<PAGE>
As filed with the Securities and Exchange Commission on October 31, 1996
REGISTRATION NO. 333-04607
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- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
AMENDMENT NO. 1
TO
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------
CHASE CREDIT CARD MASTER TRUSTS
(FORMERLY KNOWN AS CHEMICAL MASTER CREDIT CARD TRUSTS)
(ISSUERS OF THE CERTIFICATES)
CHASE MANHATTAN BANK USA, NATIONAL ASSOCIATION
(ORIGINATOR OF THE TRUSTS DESCRIBED HEREIN)
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
802 DELAWARE AVENUE 22-2382028
UNITED STATES WILMINGTON, DELAWARE 19801 (I.R.S. EMPLOYER
(STATE OR OTHER (302) 575-5000 IDENTIFICATION NUMBER)
JURISDICTION OF
INCORPORATION OR
ORGANIZATION)
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING
AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
ANDREW T. SEMMELMAN
VICE PRESIDENT
CHASE MANHATTAN BANK USA, NATIONAL ASSOCIATION
802 DELAWARE AVENUE
WILMINGTON, DELAWARE 19801
(302) 575-5000
COPIES TO:
DAVID M. EISENBERG, ESQ. MARTIN R. JOYCE, ESQ. ANDREW M. FAULKNER, ESQ.
SIMPSON THACHER & THE CHASE MANHATTAN BANK, N.A. SKADDEN, ARPS, SLATE,
BARTLETT 270 PARK AVENUE MEAGHER & FLOM LLP
425 LEXINGTON AVENUE NEW YORK, NEW YORK 10017 919 THIRD AVENUE
NEW YORK, NEW YORK 10017 (212) 270-5918 NEW YORK, NEW YORK 10022
(212) 455-2000 (212) 735-2000
---------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
From time to time after this Registration Statement becomes effective as
determined by market conditions.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box: [_]
If any of the Securities being registered on this form are being 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, please check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering.
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
CALCULATION OF REGISTRATION FEE:
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<TABLE>
<CAPTION>
TITLE OF EACH CLASS OF PROPOSED MAXIMUM PROPOSED MAXIMUM
SECURITIES TO BE AMOUNT TO BE OFFERING PRICE AGGREGATE OFFERING AMOUNT OF
REGISTERED REGISTERED PER UNIT* PRICE* REGISTRATION FEE**
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<S> <C> <C> <C> <C>
Asset Backed Certifi-
cates................. $6,000,000,000 100% $6,000,000,000 $1,818,181.82
</TABLE>
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* Estimated solely for purposes of calculating the registration fee.
** $344.83 of which has previously been paid.
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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 THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(a), MAY DETERMINE.
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<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ANY STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
Subject to Completion, Dated October 31, 1996
PROSPECTUS
CHASE CREDIT CARD MASTER TRUSTS
(FORMERLY KNOWN AS CHEMICAL MASTER CREDIT CARD TRUSTS)
ASSET BACKED CERTIFICATES
CHASE MANHATTAN BANK USA, NATIONAL ASSOCIATION
Transferor
THE CHASE MANHATTAN BANK
Servicer
The Asset Backed Certificates (collectively, the "Certificates") described
herein may be sold from time to time in one or more series (each, a "Series"),
in amounts, at prices and on terms to be determined at the time of sale and to
be set forth in a supplement to this Prospectus (a "Prospectus Supplement").
The Certificates of each Series will represent an undivided interest in a
specified Chase Credit Card Master Trust (each, a "Trust"). Each Trust will be
formed pursuant to a pooling and servicing agreement among a transferor, a
servicer and a trustee, each as identified in the Prospectus Supplement related
to the Series of Certificates representing interests in such Trust. The
property of each Trust will include receivables (the "Receivables") generated
from time to time in a portfolio of consumer revolving credit card accounts
(the "Accounts"), all monies due or to become due in payment of the Receivables
and certain other property, as more fully described herein and, with respect to
any Series offered hereby, in the related Prospectus Supplement. It is
currently contemplated that Chase Manhattan Bank USA, National Association
("Chase USA" or the "Bank") will own the remaining undivided interest in each
Trust not represented by the Certificates issued by such Trust. The Chase
Manhattan Bank ("CMB"), an affiliate of Chase USA, initially will service the
related Receivables.
Each Series will consist of one or more classes of Certificates (each, a
"Class"), one or more of which may be fixed rate Certificates or floating or
variable rate Certificates, as specified in the related Prospectus Supplement.
Each Certificate will represent an undivided interest in the related Trust and
the interest of the Certificateholders of each Class or Series will include the
right to receive a varying percentage of each month's collections with respect
to the Receivables of such Trust at the times, in the manner and to the extent
described herein and, with respect to any Series offered hereby, in the related
Prospectus Supplement. Interest and principal payments with respect to each
Series offered hereby will be made as specified in the related Prospectus
Supplement. One or more Classes of a Series offered hereby may be entitled to
the benefits of a cash collateral account or guaranty, a collateral interest, a
letter of credit, a surety bond, an insurance policy or other form of
enhancement as specified in the Prospectus Supplement relating to such Series.
In addition, any Series offered hereby may include one or more Classes which
are subordinated in right and priority of payment to payment of principal of,
and/or interest on, one or more other Classes of such Series or another Series,
in each case to the extent described in the related Prospectus Supplement. Each
Series of Certificates or Class thereof offered hereby will be rated in one of
the four highest rating categories by at least one nationally recognized rating
organization.
While the specific terms of any Series in respect of which this Prospectus is
being delivered will be described in the related Prospectus Supplement, the
terms of such Series will not be subject to prior review by, or consent of, the
Certificateholders of any previously issued Series.
PROSPECTIVE INVESTORS SHOULD CONSIDER, AMONG OTHER THINGS, THE INFORMATION SET
FORTH UNDER THE HEADING "RISK FACTORS" BEGINNING ON PAGE 22.
------------------------------------
THE CERTIFICATES WILL REPRESENT INTERESTS IN THE RELATED TRUSTS ONLY AND WILL
NOT REPRESENT INTERESTS IN OR RECOURSE OBLIGATIONS OF CHASE USA, CMB OR ANY OF
THEIR AFFILIATES. A CERTIFICATE IS NOT A DEPOSIT AND NEITHER THE CERTIFICATES
NOR THE UNDERLYING ACCOUNTS OR RECEIVABLES ARE INSURED OR GUARANTEED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY.
