
Distribution Date, first to the Class A
Certificateholders until the Class A Investor
Amount has been paid in full, then to the
Class B Certificateholders until the Class B
Invested Amount is paid in full and then to
the Class C Interest Holder until the Class C
Invested Amount is paid in full. See
"Description of the Certificates -- Pay Out
Events" for a discussion of the events which
might lead to the commencement of the Rapid
Amortization Period. See "Description of the
Certificates -- Application of Collections."
SUBORDINATION OF THE CLASS B
CERTIFICATES AND THE
CLASS C INTEREST............ The Class B Certificates will be subordinated
as described herein to the extent necessary
to fund payments with respect to the Class A
Certificates as described herein. In
addition, the Class C Interest will be
subordinated to the extent necessary to fund
certain payments with respect to the
Certificates. If the principal amount of the
Class C Interests is reduced to zero, the
Class B Certificateholders will bear directly
the credit and other risks associated with
their undivided interest in the Trust. To the
extent the Class B Invested Amount is
reduced, and is not reinstated, the amount of
principal distributable to the Class B
Certificateholders will be reduced. See
"Description of the Certificates --
Subordination."
SHARED COLLECTIONS OF
PRINCIPAL RECEIVABLES....... To the extent that collections of Principal
Receivables allocated to the Certificates or
the Class C Interest are not needed to make
payments to or for the benefit of
Certificateholders or the Class C Interest
Holders, such
S-15
<PAGE>
collections may be applied to cover principal
payments due to or for the benefit of other
Series, if any, in [Group One]. Any such
application of collections will not result in
a reduction of the Class A Invested Amount,
the Class B Invested Amount or the Class C
Invested Amount. In addition, during the
Controlled Accumulation Period, certain
collections of Principal Receivables
allocated to other Series in [Group One], and
certain Shared Transferor Principal
Collections, to the extent such collections
are not needed to make payments in respect of
such other Series, may be applied to cover
principal amounts payable to or for the
benefit of the Certificateholders or the
Class C Interest Holder. See "Description of
the Certificates -- Shared Collections of
Principal Receivables and Transferor
Principal Collections."
REQUIRED TRANSFEROR
PERCENTAGE.................. The Required Transferor Percentage applicable
to Series 199 - is currently %, provided
- -- --
that the Required Transferor Percentage may
be reduced to as low as 2% if the Transferor
delivers an officer's certificate stating
that such reduction will not have an Adverse
Effect and the Rating Agency Condition is
satisfied.
RECORD DATE................. With respect to any Distribution Date, the
last Business Day of the month preceding such
Distribution Date.
OPTIONAL REPURCHASE......... The Certificates will be subject to optional
repurchase by the Transferor on any
Distribution Date after the Investor Amount
is less than or equal to % of the Initial
--
Investor Amount, unless certain events as
specified in the Pooling and Servicing
Agreement have occurred. The repurchase price
on the Distribution Date on which such
purchase occurs will be equal to the Investor
Amount plus accrued and unpaid interest on
the Certificates and the Class C Interest as
described herein. See "Description of the
Certificates -- Optional Repurchase."
FINAL PAYMENT OF PRINCIPAL
AND INTEREST; TERMINATION OF
TRUST....................... The interest of the Certificateholders in the
Trust will terminate following the earlier of
(i) the day after the Distribution Date on
which the Investor Amount is paid in full and
(ii) the earlier of the
---- ----
Distribution Date and the termination of the
Trust (the "Series 199 - Termination
- --
Date"). All principal and interest will be
due and payable no later than the Series
199 - Termination Date. See "Description of
- --
the Certificates -- Final Payment of
Principal and Interest; Termination" in the
Prospectus.
TRUSTEE..................... The Bank of New York, a New York banking
corporation.
TAX STATUS.................. Subject to the matters discussed under
"Certain Federal Income Tax Consequences"
herein and in the Prospectus, Special Tax
Counsel to the Transferor will deliver its
S-16
<PAGE>
opinion to the effect that, under existing
law, the Class A Certificates and the Class B
Certificates will properly be characterized
as debt for Federal income tax purposes on
the date of issuance. Under the Pooling and
Servicing Agreement, the Certificate Owners
will agree to treat the Certificates as
indebtedness for income tax purposes. See
"Certain Federal Income Tax Consequences"
herein and in the Prospectus for additional
information concerning the application of
Federal income tax laws.
ERISA CONSIDERATIONS........ Subject to the considerations described
below, the Certificates are eligible for
purchase by employee benefit plan investors.
Under a regulation issued by the Department
of Labor, the Trust Assets would not be
deemed "plan assets" of an employee benefit
plan holding the Certificates if certain
conditions are met, including that each Class
of the Certificates must be held, upon
completion of the public offering made
hereby, by at least 100 investors who are
independent of the Transferor and of one
another. The Underwriter[s] expect that each
Class of the Certificates will be held by at
least 100 independent investors at the
conclusion of the offering, although no
assurance can be given, and no monitoring or
other measures will be taken to ensure that
such condition will be met. The Transferor
anticipates that the other conditions of the
regulation will be met. If the Trust Assets
were deemed to be "plan assets" of an
employee benefit plan investor (e.g., if the
100 independent investor criterion is not
satisfied) violation of the "prohibited
transaction" rules of the Employee Retirement
Income Security Act of 1974, as amended
("ERISA"), could result and generate excise
tax and other liabilities under ERISA and
Section 4975 of the Internal Revenue Code of
1986, as amended (the "Code"), unless a
satisfactory, regulatory or administrative
exemption is available. It is uncertain
whether existing exemptions from the
"prohibited transaction" rules of ERISA would
apply to all transactions involving the Trust
Assets. Accordingly, employee benefit plan
fiduciaries or other persons contemplating
purchasing the Certificates on behalf or with
"plan assets" of any employee benefit plan
should consult their counsel before making a
purchase. See "ERISA Considerations" in the
Prospectus.
CERTIFICATE RATINGS......... It is a condition to the issuance of the
Class A Certificates that they be rated in
the rating category by at least
------ ----
nationally recognized rating
[agency][agencies].
It is a condition to the issuance of the
Class B Certificates that they be rated in
the rating category by at least
------ ----
nationally recognized rating
[agency][agencies].
The rating agency or rating agencies rating
the Certificates or any other Series are
collectively referred to herein as the
"Rating Agencies" or individually as a
"Rating Agency." The Certificates offered
hereby are investment grade asset-
S-17
<PAGE>
backed securities within the meaning of the
Act and the rules promulgated thereunder.
[LISTING.................... Application will be made to list the
Certificates on the Luxembourg Stock
Exchange; however, no assurance can be given
that such listing will be obtained.
Certificateholders should consult with
, the Luxembourg listing agent
------------
for the Certificates , phone number
-------
, for the status of such listing.]
-----------
S-18
<PAGE>
RISK FACTORS
LIMITED LIQUIDITY. There is currently no market for the Certificates. The
Underwriters expect to make a secondary market in the Certificates, but are
not obligated to do so. There can be no assurance that a secondary market
will develop or, if it does develop, that such market will provide
Certificateholders with liquidity of investment or that it will continue
for the life of the Certificates.
RATING OF THE CERTIFICATES. It is a condition to the issuance of the
Class A Certificates that they be rated by at
------------------------
least nationally recognized rating [agency][agencies]. It is a
----
condition to the issuance of the Class B Certificates that they be rated
by at least nationally recognized rating
- -------------------------- ----
[agency][agencies]. The rating of the Certificates is based primarily on
the value of the Receivables and, in the case of the Class A Certificates,
the subordination of the Class B Certificates and the Class C Interest and,
in the case of the Class B Certificates, the subordination of the Class C
Interest. The ratings of the Certificates are not a recommendation to
purchase, hold or sell Certificates, and such ratings do not comment as to
the marketability of the Certificates, any market price or suitability for
a particular investor. There is no assurance that any rating will remain
for any given period of time or that any rating will not be lowered or
withdrawn entirely by any such rating agency, if in its judgment
circumstances so warrant.
LIMITED AMOUNTS OF CREDIT ENHANCEMENT. Although credit enhancement with
respect to the Certificates will be provided by the subordination of the
Class C Interest, such amounts are limited. If the Class C Invested Amount
is reduced to zero, the Class B Certificateholders will bear directly the
credit and other risks associated with their undivided interest in the
Trust and the Class B Invested Amount may be reduced. If the Class B
Invested Amount is reduced to zero, Class A Certificateholders will bear
directly the credit and other risks associated with their undivided
interest in the Trust. See "Description of the Certificates -- Allocation
Percentages," "-- Allocation of Investor Default Amount."
EFFECT OF SUBORDINATION OF CLASS B CERTIFICATES; PRINCIPAL PAYMENTS. The
Class B Certificates are subordinated in right of payment of principal to
the Class A Certificates. Payments of principal in respect of the Class B
Certificates will not commence until after the final principal payment with
respect to the Class A Investor Amount has been made as described herein.
Moreover, the Class B Invested Amount is subject to reduction if the Class
A Required Amount for any Monthly Period is greater than zero and is not
funded from Excess Spread, Excess Finance Charges [and Excess Transferor
Finance Charge Collections] allocated to Series 199 - , Reallocated
- --
Principal Collections with respect to the Class C Invested Amount, and
reductions in the Class C Invested Amount. To the extent the Class B
Invested Amount is reduced, the percentage of collections of Finance Charge
Receivables allocable to the Class B Certificateholders will be reduced.
See "Description of the Certificates -- Allocation Percentages" and "--
Reallocation of Cash Flows." If the Class B Invested Amount is reduced to
zero, the Class A Certificateholders will bear directly the credit and
other risks associated with their undivided interest in the Trust. See
"Description of the Certificates -- Subordination."
DISCOUNT OPTION. The Pooling and Servicing Agreement provides that a
percentage (the "Discount Percentage") (which on the Closing Date will be
%) of collections of Principal Receivables will be treated as
- ---
collections of Finance Charge Receivables ("Discount Option Collections").
Pursuant to the Pooling and Servicing Agreement, the Transferor may, without
notice to or consent of the Certificateholders, from time to time, increase,
reduce or eliminate (subject to the limitations described below) the Discount
Percentage for all or any specified portion of collections of Principal
Receivables on or after the date of such change (each a "Discount Option
Date"). The Transferor must provide 30 days' prior written notice to the
Trustee and each Rating Agency of any such change and such change will become
effective only if (i) in the reasonable belief of the Transferor such
designation would not cause to occur a Pay Out Event (or "Reinvestment
Event") with respect to any Series or an event which with notice or the lapse
of time or both would constitute a Pay Out Event (or Reinvestment Event) with
respect to any Series and (ii) if such change would cause the Discount
Percentage to be greater than [3%] or less than [1%] the Rating Agency
Condition is satisfied. See "Description of the Certificates --Discount
Option" in the Prospectus. Any such change that raises the Discount
Percentage would result in an increase in the amount of collections of
Finance Charge Receivables and a lower payment rate of collections of
Principal Receivables and will reduce the Transferor Amount (which is
calculated after applying the Discount Percentage to the aggregate amount of
Principal Receivables), thereby decreasing the likelihood that certain Pay
Out Events or Reinvestment Events based in part on the amount of collections
of Finance Charge
S-19
<PAGE>
Receivables will occur and increasing the likelihood that the Transferor will
be required to designate Additional Accounts. Any such change that reduces
the Discount Percentage will have the opposite effect.
BOOK-ENTRY REGISTRATION. The Certificates initially will be represented
by certificates registered in the name of Cede, the nominee for DTC, and
will not be registered in the names of the Certificate Owners or their
nominees. As a result, unless and until Definitive Certificates are issued,
Certificate Owners will not be recognized by the Trustee as
Certificateholders, as that term is used in the Pooling and Servicing
Agreement. Until such time, Certificate Owners will only be able to
exercise the rights of Certificateholders indirectly through DTC and its
participating members (in the United States) [or Cedel or Euroclear (in
Europe).] See "Description of the Certificates -- Book-Entry Registration"
and "-- Definitive Certificates" in the Prospectus.
THE BANKS' CREDIT CARD ACTIVITIES
BILLING AND PAYMENT
Nearly all of the accounts in the Travelers Consumer Credit Card
Portfolio are subject to finance charges at variable rates determined on
the basis of ranging from % to % for purchases and cash
------ -- --
advances. For more information, see "The Banks' Credit Card Activities --
Billing and Payments" in the Prospectus.
DELINQUENCIES AND LOSS EXPERIENCE
The following tables set forth the delinquency and loss experience for
each of the periods shown for the Travelers Consumer Credit Card Portfolio.
[Additional Accounts have been designated for inclusion in the Trust from
time to time as set forth in Annex II.] The Accounts in the Trust Portfolio
have been selected from accounts in the Travelers Consumer Credit Card
Portfolio based on certain eligibility criteria specified in the Pooling
and Servicing Agreement. See "The Receivables." There can be no assurance
that the delinquency and loss experience for the Receivables will be
similar to the historical experience set forth below.
DELINQUENCY EXPERIENCE
TRAVELERS CONSUMER CREDIT CARD PORTFOLIO
(DOLLARS IN THOUSANDS)
Receivables Outstanding
Receivables Contractually Delinquent
Outstanding:
30-59 Days
60-89 Days
90 or more days
Total
LOSS EXPERIENCE
TRAVELERS CONSUMER CREDIT CARD PORTFOLIO
(DOLLARS IN THOUSANDS)
Average Receivables
Outstanding
Gross Losses
Recoveries
Net Losses
Net Losses as a Percentage of Average
Receivables Outstanding
S-20
<PAGE>
INTERCHANGE
The Interchange attributed to the cardholder charges for merchandise and
services in the Accounts, is not transferred from the Banks and does not
constitute a portion of the Receivables.
THE RECEIVABLES
The Receivables in the Initial Accounts as of the Initial Cut-Off Date
will be conveyed to the Trust on , 1997 (the "Initial Closing
-------- --
Date"). The Initial Accounts were selected from the Travelers Consumer
Credit Card Portfolio satisfying criteria set forth in the Pooling and
Servicing Agreement (the "Criteria") as applied on , 1997 (the
--------
"Initial Cut Off Date"). [Receivables in Additional Accounts will be
conveyed to the Trust from time to time after the Initial Closing Date.]
[Receivables in Additional Accounts have been conveyed to the Trust from
time to time since the Initial Closing Date as set forth in Annex II.]
Additional Accounts [will be] [have been and will be] selected from the
Travelers Consumer Credit Card Portfolio satisfying the Criteria as applied
on the Addition Cut-Off Date. The Initial Accounts and all Additional
Accounts conveyed to the Trust are hereinafter referred to as the "Trust
Portfolio." In order to meet the Criteria, each Account must, on the
Initial Cut-Off Date or Addition Cut-Off Date, among other things, have
been in existence and maintained by the Bank that owns such Account, have a
cardholder with a billing address in the United States, its territories or
possessions or a military address, and, except under certain circumstances,
not be an account the credit card or cards with respect to which have been
reported to the Bank that owns such Account as having been lost or stolen.
See "The Pooling and Servicing Agreement Generally -- Representations,
Warranties and Covenants" in the Prospectus. Cardholders whose accounts are
included in the Travelers Consumer Credit Card Portfolio have billing
addresses in all states, [the District of Columbia, Puerto Rico, Guam,
--
the Virgin Islands and certain foreign countries.] Pursuant to the Pooling
and Servicing Agreement, the Transferor may be obligated (subject to
certain limitations and conditions) to designate Additional Accounts to be
included as Accounts and to convey to the Trust all Receivables of such
Additional Accounts, or may elect to automatically designate Additional
Accounts and convey the Receivables therein whether such Receivables are
then existing or thereafter created. See "The Pooling and Servicing
Agreement Generally -- Addition of Accounts or Participation Interests" in
the Prospectus. If the Transferor is required to designate Additional
Accounts under the Pooling and Servicing Agreement, each Account Owner,
under its respective Receivables Transfer Agreement, agrees that it will
designate sufficient Eligible Accounts which, together with Additional
Accounts designated by any other Account Owners, will cause the Transferor
to be in compliance with the Requirements of the Pooling and Servicing
Agreement. These accounts must meet the Criteria set forth above as of the
relevant Addition Cut-Off Date. Throughout the term of the Trust, the
Accounts from which the Receivables arise will be the same MasterCard and
VISA accounts designated by the respective Account Owner on the Initial
Cut-Off Date and each Addition Cut-Off Date (plus any Additional Accounts
subsequently designated as described above). In addition, as of the Initial
Cut-Off Date and each Addition Cut-Off Date and on the date any new
Receivables are created, the Transferor will represent and warrant to the
Trust that the Receivables meet the eligibility requirements specified in
the Pooling and Servicing Agreement. See "The Pooling and Servicing
Agreement Generally -- Representations, Warranties and Covenants" in the
Prospectus.
The following tables summarize the Trust Portfolio by various criteria
as of the close of business on , 199 . Because the future
-------- -- --
composition of the Trust Portfolio may change over time, these tables are
not necessarily indicative of future results.
S-21
<PAGE>
COMPOSITION BY ACCOUNT BALANCE
TRUST PORTFOLIO
PERCENTAGE OF
TOTAL PERCENTAGE OF
NUMBER OF NUMBER OF TOTAL
ACCOUNT BALANCE ACCOUNTS ACCOUNTS RECEIVABLES RECEIVABLES
- --------------- --------- ------------- ----------- ------------
Credit balance..... % $ %
Over $
-------------
Total $ %
----------
----------
COMPOSITION BY CREDIT LIMIT
TRUST PORTFOLIO
PERCENTAGE
OF TOTAL PERCENTAGE
NUMBER OF NUMBER OF OF TOTAL
CREDIT LIMIT BALANCE ACCOUNTS ACCOUNTS RECEIVABLES RECEIVABLES
- -------------------- --------- ---------- ----------- -----------
% $ %
Over $
--------------
Total % $ %
----------
----------
S-22
<PAGE>
COMPOSITION BY PERIOD OF DELINQUENCY
TRUST PORTFOLIO
PERCENTAGE
OF TOTAL PERCENTAGE
PERIOD OF DELINQUENCY (DAYS NUMBER OF NUMBER OF OF TOTAL
CONTRACTUALLY DELINQUENT) ACCOUNTS ACCOUNTS RECEIVABLES RECEIVABLES
- --------------------------- -------- ------------ ----------- ------------
Not Delinquent............. % $ %
1 to 29 days...............
30 to 59 days..............
60 to 89 days..............
90 to 119 days.............
120 to 149 days............
150 to 179 days............
180 or more................
Total...................... % $ %
-----------
-----------
COMPOSITION BY ACCOUNT AGE
TRUST PORTFOLIO
PERCENTAGE
OF TOTAL PERCENTAGE
NUMBER OF NUMBER OF OF TOTAL
AGE (IN MONTHS) ACCOUNTS ACCOUNTS RECEIVABLES RECEIVABLES
- -------------- --------- ---------- ----------- ------------
0 to 6 months.............. % $ %
Over 6 to 12 months........
Over 12 to 24 months.......
Over 24 to 36 months.......
Over 36 to 48 months.......
Over 48 to 60 months.......
Over 60 to 84 months.......
Over 84 months.............
Total...................... % $ %
-----------
-----------
S-23
<PAGE>
GEOGRAPHIC DISTRIBUTION OF ACCOUNTS AND RECEIVABLES
TRUST PORTFOLIO
<TABLE>
<CAPTION>
PERCENTAGE OF TOTAL PERCENTAGE OF TOTAL
STATE NUMBER OF ACCOUNTS NUMBER OF ACCOUNTS RECEIVABLES RECEIVABLES
---------- ------------------- ------------------- ----------- -------------------
<S> <C> <C> <C> <C>
Alabama.....................
Alaska......................
Arizona.....................
Arkansas....................
California..................
Colorado....................
Connecticut.................
Delaware....................
District of Columbia........
Florida.....................
Georgia.....................
Hawaii......................
Idaho.......................
Illinois....................
Indiana.....................
Iowa........................
Kansas......................
Kentucky....................
Louisiana...................
Maine.......................
Maryland....................
Massachusetts...............
Michigan....................
Minnesota...................
Mississippi.................
Missouri....................
Montana.....................
Nebraska....................
Nevada......................
New Hampshire...............
New Jersey..................
New Mexico..................
New York....................
North Carolina..............
North Dakota................
Ohio........................
Oklahoma....................
Oregon......................
Pennsylvania................
Rhode Island................
South Carolina..............
South Dakota................
Tennessee...................
Texas.......................
Utah........................
Vermont.....................
Virginia....................
Washington..................
West Virginia...............
Wisconsin...................
Wyoming.....................
All Others..................
Total.......................
</TABLE>
S-24
<PAGE>
MATURITY ASSUMPTIONS
The Pooling and Servicing Agreement provides that Class A
Certificateholders will not begin to receive payments of principal until
the Class A Expected Final Distribution Date or following the occurrence of
a Pay Out Event which results in the commencement of the Rapid Amortization
Period. Class B Certificateholders will not receive payments of principal
until the payment in full of the Class A Investor Amount. Unless and until
a Pay Out Event occurs, on each Distribution Date during the Controlled
Accumulation Period, monthly deposits of principal equal to the lesser of
(a) Available Investor Principal Collections and (b) the Controlled Deposit
Amount will be made into the Principal Funding Account.
Although it is anticipated that a single principal payment will be made
to Class A Certificateholders in an amount equal to the Class A Investor
Amount on the , Distribution Date (the "Class A Expected Final
-------- ----
Distribution Date") and that a single principal payment will be made to
Class B Certificateholders in an amount equal to the Class B Invested
Amount on the , Distribution Date (the "Class B Expected Final
-------- ----
Distribution Date"), no assurance can be given in that regard.