------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION
OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------------------------------
Certificates may be sold by Chase USA directly to purchasers, through agents
designated from time to time, through underwriting syndicates led by one or
more managing underwriters or through one or more underwriters acting alone. If
underwriters or agents are involved in the offering of the Certificates of any
Series offered hereby, the name of the managing underwriter or underwriters or
agents will be set forth in the related Prospectus Supplement. If an
underwriter, agent or dealer is involved in the offering of the Certificates of
any Series offered hereby, the underwriter's discount, agent's commission or
dealer's purchase price will be set forth in, or may be calculated from, the
related Prospectus Supplement, and the net proceeds to Chase USA from such
offering will be the public offering price of such Certificates less such
discount in the case of an underwriter, the purchase price of such Certificates
less such commission in the case of an agent or the purchase price of such
Certificates in the case of a dealer, and less, in each case, the other
expenses of Chase USA associated with the issuance and distribution of such
Certificates. See "Plan of Distribution."
THIS PROSPECTUS MAY NOT BE USED TO CONSUMMATE SALES OF ANY SERIES OF
CERTIFICATES UNLESS ACCOMPANIED BY THE RELATED PROSPECTUS SUPPLEMENT.
------------------------------------
The date of this Prospectus is , 1996.
<PAGE>
PROSPECTUS SUPPLEMENT
The 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 of each Class of such Series; (b) the
certificate interest rate (or method for determining it) of each Class of such
Series; (c) certain information concerning the Receivables allocated to such
Series; (d) the expected date or dates on which the principal amount of the
Certificates will be paid to holders of each Class of Certificates (the
"Certificateholders"); (e) the extent to which any Class within a Series is
subordinated to any other Class of such Series or any other Series; (f) the
identity of each Class of floating rate Certificates and fixed rate
Certificates included in such Series, if any; (g) the Distribution Dates for
the respective Classes; (h) relevant financial information with respect to the
Receivables; (i) additional information with respect to any Enhancement
relating to such Series; and (j) the plan of distribution of such Series.
REPORTS TO CERTIFICATEHOLDERS
Unless and until Definitive Certificates are issued, monthly and annual
reports, containing information concerning each Trust and prepared by the
Servicer, will be sent on behalf of such Trust to Cede & Co. ("Cede"), as
nominee of The Depositary Trust Company ("DTC") and registered holder of the
related Certificates, pursuant to the related Agreement. See "Description of
the Certificates--Book-Entry Registration," "--Reports to Certificateholders"
and "--Evidence as to Compliance." Such reports will not constitute financial
statements prepared in accordance with generally accepted accounting
principles. The Servicer does not intend to send any financial reports of
Chase USA or CMB to Certificateholders or to the owners of beneficial
interests in the Certificates ("Certificate Owners"). The Servicer will file
with the Securities and Exchange Commission (the "Commission") such periodic
reports with respect to each 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
The Transferor has filed a Registration Statement under the Securities Act
of 1933, as amended (the "Securities Act") with the Commission on behalf of
the Trusts with respect to the Certificates offered pursuant to this
Prospectus. This Prospectus, which forms a part of the Registration Statement,
omits certain information contained in such Registration Statement pursuant to
the rules and regulations of the Commission. For further information,
reference is made to the Registration Statement (including any amendments
thereof and exhibits thereto) and any reports and other documents incorporated
herein by reference as described below under "Incorporation of Certain
Documents by Reference," which are available for inspection without charge at
the public reference facilities maintained by the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549; 7 World Trade Center, New York, New York
10048; and Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661-2511. Copies of such material may be obtained from the Public
Reference Section of the Commission, 450 Fifth Street, N.W., Washington, D.C.
20549, at prescribed rates. Such reports and other documents may also be
obtained from the web site that the Commission maintains at
http://www.sec.gov. The Bank has taken all reasonable care to ensure that the
information contained in this Prospectus in relation to the Bank and the
Certificates is true and accurate in all material respects and that in
relation to the Bank and the Certificates there are no material facts the
omission of which would make misleading any statement herein, whether fact or
opinion. The Bank accepts responsibility accordingly.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
All reports and other documents filed by the Servicer, on behalf of each
Trust, pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act
subsequent to the date of this Prospectus and prior to the termination of the
offering of the Certificates shall be deemed to be incorporated by reference
into this Prospectus and to be part hereof. Any statement contained in a
document incorporated or deemed to be incorporated by reference herein shall
be deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement in this Prospectus or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or replaces such statement. Any such statement so modified or
replaced shall not be deemed, except as so modified or replaced, 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 Controller of Chase USA, 802
Delaware Avenue, Wilmington, Delaware 19801. Telephone requests for such
copies should be directed to Chase USA, at (302) 575-5000.
2
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PROSPECTUS SUPPLEMENT...................................................... 2
REPORTS TO CERTIFICATEHOLDERS.............................................. 2
AVAILABLE INFORMATION...................................................... 2
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE............................ 2
PROSPECTUS SUMMARY......................................................... 4
RISK FACTORS............................................................... 22
THE TRUSTS................................................................. 27
CHASE USA'S CREDIT CARD ACTIVITIES......................................... 28
General.................................................................. 28
Acquisition and Use of Credit Card Accounts.............................. 28
Billing and Payments..................................................... 30
Collection of Delinquent Accounts........................................ 31
Description of FDR....................................................... 31
Interchange.............................................................. 31
Recoveries............................................................... 32
THE RECEIVABLES............................................................ 32
MATURITY ASSUMPTIONS....................................................... 33
USE OF PROCEEDS............................................................ 33
CHASE USA.................................................................. 34
DESCRIPTION OF THE CERTIFICATES............................................ 34
General.................................................................. 34
Book-Entry Registration.................................................. 35
Definitive Certificates.................................................. 38
Interest Payments........................................................ 39
Principal Payments....................................................... 39
Transfer and Assignment of Receivables................................... 40
Exchanges................................................................ 40
Representations and Warranties........................................... 41
Addition of Trust Assets................................................. 44
Removal of Accounts...................................................... 45
Collection and Other Servicing Procedures................................ 45
Discount Option.......................................................... 46
Trust Accounts........................................................... 46
Funding Period........................................................... 47
Companion Series......................................................... 47
Investor Percentage and Transferor Percentage............................ 48
Application of Collections............................................... 48
Shared Excess Finance Charge Collections................................. 50
Shared Principal Collections............................................. 50
</TABLE>
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Defaulted Receivables; Rebates and Fraudulent Charges; Investor Charge-
Offs................................................................... 50
Defeasance.............................................................. 51
Final Payment of Principal; Termination................................. 51
Pay Out Events.......................................................... 52
Servicing Compensation and Payment of Expenses.......................... 52
Certain Matters Regarding the Transferor and the Servicer............... 53
Servicer Default........................................................ 54
Reports to Certificateholders........................................... 55
Evidence as to Compliance............................................... 55
Amendments.............................................................. 56
List of Certificateholders.............................................. 57
The Trustee............................................................. 57
CREDIT ENHANCEMENT........................................................ 57
General................................................................. 57
Subordination........................................................... 58
Letter of Credit........................................................ 58
Cash Collateral Guaranty or Account..................................... 58
Collateral Interest..................................................... 58
Surety Bond or Insurance Policy......................................... 59
Spread Account.......................................................... 59
Reserve Account......................................................... 59
CERTAIN LEGAL ASPECTS OF THE RECEIVABLES.................................. 59
Transfer of Receivables................................................. 59
Certain Matters Relating to Receivership................................ 60
Consumer Protection Laws................................................ 61
TAX MATTERS............................................................... 62
General................................................................. 62
Treatment of the Certificates as Debt................................... 62
Taxation of Interest Income of U.S. Certificate Owners.................. 63
Sale or Exchange of Certificates........................................ 63
Possible Alternative Characterizations.................................. 63
Non-U.S. Certificate Owners............................................. 64
Information Reporting and Backup Withholding............................ 65
Recent Legislation...................................................... 66
State and Local Taxation................................................ 66
EMPLOYEE BENEFIT PLAN CONSIDERATIONS...................................... 66
PLAN OF DISTRIBUTION...................................................... 67
LEGAL MATTERS............................................................. 68
</TABLE>
3
<PAGE>
PROSPECTUS SUMMARY
The following is qualified in its entirety by reference to the detailed
information appearing elsewhere in this Prospectus and in any accompanying
Prospectus Supplement. Certain capitalized terms used in this summary are
defined elsewhere in this Prospectus and in the accompanying Prospectus
Supplement. A listing of the pages on which some of such terms are defined is
found in the "Index of Terms for Prospectus." Unless the context requires
otherwise, capitalized terms used in this Prospectus and in any accompanying
Prospectus Supplement refer only to the particular Series being offered by such
Prospectus Supplement.
TYPE OF SECURITIES..........
Asset Backed Certificates (the "Certificates")
evidencing an undivided interest in the assets
of a Chase Credit Card Master Trust (each, a
"Trust") may be issued from time to time in one
or more series (each, a "Series") which will
consist of one or more classes of Certificates
(each, a "Class").
TRUSTS......................
Each Trust (each, a "Trust") will be formed
pursuant to a pooling and servicing agreement
(each such agreement, an "Agreement") among a
transferor, a servicer, and a trustee, each as
identified in the Prospectus Supplement relating
to the Series of Certificates representing
interests in such Trust (each trustee under an
Agreement, a "Trustee"). Each Trust will be
created as a master trust under which one or
more Series will be issued pursuant to a series
supplement to the related Agreement (a "Series
Supplement"). Any Series issued by a Trust may
or may not be a Series offered pursuant to this
Prospectus. Each Prospectus Supplement will
identify the related Trust and all Series
previously or concurrently issued by such Trust.
TRUST ASSETS................
The assets of each Trust will include receivables
(the "Receivables") arising under certain
MasterCard(R) and VISA(R)/1/ revolving credit
card accounts (the "Accounts") selected from the
portfolio of MasterCard and VISA accounts that
were originated prior to June 1, 1996 (the
"Account Transfer Date") by Chemical Bank (the
"Chemical Bank Portfolio") and the portfolio of
MasterCard and VISA accounts that were
originated prior to the Account Transfer Date by
Chase USA (the "Chase Portfolio") and the
MasterCard and VISA accounts that have been
originated on or after the Account Transfer Date
by Chase USA (the "New Chase Portfolio" and
together with the Chemical Bank Portfolio and
the Chase Portfolio, the "Bank Portfolio"), and
all monies due or to become due in payment of
the Receivables, all proceeds of the Receivables
and proceeds of credit insurance policies
relating to the Receivables, and may include the
right to receive Interchange and Recoveries, if
any, allocable to the Trust and all monies on
deposit in certain bank accounts of the Trust
(including any permitted investments in which
any such monies are invested, but excluding
investment earnings on such amounts unless
- ---------- otherwise specified in the related
/1/ MasterCard(R) and VISA(R) are registered trademarks of MasterCard
International Inc. and VISA U.S.A., Inc., respectively.
4
<PAGE>
Prospectus Supplement), and any Enhancement with
respect to any particular Series or Class, as
described in the related Prospectus Supplement.
"Interchange" consists of certain fees received
by the Transferor from VISA and MasterCard as
partial compensation for taking credit risk,
absorbing fraud losses and funding receivables
for a limited period prior to initial billing.
The term "Enhancement" means, with respect to
any Series or Class thereof, any Credit
Enhancement, guaranteed rate agreement, maturity
liquidity facility, interest rate cap agreement,
interest rate swap agreement or other similar
arrangement for the benefit of the
Certificateholders of such Series or Class. The
term "Credit Enhancement" means, with respect to
any Series or Class thereof, any letter of
credit, cash collateral guaranty or account,
collateral interest, surety bond, insurance
policy, spread account, reserve account or other
similar arrangement for the benefit of the
Certificateholders of such Series or Class.
Credit Enhancement may also take the form of
subordination of one or more Classes of a Series
to any other Class or Classes of a Series or a
cross- support feature which requires
collections on Receivables of one Series to be
paid as principal and/or interest with respect
to another Series.