A Pay Out Event occurs, with respect to Series 199 - only, either
- --
automatically or after specified notice, upon (a) failure of the Transferor
to make certain payments or transfers of funds for the benefit of the
Certificateholders within the time periods stated in the Pooling and
Servicing Agreement, (b) material breaches of certain representations,
warranties or covenants of the Transferor, (c) (i) with respect to the end
of any Monthly Period, as determined on the third Business Day preceding
the related Distribution Date (the "Determination Date"), with respect to
which the Transferor Amount is less than the Required Transferor Amount as
of the last day of such Monthly Period, the failure of the Transferor to
convey Receivables in Additional Accounts to the Trust such that the
Transferor Amount is at least equal to the Required Transferor Amount on or
prior to the tenth Business Day following such Determination Date or (ii)
with respect to the end of any Monthly Period with respect to which the
aggregate Principal Receivables in the Trust are not at least equal to the
Required Principal Balance as of the last day of such Monthly Period, the
failure of the Transferor to convey Receivables in Additional Accounts to
the Trust such that the aggregate Principal Receivables in the Trust are at
least equal to the Required Principal Balance on or prior to the tenth
Business Day following such Determination Date, (d) the [average of the Net
Portfolio Yield for three consecutive Monthly Periods being a rate which is
less than for such period], (e) the occurrence of a Servicer
-------------
Default having a material adverse effect on the Certificateholders, or (f)
failure to pay in full (i) the Class A Investor Amount on the Class A
Expected Final Distribution Date or (ii) the Class B Invested Amount on the
Class B Expected Final Distribution Date.
A Pay Out Event occurs, with respect to the Certificates and each other
Series, automatically upon (a) an Insolvency Event relating to any
Transferor [or an Account Owner], (b) the Trust becoming an "investment
company" within the meaning of the Investment Company Act of 1940, as
amended (the "Investment Company Act"), or (c) the inability of any
Transferor to transfer Receivables to the Trust in accordance with the
Pooling and Servicing Agreement. Although the Transferor believes that the
likelihood of a Pay Out Event occurring is remote, there can be no
assurance that a Pay Out Event will not occur. See "Description of the
Certificates -- Pay Out Events."
In the event of the occurrence of a Pay Out Event, the Rapid
Amortization Period will begin. During the Rapid Amortization Period, first
the Class A Certificateholders and then, following the payment in full of
the Class A Investor Amount, the Class B Certificateholders will be
entitled to receive monthly payments of principal equal to the Available
Investor Principal Collections received by the Trust during the related
Monthly Period (plus the principal amount on deposit in the Principal
Funding Account) until the Class A Investor Amount or Class B Invested
Amount, as applicable, are paid in full. Allocations of Principal
Receivables will be based on the Principal Allocation Percentage. See
"Description of the Certificates -- Allocation Percentages."
The following table sets forth the highest and lowest cardholder monthly
payment rates for the Travelers Consumer Credit Card Portfolio during any
month in the periods shown and the average of the cardholder monthly
payment rates for all months during the period shown, in each case
calculated as a percentage of total opening monthly account balances during
the periods shown. Payments shown in the table include amounts which would
be deemed payments of Principal Receivables and Finance Charge Receivables
with respect to the Accounts.
S-25
<PAGE>
MONTHLY PAYMENT RATES
TRAVELERS CONSUMER CREDIT CARD PORTFOLIO
YEAR ENDED DECEMBER 31,
-----------------------
Lowest.................
Highest................
Monthly Average........
The amount of collections on Receivables may vary from month to month
due to seasonal variations, general economic conditions, changes in tax law
and payment habits of individual cardholders. There can be no assurance
that collections of Principal Receivables with respect to the Trust
Portfolio, and thus the rate at which Certificateholders could expect to
accumulate or receive payments of principal on their Certificates during
the Controlled Accumulation Period or the Rapid Amortization Period, will
be similar to the historical experience set forth above. In addition, the
ability of the Certificateholders to be paid the applicable Class A
Investor Amount or the Class B Invested Amount on the Class A Expected
Final Distribution Date and the Class B Expected Final Distribution Date,
respectively, may be dependent upon the availability of Shared Principal
Collections. Since the Trust, as a master trust, may issue additional
Series from time to time, there can be no assurance that the issuance of
additional Series or the terms of any additional Series might not have an
impact on the timing of payments received by Certificateholders. Further,
if a Pay Out Event occurs, the average life and maturity of the
Certificates could be significantly reduced.
RECEIVABLE YIELD CONSIDERATIONS
The yield on the Travelers Consumer Credit Card Portfolio for the
---
period ended , and for each of the years in the
-------- -- ----- ----
period ended , is set forth in the following table. Yield,
-------- -- -----
on both an accrual and a cash basis will be affected by numerous factors,
including the finance charges on the Receivables, the amount of the annual
cardholder fees and other fees and charges, changes in the delinquency rate
on the Receivables and the percentage of cardholders who pay their balances
in full each month and do not incur finance charges. There can be no
assurance that the revenue from finance charges and fees for the
Receivables will be similar to the historical experience set forth below.
See "Risk Factors" in the Prospectus.
REVENUE FROM FINANCE CHARGES
TRAVELERS CONSUMER CREDIT CARD PORTFOLIO
YEAR ENDED ,
--------------------------
Average Monthly Accrued Fees and
Charges.............................
Average Account Balance...............
Yield From Fees and Charges...........
The yield for the Travelers Consumer Credit Card Portfolio shown in
the above table is comprised of the following components:
, , [The yield related to annual
- --------------------- -------------------
cardholder fees (on those accounts which assess such fees) and other
service charges varies with the type and volume of activity in, and the
balance of each account.] [Information concerning annual cardholder fees,
if any, to be discussed.]
S-26
<PAGE>
[Variances from Travelers Consumer Credit Card Portfolio to the Trust
Portfolio, if any, to be discussed.]
DESCRIPTION OF THE CERTIFICATES
The Certificates will be issued pursuant to the Pooling and Servicing
Agreement entered into among CC Credit Card Corporation, as Transferor, The
Travelers Bank, as Servicer of the Accounts and the Receivables, and The
Bank of New York, as Trustee for the Certificateholders, substantially in
the form filed as an exhibit to the Registration Statement of which the
Prospectus is a part. Pursuant to the Master Pooling and Servicing
Agreement, the Transferor may execute further supplements thereto among
each of the Transferor and the Trustee in order to issue additional Series.
See "Description of the Certificates -- New Issuances" in the Prospectus.
The Trustee will provide a copy of the Master Pooling and Servicing
Agreement (without exhibits or schedules), including any Supplements, to
Certificateholders without charge upon written request. The following
summary describes certain terms of the Pooling and Servicing Agreement and
is qualified in its entirety by reference to the Pooling and Servicing
Agreement.
GENERAL
The Certificates will represent undivided interests in the Trust
Assets, including the right to a floating percentage (in the case of
collections of Principal Receivables during the Revolving Period, such
collections will be allocated to the Certificates and paid to the holders
of the Transferor Certificates, to amortizing or accumulating Series in
[Group One] or, in certain limited circumstances described herein, to the
holder of the Class C Interest, or deposited into the Excess Funding
Account, and in the case of collections of Finance Charge Receivables and
Defaulted Receivables at all times) or a resettable fixed/floating
percentage (in the case of collections of Principal Receivables during the
Controlled Accumulation Period or the Rapid Amortization Period) (each, the
"Series Percentage") of all cardholder payments on the Receivables;
PROVIDED, HOWEVER, that on any Distribution Date during the Controlled
Accumulation Period, the amount to be deposited in the Principal Funding
Account in respect of collections of Principal Receivables will be limited
to the Controlled Deposit Amount on such Distribution Date. See "--
Allocation Percentages." For any Monthly Period, the portion of the
Principal Receivables and any amounts on deposit in the Excess Funding
Account represented by the Certificates and the Class C Interest (the
"Invested Amount") will be equal to the Initial Invested Amount, [PLUS the
amount of any increases in the Invested Amount during the Funding Period as
a result of withdrawals from the Pre-Funding Account in connection with any
increases in the amount of Principal Receivables in the Trust,] MINUS the
amount of principal deposits into the Principal Funding Account, MINUS
(without duplication of the amount of principal deposits into the Principal
Funding Account) the amount of principal payments paid to the
Certificateholders and the Class C Interest Holder (other than any
principal payments made from any amounts on deposit in the Pre-Funding
Account at the end of the Funding Period) and MINUS any unreimbursed
reductions in the Invested Amount. See "The Pooling and Servicing Agreement
Generally -- Defaulted Receivables; Rebates and Fraudulent Charges" in the
Prospectus and "Description of the Certificates -- Allocation of Investor
Default Amount" herein. Each Certificate represents the right to receive
monthly payments of interest for the related Interest Periods at the
applicable Certificate Rate for such Interest Periods from collections of
Finance Charge Receivables and, in certain circumstances Reallocated
Principal Collections, and deposits or payments of principal during the
Controlled Accumulation Period or the Rapid Amortization Period funded from
collections of Principal Receivables allocated to the Class A Invested
Amount and the Class B Invested Amount (PLUS certain other amounts
specified herein, including, during the Controlled Accumulation Period,
certain collections of Principal Receivables otherwise allocable to other
Series or to the Transferor, to the extent such collections are not needed
to make payments to or for the benefit of such other Series).
The Transferor holds the interest in the Principal Receivables and the
amounts on deposit in the Excess Funding Account, if any (the "Transferor
Amount"), not represented by the Certificates, the Class C Interest and the
certificates of and uncertificated interests in other Series, if any. The
Transferor holds an undivided interest in the Trust (the "Transferor's
Interest"), including the right to a percentage (the "Transferor
Percentage") of all cardholder payments on the Receivables.
During the Revolving Period, the Investor Amount will remain constant
except in certain limited circumstances [(including the circumstance where
there are amounts remaining in the Pre-Funding Account at the end of the
Funding Period that are paid to Certificateholders)]. See "The Pooling and
Servicing Agreement Generally -- Defaulted Receivables; Rebates and
Fraudulent Charges" in the Prospectus and "Description of the Certificates
["-- Pre-Funding Account"] and "-- Allocation of Investor Default Amounts"
herein. The amount of Principal Receivables,
S-27
<PAGE>
however, will vary each day as new Principal Receivables are created and
others are paid. The Transferor Amount will fluctuate daily, therefore, to
reflect the changes in the amount of the Principal Receivables. During the
Controlled Accumulation Period or the Rapid Amortization Period, the
Invested Amount will decline for each Monthly Period as cardholder payments
of Principal Receivables are collected and deposited in the Principal
Funding Account or paid to the Certificateholders.
INTEREST PAYMENTS
Interest will accrue on the Certificates at the applicable Class A
Certificate Rate or Class B Certificate Rate from the date of the initial
issuance of the Certificates (the "Closing Date"). Interest at such
applicable rate will be paid to the Certificateholders on each Distribution
Date beginning on , .
-------- -- ----
Interest payments on the Certificates on any Distribution Date will be
calculated on the outstanding principal amount of the Class A Certificates
or the Class B Certificates, as applicable, as of the preceding Record Date
(or, in the case of the first Distribution Date, as of the Closing Date)
based upon the applicable Certificate Rate for the related Interest Period.
Interest due but not paid on any Distribution Date will be payable on the
next succeeding Distribution Date together with additional interest on such
amount at the applicable Certificate Rate PLUS %.
----
Interest on the Class A Certificates and the Class B Certificates will
be calculated on the basis of [the actual number of days in the related
Interest Period and a [360][365] day year.] [a 360-day year of twelve
30-day months.] The Class A Certificates will bear interest from the
Closing Date at [the rate of %][a Floating-Rate determined as follows
----
.]
- -----------------------------------------
On each Distribution Date, Class A Monthly Interest and Class A
Monthly Interest previously due but not distributed to the Class A
Certificateholders will be paid to the Class A Certificateholders from
Class A Available Funds for the related Monthly Period. To the extent Class
A Available Funds for such Monthly Period are insufficient to pay such
interest, Excess Spread, Excess Finance Charges and Excess Transferor
Finance Charge Collections allocated to Series 199 - , and Reallocated
- --
Principal Collections allocable first to the Class C Invested Amount and
then the Class B Invested Amount will be used to make such payments. "Class
A Available Funds" means, with respect to any Monthly Period, an amount
equal to the sum of (a) the Class A Floating Percentage of collections of
Finance Charge Receivables allocated to the Series 199 - Certificates
- --
with respect to such Monthly Period (including [any investment earnings on
amounts on deposit in the Pre-Funding Account and] certain other amounts
that are to be treated as collections of Finance Charge Receivables in
accordance with the Pooling and Servicing Agreement), (b) the amount of
Principal Funding Investment Proceeds, if any, with respect to such
Distribution Date [and (c) the amount of funds, if any, to be withdrawn
from the Reserve Account that, pursuant to the Supplement, are required to
be included in Class A Available Funds with respect to such Distribution
Date.]
On each Distribution Date, Class B Monthly Interest and Class B
Monthly Interest previously due but not distributed to the Class B
Certificateholders will be paid to the Class B Certificateholders from
Class B Available Funds for the related Monthly Period. To the extent Class
B Available Funds for such Monthly Period are insufficient to pay such
interest, Excess Spread, Excess Finance Charges and Excess Transferor
Finance Charge Collections allocated to Series 199 - , and Reallocated
- --
Principal Collections allocable to the Class C Invested Amount will be used
to make such payment. "Class B Available Funds" means, with respect to any
Monthly Period, an amount equal to the Class B Floating Percentage of
collections of Finance Charge Receivables allocated to the Series 199 -
- --
Certificates with respect to such Monthly Period (including [any investment
earnings on amounts on deposit in the Pre-Funding Account and] certain
other amounts that are to be treated as collections of Finance Charge
Receivables in accordance with the Pooling and Servicing Agreement).
"Class A Monthly Interest" means, with respect to any Distribution
Date, an amount equal to [one-twelfth of] the product of (i) [(A) a
fraction, the numerator of which is the actual number of days in the period
from and including the preceding Distribution Date to but excluding such
Distribution Date and the denominator of which is [360][365], times (B)]
the Class A Certificate Rate and (ii) the outstanding principal amount of
the Class A Certificates as of the preceding Record Date; PROVIDED,
HOWEVER, with respect to the first Distribution Date, Class A Monthly
Interest shall be equal to the interest accrued on the outstanding
principal amount of the Class A Certificates at the applicable Class A
Certificate Rate for the period from the Closing Date through ,
-------- --
.
- ----
S-28
<PAGE>
"Class B Monthly Interest" means, with respect to any Distribution
Date, an amount equal to [one-twelfth of] the product of (i) [(A) a
fraction, the numerator of which is the actual number of days in the period
from and including the preceding Distribution Date to but excluding such
Distribution Date and the denominator of which is [360][365], times (B)]
the Class B Certificate Rate and (ii) the outstanding principal amount of
the Class B Certificates as of the preceding Record Date; PROVIDED,
HOWEVER, with respect to the first Distribution Date, Class B Monthly
Interest shall be equal to the interest accrued on the outstanding
principal amount of the Class B Certificates at the applicable Class B
Certificate Rate for the period from the Closing Date through ,
. -------- --
- ----
"Class C Monthly Interest" means, initially zero. However, the
Transferor may, subsequent to the issuance of the Series 199 -
- -
Certificates, set an interest rate for the Class C Interest without the
consent of the Certificateholders. See "--Transfer of the Class C
Interest."
[PRE-FUNDING ACCOUNT]
[The Servicer will establish and maintain in the name of the Trustee,
on behalf of the Certificateholders and the Class C Interest Holder, the
Pre-Funding Account with an Eligible Institution. Funds on deposit in the
Pre-Funding Account will be withdrawn on a monthly basis to the extent of
any increases in the Invested Amount during the Funding Period as a result
of an increase in the amount of Principal Receivables in the Trust to the
extent that the Transferor Amount on the last day of any Monthly Period
during the Funding Period exceeds the product of (A) the sum of % and
---
the Required Transferor Percentage on such date and (B) the sum of the
aggregate amount of Principal Receivables in the Trust and amounts on
deposit in the Excess Funding Account on such day; PROVIDED, HOWEVER, that
the Invested Amount will in no event exceed $ or increase by an
--------
amount in excess of the Pre-Funded Amount immediately prior to giving
effect to such increase. Should the Pre-Funded Amount be greater than zero
at the end of the Funding Period, any principal amounts remaining on
deposit in the Pre-Funding Account will be withdrawn for pro rata
distribution to Certificateholders and the Class C Interest Holder on the
next succeeding Distribution Date.]
[All amounts on deposit in the Pre-Funding Account will be invested by
the Trustee in Eligible Investments. On each Distribution Date with respect
to the Funding Period, all net investment income earned on amounts in the
Pre-Funding Account during the preceding Monthly Period will be withdrawn
from the Pre-Funding Account and deposited into the Collection Account for
distribution as collections of Finance Charge Receivables allocable to the
Certificateholders and the Class C Interest Holder. Such investment income
will be deemed to be collections of Finance Charge Receivables allocable to
the Certificates and the Class C Interest for such Monthly Period.]
PRINCIPAL PAYMENTS
During the Revolving Period (which begins on the Closing Date and ends
on the day before the commencement of the Accumulation Period or, if
earlier, the Rapid Amortization Period), no principal payments will be made
to the Certificateholders [(other than any principal payment made from any
amount on deposit in the Pre-Funding Account at the end of the Funding
Period)]. On each Distribution Date during the Revolving Period,
collections of Principal Receivables allocable to the Certificateholders'
Interest and the Class C Interest will, subject to certain limitations,
including the allocation of any Reallocated Principal Collections with
respect to the related Monthly Period to pay the Class A Required Amount
and the Class B Required Amount and payments of Class C Monthly Principal,
be treated as Shared Principal Collections; provided that, certain
collections of Principal Receivables allocable to the Series 199 -
- -
Certificateholders' Interest may be applied to reduce the Class C Invested
Amount if the Rating Agency Condition has been met.
The first principal payment [(other than any principal payment made
from any amount on deposit in the Pre-Funding Account at the end of the
Funding Period)] will be made to the Certificateholders on the earlier of
the Class A Expected Final Distribution Date or on the Distribution Date in
the month following the month in which the Rapid Amortization Period
commences. On each Distribution Date with respect to the Class A
Accumulation Period, an amount equal to the least of (a) Available Investor
Principal Collections on deposit in the Collection Account with respect to
such Distribution Date, (b) the applicable Controlled Deposit Amount for
such Distribution Date and (c) the Class A Invested Amount, will be
deposited in the Principal Funding Account for payment to the Class A
Certificateholders on the Class A Expected Final Payment Date or on the
first Distribution Date with respect to the Rapid Amortization Period.
After the Class A Investor Amount has been paid in full, on each
Distribution Date with
S-29
<PAGE>
respect to the Class B Accumulation Period, amounts equal to the least of
(a) Available Investor Principal Collections on deposit in the Collection
Account with respect to such Distribution Date (MINUS the portion of such
Available Investor Principal Collections applied to Class A Monthly
Principal on such Distribution Date), (b) the applicable Controlled Deposit
Amount for such Distribution Date and (c) the Class B Invested Amount will
be paid to the Class B Certificateholders until the Class B Invested Amount
has been paid in full.
"Available Investor Principal Collections" means, with respect to any
Monthly Period, an amount equal to the sum of (a) (i) an amount equal to
the Principal Allocation Percentage of all collections of Principal
Receivables received during such Monthly Period, MINUS (ii) the amount of
Reallocated Principal Collections with respect to such Monthly Period used
to fund the Class A Required Amount or the Class B Required Amount, PLUS
(b) any Shared Principal Collections with respect to other Series in [Group
One] that are allocated to Series 199 - , PLUS (c) any other amounts which
- --
pursuant to the Supplement are to be treated as Available Investor
Principal Collections with respect to the related Distribution Date.
On each Distribution Date during the Rapid Amortization Period until
the Class A Investor Amount has been paid in full or the Series 199 -
- --
Termination Date occurs, the Class A Certificateholders will be entitled to
receive Available Investor Principal Collections in an amount up to the
Class A Investor Amount. After payment in full of the Class A Investor
Amount, the Class B Certificateholders will be entitled to receive, on each
such Distribution Date, Available Investor Principal Collections until the
earlier of the date the Class B Invested Amount is paid in full and the
Series 199 - Termination Date.
- --
"Class A Monthly Principal" with respect to any Distribution Date
relating to the Class A Accumulation Period or the Rapid Amortization
Period will equal the least of (i) the Available Investor Principal
Collections on deposit in the Collection Account with respect to such
Distribution Date, (ii) for each Distribution Date with respect to the
Class A Accumulation Period (and on or prior to the Class A Expected Final
Distribution Date), the Controlled Deposit Amount for such Distribution
Date and (iii) the Class A Invested Amount on such Distribution Date.
"Class B Monthly Principal" with respect to any Distribution Date,
beginning with the Class B Principal Commencement Date, will equal the
least of (i) the Available Investor Principal Collections on deposit in the
Collection Account with respect to such Distribution Date (MINUS the
portion of such Available Principal Collections applied to Class A Monthly
Principal on such Distribution Date), (ii) for each Distribution Date with
respect to the Class B Accumulation Period, the Controlled Deposit Amount
for such Distribution Date and (iii) the Class B Invested Amount on such
Distribution Date.
"Controlled Accumulation Amount" means (a) for any Distribution Date
with respect to the Class A Accumulation Period, the maximum Class A
Invested Amount during the Revolving Period divided by twelve, subject to
upward adjustment in connection with the postponement of the Class A
Accumulation Period, and (b) for any Distribution Date with respect to the
Class B Accumulation Period, the maximum Class B Invested Amount during the
Revolving Period.
"Deficit Controlled Accumulation Amount" means (a) on the first
Distribution Date with respect to the Class A Accumulation Period or the
Class B Accumulation Period, the excess, if any, of the Controlled
Accumulation Amount for such Distribution Date over the amount distributed
from the Collection Account as Class A Monthly Principal or Class B Monthly
Principal, as the case may be, for such Distribution Date and (b) on each
subsequent Distribution Date with respect to the Class A Accumulation
Period or the Class B Accumulation Period, the excess, if any, of the
Controlled Deposit Amount for such subsequent Distribution Date over the
amount distributed from the Collection Account as Class A Monthly Principal
or Class B Monthly Principal, as the case may be, for such subsequent
Distribution Date.
[POSTPONEMENT OF ACCUMULATION PERIOD
Upon written notice to the Trustee, the Servicer may elect to postpone
the commencement of the Class A Accumulation Period, and extend the length
of the Revolving Period, subject to certain conditions including those set
forth below. The Servicer may make such election only if the Accumulation
Period Length (determined as described below) is less than twelve months.
On each Determination Date, until the Class A Accumulation Period begins,
the Servicer will determine the "Accumulation Period Length," which is the
number of months expected to be required to
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<PAGE>
fully fund the Principal Funding Account no later than the Class A Expected
Final Distribution Date, based on (a) the monthly collections of Principal
Receivables expected to be distributable to the Certificateholders of all
Series, assuming a principal payment rate no greater than the lowest
monthly principal payment rate on the Receivables for the preceding twelve
months and (b) the amount of principal expected to be distributable to
certificateholders of Series which are not expected to be in their
revolving periods during the Class A Accumulation Period. If the
Accumulation Period Length is less than twelve months, the Servicer may, at
its option, postpone the commencement of the Class A Accumulation Period
such that the number of months included in the Class A Accumulation Period
will be equal to or exceed the Accumulation Period Length. The effect of
the foregoing calculation is to permit the reduction of the length of the
Class A Accumulation Period based on the investor interest of certain other
Series which are scheduled to be in their revolving periods during the
Class A Accumulation Period and on increases in the principal payment rate
occurring after the Closing Date. The length of the Class A Accumulation
Period will not be less than one month.]
SUBORDINATION
The Class B Certificateholders' Interest and the Class C Interest will
be subordinated to the extent necessary to fund certain payments with
respect to the Class A Certificates. In addition, the Class C Interest will
be subordinated to the extent necessary to fund certain payments with
respect to the Class B Certificates. Certain principal payments otherwise
allocable to the Class B Certificateholders may be reallocated to the Class
A Certificateholders and the Class B Invested Amount may be reduced.
Similarly, certain principal payments allocable to the Class C Interest may
be reallocated to the Class A Certificateholders and the Class B
Certificateholders and the Class C Invested Amount may be reduced. To the
extent the Class B Invested Amount is reduced, the percentage of
collections of Finance Charge Receivables allocated to the Class B
Certificateholders in subsequent Monthly Periods will be reduced. Moreover,
to the extent the amount of such reduction in the Class B Invested Amount
is not reimbursed, the amount of principal distributable to the Class B
Certificateholders will be reduced. See "-- Allocation Percentages," "--
Reallocation of Cash Flows," and "-- Application of Collections -- Excess
Spread; Excess Finance Charges."
[TRANSFER OF THE CLASS C INTEREST
The Certificates will have the benefit of the subordination of the
Class C Interest which will be retained initially by the Transferor. The
Transferor may at any time, without consent of the Certificateholders, sell
or transfer all or a portion of the Class C Interest and, in connection
with any such sale or transfer, enter into a supplemental agreement with
the Trustee pursuant to which the Transferor may provide that the Class C
Interest will bear interest at a specified rate, set forth the amount of
monthly interest due to Class C Interest Holder, provide for the payment of
additional amounts with respect to any shortfall of such amount and provide
for such other terms with respect to the Class C Interest as may be
specified therein, provided that in each case (i) the Transferor shall have
given notice to the Trustee, the Servicer and the Rating Agencies of the
proposed sale or transfer of the Class C Interest and such supplemental
agreement at least five Business Days prior to the consummation of such
transfer or sale and the execution of such supplemental agreement; (ii) the
Trustee shall have been notified in writing that the Rating Agency
Condition has been satisfied; (iii) no Pay Out Event shall have occurred
prior to the proposed sale or transfer or the execution of such
supplemental agreement; (iv) the Transferor shall have delivered to the
Trustee a certificate of an authorized officer, dated the date of such sale
or transfer and the execution of such supplemental agreement, to the effect
that, in the reasonable belief of the Transferor, such sale or transfer and
the effectiveness of such supplemental agreement will not, based on the
facts known to such officer at the time of such certification, cause a Pay
Out Event to occur with respect to any Series, including Series 199 - ;
- --
and (v) the Transferor will have delivered a Tax Opinion (as defined in the
Prospectus), dated the date of such sale or transfer, with respect to such
action.]
ALLOCATION PERCENTAGES
Pursuant to the Pooling and Servicing Agreement, with respect to each
Monthly Period the Servicer will allocate among the Class A Certificates,
the Class B Certificates and the Class C Interest, the certificateholders'
interest for all other Series issued and outstanding and the Transferor's
Interest in all collections of Finance Charge Receivables and Principal
Receivables and the Defaulted Amount with respect to such Monthly Period.
Collections of Finance Charge Receivables and the Defaulted Amount
with respect to any Monthly Period will be allocated to Series 199 -
- --
based on the Floating Allocation Percentage. The "Floating Allocation
Percentage" means, with respect to any Monthly Period, the percentage
equivalent (which percentage shall never exceed 100%) of a
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<PAGE>
fraction, the numerator of which is the Invested Amount as of the last day
of the preceding Monthly Period (or with respect to the first Monthly
Period, the Initial Invested Amount) and the denominator of which is the
greater of (1) the sum of (x) the total amount of the Principal Receivables
in the Trust as of such day (or with respect to the first Monthly Period,
the total amount of Principal Receivables in the Trust on the Closing Date)
and (y) the principal amount on deposit in the Excess Funding Account as of
such day and (2) the sum of the numerators used to calculate the Series
Percentages with respect to Finance Charge Receivables or Defaulted
Receivables, as applicable, for all Series of certificates then
outstanding; PROVIDED, HOWEVER, that such ratio is subject to adjustment to
give effect to additions of Additional Accounts. Such amounts so allocated
will be further allocated between the Class A Certificateholders, the Class
B Certificateholders and the Class C Interest Holder in accordance with the
Class A Floating Percentage, the Class B Floating Percentage and the Class
C Floating Percentage, respectively.
The "Class A Floating Percentage" means, with respect to any Monthly
Period, the percentage equivalent (which percentage shall never exceed
100%) of a fraction, the numerator of which is equal to the Class A
Invested Amount as of the close of business on the last day of the
preceding Monthly Period (or with respect to the first Monthly Period, the
Class A Initial Invested Amount) and the denominator of which is equal to
the Invested Amount as of the close of business on such day (or with
respect to the first Monthly Period, the Initial Invested Amount).
The "Class B Floating Percentage" means, with respect to any Monthly
Period, the percentage equivalent (which percentage shall never exceed
100%) of a fraction, the numerator of which is equal to the Class B
Invested Amount as of the close of business on the last day of the
preceding Monthly Period (or with respect to the first Monthly Period, the
Class B Initial Invested Amount) and the denominator of which is equal to
the Invested Amount at the close of business on such day (or with respect
to the first Monthly Period, the Initial Invested Amount).
The "Class C Floating Percentage" means, with respect to any Monthly
Period, the percentage equivalent (which percentage shall never exceed
100%) of a fraction, the numerator of which is the Class C Invested Amount
as of the close of business on the last day of the preceding Monthly Period
(or with respect to the first Monthly Period, the Class C Initial Invested
Amount) and the denominator of which is equal to the Invested Amount as of
the close of business on such day (or with respect to the first Monthly
Period, the Initial Invested Amount).
Collections of Principal Receivables will be allocated to Series
199 - based on the Principal Allocation Percentage. The "Principal
- ---
Allocation Percentage" means, with respect to any Monthly Period, the
percentage equivalent (which percentage shall never exceed 100%) of a
fraction, the numerator of which is (a) during the Revolving Period, the
Invested Amount as of the last day of the immediately preceding Monthly
Period (or, in the case of the first Monthly Period, the Closing Date) and
(b) during the Controlled Accumulation Period or the Rapid Amortization
Period, the Invested Amount as of the last day of the Revolving Period, and
the denominator of which is the greater of (i) the sum of the total amount of
Principal Receivables in the Trust as of the last day of the immediately
preceding Monthly Period and the principal amount on deposit in the Excess
Funding Account as of such last day (or, in the case of the first Monthly
Period, the Closing Date) and (ii) the sum of the numerators used to
calculate the Series Percentages applicable to Principal Receivables for all
Series outstanding as of the date as to which such determination is being
made; PROVIDED, HOWEVER, that such ratio is subject to adjustment to give
effect to additions of Additional Accounts.
Such amounts allocated to the Certificateholders will be further
allocated between the Class A Certificateholders, the Class B
Certificateholders and the Class C Interest based on the Class A Principal
Percentage, the Class B Principal Percentage, and the Class C Principal
Percentage, respectively. The "Class A Principal Percentage" means, with
respect to any Monthly Period, (a) during the Revolving Period, the
percentage equivalent (which shall never exceed 100%) of a fraction, the
numerator of which is equal to the Class A Invested Amount as of the last
day of the immediately preceding Monthly Period (or, in the case of the
first Monthly Period, the Closing Date), and the denominator of which is
equal to the Invested Amount as of such day (or, in the case of the first
Monthly Period, the Closing Date) and (b) during the Accumulation Period or
the Rapid Amortization Period, the percentage equivalent (which shall never
exceed 100%) of a fraction, the numerator of which is the Class A Invested
Amount as of the last day of the Revolving Period, and the denominator of
which is the Invested Amount as of such last day. The "Class B Principal
Percentage" means, with respect to any Monthly Period, (i) during the
Revolving Period, the percentage equivalent (which percentage shall never
exceed 100%) of a fraction, the numerator of which is the Class B Invested
Amount as of the last day of the immediately preceding Monthly Period (or,
in the case of the
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<PAGE>
first Monthly Period, the Closing Date) and the denominator of which is the
Invested Amount as of such day (or, in the case of the first Monthly Period,
the Closing Date) and (ii) during the Accumulation Period or the Rapid
Amortization Period, the percentage equivalent (which percentage shall never
exceed 100%) of a fraction, the numerator of which is the Class B Invested
Amount as of the last day of the Revolving Period, and the denominator of
which is the Invested Amount as of such last day. The "Class C Principal
Percentage" means, for any Monthly Period, a percentage (which shall never
exceed 100% or be less than 0%) equal to the difference between 100% and the
sum of the Class A Principal Percentage and the Class B Principal Percentage.
As used herein, the following terms have the meanings indicated:
"Class A Invested Amount" for any date means an amount equal to (i)
the Class A Initial Invested Amount, [PLUS (ii) the amount of any increases
in the Class A Invested Amount during the Funding Period on or prior to
such date,] MINUS (iii) the amount of principal payments [(other than
principal payments made from amounts on deposit in the Pre-Funding Account
on the first Distribution Date following the end of the Funding Period)]
made to the Class A Certificateholders on or prior to such date, MINUS (iv)
the excess, if any, of the aggregate amount of Class A Investor Charge-Offs
for all prior Distribution Dates over the aggregate amount of any
reimbursements of Class A Investor Charge-Offs for all Distribution Dates
prior to such date and MINUS (v) the principal amount on deposit in the
Principal Funding Account (the "Principal Funding Account Balance").
"Class B Invested Amount" for any date means an amount equal to (i)
the Class B Initial Invested Amount, [PLUS (ii) the amount of any increases
in the Class B Invested Amount during the Funding Period on or prior to
such date,] MINUS (iii) the amount of principal payments [(other than
principal payments made from amounts on deposit in the Pre-Funding Account
on the first Distribution Date following the end of the Funding Period)]
made to Class B Certificateholders on or prior to such date, MINUS (iv) the
excess, if any, of the aggregate amount of Class B Investor Charge-Offs for
all prior Distribution Dates over the aggregate amount of any reimbursement
of Class B Investor Charge-Offs for all Distribution Dates preceding such
date, MINUS (v) the aggregate amount of Reallocated Principal Collections
for all prior Distribution Dates which have been used to fund the Class A
Required Amount with respect to such Distribution Dates (excluding any
Reallocated Principal Collections that have resulted in a reduction of the
Class C Invested Amount), MINUS (vi) an amount equal to the amount by which
the Class B Invested Amount has been reduced to fund the Class A Investor
Default Amount on all prior Distribution Dates as described under "--
Allocation of Investor Default Amount," and PLUS (vii) the aggregate amount
of Excess Spread and Excess Finance Charges allocated to Series 199 - and
- --
applied on all prior Distribution Dates for the purpose of reimbursing
amounts deducted pursuant to the foregoing clauses (iv), (v) and (vi)
PROVIDED, HOWEVER, that the Class B Invested Amount may not be reduced
below zero.
"Class C Invested Amount" means an amount equal to (i) the Class C
Initial Invested Amount, [PLUS (ii) the amount of any increases in the
Class C Invested Amount during the Funding Period on or prior to such
date,] MINUS (iii) the aggregate amount of principal payments [(other than
principal payments made from amounts on deposit in the Pre-Funding Account
on the first Distribution Date following the end of the Funding Period)]
made with respect to the Class C Interest prior to the date of
determination, MINUS (iv) the aggregate amount of Reallocated Principal
Collections allocable to the Class C Invested Amount for all prior
Distribution Dates which have been used to fund the Class A Required Amount
or the Class B Required Amount, MINUS (v) an amount equal to the aggregate
amount by which the Class C Invested Amount has been reduced to fund the
Class A Investor Default Amount and the Class B Investor Default Amount on
all prior Distribution Dates as described under "-- Allocation of Investor
Default Amount," MINUS (vi) an amount equal to the product of the Class C
Floating Percentage and the Investor Default Amount (the "Class C Default
Amount") with respect to any Distribution Date that is not funded out of
Excess Spread and Excess Finance Charges allocated to Series 199 - and
- --
available for such purpose on such Distribution Date, and PLUS (vi) the
aggregate amount of Excess Spread and Excess Finance Charges allocated and
available to reimburse amounts deducted pursuant to the foregoing clauses
(iv), (v) and (vi); PROVIDED, HOWEVER, that the Class C Invested Amount may
not be reduced below zero.
"Invested Amount," for any date means an amount equal to the sum of
the Class A Invested Amount, the Class B Invested Amount and the Class C
Invested Amount.
"Class A Investor Amount" for any date means an amount equal to the
sum of the Class A Invested Amount, plus the Class A Floating Percentage of
the Pre-Funded Amount, plus the Principal Funding Account Balance.
["Class B Investor Amount" for any date means an amount equal to the
sum of the Class B Invested Amount plus the Class B Floating Percentage of
the Pre-Funded Amount.]
S-33
<PAGE>
["Class C Investor Amount" for any date means an amount equal to the
sum of the Class C Invested Amount plus the Class C Floating Percentage of
the Pre-Funded Amount.]
"Investor Amount," for any date means an amount equal to the sum of the
Class A Investor Amount, the Class B Investor Amount and Class C Investor
Amount.
"Series Investor Amount" for any date means an amount equal to the
numerator of the Principal Allocation Percentage on such date.
REALLOCATION OF CASH FLOWS
With respect to each Distribution Date, on each Determination Date, the
Servicer will determine the amount (the "Class A Required Amount"), which
will be equal to the amount, if any, by which (a) the sum of (i) Class A
Monthly Interest for such Distribution Date, (ii) any Class A Monthly
Interest previously due but not paid to Class A Certificateholders on a prior
Distribution Date, (iii) any Class A Additional Interest and any Class A
Additional Interest previously due but not paid to the Class A
Certificateholders on a prior Distribution Date, (iv) the Class A Servicing
Fee for such Distribution Date and any unpaid Class A Servicing Fee and (v)
the Class A Investor Default Amount, if any, for such Distribution Date
exceeds (b) the Class A Available Funds. If the Class A Required Amount is
greater than zero, Excess Spread, Excess Finance Charges and Excess
Transferor Finance Charge Collections allocated to Series 199 - and
-- ----
available for such purpose will be used to fund the Class A Required Amount
with respect to such Distribution Date. If such Excess Spread, Excess
Finance Charges and Excess Transferor Finance Charge Collections are
insufficient to fund the Class A Required Amount, collections of Principal
Receivables allocable first to the Class C Interest and then to the Class B
Certificates for the related Monthly Period ("Reallocated Principal
Collections") will then be used to fund the remaining Class A Required
Amount. If Reallocated Principal Collections with respect to the related
Monthly Period, together with Excess Spread, Excess Finance Charges and
Excess Transferor Finance Charge Collections allocated to Series 199 -
-- ----
are insufficient to fund the Class A Required Amount for such related Monthly
Period, then the Class C Invested Amount will be reduced by the amount of
such excess (but not by more than the Class A Investor Default Amount for
such Distribution Date). In the event that such reduction would cause the
Class A Invested Amount to be a negative number, the Class C Invested Amount
will be reduced to zero, and the Class B Invested Amount will be reduced by
the amount by which the Class C Invested Amount would have been reduced below
zero (but not by more than the excess of the Class A Investor Default Amount,
if any, for such Distribution Date over the amount of such reduction, if any,
of the Class C Invested Amount with respect to such Distribution Date). In
the event that such reduction would cause the Class B Invested Amount to be a
negative number, the Class B Invested Amount will be reduced to zero, and the
Class A Invested Amount will be reduced by the amount by which the Class B
Invested Amount would have been reduced below zero, but not by more than the
excess, if any, of the Class A Investor Default Amount for such Distribution
Date over the amount of the reductions, if any, of the Class C Invested
Amount and the Class B Invested Amount with respect to such Distribution Date
as described above. Any such reduction in the Class A Invested Amount will
have the effect of slowing or reducing the return of principal and interest
to the Class A Certificateholders. In such case, the Class A
Certificateholders will bear directly the credit and other risks associated
with their interest in the Trust. See "-- Allocation of Investor Default
Amount."
With respect to each Distribution Date, on each Determination Date, the
Servicer will determine the amount (the "Class B Required Amount"), which
will be equal to the amount, if any, by which the sum of (i) Class B Monthly
Interest for such Distribution Date, (ii) any Class B Monthly Interest
previously due but not paid to the Class B Certificateholders on a prior
Distribution Date, (iii) any Class B Additional Interest and any Class B
Additional Interest previously due but not paid to Class B Certificateholders
on a prior Distribution Date, (iv) the Class B Servicing Fee for such
Distribution Date and any unpaid Class B Servicing Fee and (v) the Class B
Investor Default Amount, if any, for such Distribution Date exceeds the Class
B Available Funds. If the Class B Required Amount is greater than zero,
Excess Spread and Excess Finance Charges allocated to Series 199 - not
-- ----
required to pay the Class A Required Amount or reimburse Class A Investor
Charge-Offs will be used to fund the Class B Required Amount with respect to
such Distribution Date. If such Excess Spread, Excess Finance Charges and
Excess Transferor Finance Charge Collections available to fund the remaining
Class B Required Amount with respect to such Distribution Date are less than
the Class B Required Amount, Reallocated Principal Collections allocable to
the Class C Interest not required to pay the Class A Required Amount for the
related Monthly Period will then be used to fund the remaining Class B
Required Amount. If such Reallocated Principal Collections allocable to the
Class C Interest with respect to the related
S-34
<PAGE>
Monthly Period are insufficient to fund the remaining Class B Required
Amount, then the Class C Invested Amount remaining after any adjustments made
thereto for the benefit of the Class A Certificateholders will be reduced by
the amount of such insufficiency (but not by more than the Class B Investor
Default Amount for such Distribution Date). In the event that such a
reduction would cause the Class C Invested Amount to be a negative number,
the Class C Invested Amount will be reduced to zero, and the Class B Invested
Amount will be reduced by the amount by which the Class C Invested Amount
would have been reduced below zero (but not by more than the excess of the
Class B Investor Default Amount for such Distribution Date over the amount of
such reduction of the Class C Invested Amount), and the Class B
Certificateholders will bear directly the credit and other risks associated
with their interests in the Trust. See "--Allocation of Investor Default
Amount."
Reductions of the Class A Invested Amount or Class B Invested Amount
shall thereafter be reimbursed and the Class A Invested Amount or Class B
Invested Amount increased to the extent of Excess Spread, Excess Finance
Charges, Excess Transferor Finance Charge Collections and Reallocated
Principal Collections available for such purposes on each Distribution Date.
See "-- Application of Collections -- Excess Spread; Excess Finance Charges;
Excess Transferor Finance Charge Collections." When such reductions of the
Class A Invested Amount and Class B Invested Amount have been fully
reimbursed, reductions of the Class C Invested Amount shall be reimbursed
until reimbursed in full in a similar manner.