At the time of formation of each Trust and at
certain other times subsequent thereto, the
Transferor will convey to the related Trustee
all Receivables existing under certain Accounts
selected by the Transferor from the Bank
Portfolio based on criteria provided in the
related Agreement and all Receivables arising
under such Accounts from time to time thereafter
until termination of the related Trust. In
addition, each Agreement will provide that the
Transferor may from time to time (subject to
certain limitations and conditions), and in some
circumstances will be obligated to, designate
additional eligible revolving credit card
accounts to be included as Accounts (the
"Additional Accounts"), the Receivables of which
will be included in the related Trust. Each
Agreement may provide, that in lieu of
Additional Accounts or in addition thereto, the
Transferor may include in the related Trust,
participations representing undivided interests
in a pool of assets primarily consisting of
receivables arising under consumer revolving
credit card accounts owned by the Transferor and
collections thereon ("Participations"). Unless
otherwise specified in the Prospectus Supplement
relating to a Series of Certificates, it will
not be required or anticipated that the Trustee
will make any initial or periodic general
examination of the Receivables or any records
relating to the Receivables for the purpose of
establishing the presence or absence of defects,
compliance with the Servicer's or the
Transferor's representations and warranties or
for any other purpose. See "The Receivables" and
"Description of the Certificates--Addition of
Trust Assets" and "--Representations and
Warranties."
5
<PAGE>
THE TRANSFEROR......... The "Transferor" shall mean (a) with respect to
the time period prior to June 1, 1996, CMB
(formerly known as Chemical Bank), (b) with
respect to the time period beginning on June 1,
1996, Chase USA or (c) such other entity as
identified in the applicable Prospectus
Supplement. The principal executive office of
Chase USA is located at 802 Delaware Avenue,
Wilmington, Delaware 19801, telephone number
(302) 575-5000.
CERTIFICATE INTEREST AND Each Series of Certificates will represent an
PRINCIPAL.................. undivided interest in the assets of the related
Trust. Each Certificate of a Series will
represent the right to receive (i) payments of
interest at the specified rate or rates per
annum (each, a "Certificate Rate"), which may be
fixed, floating or other type of rate and (ii)
unless otherwise provided in the related
Prospectus Supplement, payments of principal
during the Controlled Amortization Period, the
Principal Amortization Period, or, under certain
limited circumstances, the Rapid Amortization
Period (each, an "Amortization Period"), or on
Scheduled Payment Dates, all as specified in the
related Prospectus Supplement.
Each Series of Certificates will consist of one
or more Classes, one or more of which may be
senior Certificates ("Senior Certificates") and
one or more of which may be subordinated
Certificates ("Subordinated Certificates"). Any
Class of a Series may evidence the right to
receive a specified portion of each distribution
of principal or interest or both. The
Certificates of a Class may also differ from
Certificates of other Classes of the same Series
in, among other things, the amounts allocated to
principal payments, priority of payments,
payment dates, maturity, interest rates,
interest rate computation, and availability and
form of Enhancement.
The assets of each Trust will be allocated among
the Certificateholders of each Series of such
Trust and the holder of the Transferor
Certificate of such Trust and, in certain
circumstances, the related Credit Enhancement
Provider. With respect to a Trust, the aggregate
principal amount of the interest of the
Certificateholders of a Series in such Trust is
referred to herein as the "Investor Interest"
and is based on the aggregate amount of the
Principal Receivables, plus the amount on
deposit in certain accounts, in such Trust
allocated to such Series. If specified in any
Prospectus Supplement, the term "Investor
Interest" with respect to the related Series
will include the Collateral Interest with
respect to such Series. The aggregate principal
amount of the interest of the holder of the
Transferor Certificate in a Trust is referred to
herein as the "Transferor Interest," and is
based on the aggregate amount of Principal
Receivables, plus the amount on deposit in
certain accounts, in such Trust not allocated to
the Certificateholders or any Credit
6
<PAGE>
Enhancement Provider with respect to such Trust.
See "Description of the Certificates--General."
The Certificateholders of each Series will have
the right to receive (but only to the extent
needed to make required payments under the
related Agreement and the related Series
Supplement and subject to any reallocation of
such amounts if the related Series Supplement so
provides) varying percentages of the collections
of Finance Charge Receivables and Principal
Receivables for each month and will be allocated
a varying percentage of the amount of
Receivables in Accounts which were written off
as uncollectible by the Servicer ("Defaulted
Accounts") for such month (each such percentage,
an "Investor Percentage"). The related
Prospectus Supplement will specify the Investor
Percentages with respect to the allocation of
collections of Principal Receivables, Finance
Charge Receivables and Receivables in Defaulted
Accounts during the Revolving Period, any
Amortization Period and any Accumulation Period,
as applicable. If the Certificates of a Series
offered hereby include more than one Class of
Certificates, the assets of the related Trust
allocable to the Certificates of such Series may
be further allocated among each Class in such
Series as described in the related Prospectus
Supplement. See "Description of the
Certificates--Investor Percentage and Transferor
Percentage."
The Certificates of each Series will represent
interests in the related Trust only and will not
represent interests in or recourse obligations
of Chase USA, CMB or any of their affiliates. A
Certificate is not a deposit and neither the
Certificates nor the underlying Accounts or
Receivables are insured or guaranteed by the
Federal Deposit Insurance Corporation (the
"FDIC") or any other governmental agency.
RECEIVABLES.................
The Receivables held in each Trust will arise in
Accounts selected by the Transferor from the
Bank Portfolio based on criteria provided in the
related Agreement and described in the related
Prospectus Supplement as applied initially on
the date (the "Cut-Off Date") specified in the
related Prospectus Supplement and, with respect
to certain Additional Accounts, if any, on
subsequent dates.
The Receivables will consist of amounts charged
by cardholders for goods and services, cash
advances and consolidation or transfer of
balances from other credit cards (the "Principal
Receivables"), plus the related periodic finance
charges and amounts charged to the Accounts in
respect of certain credit card fees, including
cash advance fees, late fees and annual
membership fees (the "Finance Charge
Receivables"); provided, however, that if the
Transferor exercises the Discount Option with
respect to a Trust, an amount equal to the
product of the Discount Percentage and the
amount
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<PAGE>
of Receivables arising in the related Accounts
on and after the date such option is exercised
that otherwise would be Principal Receivables
will be treated as Finance Charge Receivables.
See "Description of the Certificates--Discount
Option." Recoveries and Interchange allocable to
the Trust will be treated as Finance Charge
Receivables. See "Chase USA's Credit Card
Activities--Interchange" and "--Recoveries."