APPLICATION OF COLLECTIONS
APPLICATION OF COLLECTIONS TO THE COLLECTION ACCOUNT. The Servicer will
apply, or will instruct the Trustee to apply, on or prior to the close of
business on the second Business Day following the date of processing of any
collections, all collections and other funds to be deposited into the
Collection Account that are allocated to the Certificates and the Class C
Interest as follows:
(1) during the Revolving Period, an amount equal to the Floating
Allocation Percentage of the collections of Finance Charge Receivables
processed on such date will be allocated to the Certificates and the Class C
Interest, and of that allocation, the following amounts will be deposited and
retained in the Collection Account: [an amount equal to the Monthly Interest
for the related Distribution Date less amounts previously deposited in the
Collection Account for such Monthly Interest] [prior to the day, the entire
---
amount of such allocation and on and after the day the difference between
---
the amount required to pay the Monthly Interest and amounts previously
deposited for such Monthly Interest];
(2) during the Controlled Accumulation Period or Rapid Amortization
Period, an amount equal to the Floating Allocation Percentage of the
collections of Finance Charge Receivables processed on such date will be
allocated to the Certificates and the Class C Interest and deposited and
retained in the Collection Account;
(3) during the Revolving Period, an amount equal to the Principal
Allocation Percentage of collections of Principal Receivables processed on
such date will be allocated to the Certificates and the Class C Interest and
paid to the holders of the Transferor Certificates; provided that such amount
will be paid to the holders of the Transferor Certificates only if the
Transferor Amount is greater than the Required Transferor Amount and the
product of (x) the aggregate amount of Principal Receivables and (y) one
minus the Discount Percentage is greater than the Required Principal Balance
and otherwise will be deposited in the Excess Funding Account until the
Transferor Amount is greater than the Required Transferor Amount and the
product of (x) the aggregate amount of Principal Receivables and (y) one
minus the Discount Percentage is greater than the Required Principal Balance
and the remainder will be paid to the holders of the Transferor Certificates;
provided further, that if the Class C Investor Amount is less than the
Required Class C Investor Amount, an amount equal to the sum of (x) the Class
C Principal Percentage of the product of the Principal Allocation Percentage
and the collections of Principal Receivables and (y) the Class B Principal
Percentage of the product of the Principal Allocation Percentage and the
collections of Principal Receivables ("Subordinate Principal Collections")
will be deposited and retained in the Collection Account;
(4) during the Controlled Accumulation Period, an amount equal to the
Principal Allocation Percentage of collections of Principal Receivables
processed on such date (for any such date, a "Percentage Allocation") will be
allocated to the Certificates and the Class C Interest and deposited and
retained in the Collection Account; provided, however, that if the sum of
such Percentage Allocations with respect to the same Monthly Period exceeds
the Controlled Deposit Amount for the related Distribution Date, then such
excess shall not be treated as a Percentage Allocation and shall be paid to
the holders of the Transferor Certificates only if the Transferor Amount on
such Date of Processing is greater than the Required Transferor Amount and
the product of (x) the aggregate amount of Principal Receivables and (y) one
minus the Discount Percentage is greater
S-35
<PAGE>
than the Required Principal Balance and otherwise will be deposited in the
Excess Funding Account until the Transferor Amount is greater than the
Required Transferor Amount and the product of (x) the aggregate amount of
Principal Receivables and (y) one minus the Discount Percentage is greater
than the Required Principal Balance and the remainder will be paid to the
holders of the Transferor Certificates; provided further, however, that if
the Class C Investor Amount is less than the Required Class C Investor
Amount, Subordinate Principal Collections will be retained in the Collection
Account; and
(5) during the Rapid Amortization Period, an amount equal to the
Principal Allocation Percentage of the collections of Principal Receivables
processed on such date will be allocated to the Certificates and the Class C
Interest and deposited and retained in the Collection Account; provided,
however, that after the date on which an amount of such Collections equal to
the Investor Amount has been deposited into the Collection Account and
allocated to the Certificates and the Class C Interest, such amount in excess
of the Investor Amount will be paid to the holders of the Transferor
Certificates only if the Transferor Amount is greater than the Required
Transferor Amount and the product of (x) the aggregate amount of Principal
Receivables and (y) one minus the Discount Percentage is greater than the
Required Principal Balance and otherwise will be deposited in the Excess
Funding Account until the Transferor Amount is greater than the Required
Transferor Amount and the product of (x) the aggregate amount of Principal
Receivables and (y) one minus the Discount Percentage is greater than the
Required Principal Balance and the remainder will be paid to the holders of
the Transferor Certificates.
+ WITHDRAWALS FROM SERIES ACCOUNTS. On or before each Distribution Date,
the Servicer will direct the Trustee to make the following withdrawals from
the following Series Accounts:
[(1) on the Business Day preceding each Transfer Date with respect to the
Funding Period, all net investment income earned on amounts in the Pre-Funding
Account during the preceding Monthly Period will be withdrawn from the Pre-
Funding Account and deposited into the Collection Account for distribution as
collections of Finance Charge Receivables allocable to the Certificateholders
and the Class C Interest Holder;]
(2) on each Distribution Date with respect to the Class A Accumulation
Period beginning on the second such Distribution Date and on the first
Distribution Date with respect to the Rapid Amortization Period, if
applicable, all Principal Funding Investment Proceeds then on deposit in the
Principal Funding Account will be withdrawn from the Principal Funding
Account and deposited into the Collection Account for distribution as a
portion of Class A Available Funds for such Distribution Date.
PAYMENT OF INTEREST, FEES AND OTHER ITEMS. On each Distribution Date,
the Trustee, acting pursuant to the Servicer's instructions, will apply the
Class A Available Funds, Class B Available Funds (see "-- Interest Payments"
above) and Class C Available Funds in the following priority:
(A) On each Distribution Date, an amount equal to the Class A Available
Funds with respect to such Distribution Date will be withdrawn from the
Collection Account and distributed in the following priority:
(1) an amount equal to Class A Monthly Interest for such Distribution
Date, plus the amount of any Class A Monthly Interest previously due but not
paid to the Class A Certificateholders on a prior Distribution Date, PLUS any
additional interest with respect to interest amounts that were due but not
paid to the Class A Certificateholders on a prior Distribution Date at a rate
equal to the Class A Certificate Rate plus % per annum ("Class A Additional
--
Interest"), will be distributed to the Class A Certificateholders;
(2) an amount equal to the Class A Servicing Fee for such Distribution
Date, PLUS the amount of any Class A Servicing Fee previously due but not
distributed to the Servicer on a prior Distribution Date, will be distributed
to the Servicer (unless such amount has been netted against deposits to the
Collection Account);
(3) an amount equal to the Class A Investor Default Amount for such
Distribution Date will be treated as a portion of Available Investor
Principal Collections for such Distribution Date; and
(4) the balance, if any, shall constitute Excess Spread and shall be
allocated and distributed as described under "-- Excess Spread; Excess
Finance Charges; Excess Transferor Finance Charge Collections" below.
(B) On each Distribution Date, an amount equal to the Class B Available
Funds with respect to such Distribution Date will be withdrawn from the
Collection Account and distributed in the following priority:
S-36
<PAGE>
(1) an amount equal to Class B Monthly Interest for such Distribution
Date, plus the amount of any Class B Monthly Interest previously due but not
paid to the Class B Certificateholders on a prior Distribution Date, plus any
additional interest with respect to interest amounts that were due but not
paid to the Class B Certificateholders on a prior Distribution Date at a rate
equal to the Class B Certificate Rate PLUS % per annum ("Class B Additional
--
Interest"), will be distributed to the Class B Certificateholders;
(2) an amount equal to the Class B Servicing Fee for such Distribution
Date, PLUS the amount of any Class B Servicing Fee previously due but not
distributed to the Servicer on a prior Distribution Date, will be distributed
to the Servicer (unless such amount has been netted against deposits to the
Collection Account); and
(3) the balance, if any, shall constitute Excess Spread and shall be
allocated and distributed as described under "-- Excess Spread; Excess
Finance Charges; Excess Transferor Finance Charge Collections" below.
(C) On each Distribution Date, an amount equal to the Class C Available
Funds with respect to such Distribution Date will be withdrawn from the
Collection Account and distributed in the following priority:
(1) if The Travelers Bank or the Trustee is no longer the Servicer, an
amount equal to the Class C Servicing Fee for such Distribution Date, PLUS
the amount of any Class C Servicing Fee previously due but not distributed to
the Servicer on a prior Distribution Date, will be distributed to the
Servicer (unless such amount has been netted against deposits to the
Collection Account); and
(2) the balance, if any, shall constitute Excess Spread and shall be
allocated and distributed as described under "-- Excess Spread; Excess
Finance Charges; Excess Transferor Finance Charge Collection" below.
"Excess Spread" means, with respect to any Distribution Date, an amount
equal to the sum of the amounts described in clause (A) (4) above, clause (B)
(3) above and clause (C) (2) above under "-- Payment of Interest, Fees and
Other Items."
EXCESS SPREAD; EXCESS FINANCE CHARGES; EXCESS TRANSFEROR FINANCE CHARGE
COLLECTIONS. On each Distribution Date, the Trustee, acting pursuant to the
Servicer's instructions, will apply Excess Spread, Excess Finance Charges and
Excess Transferor Finance Charge Collections allocated to Series 199 - with
-- ---
respect to the related Monthly Period to make the following distributions in
the following priority:
(1) an amount equal to any deficiency pursuant to clauses (A) (1), (2)
and (3) above under "-- Payment of Interest, Fees and Other Items" will be
used to fund such deficiency, provided that, in the event such deficiency
exceeds the amount of Excess Spread, Excess Finance Charges; and Excess
Transferor Finance Charge Collections allocated to Series 199 - , such
-- ---
Excess Spread, Excess Finance Charges and Excess Transferor Finance Charge
Collections shall be applied first to pay amounts due with respect to such
Distribution Date pursuant to clause (A)(1) above under "-- Payment of
Interest, Fees and Other Items", second to pay the Class A Servicing Fee
pursuant to clause (A)(2) above under "-- Payment of Interest, Fees and Other
Items" and third to pay the Class A Investor Default Amount for such
Distribution Date pursuant to clause (A)(3) above under "-- Payment of
Interest, Fees and Other Items;"
(2) 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 Available Investor Principal Collections for such Distribution
Date as described under "-- Payments of Principal" below;
(3) an amount equal to any deficiency pursuant to clauses (B)(1) and (2)
above under "-- Payment of Interest, Fees and Other Items" will be used to
fund such deficiency, provided that, in the event such deficiency for such
Distribution Date exceeds the remaining amount of Excess Spread, Excess
Finance Charges and Excess Transferor Finance Charge Collections allocated to
Series 199 - , such Excess Spread, Excess Finance Charges and Excess
-- ---
Transferor Finance Charge Collections shall be applied first to pay amounts
due with respect to such Distribution Date pursuant to clause (B)(1) above
under "-- Payment of Interest, Fees and Other Items," and second to pay the
Class B Servicing Fee pursuant to clause (B)(2) above under "-- Payment of
Interest, Fees and Other Items;"
S-37
<PAGE>
(4) an amount equal to the Class B Investor Default Amount for such
Distribution Date will be treated as a portion of Available Investor
Principal Collections for such Distribution Date as described under
"--Payments of Principal" below;
(5) an amount equal to the aggregate amount by which the Class B
Invested Amount has been reduced pursuant to clauses (iv), (v) and (vi) of
the definition of "Class B Invested Amount" under "-- Allocation Percentages"
above (but not in excess of the aggregate amount of such reductions which
have not been previously reimbursed) shall be treated as a portion of
Available Investor Principal Collections for such Distribution Date;
(6) an amount equal to Class C Monthly Interest, if any, for such
Distribution Date, PLUS the amount of any Class C Monthly Interest previously
due but not paid to the Class C Interest Holder on a prior Distribution Date,
plus any additional interest with respect to amounts that were due but not
paid to the Class C Interest Holder on a prior Distribution Date at a rate
equal to the Class C Rate ("Class C Additional Interest"), will be
distributed to the Class C Interest Holder in accordance with the supplement
entered into upon the transfer of the Class C Interest from the Transferor;
(7) an amount equal to the Class C Servicing Fee due but not paid to the
Servicer on such Distribution Date or a prior Distribution Date shall be paid
to the Servicer;
(8) an amount equal to the Class C Default Amount for such Distribution
Date shall be treated as a portion of Available Investor Principal
Collections with respect to such Distribution Date;
(9) an amount equal to the aggregate amount by which the Class C
Invested Amount has been reduced pursuant to clauses (iv), (v) and (vi) of
the definition of "Class C Invested Amount" under "-- Allocation Percentages"
above (but not in excess of the aggregate amount of such reductions which
have not been previously reimbursed) shall be treated as a portion of
Available Investor Principal Collections for such Distribution Date;
(10) the balance, if any, will constitute a portion of Excess Finance
Charges for such Distribution Date and will be available for allocation to
other Series in [Group One] or to the holders of the Transferor Certificates
as described in "Description of the Certificates -- Sharing of Excess Finance
Charges" in the Prospectus.
REALLOCATED PRINCIPAL COLLECTIONS. On or before each Distribution Date
after giving effect to the distributions above under "-- Excess Spread,
Excess Finance Charges; Excess Transferor Finance Charge Collections," the
Trustee, acting pursuant to the Servicer's instructions, will apply the
Reallocated Principal Collections for the related Monthly Period to make the
following distributions in the following priority:
(1) if the amount of Excess Spread, Excess Finance Charges and Excess
Transferor Finance Charge Collections allocated to Series 199 - for the
-- ---
related Monthly Period is less than the Class A Required Amount, Reallocated
Principal Collections, up to the amount of such deficiency, will be withdrawn
from the Collection Account and distributed to fund such deficiency in the
order of priority set forth in clause (1) above under "-- Excess Spread,
Excess Finance Charges; Excess Transferor Finance Charge Collections"; and
(2) if the amount of Excess Spread, Excess Finance Charges and Excess
Transferor Finance Charge Collections allocated to Series 199 - for the
-- ---
related Monthly Period not required to fund the Class A Required Amount or
reimburse Class A Investor Charge-Offs is less than the Class B Required
Amount, Reallocated Principal Collections allocable to the Class C Interest
not required to fund the Class A Required Amount, up to the amount of such
deficiency, will be withdrawn from the Collection Account and distributed to
fund such deficiency in the order of priority set forth in clauses (3) and
(4) above under "-- Excess Spread; Excess Finance Charges; Excess Transferor
Finance Charge Collections."
PAYMENTS OF PRINCIPAL. On each Distribution Date, the Trustee, acting
pursuant to the Servicer's instructions, will distribute Available Investor
Principal Collections (see "-- Principal Payments" above) in the following
priority:
(1) on each Distribution Date with respect to the Revolving Period, all
such Available Investor Principal Collections, in the following order of
priority:
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<PAGE>
(i) an amount equal to the excess, if any, of the Class C
Investor Amount over the Required Class C Investor Amount will be paid
to the Class C Interest Holder; and
(ii) the balance will be treated as Shared Principal Collections
and applied as described under "Description of the Certificates
--Shared Principal Collections and Transferor Principal Collections"
in the Prospectus;
(2) on each Distribution Date with respect to the Controlled Accumulation
Period or the Rapid Amortization Period, all such Available Investor
Principal Collections will be distributed or deposited in the following
priority:
(i) an amount equal to Class A Monthly Principal will be
deposited in the Principal Funding Account for payment to the Class A
Certificateholders on the earlier to occur of the Class A Expected
Final Distribution Date or the first Distribution Date with respect to
the Rapid Amortization Period;
(ii) for each Distribution Date beginning on the Distribution
Date on which the Class A Investor Amount is paid in full (the "Class
B Principal Commencement Date"); PROVIDED, that if the Class A
Investor Amount is paid in full on the Class A Expected Final
Distribution Date and the Rapid Amortization Period has not commenced,
the Class B Principal Commencement Date will be the Class B Expected
Final Distribution Date, an amount equal to Class B Monthly Principal
for such Distribution Date will be paid to the Class B
Certificateholders;
(iii) for each Distribution Date prior to the Distribution
Date on which the Class B Invested Amount is paid in full, an amount
equal to the excess, if any, of the Class C Invested Amount over the
Required Class C Invested Amount will be paid to the Class C Interest
Holder;
(iv) for each Distribution Date on or after the Distribution
Date on which the Class B Invested Amount is paid in full, an amount
up to the Class C Invested Amount will be paid to the Class C Interest
Holder; and
(v) the balance, if any, will be treated as Shared Principal
Collections and applied as described under "Description of the
Certificates -- Shared Principal Collections and Transferor Principal
Collections" in the Prospectus.
PRINCIPAL FUNDING ACCOUNT
Pursuant to the Supplement, the Servicer will establish and maintain the
principal funding account as a segregated trust account held for the benefit
of the Certificateholders (the "Principal Funding Account"). During the Class
A Accumulation Period, the Trustee at the direction of the Servicer will
transfer Available Investor Principal Collections to the Principal Funding
Account as described under "-- Application of Collections -- Payments of
Principal."
Funds on deposit in the Principal Funding Account will be invested by
the Trustee at the direction of the Servicer in Eligible Investments.
Investment earnings (net of investment losses and expenses) on funds on
deposit in the Principal Funding Account (the "Principal Funding Investment
Proceeds") will be included in Class A Available Funds with respect to each
Distribution Date.
[RESERVE ACCOUNT
Pursuant to the Supplement, the Servicer will establish and maintain the
reserve account as a segregated trust account held for the benefit of the
Certificateholders (the "Reserve Account"). The Reserve Account is
established to assist with the subsequent distribution of interest on the
Certificates during the Class A Accumulation Period. With respect to each
Distribution Date from and after the Reserve Account Funding Date, but prior
to the termination of the Reserve Account, the Trustee, acting pursuant to
the Servicer's instructions, will apply Excess Spread and Excess Finance
Charges allocated to the Certificates (to the extent described above under
"--Application of Collections -- Excess Spread; Excess Finance Charges;
Excess Transfer Finance Charge Collections") to increase the amount on
deposit in the Reserve Account (to the extent such amount is less than the
Required Reserve Account Amount). The "Reserve Account Funding Date" will be
the Distribution Date with respect to the Monthly Period which commences no
later than three months prior to the Monthly Period in which, as of the
related Determination Date, the Class A
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<PAGE>
Accumulation Period is scheduled to commence, or such earlier date as the
Servicer may determine. The "Required Reserve Account Amount" with respect
to any Distribution Date on or after the Reserve Account Funding Date will be
equal to (a) the product of (i) % of the Class A Investor Amount as of the
---
preceding Distribution Date (after giving effect to all changes therein on
such date) and (ii) a fraction, the numerator of which is the number of
Monthly Periods scheduled to be included in the Class A Accumulation Period
as of such date, and the denominator of which is twelve, provided that if
such numerator is one, the Required Reserve Account Amount will be zero, or
(b) any other amount designated by the Transferor, PROVIDED, that if such
designation is of a lesser amount, the Transferor shall have provided the
Servicer and the Trustee with evidence that the Rating Agency Condition has
been satisfied and the Transferor shall have delivered to the Trustee a
certificate of an authorized officer to the effect that, based on the facts
known to such officer at such time, in the reasonable belief of the
Transferor, such designation will not cause a Pay Out Event or an event that,
after the giving of notice or the lapse of time, would cause a Pay Out Event
to occur. On each Distribution Date, after giving effect to any deposit to
be made to, and any withdrawal to be made from the Reserve Account, the
Trustee will withdraw from the Reserve Account an amount equal to the excess,
if any, of the amount on deposit in the Reserve Account an amount equal to
the excess, if any, of the amount on deposit in the Reserve Account over the
Required Reserve Account Amount and will pay such amount to the Class C
Interest Holder.
Provided that the Reserve Account has not terminated as described below,
all amounts on deposit in the Reserve Account with respect to any
Distribution Date (after giving effect to any deposits to or withdrawals
from, the Reserve Account to be made on such Distribution Date) will be
invested by the Trustee at the direction of the Servicer in Eligible
Investments. The interest and other investment income (net of investment
expenses and losses) earned on such investments will be retained in the
Reserve Account (to the extent the amount on deposit is less than the
Required Reserve Account Amount) or deposited in the Collection Account and
treated as collections of Finance Charge Receivables allocable to Series
199 - .
-- ---
On or before each Distribution Date with respect to the Class A
Accumulation Period and on the first Distribution Date with respect to the
Rapid Amortization Period, a withdrawal will be made from the Reserve
Account, and the amount of such withdrawal will be deposited in the
Collection Account and included in Class A Available Funds in an amount equal
to the lesser of (a) the Available Reserve Account Amount with respect to
such Distribution Date and (b) the excess, if any, of a portion of the Class
A Monthly Interest determined in accordance with the Pooling and Servicing
Agreement over the Principal Funding Investment Proceeds with respect to such
Distribution Date; provided, that the amount of such withdrawal shall be
reduced to the extent that funds otherwise would be available to be deposited
in the Reserve Account on such Distribution Date. On each Distribution Date,
the amount available to be withdrawn from the Reserve Account (the "Available
Reserve Account Amount") will be equal to the lesser of the amount on deposit
in the Reserve Account (before giving effect to any deposit to be made to the
Reserve Account on such Distribution Date) and the Required Reserve Account
Amount for such Distribution Date.
The Reserve Account will be terminated following the earlier to occur of
(a) the termination of the Trust pursuant to the Pooling and Servicing
Agreement, (b) the date on which the Class A Investor Amount is paid in full
and (c) if the Class A Accumulation Period has not commenced, the occurrence
of a Pay Out Event or, if the Class A Accumulation Period has commenced, the
earlier of the first Distribution Date with respect to the Rapid Amortization
Period and the Class A Expected Final Distribution Date. Upon the termination
of the Reserve Account, all amounts on deposit therein (after giving effect
to any withdrawal from the Reserve Account on such date as described above)
will be distributed to the Class C Interest Holder. Any amounts withdrawn
from the Reserve Account and distributed to the Class C Interest Holder as
described above will not be available for distribution to the
Certificateholders.]
[COMPANION SERIES
The Certificates are subject to being paired with one or more later
issued Series (each, a "Companion Series") on or after the commencement of
the Controlled Accumulation Period or the Rapid Amortization Period. A
Companion Series will be pre-funded with an initial deposit to a funding
account or may have a variable principal amount. Any such funding account
will be held for the benefit of such Companion Series and not for the benefit
of the Certificateholders. Upon payment in full of the Certificates, assuming
that there have been no unreimbursed charge-offs with respect to any related
Companion Series, the aggregate investor amount of such Companion Series will
have been increased by an amount up to an aggregate amount equal to the
Investor Amount. The issuance of a Companion Series will be subject to the
conditions described under "Description of the Certificates -- New Issuances"
in the Prospectus.
S-40
<PAGE>
There can be no assurance that the terms of any Companion Series might not
have an impact on the calculation of the Series Percentage or the timing or
amount of payments received by a Certificateholder.]
SHARED COLLECTIONS OF PRINCIPAL RECEIVABLES AND TRANSFEROR PRINCIPAL COLLECTIONS
To the extent that collections of Principal Receivables allocated to the
Certificates or the Class C Interest are not needed to make payments to or
for the benefit of the Certificateholders or the Class C Interest Holder,
such collections may be applied to cover principal payments due to or for the
benefit of other Principal Sharing Series. Any such application of
collections will not result in a reduction of the Invested Amount of the
Certificates and the Class C Interest.