During the term of each Trust, all new
Receivables arising in the Accounts relating to
such Trust will be transferred automatically to
such Trust by the Transferor. The total amount
of Receivables in each Trust will fluctuate from
day to day, because the amount of new
Receivables arising in the Accounts and the
amount of payments collected on existing
Receivables usually differ each day.
Pursuant to each Agreement, the Transferor will
have the right (subject to certain limitations
and conditions), and in some circumstances, such
as the maintenance of the Transferor Interest at
a specified minimum level (the "Minimum
Transferor Interest"), will be obligated, to
designate additional eligible revolving credit
card accounts to be included as Additional
Accounts and to convey to the related Trust all
of the Receivables in the Additional Accounts,
whether such Receivables are then existing or
thereafter created or, if so specified in the
Prospectus Supplement relating to a Series,
designate Participations to be included in the
related Trust in lieu thereof or in addition
thereto. See "Description of the Certificates--
Addition of Trust Assets."
Pursuant to each Agreement, the Transferor will
have the right (subject to certain limitations
and conditions) to designate certain Accounts
and to accept the reconveyance of all the
Receivables in such Accounts (the "Removed
Accounts"), whether such Receivables are then
existing or thereafter created. See "Description
of the Certificates--Removal of Accounts."
EXCHANGES................... Each Agreement will authorize the related Trustee
to issue two types of certificates: (i) one or
more Series of Certificates that will be
transferable and have the characteristics
described below and (ii) a certificate that
evidences the Transferor Interest (the
"Transferor Certificate"), which initially will
be held by the Bank and which will be
transferable only as provided in the related
Agreement. Pursuant to any one or more Series
Supplements to the related Agreement, the holder
of the Transferor Certificate may tender the
Transferor Certificate or, if provided in the
relevant Series Supplement, Certificates
representing any Series (which may include
Series offered pursuant to this Prospectus)
issued by such Trust and the Transferor
Certificate, to the Trustee in exchange for one
or more new Series (which may include Series
offered pursuant to this Prospectus) and a
reissued Transferor Certificate (any such
tender,
8
<PAGE>
an "Exchange"). Any such Series may be offered
to the public or other investors under a
prospectus or other disclosure document (a
"Disclosure Document") in offerings pursuant to
this Prospectus or in transactions either
registered under the Securities Act of 1933, as
amended (the "Securities Act"), or exempt from
registration thereunder, directly or through one
or more other underwriters or placement agents,
in fixed-price offerings or in negotiated
transactions or otherwise.
An Exchange may occur only upon delivery to the
Trustee of the following: (i) a Series
Supplement specifying the principal terms of
such Series (the "Principal Terms"), (ii) (a) an
opinion of counsel to the effect that, unless
otherwise stated in the related Series
Supplement, the certificates of such Series will
be characterized as indebtedness for federal
income tax purposes and (b) an opinion of
counsel to the effect that, for federal income
tax purposes, (1) such issuance will not
adversely affect the tax characterization as
debt of Certificates of any outstanding Series
or Class that were characterized as debt at the
time of their issuance, (2) following such
issuance the Trust will not be deemed to be an
association (or publicly traded partnership)
taxable as a corporation and (3) such issuance
will not cause or constitute an event in which
gain or loss would be recognized by any
Certificateholder or the Trust (an opinion of
counsel with respect to any matter to the effect
referred to in clause (b) with respect to any
action is referred to herein as a "Tax
Opinion"), (iii) if required by the related
Series Supplement, the form of Credit
Enhancement, (iv) if Credit Enhancement is
required by the related Series Supplement, an
appropriate Credit Enhancement agreement with
respect thereto, (v) written confirmation from
each Rating Agency that the Exchange will not
result in such Rating Agency reducing or
withdrawing its rating on any then outstanding
Series rated by it, (vi) an officer's
certificate of the Transferor to the effect that
after giving effect to the Exchange the
Transferor would not be required to add the
Receivables of any Additional Accounts pursuant
to the related Agreement and the Transferor
Interest would be at least equal to the Minimum
Transferor Interest and (vii) the existing
Transferor Certificate and, if applicable, the
Certificates representing the Series to be
exchanged. See "Description of the
Certificates--Exchanges."
DENOMINATIONS............... Unless otherwise specified in the related
Prospectus Supplement, beneficial interests in
the Certificates will be offered for purchase in
denominations of $1,000 and integral multiples
thereof.
BOOK-ENTRY REGISTRATION..... Unless otherwise specified in the related
Prospectus Supplement, the Certificates of each
Series initially offered hereby will be
represented by Certificates registered in the
name of Cede, as the nominee of DTC. No
Certificate Owner will be entitled to receive
9
<PAGE>
a definitive certificate representing such
person's interest, except in the event that
Certificates in fully registered, certificated
form ("Definitive Certificates") are issued
under the limited circumstances described
herein. See "Description of the Certificates--
Definitive Certificates."
CLEARANCE AND SETTLEMENT.... Unless otherwise provided in the related
Prospectus Supplement, Certificate Owners of
each Series offered hereby may elect to hold
their Certificates through any of DTC (in the
United States) or Cedel or Euroclear (in
Europe). Transfer within DTC, Cedel or
Euroclear, as the case may be, will be made in
accordance with the usual rules and operating
procedures of the relevant system. Cross-market
transfers between persons holding directly or
indirectly through DTC, on the one hand, and
counterparties holding directly or indirectly
through Cedel or Euroclear, on the other, will
be effected in DTC through the relevant
Depositaries of Cedel or Euroclear. See
"Description of the Certificates--Book-Entry
Registration."
THE SERVICER................
The Chase Manhattan Bank ("CMB"). The principal
executive office of CMB is located at 270 Park
Avenue, New York, New York 10017, telephone
number (212) 270-6000. The Servicer will receive
a fee as servicing compensation from the related
Trust in respect of each Series in the amounts
and at the times specified in the related
Prospectus Supplement (the "Servicing Fee"). The
Servicing Fee may be payable from Finance Charge
Receivables, Interchange or other amounts as
specified in the related Prospectus Supplement.
In certain limited circumstances, CMB may resign
or be removed, in which event the Trustee or a
third party servicer may be appointed as
successor servicer (CMB, or any such successor
servicer, is referred to herein as the
"Servicer"). CMB is a wholly-owned subsidiary of
The Chase Manhattan Corporation (the
"Corporation"). CMB has delegated some of its
servicing duties to FDR and has delegated
substantially all of its other servicing duties
to Chase USA effective as of June 1, 1996. The
principal executive office of Chase USA is
located at 802 Delaware Avenue, Wilmington,
Delaware 19801, telephone number (302) 575-5000.