Similarly, certain collections of Principal Receivables allocated to
other Principal Sharing Series, to the extent such collections are not needed
to make payments to or for the benefit of Certificateholders of such other
Series ("Shared Principal Collections"), will be applied, if necessary, to
cover payments of principal due to Certificateholders during the Controlled
Accumulation Period and the Rapid Amortization Period. In addition, the
Servicer will, under the terms of the Pooling and Servicing Agreement,
determine the amount of collections of Principal Receivables for any Monthly
Period allocated to the Transferor's Interest but not due to the holder of
any Supplemental Certificate and other amounts payable to the Transferor with
respect to collections of Principal Receivables plus the amount of Excess
Transferor Finance Charge Collections remaining after application to amounts
payable from collections of Finances Charge Receivables ("Shared Transferor
Principal Collections"). Such Shared Transferor Principal Collections, to the
extent not needed to make payments for the benefit of Certificateholders of
other Series will be applied, if necessary, to cover payments of principal
due to Certificateholders during the Controlled Accumulation Period and the
Rapid Amortization Period. There can be no assurance that such Shared
Principal Collections or Shared Transferor Principal Collections will be
available to cover payments of principal or deposits due on any Distribution
Date during the Controlled Accumulation Period and the Rapid Amortization
Period. If no such Shared Principal Collections or Shared Transferor
Principal Collections were available to the Certificates, the Class A
Investor Amount might not be paid in full by the Class A Expected Final
Distribution Date and the Class B Invested Amount might not be paid in full
by the Class B Expected Final Distribution Date. Such Shared Principal
Collections or Shared Transferor Principal Collections may also be allocated
to other Series either currently outstanding or to be issued by the Trust in
the future. To the extent such Shared Principal Collections or Shared
Transferor Principal Collections are allocated to other Series, the pro rata
share of such Shared Principal Collections or Shared Transferor Principal
Collections allocated to Certificateholders will be reduced.
REQUIRED CLASS C INVESTOR AMOUNT
The "Required Class C Invested Amount" for any Distribution Date means
the greater of (i) the product of (a) the sum of (I) [the sum of] the Class A
Invested Amount [and the Class A Floating Percentage of the Pre-Funded Amount]
and (II) [the sum of] the Class B Invested Amount [and the Class B Floating
Percentage of the Pre-Funded Amount], each as of such Distribution Date after
taking into account distributions made on such Distribution Date, and (b) a
fraction, the numerator of which is % and the denominator of which is the
---
excess of 100% over % and (ii) the product of (A) $ and (B)
--- --------------
%; PROVIDED, HOWEVER, that (i) if a Pay Out Event with respect to Series
- ---
199 - occurs or if there are certain reductions in the Class C Invested
-- ---
Amount, the Required Class C Investor Amount for such Distribution Date shall
equal the Required Class C Investor Amount for the Distribution Date
immediately preceding the occurrence of such Pay Out Event or reduction in
the Class C Investor Amount, (ii) in no event shall the Required Class C
Investor Amount exceed the sum of the Class A Invested Amount and the Class B
Invested Amount on such date, and (iii) the Required Class C Investor Amount
may be reduced without the consent of the Certificateholders, if the
Transferor shall have received written notice that the Rating Agency
Condition has been satisfied for such reduction and the Transferor shall have
delivered a certificate of an authorized officer to the effect that, based on
the facts known to such officer at such time, in the reasonable belief of the
Transferor, such reduction will not cause a Pay Out Event with respect to
Series 199 - or an event that, after the giving of notice or the lapse of
-- ---
time, would constitute a Pay Out Event with respect to Series 199 - .
-- ---
S-41
<PAGE>
ALLOCATION OF INVESTOR DEFAULT AMOUNT
On each Determination Date, the Servicer will calculate the Investor
Default Amount for the preceding Monthly Period. The term "Investor Default
Amount" means, for any Monthly Period, the product of (i) the Floating
Allocation Percentage with respect to such Monthly Period and (ii) the
Defaulted Amount for such Monthly Period. A portion of the Investor Default
Amount will be allocated to the Class A Certificateholders (the "Class A
Investor Default Amount") on each Distribution Date in an amount equal to the
product of the Class A Floating Percentage applicable during the related
Monthly Period and the Investor Default Amount for such Monthly Period. A
portion of the Investor Default Amount will be allocated to the Class B
Certificateholders (the "Class B Investor Default Amount") in an amount equal
to the product of the Class B Floating Percentage applicable during the
related Monthly Period and the Investor Default Amount for such Monthly
Period. A portion of the Investor Default Amount will be allocated to the
Class C Interest Holder in an amount equal to the Class C Default Amount. An
amount equal to the Class A Investor Default Amount for each Monthly Period
will be paid from Class A Available Funds, Excess Spread and Excess Finance
Charges and Excess Transferor Finance Charge Collections allocated to Series
199 - or from Reallocated Principal Collections and applied as described
-- ---
above in "-- Application of Collections -- Payment of Interest, Fees and
Other Items," "-- Application of Collections -- Excess Spread; Excess Finance
Charges; Excess Transferor Finance Charge Collections" and "-- Reallocation
of Cash Flows." An amount equal to the Class B Investor Default Amount for
each Monthly Period will be paid from Excess Spread and Excess Finance
Charges and Excess Transferor Finance Charge Collections allocated to Series
199 - or from Reallocated Principal Collections allocable to the Class C
-- ---
Invested Amount and applied as described above in "-- Application of
Collections -- Excess Spread; Excess Finance Charges; Excess Transferor
Finance Charge Collections" and "-- Reallocation of Cash Flows;"
On each Distribution Date, if the Class A Required Amount for such
Distribution Date exceeds the sum of Excess Spread, Excess Finance Charges
and Excess Transferor Finance Charge Collections allocable to Series - ,
-- ---
Reallocated Principal Collections, the Class C Invested Amount will be
reduced by the amount of such excess, but not by more than the Class A
Investor Default Amount for such Distribution Date. In the event that such
reduction would cause the Class C Invested Amount to be a negative number,
the Class C Invested Amount will be reduced to zero, and the Class B Invested
Amount will be reduced by the amount by which the Class C Invested Amount
would have been reduced below zero, but not by more than the excess, if any,
of the Class A Investor Default Amount for such Distribution Date over the
amount of such reduction, if any, of the Class C Invested Amount with respect
to such Distribution Date. In the event that such reduction would cause the
Class B Invested Amount to be a negative number, the Class B Invested Amount
will be reduced to zero, and the Class A Invested Amount will be reduced by
the amount by which the Class B Invested Amount would have been reduced below
zero, but not by more than the excess, if any, of the Class A Investor
Default Amount for such Distribution Date over the amount of the reductions,
if any, of the Class C Invested Amount and the Class B Invested Amount with
respect to such Distribution Date as described above (a "Class A Investor
Charge-Off"), which will have the effect of slowing or reducing the return of
principal to the Class A Certificateholders. If the Class A Invested Amount
has been reduced by the amount of any Class A Investor Charge-Offs, it will
thereafter be increased on any Distribution Date (but not by an amount in
excess of the aggregate Class A Investor Charge-Offs) by the amount of Excess
Spread, and Excess Transferor Finance Charge Collections and Excess Finance
Charges allocated to Series 199 - and available for such purpose as
-- ---
described under "--Application of Collections -- Excess Spread; Excess
Finance Charges; Excess Transferor Finance Charge Collections."
On each Distribution Date, if the Class B Required Amount for such
Distribution Date exceeds the sum of Excess Spread, Excess Finance Charges
and Excess Transferor Finance Charge Collections allocable to Series 199 -
-- ---
and not required to pay the Class A Required Amount and Reallocated Principal
Collections allocable to the Class C Interest and not required to pay the
Class A Required Amount, then the Class C Invested Amount will be reduced by
the amount of such excess. In the event that such reduction would cause the
Class C Invested Amount to be a negative number, the Class C Invested Amount
will be reduced to zero, and the Class B Invested Amount will be reduced by
the amount by which the Class C Invested Amount would have been reduced below
zero, but not by more than the excess, if any, of the Class B Investor
Default Amount for such Distribution Date over the amount of such reduction,
if any, of the Class C Invested Amount with respect to such Distribution Date
(a "Class B Investor Charge-Off"). If the Class B Invested Amount has been
reduced by the amount of any Class B Investor Charge-Offs, it will thereafter
be increased on any Distribution Date (but not by an amount in excess of the
aggregate Class B Investor Charge-Offs) by the amount of Excess Spread,
Excess Finance Charges and Excess Transferor Finance Charge Collections
allocated to Series 199 - and available for such purpose as described under
-- ---
"-- Application of Collections -- Excess Spread; Excess Finance Charges;
Excess Transferor Finance Charge Collections."
S-42
<PAGE>
OPTIONAL REPURCHASE
On the Distribution Date occurring on or after the date that the
Investor Amount is reduced to % or less of the Initial Investor Amount, the
--
Transferor will have the option (to be exercised in its sole discretion) to
repurchase the Certificates. The purchase price of the Certificates and the
Class C Interest will be equal to the Investor Amount as of the last day of
the Monthly Period preceding the Distribution Date on which such purchase
occurs plus accrued and unpaid interest on the unpaid principal amount of the
Certificates plus accrued and unpaid interest, if any on the Class C
Interest. Following any such repurchase, the Certificateholders will have no
further rights with respect to the Receivables.
PAY OUT EVENTS
The Revolving Period will continue through , (or such
-------- -- ----
later date resulting from postponement of the Class A Accumulation Period),
unless a Pay Out Event occurs prior to such date. A Pay Out Event for Series
199 - refers to any of the following events, which are applicable only to
-- ---
Series 199 - (although other Series may have similar or identical pay out
-- ---
events):
(a) failure on the part of the Transferor (i) to make any payment
or deposit on the date required under the Pooling and Servicing
Agreement on or before the date occurring five Business Days after the
date such payment or deposit is required to be made; or (ii) duly to
observe or perform in any material respect any other covenants or
agreements of the Transferor in the Pooling and Servicing Agreement,
which failure has a material adverse effect on the Certificateholders;
(b) any representation or warranty made by the Transferor in the
Pooling and Servicing Agreement or any information required to be
given by the Servicer on behalf of the Transferor to identify the
Accounts proves to have been incorrect in any material respect when
made or delivered and continues to be incorrect in any material
respect for a period of 60 days after written notice of such failure
shall have been given to the Transferor by the Trustee, or to the
Transferor and the Trustee by the holders of Certificates aggregating
not less than 50% of the outstanding principal balance of the
Certificates and as a result the interests of the Certificateholders
are materially and adversely affected;
(c) with respect to the end of any Monthly Period (i) with
respect to which the Transferor Amount is less than the Required
Transferor Amount, the failure of the Transferor to convey on or prior
to the tenth Business Day following the related Determination Date
Receivables in Additional Accounts to the Trust such that the
Transferor Amount is at least equal to the Required Transferor Amount
or (ii) with respect to which the aggregate Principal Receivables are
less than the Required Principal Balance, the failure of the
Transferor to convey on or prior to the tenth Business Day following
the related Determination Date Receivables in Additional Accounts to
the Trust such that the aggregate Principal Receivables are at least
equal to the Required Principal Balance;
(d) the Net Portfolio Yield averaged over three consecutive
Monthly Periods is less than the Base Rate averaged over such period;
(e) any Servicer Default occurs which would have a material
adverse effect on the Certificateholders; or
(f) the Class A Investor Amount shall not be paid in full on the
Class A Expected Final Distribution Date or the Class B Invested
Amount shall not be paid in full on the Class B Expected Final
Distribution Date.
A Pay Out Event for all Series refers to any of the following events,
which are applicable to the Certificates and other Series:
(g) an Insolvency Event relating to the Transferor or an
Account Owner;
S-43
<PAGE>
(h) the Trust becomes an "investment company" within the meaning
of the Investment Company Act; or
(i) the inability of the Transferor for any reason to transfer
Receivables to the Trust in accordance with the provisions of the
Pooling and Servicing Agreement.
In the case of any event described in subparagraphs (a), (b) or (e), a
Pay Out Event will be deemed to have occurred only if, after any applicable
grace period described in such clauses, the Trustee or Certificateholders and
the Class C Interest Holder evidencing undivided interests aggregating not
less than 50% of the aggregate unpaid principal amount of the Certificates
and the Class C Interest, by written notice to the Transferor and the
Servicer (and to the Trustee if given by the Certificateholders and the Class
C Interest Holder), declare that a Pay Out Event has occurred with respect to
the Certificates and the Class C Interest and is continuing as of the date of
such notice, and in the case of any event described in subparagraphs (c),
(d), (f), (g), (h) or (i), a Pay Out Event or a Trust Pay Out Event will be
deemed to have occurred without any notice or other action on the part of the
Trustee, or the Certificateholders and the Class C Interest Holder
immediately upon the occurrence of such event. Upon the occurrence of a Pay
Out Event, the Rapid Amortization Period will commence. In such event,
distributions of principal to the Certificateholders in the priority provided
for above will begin on the first Distribution Date following the month in
which the Pay Out Event occurred.
SERVICING COMPENSATION AND PAYMENT OF EXPENSES
The share of the Servicing Fee allocable to the Certificates and the
Class C Interest with respect to any Distribution Date (the "Monthly
Servicing Fee") will be equal to one-twelfth of the product of (a) % (the
---
"Servicing Fee Rate") and (b) the Invested Amount as of the last day of the
Monthly Period preceding such Distribution Date (the amount calculated
pursuant to this clause (b) is referred to as the "Servicing Base Amount");
PROVIDED, HOWEVER, with respect to the first Distribution Date, the Monthly
Servicing Fee will be $ . On the Business Day immediately preceding
-------
each Distribution Date (the "Transfer Date") for which The Travelers Bank or
the Trustee is the Servicer, an amount equal to one-twelfth the product of
(i) % and (ii) the Servicing Base Amount with respect to the related
---
Monthly Period that is on deposit in the Collection Account shall be
withdrawn from the Collection Account and paid to the Servicer in payment of
a portion of the Monthly Servicing Fee with respect to such Monthly Period.
The share of the Monthly Servicing Fee allocable to the Class A
Certificateholders with respect to any Distribution Date (the "Class A
Servicing Fee") will be equal to one-twelfth of the product of (a) the Class
A Floating Percentage, (b) the Net Servicing Fee Rate and (c) the Servicing
Base Amount; PROVIDED, HOWEVER, that with respect to the first Distribution
Date, the Class A Servicing Fee will be $ . The share of the Monthly
--------
Servicing Fee allocable to the Class B Certificateholders with respect to any
Distribution Date (the "Class B Servicing Fee") will be equal to one-twelfth
of the product of (a) the Class B Floating Percentage, (b) the Net Servicing
Fee Rate and (c) the Servicing Base Amount; provided, however, that with
respect to the first Distribution Date, the Class B Servicing Fee will be
equal to $ . "Net Servicing Fee Rate" shall mean (a) so long as The
--------
Travelers Bank is the Servicer, % per annum, (b) so long as the Trustee is
---
the Servicer, % per annum and (c) if The Travelers Bank or the Trustee is
---
no longer the Servicer, % per annum. The Class A Servicing Fee and the
---
Class B Servicing Fee shall be payable to the Servicer solely to the extent
amounts are available for distribution in respect thereof as described under
"-- Application of Collections Payment of Interest, Fees and Other Items"
above.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
Based on the application of existing law to the facts as set forth in
the Pooling and Servicing Agreement and other relevant documents, Orrick,
Herrington & Sutcliffe LLP, special counsel to the Banks ("Special Tax
Counsel"), will deliver its opinion to the effect that the Certificates will
properly be treated as indebtedness for Federal income tax purposes. See
"Certain federal Income Tax Consequences" in the Prospectus.
S-44
<PAGE>
UNDERWRITING
Subject to the terms and conditions set forth in the underwriting
agreements relating to the [Class A Certificates] [and the Class B Certificates]
(collectively, the "Underwriting Agreement"), the Transferor has agreed to sell
to the underwriter[s] named below:
<TABLE>
<CAPTION>
UNDERWRITER CLASS A CERTIFICATES CLASS B CERTIFICATES
- ----------- -------------------- --------------------
<S> <C> <C>
$ $
- -------------------
$ $
- -------------------
$ $
- -------------------
$ $
- -------------------
</TABLE>
The Transferor has been advised by the Underwriters[s] that the
Underwriter[s] propose initially to offer the [Class A Certificates]
[Class B Certificates] to the public at the prices set forth on the cover
page of this Prospectus Supplement and to certain dealers at such price less
a concession not in excess of % of the principal amount of the
----
[Class A Certificates] [Class B Certificates]. The Underwriter[s] may allow
and such dealers may reallow a concession not in excess of % of the
----
principal amount of the [Class A Certificates] [Class B Certificates] to
certain other dealers. After the initial public offering, the public offering
price and such concessions may be changed. The Transferor has agreed that it
will indemnify the Underwriter[s] against certain liabilities, including
liabilities under the Act, or contribute to payments the Underwriter[s] may
be required to make in respect thereof. The Underwriter[s] have agreed to
reimburse the Transferor for certain expenses of the issuance and
distribution of the Certificates.
LEGAL MATTERS
Certain legal matters relating to the issuance of the Certificates will
be passed upon for the Transferor and the Banks by .
------------------
Certain legal matters relating to the issuance of the Certificates under the
laws of the State of Delaware will be passed upon for the Transferor by
Richards, Layton & Finger, Wilmington, Delaware. Certain legal matters
relating to the Federal tax consequences of such issuance legal matters, by
Orrick, Herrington & Sutcliffe LLP, Washington, D.C. Certain matters
relating to the issuance of the Certificates and ERISA matters will be passed
upon for the Underwriter[s] by Orrick, Herrington & Sutcliffe LLP.
S-45
<PAGE>
INDEX OF PRINCIPAL TERMS
<TABLE>
<CAPTION>
TERM PAGE NO.
---- --------
<S> <C>
Accounts................................................. 2
Accumulation Period...................................... 11
Accumulation Period Length............................... 30
Available Investor Principal Collections................. 30
Business Day............................................. 8
Cede..................................................... 7
Certificate Owner........................................ 7
Certificate Owners....................................... 2
Certificateholders....................................... 4
Certificateholders' Interest............................. 4
Certificates............................................. 1, 4
Class A Accumulation Period.............................. 12
Class A Additional Interest.............................. 36
Class A Available Funds.................................. 28
Class A Certificate Rate................................. 6
Class A Certificateholders............................... 4
Class A Certificates..................................... 1, 4
Class A Expected Final Distribution Date................. 25
Class A Floating Percentage.............................. 32
Class A Initial Invested Amount.......................... 4
Class A Invested Amount.................................. 4, 33
Class A Investor Amount.................................. 33
Class A Investor Charge-Off.............................. 42
Class A Investor Default Amount.......................... 42
Class A Monthly Interest................................. 28
Class A Monthly Principal................................ 30
Class A Principal Percentage............................. 32
Class A Required Amount.................................. 8, 34
Class A Servicing Fee.................................... 44
Class B Accumulation Period.............................. 12
Class B Additional Interest.............................. 37
Class B Available Funds.................................. 28
Class B Certificate Rate................................. 6
Class B Certificateholders............................... 4
Class B Certificates..................................... 1, 4
Class B Expected Final Distribution Date................. 25
Class B Floating Percentage.............................. 32
Class B Initial Invested Amount.......................... 4
Class B Invested Amount.................................. 4, 33, 38
Class B Investor Amount.................................. 33
Class B Investor Charge-Off.............................. 42
Class B Investor Default Amount.......................... 42
Class B Monthly Interest................................. 29
Class B Monthly Principal................................ 30
Class B Principal Commencement Date...................... 39
Class B Required Amount.................................. 9, 34
Class B Servicing Fee.................................... 44
Class C Additional Interest.............................. 38
Class C Default Amount................................... 33
Class C Floating Percentage.............................. 32
</TABLE>
I-2
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
Class C Initial Invested Amount.......................... 4
Class C Invested Amount.................................. 4
Class C Investor Amount.................................. 34
Class C Monthly Interest................................. 29
Class C Monthly Principal................................ 12
Closing Date............................................. 28
Code..................................................... 17
Collateral Invested Amount............................... 33
Controlled Accumulation Amount........................... 30
Controlled Deposit Amount................................ 13
Corporation.............................................. 4
Criteria................................................. 21
Deficit Controlled Accumulation Amount................... 13, 30
Definitive Certificate................................... 7
Discount Option Collections.............................. 7, 19
Discount Option Date..................................... 19
Distribution Date........................................ 8
DTC...................................................... 7
ERISA.................................................... 17
Excess Finance Charges................................... 10
Excess Spread............................................ 8, 37
FDIC..................................................... 6
Floating Allocation Percentage........................... 31
Funding Period........................................... 11
Group One................................................ 10
Initial Closing Date..................................... 21
Initial Cut Off Date..................................... 21
Initial Discount Percentage.............................. 19
Initial Invested Amount.................................. 4
Interest Period.......................................... 8
Invested Amount.......................................... 4, 27, 33
Investment Company Act................................... 25
Investor Amount.......................................... 34
Investor Default Amount.................................. 42
Investor Interest........................................ 4
Master Pooling and Servicing Agreement................... 4
Monthly Period........................................... 8
Monthly Servicing Fee.................................... 44
Net Servicing Fee Rate................................... 44
Paired Series............................................ 40
Percentage Allocation.................................... 35
Pooling and Servicing Agreement.......................... 4
Pre-Funded Amount........................................ 11
Pre-Funding Account...................................... 27
Principal Allocation Percentage.......................... 32
Principal Funding Account................................ 12, 39
Principal Funding Investment Proceeds.................... 14, 39
Rapid Amortization Period................................ 15
Rating Agencies.......................................... 17
Rating Agency............................................ 17
Reallocated Principal Collections........................ 34
Receivables.............................................. 2
Reinvestment Event....................................... 19
Required Enhancement Amount.............................. 10
Revolving Period......................................... 11
Series................................................... 4
</TABLE>
I-3
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
Series 199 - Termination Date........................ 16
-- ---
Series 199 - ........................................ 4
-- ---
Series Investor Amount................................... 34
Series Percentage........................................ 27
Servicer................................................. 1, 4
Servicing Fee Rate....................................... 44
Shared Principal Collections............................. 41
Shared Transferor Principal Collections.................. 41
Special Tax Counsel...................................... 44
Subordinate Principal Collections........................ 35
Supplement............................................... 4
TCCC..................................................... 6
Transfer Date............................................ 44
Transferor............................................... 1, 4
Transferor Amount........................................ 27
Transferor Percentage.................................... 27
Transferor's Interest.................................... 4, 27
Trust.................................................... 1, 4
Trust Pay Out Event...................................... 25
Trust Portfolio.......................................... 21
Trustee.................................................. 1, 4
Underwriting Agreement................................... 45
</TABLE>
I-4
<PAGE>
ANNEX I
OTHER SERIES ISSUED
The Certificates will be the Series to be issued by the Trust. The
-------
table below sets forth the principal characteristics of the other
-----
Series heretofore issued by the Trust and currently outstanding.
[LISTING OF OTHER SERIES]
I-5
<PAGE>
ANNEX II
RECEIVABLES IN ADDITIONAL ACCOUNTS
CONVEYED TO THE TRUST
[LISTING OF INFORMATION ABOUT ADDITIONAL ACCOUNTS]
II-1
<PAGE>
No dealer, salesperson or other person has been authorized to give any
information or to make any representation not contained in this Prospectus
Supplement or the Prospectus and, if given or made, such information or
representation must not be relied upon as having been authorized by the
Transferor or the Underwriter[s]. Neither this Prospectus Supplement nor the
Prospectus constitutes an offer to sell or a solicitation of an offer to buy
any of the securities offered hereby in any jurisdiction to any person to
whom it is unlawful to make such offer in such jurisdiction. Neither the
delivery of this Prospectus Supplement or the Prospectus, nor any sale
hereunder or thereunder, shall, under any circumstances, create any
implication that the information herein or therein is correct as of any time
subsequent to their respective dates or that there has been no change in the
affairs of the Transferor or the Trust since such dates.
-------------------
Table of Contents
Prospectus Supplement Page
----
Summary of Terms......................................................
Risk Factors..........................................................
The Banks' Credit Card Activities.....................................
The Receivables.......................................................
Maturity Assumptions..................................................
Receivable Yield Considerations.......................................
Description of the Certificates.......................................
Certain Federal Income Tax
Consequences........................................................
Underwriting..........................................................
Legal Matters.........................................................
Index of Principal Terms..............................................
Prospectus
Prospectus Supplement.................................................
Reports to Certificateholders.........................................
Available Information.................................................
Incorporation of Certain Documents
by Reference........................................................
Summary of Terms......................................................
Risk Factors..........................................................
Formation of the Trust................................................
The Banks' Credit Card Activities.....................................
Use of Proceeds.......................................................
The Banks and Travelers Corp..........................................
Certain Legal Aspects of the
Receivables.........................................................
Description of the Certificates
Enhancement...........................................................
Certain Federal Income Tax
Consequences........................................................
ERISA Considerations..................................................
Plan of Distribution..................................................
Underwriting..........................................................
Legal Matters.........................................................
Index of Principal Terms..............................................
Until , 19 , all dealers effecting transactions in
------------------- -- --
the Certificates, whether or not participating in this distribution, may be
required to deliver a Prospectus Supplement and a Prospectus. This delivery
requirement is in addition to the obligation of dealers to deliver a
Prospectus Supplement and a Prospectus when acting as underwriters and with
respect to their unsold allotments.
TRAVELERS BANK
CREDIT CARD
MASTER TRUST I
$
---------------
CLASS A [ %] [FLOATING-RATE]
--
ASSET-BACKED CERTIFICATES,
SERIES 199 -
-- ---
$
---------------
CLASS B [ %] [FLOATING-RATE]
--
ASSET-BACKED CERTIFICATES,
SERIES 199 -
-- ---
CC CREDIT CARD CORPORATION
TRANSFEROR
THE TRAVELERS BANK
SERVICER
---------------------
PROSPECTUS SUPPLEMENT
---------------------
UNDERWRITERS
<PAGE>
Exhibit 8.1
November 17, 1997
CC Credit Card Corporation
388 Greenwich Street
New York, New York 10013
RE: TRAVELERS BANK CREDIT CARD MASTER TRUST I
CC CREDIT CARD CORPORATION (TRANSFEROR)
REGISTRATION STATEMENT ON FORM S-3
Ladies and Gentlemen:
We have acted as counsel for CC Credit Card Corporation, a Delaware
corporation (the "Transferor"), in connection with the preparation of the
Registration Statement on Form S-3 (the "Registration Statement") to be filed on
November 17, 1997 with the Securities and Exchange Commission under the
Securities Act of 1933, as amended (the "Act"), for the registration under the
Act of certain series (each, a "Series") of Asset Backed Certificates
(collectively, the "Certificates"), each such Series representing an undivided
interest in Travelers Bank Credit Card Master Trust I (the "Trust"). Each such
Series of Certificates will be issued pursuant to a pooling and servicing
agreement (the "Pooling and Servicing Agreement"), between the Transferor, The
Travelers Bank, as servicer, and The Bank of New York, as trustee.
We hereby confirm that the statements set forth in the prospectus relating
to the Certificates (the "Prospectus") forming a part of the Registration
Statement under the heading "Certain Federal Income Tax Consequences," and the
statements set forth in the form of prospectus supplement, filed as Exhibit 4.3
to the Registration Statement, relating to the Certificates (the "Prospectus
Supplement) forming a part of the Registration Statement under the heading
"Summary of Terms -- Tax Status," which statements have been prepared by us, to
the extent that they constitute matters of law or legal conclusions with respect
thereto, are correct in all material respects.
We note that the Prospectus and form of Prospectus Supplement do not relate
to a specific transaction. Accordingly, the above-referenced description of
federal income tax consequences may, under certain circumstances, require
modification in the context of an actual transaction.
<PAGE>
CC Credit Card Corporation
November 17, 1997
Page 2
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. In giving such consent, we do not admit that we are
"experts" within the meaning of the term used in the Act or the rules and
regulations of the Securities and Exchange Commission issued thereunder, with
respect to any part of the Registration Statement, including this opinion as an
exhibit or otherwise.
Very truly yours,
ORRICK, HERRINGTON & SUTCLIFFE LLP
<PAGE>
Exhibit 10.1
Form of Receivables
Transfer Agreement
<PAGE>
Exhibit 10.1
OH&S DRAFT
11/12/97
CC CREDIT CARD CORPORATION,
as Corporation
and
[BANK]
as Account Owner
RECEIVABLES TRANSFER AGREEMENT
Dated as of __________ ____, 1997
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINITIONS
Section 1.01. Definitions................................................ 1
Section 1.02. Other Definitional Provisions.............................. 4
ARTICLE II
PURCHASE AND CONVEYANCE OF RECEIVABLES
Section 2.01. Purchase................................................... 4
Section 2.02. Addition of Additional Accounts............................ 6
Section 2.03. Representations and Warranties............................. 7
Section 2.04. Delivery of Documents...................................... 7
ARTICLE III
CONSIDERATION AND PAYMENT
Section 3.01. Purchase Price............................................. 7
Section 3.02. Adjustments to Purchase Price.............................. 8
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.01. Representations and Warranties of the Account Owner
Relating to the Account Owner.............................. 8
Section 4.02. Representations and Warranties of the Account Owner
Relating to the Agreement and the Receivables.............. 9
Section 4.03. Representations and Warranties of the Corporation.......... 11
i
<PAGE>
Page
----
ARTICLE V
COVENANTS
Section 5.01. Covenants of the Account Owner............................. 12
Section 5.02. Covenants of the Account Owner with Respect to
Portfolio Yield and Cardholder Agreements.................. 13
ARTICLE VI
REPURCHASE OBLIGATION
Section 6.01. Reassignment of Ineligible Receivables..................... 14
Section 6.02. Reassignment of Receivables in Trust Portfolio............. 15
ARTICLE VII
CONDITIONS PRECEDENT
Section 7.01. Conditions to the Corporation's Obligations Regarding
Initial Receivables........................................ 15
Section 7.02. Conditions Precedent to the Account Owner's Obligations.... 16
ARTICLE VIII
TERM AND PURCHASE TERMINATION
Section 8.01. Term....................................................... 17
Section 8.02. Purchase Termination....................................... 17
ARTICLE IX
MISCELLANEOUS PROVISIONS
Section 9.01. Amendment.................................................. 17
Section 9.02. Governing Law.............................................. 18
Section 9.03. Notices.................................................... 18
Section 9.04. Severability of Provisions................................. 18
Section 9.05. Assignment................................................. 18
Section 9.06. Acknowledgement and Agreement of the Account Owner......... 19
Section 9.07. Further Assurances......................................... 19
ii
<PAGE>
Page
----
Section 9.08. No Waiver; Cumulative Remedies............................. 19
Section 9.09. Counterparts............................................... 19
Section 9.10. Binding; Third-Party Beneficiaries......................... 19
Section 9.11. Merger and Integration..................................... 20
Section 9.12. Headings................................................... 20
Section 9.13. Schedules and Exhibits..................................... 20
Section 9.14. Survival of Representations and Warranties................. 20
Section 9.15. Nonpetition Covenant....................................... 20
iii
<PAGE>
RECEIVABLES TRANSFER AGREEMENT, dated as of __________ ____, 1997, by
and between [BANK], a Delaware state-chartered banking corporation (the "Account
Owner") and CC CREDIT CARD CORPORATION, a Delaware corporation (the
"Corporation").
W I T N E S S E T H:
WHEREAS, the Corporation desires to purchase, from time to time,
certain Receivables (hereinafter defined) arising in certain credit card
accounts of the Account Owner;
WHEREAS, the Account Owner desires to sell from time to time and
assign certain Receivables to the Account Owner upon the terms and conditions
hereinafter set forth;
WHEREAS, it is contemplated that the Receivables purchased hereunder
will be transferred by the Corporation to the Trust (hereinafter defined) in
connection with the issuance of certain Certificates (hereinafter defined); and
WHEREAS, the Account Owner agrees that all covenants and agreements
made by the Account Owner herein with respect to the Accounts (hereinafter
defined) and Receivables shall also be for the benefit of the Trustee
(hereinafter defined) and all beneficiaries of the Trust, including the holders
of the Certificates.
NOW, THEREFORE, it is hereby agreed by and between the Account Owner
and the Corporation as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Definitions. All capitalized terms used herein or in
any certificate, document, or Conveyance Paper made or delivered pursuant
hereto, and not defined herein or therein, shall have the meaning ascribed
thereto in the Pooling and Servicing Agreement; in addition, the following words
and phrases shall have the following meanings:
"Account" shall mean each Initial Account and each Additional Account
(but only from and after the Addition Date with respect thereto) but shall
exclude any Account in which all the Receivables are either reassigned or
assigned to the Corporation or its designee or to the Servicer in accordance
with the terms of the Pooling and Servicing Agreement and shall exclude any
Account all the Receivables in which are, after the Removal Date, not to be
assigned to the Corporation pursuant to Section ____ hereof. The definition of
Account shall include each account into which an Account shall be transferred (a
"Transferred Account"), provided that (i) such transfer is made in accordance
with the Credit Card Guidelines and (ii) such Transferred Account can be traced
or identified as an account into which an Account has been transferred.
<PAGE>
"Account Owner" shall mean [Bank], a Delaware state-chartered banking
corporation.
"Additional Account" shall mean each consumer revolving credit card
account established pursuant to a Cardholder Agreement, which account is
designated by the Account Owner pursuant to subsection ____, ____ or ____ hereof
to be included as an Account and which is identified in a computer file or
microfiche list delivered to the Corporation or to the Trustee pursuant to
Section ____.
"Addition Cut-Off Date" shall mean with respect to any Additional
Accounts the date specified in the related Assignment.
"Addition Date" shall mean with respect to Additional Accounts, the
date on which the Receivables in such Additional Accounts are conveyed to the
Trust pursuant to Section 2.02.
"Addition Notice Date" shall have the meaning specified in Section
2.02 of this Agreement.
"Agreement" shall mean this Receivables Transfer Agreement and all
amendments hereof and supplements hereto.
"Conveyance" shall have the meaning specified in subsection 2.01(a).
"Conveyance Papers" shall have the meaning specified in subsection
4.01(c).
"Corporation" shall mean CC Credit Card Corporation, a Delaware
corporation, and its permitted successors and assigns.
"Credit Adjustment" shall have the meaning specified in Section 3.02.
"Debtor Relief Laws" shall mean (i) the Bankruptcy Code of the United
States of America and (ii) all other applicable liquidation, conservatorship,
bankruptcy, moratorium, rearrangement, receivership, insolvency, reorganization,
suspension of payments, readjustment of debt, marshalling of assets or similar
debtor relief laws of the United States, any state or any foreign country from
time to time in effect affecting the rights of creditors generally.
"Finance Charge Receivables" shall mean all Receivables in the
Accounts which would be treated as "Finance Charge Receivables" in accordance
with the definition for such term in the Pooling and Servicing Agreement.
"Initial Account" shall mean each MasterCard-Registered Trademark- and
VISA-Registered Trademark-(1) account established pursuant to a Cardholder
Agreement between [Bank] and any person, and identified by account
- --------------------
(1) MasterCard and VISA are registered trademarks of MasterCard International
Incorporated and of VISA USA, Inc., respectively.
2
<PAGE>
number and by the Receivable balance in a computer file or microfiche list
delivered to the Trustee by the Corporation on or prior to the Initial
Closing Date pursuant to Section 2.01(c).
"Initial Closing Date" shall mean __________ ____, 1997.
"Insolvency Event" shall have the meaning specified in Section 8.02.
"New Principal Receivables" shall have the meaning set forth in
Section 3.01.
"Obligor" shall mean, with respect to each Account, each person that
would be treated as an "Obligor" in accordance with the definition for such term
in the Pooling and Servicing Agreement.
"Pooling and Servicing Agreement" shall mean the Pooling and Servicing
Agreement, dated as of __________ ____, 1997, among CC Credit Card Corporation,
as Corporation, The Travelers Bank, as Servicer, and the Trustee together with
all amendments and supplements thereto.
"Portfolio Reassignment Price" shall mean that portion of the amount
payable by the Corporation to the Trustee pursuant to Section 2.06 of the
Pooling and Servicing Agreement which is allocable to the Receivables in
Accounts of the Account Owner hereunder.
"Principal Receivables" shall mean all Receivables in the Accounts
that would be treated as "Principal Receivables" in accordance with the
definition for such term in the Pooling and Servicing Agreement.
"Purchase Price" shall have the meaning set forth in Section 3.01.
"Purchased Assets" shall have the meaning set forth in Section 2.01.
"Receivables" shall mean all amounts shown on the Servicer's records
as amounts payable by Obligors on any Account from time to time, including
amounts payable for Principal Receivables and Finance Charge Receivables.
Receivables which become Defaulted Receivables will cease to be included as
Receivables as of the day on which they become Defaulted Receivables.
"Removed Account" shall mean an Account hereunder that is a "Removed
Account" (as such term is defined in the Pooling and Servicing Agreement) that
is designated for removal pursuant to Section 2.10 of the Pooling and Servicing
Agreement.
"Repurchase Price" shall have the meaning set forth in subsection
6.01(b) hereof.
"Supplemental Conveyance" shall have the meaning set forth in Section
2.04.
"Trust" shall mean the Travelers Bank Credit Card Master Trust I
created by the Pooling and Servicing Agreement.
3
<PAGE>
"Trust Cut-Off Date" shall mean _________________, 1997.
"Trustee" shall mean The Bank of New York, a New York banking
corporation, the institution executing the Pooling and Servicing Agreement as,
and acting in the capacity of Trustee thereunder, or its successor in interest,
or any successor trustee appointed as provided in the Pooling and Servicing
Agreement.
Section 1.02. Other Definitional Provisions.
(a) All terms defined in this Agreement shall have the defined
meanings when used in any certificate, other document, or Conveyance Paper
made or delivered pursuant hereto unless otherwise defined therein.
(b) The words "hereof," "herein" and "hereunder" and words of similar
import when used in this Agreement or any Conveyance Paper shall refer to this
Agreement as a whole and not to any particular provision of this Agreement; and
Section, subsection, Schedule and Exhibit references contained in this Agreement
are references to Sections, subsections, Schedules and Exhibits in or to this
Agreement unless otherwise specified.
(c) All determinations of the principal or finance charge balance of
Receivables, and of any collections thereof, shall be made in accordance with
the Pooling and Servicing Agreement and all applicable Supplements.
ARTICLE II
PURCHASE AND CONVEYANCE OF RECEIVABLES
Section 2.01. Purchase.
(a) By execution of this Agreement, the Account Owner does hereby
sell, transfer, assign, set over and otherwise convey to the Corporation
(collectively, the "Conveyance"), without recourse except as provided herein,
all its right, title and interest in, to and under the Receivables existing
at the close of business on the Trust Cut-Off Date, in the case of
Receivables arising in the Initial Accounts, and the Receivables existing on
each Addition Cut-Off Date, in the case of Receivables arising in the
Additional Accounts, and, in each case, the Receivables thereafter created
from time to time until the termination of the Trust, all monies due or to
become due and all amounts received with respect thereto and all proceeds
(including "proceeds" as defined in the UCC) thereof (the "Purchased Assets").
(b) In connection with such Conveyance, the Account Owner agrees
(i) to record and file, at its own expense, any financing statements (and
continuation statements with respect to such financing statements when
applicable) with respect to the Receivables and other Purchased Assets now
existing and hereafter created, meeting the requirements of applicable state
law in such manner and in such jurisdictions as are necessary to perfect, and
maintain
4
<PAGE>
perfection of, the Conveyance of such Purchased Assets from the Account
Owner to the Corporation, (ii) that such financing statements shall name the
Account Owner, as seller, and the Corporation, as purchaser, of the Receivables
and other Purchased Assets and (iii) to deliver a file-stamped copy of such
financing statements or other evidence of such filings (excluding such
continuation statements, which shall be delivered as filed) to the Corporation
as soon as is practicable after filing.
(c) In connection with such Conveyance, the Account Owner further
agrees that it will, at its own expense, (i) on or prior to (x) the Initial
Closing Date, in the case of Initial Accounts, (y) the applicable Addition Date,
in the case of Additional Accounts and (z) the applicable Removal Date, in the
case of Removed Accounts, indicate in its computer files with the code "____" in
the ____ field of such computer files that, in the case of the Initial Accounts
or the Additional Accounts, Receivables created in connection with such Accounts
have been conveyed to the Account Owner in accordance with this Agreement and
have been conveyed by the Corporation to the Trustee pursuant to the Pooling and
Servicing Agreement for the benefit of the Certificateholders by including (or
deleting, in the case of newly originated Receivables in Removed Accounts) in
such computer files the code identifying each such Account and (ii) deliver to
the Corporation or the Trustee a computer files or microfiche file containing a
true and complete list of all such Accounts specifying for each such Account, as
of the Trust Cut-Off Date, in the case of Initial Accounts, the applicable
Addition Cut-Off Date, in the case of Additional Accounts and the applicable
Removal Cut-Off Date, in the case of Removed Accounts, its account number, the
aggregate amount outstanding in such Account and the aggregate amount of
Principal Receivables outstanding in such Account. Each such file or list, as
supplemented from time to time to reflect Additional Accounts or Removed
Accounts, shall be marked as Schedule I to this Agreement, shall be delivered to
the Corporation or the Trustee and is hereby incorporated into and made a part
of this Agreement. The Account Owner further agrees not to alter the code
referenced in clause (i) of this paragraph with respect to any Account during
the term of this Agreement unless and until such Account becomes a Removed
Account or unless and until (i) the Account Owner shall give written notice of
any such alteration to the Corporation and to the Trustee, such written notice
to be as of the date of its receipt by the Trustee incorporated into and part of
this Agreement and (ii) the Account Owner and the Corporation shall execute and
file any UCC financing statement or amendment thereof necessitated by such
alteration.
(d) The parties hereto intend that the conveyance of the Account
Owner's right, title and interest in and to the Receivables and the other
Purchased Assets shall constitute an absolute sale, conveying good title free
and clear of any liens, claims, encumbrances or rights of others from the
Account Owner to the Corporation. It is the intention of the parties hereto
that the arrangements with respect to the Receivables and other Purchased Assets
shall constitute a purchase and sale of such Receivables and not a loan. In the
event, however, that it were to be determined that the transactions evidenced
hereby constitute a loan and not a purchase and sale, it is the intention of the
parties hereto that this Agreement shall constitute a security agreement under
applicable law, and that the Account Owner shall be deemed to have granted and
does hereby grant to the Corporation a first priority perfected security
interest, in all of the Account Owner's right, title and interest, whether now
owned or hereafter acquired, in, to and under the
5
<PAGE>
Receivables and other Purchased Assets to secure the rights of the
Corporation hereunder and the obligations of the Account Owner hereunder.
Section 2.02. Addition of Additional Accounts.
(a) If, from time to time, the Corporation becomes obligated to
designate Additional Accounts (as such term is defined in the Pooling and
Servicing Agreement) pursuant to subsection 2.09(a) of the Pooling and Servicing
Agreement, then the Corporation may, at its option, give the Account Owner
written notice thereof on or before the tenth Business Day (the "Addition Notice
Date") prior to the Addition Date therefor, and upon receipt of such notice the
Account Owner shall on or before the Addition Date, designate sufficient
Eligible Accounts to be included as Additional Accounts so that after the
inclusion thereof the Corporation will be in compliance with the requirements of
said subsection 2.09(a). Additionally, subject to subsection 2.02(b) hereof,
from time to time Eligible Accounts may be designated to be included as
Additional Accounts, upon the mutual agreement of the Corporation and the
Account Owner. In either event, the Account Owner shall have sole
responsibility for selecting the Additional Accounts and shall determine and
notify the Corporation of the Addition Cut-Off Date with respect to such
Additional Accounts.