See "Chase USA" and "Description of the
Certificates--Certain Matters Regarding the
Transferor and Servicer."
COLLECTIONS................. Unless otherwise specified in the related
Prospectus Supplement, the Servicer will deposit
all collections of Receivables in an account
required to be established for such purpose by
the related Agreement (the "Collection
Account"). See "Description of the
Certificates--Application of Collections." All
amounts deposited in the Collection Account with
respect to a Trust will be allocated by the
Servicer between amounts collected on Principal
Receivables and amounts collected on Finance
Charge Receivables. If so specified in the
related Prospectus Supplement, Principal
Receivables and/or Finance Charge Receivables
may be
10
<PAGE>
otherwise characterized. See "Description of the
Certificates--Discount Option." All such amounts
will then be allocated in accordance with the
respective interests of the Certificateholders
of each Series of Certificates or Class thereof
and the holder of the Transferor Certificate
and, in certain circumstances, certain Credit
Enhancement Providers. See "Description of the
Certificates--Investor Percentage and Transferor
Percentage."
INTEREST PAYMENTS........... Interest on each Series of Certificates or Class
thereof for each accrual period (each, an
"Interest Period") specified in the related
Prospectus Supplement will be distributed in the
amounts and on the dates (which may be monthly,
quarterly, semiannually or otherwise as
specified in the related Prospectus Supplement)
(each, a "Distribution Date") specified in the
related Prospectus Supplement. Interest payments
on each Distribution Date will be funded from
collections of Finance Charge Receivables
allocated to the Investor Interest during the
preceding monthly period or periods (each, a
"Monthly Period"), as described in the related
Prospectus Supplement, and may be funded from
certain investment earnings on funds in certain
accounts of the related Trust and from any
applicable Enhancement, if necessary, or certain
other amounts as specified in the related
Prospectus Supplement. If the Distribution Dates
for payment of interest for a Series or Class
occur less frequently than monthly, such
collections or other amounts allocable to such
Series or Class may be deposited in one or more
trust accounts pending distribution to the
Certificateholders of such Series or Class, all
as described in the related Prospectus
Supplement. See "Description of the
Certificates--Application of Collections," "--
Shared Excess Finance Charge Collections,"
"Credit Enhancement" and "Risk Factors--Credit
Enhancement."
REVOLVING PERIOD............ Unless otherwise specified in the related
Prospectus Supplement, with respect to each
Series and any Class thereof, no principal will
be payable to Certificateholders until the
Principal Commencement Date or the Scheduled
Payment Date with respect to such Series or
Class, as described below. For the period
beginning on the date of issuance of the related
Series (the "Closing Date") and ending with the
commencement of an Amortization Period or an
Accumulation Period (the "Revolving Period"),
collections of Principal Receivables otherwise
allocable to the Investor Interest will, subject
to certain limitations, be paid from the Trust
to the holder of the Transferor Certificate or,
under certain circumstances and if so specified
in the related Prospectus Supplement, will be
treated as Shared Principal Collections and paid
to the holders of other Series of Certificates
issued by such Trust, as described herein and in
the related Prospectus Supplement. See
"Description of the Certificates--Pay Out
Events" for a discussion of the events which
might lead to early termination of the Revolving
Period.
11
<PAGE>
PRINCIPAL PAYMENTS.......... The principal of the Certificates of each Series
offered hereby will be scheduled to be paid
either in installments commencing on a date
specified in the related Prospectus Supplement
(the "Principal Commencement Date"), in which
case such Series will have either a Controlled
Amortization Period or a Principal Amortization
Period, as described below, or on an expected
date specified in, or determined in the manner
specified in, the related Prospectus Supplement
(the "Scheduled Payment Date"), in which case
such Series will have an Accumulation Period, as
described below. If a Series has more than one
Class of Certificates, a different method of
paying principal, Principal Commencement Date or
Scheduled Payment Date may be assigned to each
Class. The payment of principal with respect to
the Certificates of a Series or Class may
commence earlier than the applicable Principal
Commencement Date or Scheduled Payment Date, and
the final principal payment with respect to the
Certificates of a Series or Class may be made
later than the applicable expected payment date,
Scheduled Payment Date or other expected date,
if a Pay Out Event occurs and the Rapid
Amortization Period commences with respect to
such Series or Class or under certain other
circumstances described herein. See "Description
of the Certificates--Principal Payments."
CONTROLLED AMORTIZATION If the Prospectus Supplement relating to a Series
PERIOD..................... so specifies, unless a Rapid Amortization Period
with respect to such Series commences, the
Certificates of such Series or any Class thereof
will have an amortization period (the
"Controlled Amortization Period") during which
collections of Principal Receivables allocable
to the Investor Interest of such Series (and
certain other amounts if so specified in the
related Prospectus Supplement) will be used on
each Distribution Date to make principal
distributions in scheduled amounts to the
Certificateholders of such Series or any Class
of such Series then scheduled to receive such
distributions. The amount to be distributed on
any Distribution Date during the Controlled
Amortization Period will be limited to an amount
(the "Controlled Distribution Amount") equal to
an amount specified in the related Prospectus
Supplement (the "Controlled Amortization
Amount") plus any existing deficit controlled
amortization amount arising from prior
Distribution Dates. If a Series has more than
one Class of Certificates, each Class may have a
separate Controlled Amortization Amount. In
addition, the related Prospectus Supplement may
describe certain priorities among such Classes
with respect to such distributions. The
Controlled Amortization Period will commence at
the close of business on a date specified in the
related Prospectus Supplement and continue until
the earliest of (a) the commencement of the
Rapid Amortization Period, (b) payment in full
of the Investor Interest of the Certificates of
such Series or Class and, if so specified in the
related Prospectus Supplement, of
12
<PAGE>
the Collateral Interest, if any, with respect to
such Series and (c) the Series Termination Date
with respect to such Series.
PRINCIPAL AMORTIZATION If the Prospectus Supplement relating to a Series
PERIOD..................... so specifies, unless a Rapid Amortization Period
with respect to such Series commences, the
Certificates of such Series or any Class thereof
will have an amortization period (the "Principal
Amortization Period") during which collections
of Principal Receivables allocable to the
Investor Interest of such Series (and certain
other amounts if so specified in the related
Prospectus Supplement) will be used on each
Distribution Date to make principal
distributions to the Certificateholders of such
Series or any Class of such Series then
scheduled to receive such distributions. If a
Series has more than one Class of Certificates,
the related Prospectus Supplement may describe
certain priorities among such Classes with
respect to such distributions. The Principal
Amortization Period will commence at the close
of business on a date specified in the related
Prospectus Supplement and continue until the
earlier of (a) the commencement of the Rapid
Amortization Period, (b) payment in full of the
Investor Interest of the Certificates of such
Series or Class and, if so specified in the
related Prospectus Supplement, of the Collateral
Interest, if any, with respect to such Series
and (c) the Series Termination Date with respect
to such Series.
ACCUMULATION PERIOD......... If the Prospectus Supplement relating to a Series
so specifies, unless a Rapid Amortization Period
with respect to such Series commences, the
Certificates of such Series or any Class thereof
will have an accumulation period (the
"Accumulation Period") during which collections
of Principal Receivables allocable to the
Investor Interest of such Series (and certain
other amounts if so specified in the related
Prospectus Supplement) will be deposited on the
business day immediately prior to each
Distribution Date or other business day
specified in the related Prospectus Supplement
(each a "Transfer Date") in a trust account
established for the benefit of the
Certificateholders of such Series or Class (a
"Principal Funding Account") and used to make
distributions of principal to the
Certificateholders of such Series or Class on
the Scheduled Payment Date. The amount to be
deposited in the Principal Funding Account on
any Transfer Date will be limited to an amount
(the "Controlled Deposit Amount") equal to an
amount specified in the related Prospectus
Supplement (the "Controlled Accumulation
Amount") plus any deficit controlled
accumulation amount arising from prior
Distribution Dates. If a Series has more than
one Class of Certificates, each Class may have a
separate Principal Funding Account and
Controlled Accumulation Amount. In addition, the
related Prospectus Supplement may describe
certain priorities among such Classes with
respect to deposits of principal into such
Principal Funding Accounts. The Accumulation
Period will
13
<PAGE>
commence at the close of business on a date
specified in or determined in the manner
specified in the related Prospectus Supplement
and continue until the earliest of (a) the
commencement of the Rapid Amortization Period,
or, if so specified in the related Prospectus
Supplement, the Rapid Accumulation Period, (b)
payment in full of the Investor Interest of the
Certificates of such Series or Class and, if so
specified in the related Prospectus Supplement,
of the Collateral Interest, if any, with respect
to such Series and (c) the Series Termination
Date with respect to such Series.
Funds on deposit in any Principal Funding Account
may be invested in permitted investments or
subject to a guaranteed rate or investment
contract or other arrangement intended to assure
a minimum return on the investment of such
funds. Investment earnings on such funds may be
applied to pay interest on the related Series of
Certificates. In order to enhance the likelihood
of payment in full of principal at the end of an
Accumulation Period with respect to a Series of
Certificates, such Series or any Class thereof
may be subject to a principal payment guaranty
or other similar arrangement.
RAPID ACCUMULATION PERIOD... If so specified and under the conditions set
forth in the Prospectus Supplement relating to a
Series having a Controlled Accumulation Period,
during the period from the day on which a Pay
Out Event has occurred until the earliest of (a)
the commencement of the Rapid Amortization
Period, (b) payment in full of the Investor
Interest of the Certificates of such Series and,
if so specified in the related Prospectus
Supplement, of the Collateral Interest, if any,
with respect to such Series and (c) the related
Series Termination Date (the "Rapid Accumulation
Period"), collections of Principal Receivables
allocable to the Investor Interest of such
Series (and certain other amounts if so
specified in the related Prospectus Supplement)
will be deposited on each Transfer Date in the
Principal Funding Account and used to make
distributions of principal to the
Certificateholders of such Series or Class on
the Scheduled Payment Date. The amount to be
deposited in the Principal Funding Account
during the Rapid Accumulation Period will not be
limited to the Controlled Deposit Amount. The
term "Pay Out Event" with respect to a Series of
Certificates issued by a Trust means any of the
events identified as such in the related
Prospectus Supplement and any of the following:
(a) certain events of insolvency or receivership
relating to the Transferor, (b) the Transferor
is unable for any reason to transfer Receivables
to such Trust in accordance with the provisions
of the related Agreement or (c) such trust
becomes an "investment company" within the
meaning of the Investment Company Act of 1940,
as amended. See "Description of the
Certificates--Pay Out Events" for a discussion
of the events which might lead to commencement
of a Rapid Accumulation Period.
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<PAGE>
During the Rapid Accumulation Period, funds on
deposit in any Principal Funding Account may be
invested in permitted investments subject to a
guaranteed rate or investment contract or other
arrangement intended to assure a minimum return
on the investment of such funds. Investment
earnings on such funds may be applied to pay
interest on the related Series of Certificates
or make other payments as specified in the
related Prospectus Supplement. In order to
enhance the likelihood of payment in full of
principal at the end of the Rapid Accumulation
Period with respect to a Series of Certificates,
such Series may be subject to a principal
guaranty or other similar arrangement.
RAPID AMORTIZATION PERIOD...
During the period from the day on which a Pay Out
Event has occurred with respect to a Series or,
if so specified in the Prospectus Supplement
relating to a Series with a Controlled
Accumulation Period, from such time specified in
the related Prospectus Supplement after a Pay
Out Event has occurred and the Rapid
Accumulation Period has commenced, to the
earlier of (a) the date on which the Investor
Interest of the Certificates of such Series and
the Enhancement Invested Amount or the
Collateral Interest, if any, with respect to
such Series have been paid in full and (b) the
related Series Termination Date (the "Rapid
Amortization Period"), collections of Principal
Receivables allocable to the Investor Interest
of such Series (and certain other amounts if so
specified in the related Prospectus Supplement)
will be distributed as principal payments to the
Certificateholders of such Series and, in
certain circumstances, to the Credit Enhancement
Provider, monthly on or before each Distribution
Date with respect to such Series in the manner
and order of priority set forth in the related
Prospectus Supplement. During the Rapid
Amortization Period with respect to a Series,
distributions of principal will not be limited
by any Controlled Deposit Amount or Controlled
Distribution Amount. In addition, upon the
commencement of the Rapid Amortization Period
with respect to a Series, any funds on deposit
in a Principal Funding Account with respect to
such Series or any Class thereof will be paid to
the Certificateholders of such Series or Class
on the first Distribution Date in the Rapid
Amortization Period. See "Description of the
Certificates--Pay Out Events" for a discussion
of the events which might lead to commencement
of the Rapid Amortization Period.