(b) On the Addition Date with respect to any designation of
Additional Accounts, the Corporation shall purchase the Account Owner's right,
title and interest in, to and under the Receivables in Additional Accounts (as
of the Addition Cut-Off Date) (and such Additional Accounts shall be deemed to
be Accounts for purposes of this Agreement), subject to the satisfaction of the
following conditions:
i) all Additional Accounts shall be Eligible Accounts;
ii) the Account Owner shall have delivered to the Account Owner
copies of UCC-1 financing statements covering such Additional Accounts, if
necessary to perfect the Corporation's ownership of the Receivables arising
therein;
iii) to the extent required of the Corporation by Section 4.03 of the
Pooling and Servicing Agreement, the Account Owner shall have deposited in
the Collection Account all Collections with respect to such Additional
Accounts since the Addition Cut-Off Date;
iv) as of each of the Addition Cut-Off Date and the Addition Date, no
Insolvency Event with respect to the Account Owner shall have occurred nor
shall the transfer to the Corporation of the Receivables arising in the
Additional Accounts have been made in contemplation of the occurrence
thereof;
v) the Account Owner shall have delivered to the Corporation an
Officer's Certificate, dated the Addition Date, (a) stating that, as of the
applicable Addition Cut-Off Date, the Additional Accounts are all Eligible
Accounts (b) confirming, to the extent applicable, the items set forth in
clauses (ii) through (iv) above; and (c) stating that the Account Owner
reasonably believes that the addition to the Trust of the Receivables
6
<PAGE>
arising in the Additional Accounts will not based on the facts known to
such officer at the time of such addition, then or thereafter cause an
Adverse Effect to occur.
Section 2.03. Representations and Warranties. The Account Owner
hereby represents and warrants to the Corporation as of the related Addition
Date that, in the case of the Initial Accounts, the computer file or microfiche
file delivered pursuant to Section 2.01(c) hereof and marked as Schedule I to
this Agreement delivered pursuant to Section 2.01(c) and, in the case of
Additional Accounts, the list delivered pursuant to Section 2.04 below is, as of
the applicable Addition Cut-Off Date, true and complete in all material
respects.
Section 2.04. Delivery of Documents. In the case of the designation
of Additional Accounts, the Account Owner shall deliver to the Corporation or
the Trustee (i) the schedule to be delivered pursuant to Section 2.01 with
respect to such Additional Accounts on the date such file or list is required to
be delivered pursuant to Section 2.01 (the "Document Delivery Date") and (ii)
with respect to Additional Accounts a duly executed, written assignment
(including an acceptance by the Corporation), substantially in the form of
Exhibit A (the "Supplemental Conveyance"), on the Addition Date.
ARTICLE III
CONSIDERATION AND PAYMENT
Section 3.01. Purchase Price.
(a) The "Purchase Price" for the Receivables in the Initial
Accounts as of the Trust Cut-Off Date conveyed to the Corporation under this
Agreement shall be payable on the Initial Closing Date and shall be an amount
equal to a percentage of the aggregate balance of Principal Receivables in
those Accounts as of the Trust Cut-Off Date, adjusted to reflect such factors
as the Account Owner and the Corporation mutually agree will result in a
Purchase Price determined to be not less than the fair market value of such
Receivables. This computation of initial purchase price should assume no
reinvestment in new Receivables. The Purchase Price for the Receivables
(including Receivables in Additional Accounts) to be conveyed to the
Corporation under this Agreement which come into existence after the Closing
Date, shall be payable on the Distribution Date following the Monthly Period
in which such Receivables are conveyed by the Account Owner to the
Corporation in an amount equal to a percentage of the aggregate balance of
the Principal Receivables so conveyed (the "New Principal Receivables"),
adjusted to reflect such factors as the Account Owner and the Corporation
mutually agree will result in a Purchase Price determined to be not less than
the fair market value of such New Principal Receivables.
(b) The Purchase Price to be paid by the Corporation on the Closing
Date and on each Distribution Date following a Monthly Period during which New
Principal Receivables are conveyed to the Corporation shall be paid in cash.
7
<PAGE>
Section 3.02. Adjustments to Purchase Price. The Purchase Price
shall be adjusted on each Distribution Date (a "Credit Adjustment") with respect
to any Receivable previously conveyed to the Corporation by the Account Owner
which has since been reversed by the Account Owner or the Servicer because of a
rebate, refund, unauthorized charge or billing error to an Obligor because such
Receivable was created in respect of merchandise which was refused or returned
or due to the occurrence of any other event referred to in Section 3.09 of the
Pooling and Servicing Agreement. The amount of such adjustment shall equal (x)
the reduction in the Principal Receivables resulting from the occurrence of such
event multiplied by (y) the quotient (expressed as a percentage) of (i) the
Purchase Price for Principal Receivables payable on such Distribution Date
computed in accordance with Section 3.01 divided by (ii) the Principal
Receivables paid for on such date pursuant to such Section. In the event that
an adjustment pursuant to this Section 3.02 causes the Purchase Price to be a
negative number, the Account Owner agrees that, not later than 1:00 P.M. New
York City time on such Distribution Date, the Account Owner shall pay to the
Corporation an amount equal to the amount by which the Purchase Price minus the
Credit Adjustment would be reduced below zero.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.01. Representations and Warranties of the Account Owner
Relating to the Account Owner. The Account Owner hereby represents and warrants
to, and agrees with, the Corporation as of the Initial Closing Date and on each
Addition Date, that:
(a) Organization and Good Standing. The Account Owner is a state
banking corporation duly organized and validly existing in good standing
under the laws of the State of Delaware and has, in all material respects,
full 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. The Account Owner is duly qualified to do
business and is in good standing as a foreign corporation (or is exempt from
such requirements) and has obtained all necessary licenses and approvals, in
each jurisdiction in which failure to so qualify or to obtain such licenses and
approvals would (i) render any Cardholder Agreement relating to an Account, or
any Receivable unenforceable by the Account Owner, the Servicer or the Trustee
and (ii) have a material adverse effect on the interests of the
Certificateholders.
(c) Due Authorization. The execution, delivery and performance of
this Agreement and any other document or instrument delivered pursuant hereto,
including any Supplemental Conveyance (such other documents or instruments,
collectively, the "Conveyance Papers"), and the consummation of the transactions
provided for in this Agreement and the Conveyance Papers have been (i) duly
authorized by the Account Owner by all necessary corporate action on the part of
the Account Owner and (ii) each of such Agreement and the Conveyance papers will
remain, from the time of its execution, an official record of the Account Owner.
8
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(d) No Conflict. The execution and delivery of this Agreement and
the Conveyance Papers by the Account Owner, the performance of the transactions
contemplated by this Agreement and the Conveyance Papers, and the fulfillment of
the terms of this Agreement and the Conveyance Papers applicable to the Account
Owner will not conflict with or result in any breach of any of the material
terms and provisions of, or constitute (with or without notice or lapse of time
or both) a material default under, any indenture, contract, agreement, mortgage,
deed of trust, or other instrument to which the Account Owner is a party or by
which it or any of its properties are bound.
(e) No Proceedings. There are no proceedings or investigations
pending or, to the best knowledge of the Account Owner, threatened against the
Account Owner, before any court, regulatory body, administrative agency, or
other tribunal or governmental instrumentality (i) asserting the invalidity of
this Agreement or the Conveyance Papers, (ii) seeking to prevent the
consummation of any of the transactions contemplated by this Agreement or the
Conveyance Papers, (iii) seeking any determination or ruling that, in the
reasonable judgment of the Account Owner, would materially and adversely affect
the performance by the Account Owner of its obligations under this Agreement or
the Conveyance Papers, (iv) seeking any determination or ruling that would
materially and adversely affect the validity or enforceability of this Agreement
or the Conveyance Papers or (v) seeking to affect adversely the income tax
attributes of the Trust under the United States Federal or any state income or
franchise tax systems.
(f) All Consents. All approvals, authorizations, consents, orders or
other actions of any Person or of any governmental body or official required to
be obtained, effected or given by the Account Owner in connection with the
execution and delivery by the Account Owner of this Agreement and the Conveyance
Papers and the performance of the transactions contemplated by this Agreement or
the Conveyance Papers by the Account Owner have been duly obtained, effected or
given and are in full force and effect.
(g) No Insolvency Event with respect to the Account Owner has
occurred and the transfer of the Receivables and other Purchased Assets by the
Account Owner to the Corporation as contemplated by this Agreement has not been
made in contemplation thereof.
The representations and warranties set forth in this Section 4.01
shall survive the transfer and assignment of the Receivables to the Corporation
and the transfer and assignment by the Corporation to the Trust. Upon discovery
by the Account Owner, the Corporation or the Trustee of a breach of any of the
foregoing representations and warranties, the party discovering such breach
shall give prompt written notice to the others.
Section 4.02. Representations and Warranties of the Account Owner
Relating to the Agreement and the Receivables.
(a) Representations and Warranties. The Account Owner hereby
represents and warrants to the Corporation as of the date of this Agreement,
as of the Initial Closing Date and, with respect to Additional Accounts, as
of the related Addition Date that:
9
<PAGE>
(i) this Agreement and, in the case of Additional Accounts, the
related Supplemental Conveyance, each constitutes a legal, valid and
binding obligation of the Account Owner enforceable against the
Corporation 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 generally from time to time in effect or
general principles of equity (whether considered in a suit of law or in
equity);
(ii) as of the Trust Cut-Off Date, and as of the related Addition
Cut-Off Date with respect to Additional Accounts, Schedule I to this
Agreement (composed of the list of accounts) as supplemented to such date,
is an accurate and complete listing in all material respects of all the
Accounts the Receivables in which were transferred as of the Trust Cut-Off
Date or such Addition Cut-Off Date, as the case may be, and the information
contained therein with respect to the identity of such Accounts and the
Receivables existing thereunder is true and correct in all material
respects as of the Trust Cut-Off Date or such applicable Addition Cut-Off
Date, as the case may be, and as of the Trust Cut-Off Date, the aggregate
amount of Receivables in all the Initial Accounts was $______________, of
which $______________ were Principal Receivables;
(iii) each Receivable has been conveyed to the Account Owner free
and clear of any Lien;
(iv) all authorizations, consents, orders or approvals of or
registrations or declarations with any Governmental Authority required to
be obtained, effected or given by the Account Owners in connection with the
conveyance of the Receivables to the Corporation have been duly obtained,
effected or given and are in full force and effect;
(v) this Agreement and, in the case of Additional Accounts, any
related Supplemental Conveyance constitutes a valid sale, transfer and
assignment to the Corporation of all right, title and interest of the
Account Owner in the Receivables conveyed to the Trust by the Account Owner
and the proceeds thereof; upon the filing of the financing statements and,
in the case of Receivables hereafter created and the proceeds thereof, upon
the creation thereof, the Corporation shall have a first priority perfected
ownership interest in such property and proceeds;
(vi) on the Trust Cut-Off Date, each Initial Account is an Eligible
Account and, in the case of Additional Accounts, on the Addition Cut-Off
Date, each related Additional Account is an Eligible Account;
(vii) on the Trust Cut-Off Date, each Receivable then existing and
conveyed to the Account Owner is an Eligible Receivable, and in the case of
Additional Accounts, on the applicable Addition Cut-Off Date, each
Receivable contained in such Additional Account and conveyed to the Account
Owner is an Eligible Receivable;
(viii) as of the date of the creation of any new Receivable, such
Receivable is an Eligible Receivable; and
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(ix) no selection procedures believed by the Account Owner to be
materially adverse to the interests of the Corporation or the Investor
Certificateholders have been used in selecting such Accounts.
(b) Notice of Breach. The representations and warranties set forth
in this Section 4.02 shall survive the transfer and assignment of the
Receivables to the Corporation and the transfer and assignment by the
Corporation to the Trust. Upon discovery by either the Account Owner, the
Corporation, the Servicer or the Trustee of a breach of any of the
representations and warranties set forth in this Section 4.02, the party
discovering such breach shall give prompt written notice to the others. The
Account Owner hereby acknowledges that the Corporation intends to rely on the
representations hereunder in connection with representations made by the
Corporation to secured parties, assignees or subsequent transferees including
but not limited to transfers made by the Corporation to the Trust pursuant to
the Pooling and Servicing Agreement and that the Trustee may enforce such
representations directly against the Account Owner.
Section 4.03. Representations and Warranties of the Corporation. As
of the Initial Closing Date, the Corporation hereby represents and warrants to,
and agrees with, the Account Owner that:
(a) Organization and Good Standing. The Corporation is a
corporation duly organized and validly existing under the laws of the State
of Delaware and has, in all material respects, full power and authority 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 Authorization. The execution and delivery of this Agreement
and the Conveyance Papers and the consummation of the transactions provided for
in this Agreement and the Conveyance Papers have been duly authorized by the
Corporation by all necessary corporate action on the part of the Corporation.
(c) No Conflict. The execution and delivery of this Agreement and
the Conveyance Papers by the Corporation, the performance of the transactions
contemplated by this Agreement and the Conveyance Papers, and the fulfillment of
the terms of this Agreement and the Conveyance Papers applicable to the Account
Owner, will not conflict with, result in any breach of any of the material terms
and provisions of, or constitute (with or without notice or lapse of time or
both) a material default under, any indenture, contract, agreement, mortgage,
deed of trust or other instrument to which the Corporation is a party or by
which it or any of its properties are bound.
(d) No Violation. The execution, delivery and performance of this
Agreement and the Conveyance Papers by the Corporation and the fulfillment of
the terms contemplated herein and therein applicable to the Corporation will not
conflict with or violate any Requirements of Law applicable to the Corporation.
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(e) No Proceedings. There are no proceedings or investigations
pending or, to the best knowledge of the Corporation, threatened against the
Corporation, before any court, regulatory body, administrative agency, or other
tribunal or governmental instrumentality (i) asserting the invalidity of this
Agreement or the Conveyance Papers, (ii) seeking to prevent the consummation of
any of the transactions contemplated by this Agreement or the Conveyance Papers,
(iii) seeking any determination or ruling that, in the reasonable judgment of
the Corporation, would materially and adversely affect the performance by the
Corporation of its obligations under this Agreement or the Conveyance Papers or
(iv) seeking any determination or ruling that would materially and adversely
affect the validity or enforceability of this Agreement or the Conveyance
Papers.
(f) All Consents. All authorizations, consents, orders or approvals
of or registrations or declarations with any Governmental Authority required to
be obtained, effected or given by the Corporation in connection with the
execution and delivery by the Corporation of this Agreement and the Conveyance
Papers and the performance of the transactions contemplated by this Agreement
and the Conveyance Papers have been duly obtained, effected or given and are in
full force and effect.
The representations and warranties set forth in this Section 4.03
shall survive the conveyance of the Receivables to the Corporation and the
conveyance by the Corporation to the Trust. Upon discovery by the Corporation
or the Account Owner of a breach of any of the foregoing representations and
warranties, the party discovering such breach shall give written notice to the
other party and the Trustee within three Business Days following such discovery.
ARTICLE V
COVENANTS
Section 5.01. Covenants of the Account Owner. The Account Owner
hereby covenants and agrees with and for the benefit of the Corporation as
follows:
(a) Receivables Not To Be Evidenced by Promissory Notes. Except
in connection with its enforcement or collection of a Receivable, the Account
Owner will take no action to cause any Receivable to be evidenced by any
instrument or chattel paper (as defined in the UCC) and, if any Receivable is
so evidenced, it shall be deemed to be an Ineligible Receivable in accordance
with Section 6.01(a) and shall be reassigned to the Account Owner in
accordance with Section 6.01(b); provided, however, that Receivables
evidences by notes taken from Obligors in the ordinary course of business of
the Servicer's collection efforts shall not be deemed Ineligible Receivables
solely as a result thereof.
(b) Security Interests. Except for the conveyance hereunder, the
Account Owner will not sell, pledge, assign or transfer to any other Person, or
take any other action inconsistent with the Corporation's ownership of the
Receivables and other Purchased Assets or grant, create, incur, assume or suffer
to exist any Lien on any Receivable or other Purchased Assets, whether now
existing or hereafter created, or any interest therein, and the Corporation
shall not
<PAGE>
claim any ownership interest in the Receivables or in other Purchased Assets
and shall defend the right, title and interest of the Corporation in, to and
under the Receivables and other Purchased Assets, whether now existing or
hereafter created, against all claims of third parties claiming through or
under the Account Owner; provided, however, that nothing in this subsection
5.01(b) shall prevent or be deemed to prohibit the Account Owner from
suffering to exist upon any of the Receivables transferred by it to the
Corporation any Liens for municipal or other local taxes if such taxes shall
not at the time be due and payable or if the Account Owner shall be currently
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 Allocations. In the event that the Account Owner is
unable for any reason to transfer Receivables to the Corporation in accordance
with the provisions of this Agreement (including, without limitation, by reason
of the application of the provisions of Section 8.02 or any order of any
Governmental Authority), then, in any such event, the Account Owner agrees
(except as prohibited by any such order) to allocate and pay to the Corporation,
after the date of such inability, all amounts in the manner by which the
Corporation will allocate and pay to the Trust after such inability by the
Corporation pursuant to Section 2.11 of the Pooling and Servicing Agreement.
(d) Delivery of Collections. In the event that the Account Owner
receives Collections, the Account Owner agrees to pay to the Corporation (or to
the Servicer if the Corporation so directs) all such Collections as soon as
practicable after receipt thereof.
(e) Notice of Liens. The Account Owner shall notify the Corporation
promptly after becoming aware of any Lien on any Receivable other than the
conveyances hereunder and under the Pooling and Servicing Agreement or Liens
permitted under subsection 5.01(b).
(f) Documentation of Transfer. The Account Owner shall undertake to
file the documents which would be necessary to perfect and maintain the transfer
of the Purchased Assets to the Corporation. This Agreement and any amendments
hereto will be maintained, continuously, as an official record of the Account
Owner.
(g) Sale. The Account Owner agrees to treat the Conveyance, for all
purposes (including all relevant tax and financial accounting purposes) as a
sale on all federal and state tax returns, financial statements and other
applicable documents.
Section 5.02. Covenants of the Account Owner with Respect to
Portfolio Yield and Cardholder Agreements. The Account Owner, hereby agrees,
for the benefit of the Corporation that:
(a) Periodic Finance Charges and Other Fees. (i) Except as otherwise
required by any Requirement of Law, or (y) as is deemed by the Account Owner to
be necessary in order for it to maintain its credit card business on a
competitive basis based on a good faith assessment by it of the nature of its
competition in the credit card business, it shall not at any time reduce the
annual percentage rate of the Periodic Finance Charges assessed on the
Receivables transferred by it to the Corporation or other fees charged on any of
the Accounts if, as a result
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of any such reduction, either (i) the Account Owner's reasonable expectation
is that such reduction will cause a Pay Out Event or Reimbursement Event to
occur or (ii) such reduction is not also applied to any comparable segments
of consumer revolving credit card accounts owned by the Account Owner which
have characteristics the same as, or substantially similar to, such Accounts.
(b) Cardholder Agreements and Credit Card Guidelines. The Account
Owner shall comply with and perform its obligations under the Cardholder
Agreements relating to the Accounts and the Credit Card Guidelines and all
applicable rules and regulations of MasterCard and VISA or their respective
substantial equivalents except insofar as any failure so to comply or perform
would not materially and adversely affect the rights of the Trust or the
Certificateholders under the Pooling and Servicing Agreement. Subject to
compliance with all Requirements of Law, the Account Owner may change the terms
and provisions of the Cardholder Agreements or the Credit Card Guidelines with
respect to any of the Accounts in any respect (including 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 in the reasonable judgment of the Account
Owner such change is made applicable to any comparable segment of the consumer
revolving credit card accounts owned by the Account Owner which have
characteristics the same as, or substantially similar to, such Accounts.
(c) MasterCard and VISA. The Corporation, to the extent applicable
to Accounts owned or serviced by it, shall use its best efforts to remain,
either directly or indirectly, a member in good standing of the MasterCard
system, the VISA system and any other similar entity's or organization's system
relating to any other type of consumer revolving credit card accounts included
as Accounts.
(d) Provide Information. The Corporation covenants that[, if at any
time, the Account Owner is not the Servicer under the Pooling and Servicing
Agreement,] the Corporation will provide the Account Owner with such information
as the Account Owner may reasonably request to enable the Account Owner to
determine compliance with the covenants contained in Section 5.02(a) and (b)
above.
ARTICLE VI
REPURCHASE OBLIGATION
Section 6.01. Reassignment of Ineligible Receivables.
(a) In the event (i) any representation or warranty under Section
4.02(a)(ii), (iii), (iv), (vi), (vii), (viii) or (ix) is not true and correct in
any material respect as of the date specified therein with respect to any
Receivable or the related Account or (ii) there is a breach of the covenant set
forth in Section 5.01(a) hereof and as a result of such untrue or incorrect
representation or warranty or such breach the Corporation is required to accept
reassignment of Ineligible Receivables previously sold by the Account Owner to
the Corporation pursuant to Section 2.05(a) of the Pooling and Servicing
Agreement, the Account Owner shall accept
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reassignment of the Corporation's interest in such Ineligible Receivables on
the terms and conditions set forth in Section 6.01(b).
(b) the Account Owner shall accept reassignment of any Ineligible
Receivables previously sold by the Account Owner to the Corporation from the
Corporation on the date on which such reassignment obligation arises, and shall
pay for such reassigned Ineligible Receivables by paying to the Corporation, not
later than 3:00 p.m., New York City time on such date, an amount equal to the
unpaid principal balance of such Ineligible Receivables plus accrued and unpaid
finance charges at the annual percentage rate applicable to such Receivables
from the last date billed through the end of the Monthly Period in which such
reassignment obligation arises (the "Repurchase Price"). Upon reassignment of
such Ineligible Receivables, the Corporation shall automatically and without
further action be deemed to sell, transfer, assign, set-over and otherwise
convey to the Account Owner, without recourse, representation or warranty, all
the right, title and interest of the Corporation in and to such Ineligible
Receivables, all monies due or to become due with respect thereto and all
proceeds thereof; and such reassigned Ineligible Receivables shall be treated by
the Corporation as collected in full as of the date on which they were
transferred. The Corporation shall execute such documents and instruments of
transfer or assignment and take such other actions as shall reasonably be
requested by the Account Owner to effect the conveyance of such Ineligible
Receivables pursuant to this subsection.
Section 6.02. Reassignment of Receivables in Trust Portfolio. In the
event any representation or warranty set forth in Section 4.01(a) or (c) or
Section 4.02(a)(i) or (a)(v) is not true and correct in any material respect
and, as a result of such breach, the Corporation is required to accept a
reassignment of the Receivables previously sold by the Account Owner to the
Corporation pursuant to Section 2.06 of the Pooling and Servicing Agreement, the
Account Owner shall be obligated to accept a reassignment of the Corporation's
interest in such Receivables on the terms set forth below.
The Account Owner shall pay to the Corporation by depositing in the
Collection Account in immediately available funds, not later than 12:00 noon New
York City time, on the first Distribution Date following the Monthly Period in
which such reassignment obligation arises, in payment for such reassignment, an
amount equal to the amount specified in Section 2.06 of the Pooling and
Servicing Agreement.
ARTICLE VII
CONDITIONS PRECEDENT
Section 7.01. Conditions to the Corporation's Obligations Regarding
Initial Receivables. The obligations of the Corporation to purchase the
Receivables in the Initial Accounts on the Initial Closing Date shall be subject
to the satisfaction of the following conditions:
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(a) All representations and warranties of the Account Owner
contained in this Agreement shall be true and correct on the Initial Closing
Date with the same effect as though such representations and warranties had
been made on such date;
(b) All information concerning the Initial Accounts provided to the
Corporation shall be true and correct in all material respects as of the Trust
Cut-Off Date;
(c) the Account Owner shall have (i) delivered to the Corporation a
schedule of Accounts as of the Trust Cut-Off Date and (ii) substantially
performed all other obligations required to be performed by the provisions of
this Agreement;
(d) the Account Owner shall have recorded and filed, at its expense,
any financing statement with respect to the Receivables (other than Receivables
in Additional Accounts) now existing and hereafter created for the transfer of
accounts and general intangibles (each as defined in Section 9-106 of the UCC)
meeting the requirements of applicable state law in such manner and in such
jurisdiction as would be necessary to perfect the sale of and security interest
in the Receivables and other Purchased Assets from the Account Owner to the
Corporation, and shall deliver a file-stamped copy of such financing statements
or other evidence of such filings to the Corporation;
(e) On or before the Initial Closing Date, the Corporation and the
Trustee shall have entered into the Pooling and Servicing Agreement and the
closing under the Pooling and Servicing Agreement shall take place
simultaneously with the initial closing hereunder; and
(f) All corporate and legal proceedings and all instruments in
connection with the transactions contemplated by this Agreement shall be
satisfactory in form and substance to the Corporation, and the Corporation shall
have received from the Account Owner copies of all documents (including, without
limitation, records of corporate proceedings) relevant to the transactions
herein contemplated as the Corporation may reasonably have requested.
Section 7.02. Conditions Precedent to the Account Owner's
Obligations. The obligations of the Account Owner Corporation to sell
Receivables in the Initial Accounts on the Initial Closing Date shall be subject
to the satisfaction of the following conditions:
(a) All representations and warranties of the Corporation contained
in this Agreement shall be true and correct with the same effect as though
such representations and warranties had been made on such date;
(b) Payment or provision for payment of the Purchase Price in
accordance with the provision of Section 3.01 hereof shall have been made; and
(c) All corporate and legal proceedings and all instruments in
connection with the transactions contemplated by this Agreement shall be
satisfactory in form and substance to the Account Owner, and the Account Owner
shall have received from the Corporation copies of all documents (including,
without limitation, records of corporate proceedings) relevant to the
transactions herein contemplated as the Account Owner may reasonably have
requested.
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ARTICLE VIII
TERM AND PURCHASE TERMINATION
Section 8.01. Term. This Agreement shall commence as of the date
of execution and delivery hereof and shall continue until the termination of
the Trust as provided in Article XII of the Pooling and Servicing Agreement.
Section 8.02. Purchase Termination. If the Account Owner shall
fail generally to, or admit in writing its inability to, pay its debts as
they become due; or if a proceeding shall have been instituted in a court
having jurisdiction in the premises seeking a decree or order for relief in
respect of the Account Owner in an involuntary case under any Debtor Relief
Law, or for the appointment of a receiver, liquidator, assignee, trustee,
custodian, sequestrator, conservator or other similar official of the Account
Owner or for any substantial part of the Account Owner's property, or for the
winding-up or liquidation of the Account Owner's affairs and, if instituted
against the Account Owner, any such proceeding shall continue undismissed or
unstayed and in effect, for a period of 60 consecutive days, or any of the
actions sought in such proceeding shall occur; or if the Account Owner shall
commence a voluntary case under any Debtor Relief Law, or if the Account
Owner shall consent to the entry of an order for relief in an involuntary
case under any Debtor Relief Law, or consent to the appointment of or taking
possession by a receiver, liquidator, assignee, trustee, custodian,
sequestrator, conservator or other similar official of, or for, any
substantial part of its property, or any general assignment for the benefit
of its creditors; or the Account Owner or any subsidiary of the Account Owner
shall have taken any corporate action in furtherance of any of the foregoing
actions (each an "Insolvency Event"); then the Account Owner shall
immediately cease to transfer Principal Receivables to the Corporation and
shall promptly give notice to the Corporation and the Trustee of such
Insolvency Event. Notwithstanding any cessation of the transfer to the
Corporation of additional Principal Receivables, Principal Receivables
transferred to the Corporation prior to the occurrence of such Insolvency
Event and Collections in respect of such Principal Receivables and Finance
Charge Receivables whenever created, accrued in respect of such Principal
Receivables, shall continue to be property of the Corporation available for
transfer by the Corporation to the Trust pursuant to the Pooling and
Servicing Agreement.
ARTICLE IX
MISCELLANEOUS PROVISIONS
Section 9.01. Amendment. This Agreement and any Conveyance Papers
and the rights and obligations of the parties hereunder may not be changed
orally, but only by an instrument in writing signed by the Corporation and
the Account Owner in accordance with this Section 9.01. This Agreement and
any Conveyance Papers may be amended from time to time by the Corporation and
the Account Owner (i) to cure any ambiguity, (ii) to correct or supplement
any provisions herein which may be inconsistent with any other provisions
herein or in any such other Conveyance Papers, (iii) to add any other
provisions with respect to matters or questions arising under this Agreement
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or any Conveyance Papers which shall not be inconsistent with the provisions
of this Agreement or any Conveyance Papers, (iv) to change or modify the
Purchase Price and (v) to change, modify, delete or add any other obligation
of the Account Owner or the Corporation; provided, however, that no amendment
pursuant to clause (iv) or (v) of this Section 9.01 shall be effective unless
the Account Owner and the Corporation have been notified in writing that the
Rating Agency Condition has been satisfied; provided, further, that such
action shall not (as evidenced by an Opinion of Counsel delivered to the
Trustee) adversely affect in any material respect the interests of the
Trustee or the Investor Certificateholders, unless the Trustee shall consent
thereto. Any reconveyance executed in accordance with the provisions hereof
shall not be considered to be an amendment to this Agreement. A copy of any
amendment to this Agreement shall be sent to each Rating Agency.
Section 9.02. Governing Law. THIS AGREEMENT AND THE CONVEYANCE
PAPERS SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED
IN ACCORDANCE WITH SUCH LAWS.
Section 9.03. Notices. All demands, notices and communications
hereunder shall be in writing and shall be deemed to have been duly given if
personally delivered at or mailed by registered mail, return receipt
requested, to (a) in the case of the Account Owner, [Bank],
____________________________________, (b) in the case of the Corporation, CC
Credit Card Corporation, __________________________________________________,
(c) in the case of the Trustee, The Bank of New York
__________________________________________; or, as to each party, at such
other address as shall be designated by such party in a written notice to
each other party.
Section 9.04. Severability of Provisions. If any one or more of
the covenants, agreements, provisions or terms of this Agreement or any
Conveyance Paper 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, and terms of this Agreement
or any Conveyance Paper and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of any Conveyance
Paper.
Section 9.05. Assignment. Notwithstanding anything to the contrary
contained herein, other than the Corporation's assignment of its rights,
title, and interests in, to, and under this Agreement to the Trustee for the
benefit of the beneficiaries of the Trust, including the Certificateholders
as contemplated by the Pooling and Servicing Agreement and Section 9.06
hereof, this Agreement and all other Conveyance Papers may not be assigned by
the parties hereto; provided, however, that the Account Owner shall have the
right to assign its rights, title and interests, in to and under this
Agreement to (i) any successor by merger assuming this Agreement (ii) to any
affiliate owned directly or indirectly by Commercial Credit Company which
assumes the obligations of this Agreement or (iii) to any entity provided
that the Rating Agency Condition has been satisfied.
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Section 9.06. Acknowledgement and Agreement of the Account Owner.
By execution below, the Account Owner expressly acknowledges and agrees that
all of the Corporation's right, title, and interest in, to, and under this
Agreement, including, without limitation, all of the Account Owner's right,
title, and interest in and to the Receivables and other Purchased Assets
purchased pursuant to this Agreement, shall be assigned by the Corporation to
the Trustee for the benefit of the beneficiaries of the Trust, including the
Certificateholders, and the Corporation consents to such assignment. The
Account Owner further agrees that notwithstanding any claim, counterclaim,
right of setoff or defense which it may have against the Corporation, due to
a breach by the Corporation of this Agreement or for any other reason, and
notwithstanding the bankruptcy of the Corporation or any other event
whatsoever, the Account Owner's sole remedy shall be a claim against the
Corporation for money damages and, then only to the extent of funds received
by the Corporation pursuant to the Pooling and Servicing Agreement, and in no
event shall the Corporation assert any claim on or any interest in the
Receivables and other Purchased Assets or any proceeds thereof or take any
action which would reduce or delay receipt by Certificateholders of
collections with respect to the Receivables and other Purchased Assets.
Additionally, the Account Owner agrees for the benefit of the Trustee that
any amounts payable by the Account Owner to the Corporation hereunder which
are to be paid by the Account Owner to the Trustee for the benefit of the
Certificateholders shall be paid by the Account Owner, on behalf of the
Corporation, directly to the Trustee.
Section 9.07. Further Assurances. The Account Owner and the
Corporation agree to do and perform, from time to time, any and all acts and
to execute any and all further instruments required or reasonably requested
by the other party or the Trustee more fully to effect the purposes of this
Agreement, the Conveyance Papers and the Pooling and Servicing Agreement,
including, without limitation, the execution of any financing statements or
continuation statements or equivalent documents relating to the Receivables
and other Purchased Assets for filing under the provisions of the UCC or
other law of any applicable jurisdiction.
Section 9.08. No Waiver; Cumulative Remedies. No failure to
exercise and no delay in exercising, on the part of the Corporation or the
Account Owner, 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.
Subject to Section 9.06, the rights, remedies, powers and privileges herein
provided are cumulative and not exhaustive of any rights, remedies, powers
and privileges provided by law.
Section 9.09. Counterparts. This Agreement and all Conveyance
Papers 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 9.10. Binding; Third-Party Beneficiaries. This Agreement
and the Conveyance Papers will inure to the benefit of and be binding upon
the parties hereto and their respective successors and permitted assigns.
The Trustee shall be considered a third-party beneficiary of this Agreement.
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Section 9.11. Merger and Integration. Except as specifically
stated otherwise herein, this Agreement and the Conveyance Papers set 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 and the Conveyance Papers. This Agreement and the Conveyance
Papers may not be modified, amended, waived or supplemented except as
provided herein.
Section 9.12. Headings. The headings are for purposes of reference
only and shall not otherwise affect the meaning or interpretation of any
provision hereof.
Section 9.13. Schedules and Exhibits. The schedules and exhibits
attached hereto and referred to herein shall constitute a part of this
Agreement and are incorporated into this Agreement for all purposes.
Section 9.14. Survival of Representations and Warranties. All
representations, warranties and agreements contained in this Agreement or
contained in any Supplemental Conveyance, shall remain operative and in full
force and effect and shall survive conveyance of the Receivables by the
Corporation to the Trust pursuant to the Pooling and Servicing Agreement.
Section 9.15. Nonpetition Covenant. Notwithstanding any prior
termination of this Agreement, the Account Owner shall not, prior to the date
which is one year and one day after the termination of this Agreement,
acquiesce, petition or otherwise invoke or cause the Corporation to invoke
the process of any Governmental Authority for the purpose of commencing or
sustaining a case against the Corporation under any Federal or state
bankruptcy, insolvency or similar law or appointing a receiver, liquidator,
assignee, trustee, custodian, sequestrator or other similar official of the
Corporation or any substantial part of its property or ordering the
winding-up or liquidation of the affairs of the Corporation.
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IN WITNESS WHEREOF, the Corporation and the Account Owner have caused this
Receivables Transfer Agreement to be duly executed by their respective
officers as of the day and year first above written.
[BANK]
as Account Owner
By:___________________________
Name:
Title:
CC CREDIT CARD CORPORATION,
as Corporation
By:___________________________
Name:
Title:
[Signature Page to Receivables Transfer Agreement]
<PAGE>
EXHIBIT A
FORM OF SUPPLEMENTAL CONVEYANCE
(As required by Section 2.04 of
the Receivables Transfer Agreement)
SUPPLEMENTAL CONVEYANCE No. ___ dated as of ___, 19___, by and
between [THE BANK], as Account Owner ("the Account Owner"), and CC CREDIT
CARD CORPORATION as Corporation (the "Corporation"), pursuant to the
Receivables Transfer Agreement referred to below.
WITNESSETH:
WHEREAS, the Corporation and the Account Owner are parties to a
Receivables Transfer Agreement, dated as of __________ ____, 1997
(hereinafter as such agreement may have been, or may from time to time be,
amended, supplemented or otherwise modified, the "Receivables Transfer
Agreement");
WHEREAS, pursuant to the Receivables Transfer Agreement, the
Corporation wishes to designate Additional Accounts to be included as
Accounts and the Account Owner wishes to convey its right, title and interest
in the Receivables of such Additional Accounts, whether now existing or
hereafter created, to the Corporation pursuant to the Receivables Transfer
Agreement (as each such term is defined in the Receivables Transfer
Agreement); and
WHEREAS, the Corporation is willing to accept such designation and
conveyance subject to the terms and conditions hereof.
NOW, THEREFORE, the Corporation and the Account Owner hereby agree
as follows:
1. Defined Terms. All capitalized terms used herein shall have the
meanings ascribed to them in the Receivables Transfer Agreement unless
otherwise defined herein.
"Addition Date" shall mean, with respect to the Additional Accounts
designated hereby, __________, 19__.
"Addition Cut-Off Date" shall mean, with respect to the Additional
Accounts designated hereby, _________ __, 19__.
2. Designation of Additional Accounts. The Account Owner delivers
herewith a computer file or microfiche list containing a true and complete
schedule identifying all such Additional Accounts and specifying for each
such Account, as of the Addition Cut-Off Date, its account number, the
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aggregate amount outstanding in such Account and the aggregate amount of
Principal Receivables in such Account. Such computer file, microfiche list
or other documentation (each an "Account Schedule") shall be as of the date
of this Supplemental Conveyance incorporated into and made part of this
Supplemental Conveyance and is marked as Schedule I to this Supplemental
Conveyance.
3. Conveyance of Receivables.
(a) The Account Owner does hereby sell, transfer, assign, set over
and otherwise convey to the Corporation, without recourse except as provided
in the Receivables Transfer Agreement, all its right, title and interest in,
to and under (i) the Receivables generated by such Additional Accounts,
existing at the close of business on the Addition Cut-Off Date and thereafter
created until termination of the Receivables Transfer Agreement, all monies
due or to become due and all amounts received with respect thereto and all
"proceeds" (including, without limitation, "proceeds" as defined in Article 9
of the UCC) thereof and (ii) the right to receive Recoveries with respect to
such Receivables.
(b) In connection with such sale, the Account Owner agrees to
record and file, at its own expense, one or more financing statements (and
continuation statements with respect to such financing statements when
applicable) with respect to the Receivables now existing and hereafter
created, for the transfer of accounts and general intangibles meeting the
requirements of applicable state law in such manner and in such jurisdictions
as are necessary to perfect the sale and assignment of and the security
interest in the Receivables to the Corporation, and to deliver a file-stamped
copy of such financing statement or other evidence of such filing to the
Corporation.
(c) In connection with such sale, the Account Owner further agrees,
at its own expense, on or prior to the date of this Supplemental Conveyance,
to indicate in the appropriate computer files or microfiche list that all
Receivables created in connection with the Additional Accounts designated
hereby have been conveyed to the Corporation pursuant to this Supplemental
Conveyance.
4. Acceptance by the Corporation. The Corporation hereby
acknowledges its acceptance of all right, title and interest to the property,
now existing and hereafter created, conveyed to the Corporation pursuant to
Section 3(a) of this Supplemental Conveyance, and declares that it shall
maintain such right, title and interest. The Corporation further
acknowledges that, prior to or simultaneously with the execution and delivery
of this Supplemental Conveyance, the Account Owner delivered to the
Corporation the computer file or microfiche list described in Section 2 of
this Supplemental Conveyance.
5. Representations and Warranties of the Account Owner. The
Account Owner hereby represents and warrants to the Corporation as of the
date of this Supplemental Conveyance and as of the Addition Date that:
(a) Legal, Valid and Binding Obligation. This Supplemental
Conveyance constitutes a legal, valid and binding obligation of the Account
Owner enforceable against the Account Owner in accordance with its terms,
except as such enforceability may be limited by applicable bankruptcy,
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insolvency, reorganization, moratorium or other similar laws affecting
creditors' rights generally from time to time in effect or general principles
of equity;
(b) Eligibility of Accounts. On the Addition Cut-Off Date, each
Additional Account designated hereby is an Eligible Account;
(c) No Liens. Each Receivable in an Additional Account designated
hereby has been conveyed to the Corporation free and clear of any Lien;
(d) Eligibility of Receivables. On the Addition Cut-Off Date, each
Receivable existing in an Additional Account designated hereby is an Eligible
Receivable and as of the date of creation of any Receivable in an Additional
Account designated hereby, such Receivable is an Eligible Receivable;
(e) Selection Procedures. No selection procedure believed by the
Account Owner to be adverse to the interests of the Corporation or the
Investor Certificateholders was utilized in selecting the Additional Accounts;
(f) Transfer of Receivables. This Supplemental Conveyance
constitutes a valid sale, transfer and assignment to the Corporation of all
right, title and interest of the Account Owner in the Receivables arising in
the Additional Accounts designated hereby now existing or hereafter created,
all monies due or to become due, all amounts received with respect thereto,
the "proceeds" (including, without limitation, "proceeds" as defined in
Article 9 of the UCC) thereof and the Recoveries with respect thereto;
(g) No Conflict. The execution and delivery of this Supplemental
Conveyance, the performance of the transactions contemplated by this
Supplemental Conveyance and the fulfillment of the terms hereof, will not
conflict with, result in any breach of any of the material terms and
provisions of, or constitute (with or without notice or lapse of time or
both) a material default under, any indenture, contract, agreement, mortgage,
deed of trust or other instrument to which the Account Owner is a party or by
which it or its properties are bound;
(h) No Violation. The execution and delivery of this Supplemental
Conveyance by the Account Owner, the performance of the transactions
contemplated by this Supplemental Conveyance and the fulfillment of the terms
hereof applicable to the Account Owner will not conflict with or violate any
Requirements of Law applicable to the Account Owner;
(i) No Proceedings. There are no proceedings or investigations,
pending or, to the best knowledge of the Account Owner, threatened against
the Account Owner before any Governmental Authority (i) asserting the
invalidity of this Supplemental Conveyance, (ii) seeking to prevent the
consummation of any of the transactions contemplated by this Supplemental
Conveyance, (iii) seeking any determination or ruling that, in the reasonable
judgment of the Account Owner, would materially and adversely affect the
performance by the Account Owner of its obligations under this Supplemental
Conveyance or (iv) seeking any determination or ruling that would materially
and adversely affect the validity or enforceability of this Supplemental
Conveyance; and
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(j) All Consents. All authorizations, consents, orders or
approvals of any court or other governmental authority required to be
obtained by the Account Owner in connection with the execution and delivery
of this Supplemental Conveyance by the Account Owner and the performance of
the transactions contemplated by this Supplemental Conveyance by the Account
Owner, have been obtained.
6. Ratification of the Receivables Transfer Agreement. The
Receivables Transfer Agreement is hereby ratified, and all references to the
"Receivables Transfer Agreement," to "this Agreement" and "herein" shall be
deemed from and after the Addition Date to be a reference to the Receivables
Transfer Agreement as supplemented by this Supplemental Conveyance. Except
as expressly amended hereby, all the representations, warranties, terms,
covenants and conditions of the Receivables Transfer Agreement shall remain
unamended and shall continue to be, and shall, remain, in full force and
effect in accordance with its terms and except as expressly provided herein
shall not constitute or be deemed to constitute a waiver of compliance with
or consent to non-compliance with any term or provision of the Receivables
Transfer Agreement.
7. Counterparts. This Supplemental Conveyance may be executed in
any number of counterparts, all of which taken together shall constitute one
and the same instrument.
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IN WITNESS WHEREOF, the undersigned have caused this Supplemental
Conveyance to be duly executed and delivered by their respective duly
authorized officers on the day and the year first above written.
CC CREDIT CARD CORPORATION
By:___________________________
Name:______________________
Title:_____________________
[BANK]
By:___________________________
Name:______________________
Title:_____________________
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Schedule I to
Supplemental
Conveyance
Additional Accounts
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<PAGE>
Schedule I
to Receivables
Transfer Agreement
LIST OF ACCOUNTS
DEEMED INCORPORATED BY REFERENCE