SHARED EXCESS FINANCE
CHARGE COLLECTIONS.........
Any Series offered hereby may be included in a
group of Series (a "Group"). If so specified in
the related Prospectus Supplement, the
Certificateholders of a Series within a Group or
any Class thereof may be entitled to receive all
or a portion of Excess
15
<PAGE>
Finance Charge Collections with respect to
another Series within such Group or Class
thereof to cover any shortfalls with respect to
amounts payable from collections of Finance
Charge Receivables allocable to such Series or
Class. Unless otherwise provided in the related
Prospectus Supplement, with respect to any
Series, "Excess Finance Charge Collections" for
any Monthly Period will equal the excess of
collections of Finance Charge Receivables,
annual membership fees and certain other amounts
allocated to the Investor Interest of such
Series or Class over the sum of (i) interest
accrued for the current month ("Monthly
Interest") and overdue Monthly Interest on the
Certificates of such Series or Class (together
with, if applicable, interest on overdue Monthly
Interest at the rate specified in the related
Prospectus Supplement ("Additional Interest"),
(ii) accrued and unpaid Investor Servicing Fees
with respect to such Series or Class payable
from collections of Finance Charge Receivables,
(iii) the Investor Default Amount with respect
to such Series or Class, (iv) unreimbursed
Investor Charge-Offs with respect to such Series
or Class and (v) other amounts specified in the
related Prospectus Supplement. The term
"Investor Servicing Fee" for any Series of
Certificates or Class thereof means the
Servicing Fee allocable to the Investor Interest
with respect to such Series or Class, as
specified in the related Prospectus Supplement.
The term "Investor Default Amount" means, for
any Monthly Period and for any Series or Class
thereof, the aggregate amount of the applicable
Investor Percentage of Principal Receivables in
Defaulted Accounts. The term "Investor Charge-
Off" means, for any Monthly Period, and for any
Series or Class thereof, the amount by which (a)
the related Monthly Interest and overdue Monthly
Interest (together with, if applicable,
Additional Interest), the accrued and unpaid
Investor Servicing Fees payable from collections
of Finance Charge Receivables, the Investor
Default Amount and any other required fees
exceeds (b) amounts available to pay such
amounts out of collections of Finance Charge
Receivables, available Credit Enhancement
amounts, if any, and other sources specified in
the related Prospectus Supplement, if any, but
not more than such Investor Default Amount. See
"Description of the Certificates--Application of
Collections," "--Shared Excess Finance Charge
Collections," "--Defaulted Receivables; Rebates
and Fraudulent Charges; Investor Charge-Offs"
and "Credit Enhancement."
SHARED PRINCIPAL If so specified in the related Prospectus
COLLECTIONS................ Supplement, to the extent that collections of
Principal Receivables that are allocated to the
Investor Interest of any Series are not needed
to make payments or deposits with respect to
such Series, such collections ("Shared Principal
Collections") will be applied to cover principal
payments due to or for the benefit of
Certificateholders of another
16
<PAGE>
Series. If so specified in the related
Prospectus Supplement, the allocation of Shared
Principal Collections may be among Series within
a Group. Any such reallocation will not result
in a reduction in the Investor Interest of the
Series to which such collections were initially
allocated.
FUNDING PERIOD.............. The Prospectus Supplement relating to a Series of
Certificates may specify that for a period
beginning on the Closing Date and ending on a
specified date before the commencement of an
Amortization Period or Accumulation Period with
respect to such Series (the "Funding Period"),
the aggregate amount of Principal Receivables in
the related Trust allocable to such Series may
be less than the aggregate principal amount of
the Certificates of such Series and that the
amount of such deficiency (the "Pre-Funding
Amount"), which may be up to 100% of the
aggregate principal amount of such Series, will
be held in a trust account established with the
related Trustee for the benefit of
Certificateholders of such Series (the "Pre-
Funding Account") pending the transfer of
additional Principal Receivables to the Trust or
pending the reduction of the Investor Interests
of other Series issued by the related Trust. The
Prospectus Supplement relating to a Series of
Certificates will specify that the Funding
Period for such Series will end on a specified
date certain or earlier under certain
circumstances, such as the commencement of the
Rapid Amortization Period. The actual length of
a Funding Period for a Series will be contingent
upon another event such as the generation by the
Transferor of additional Principal Receivables
or the term of the Amortization Period or
Accumulation Period of a related Companion
Series. Generally, the Amortization Period or
Accumulation Period of a related Companion
Series will depend upon the payment rate of the
Receivables in the Trust. See "Maturity
Assumptions." Until the end of the Funding
Period of a Series paired with a related
Companion Series, the Certificates of such
Series will evidence an undivided interest in
Receivables to the extent of the Investor
Interest in such Series and in funds on deposit
in the Pre-Funding Account and Permitted
Investments of such funds to the extent of the
difference between the aggregate principal
amount of the Certificate of such Series (the
"Full Investor Interest") and the Investor
Interest. The related Prospectus Supplement will
specify the initial Investor Interest on the
Closing Date with respect to such Series, the
Full Investor Interest and the date by which the
Investor Interest is expected to equal the Full
Investor Interest. The Investor Interest will
increase as Principal Receivables are delivered
to the related Trust or as the Investor
Interests of other Series of the related Trust
are reduced. The Investor Interest may also
decrease due to Investor Charge-Offs.
During the Funding Period, funds on deposit in
the Pre-Funding Account for a Series of
Certificates will be withdrawn and paid to
17
<PAGE>
the Transferor to the extent of any increases in
the Investor Interest. In the event that the
Investor Interest does not for any reason equal
the Full Investor Interest by the end of the
Funding Period, any amount remaining in the Pre-
Funding Account and any additional amounts
specified in the related Prospectus Supplement
will be payable to the Certificateholders of
such Series in a manner and at such time as set
forth in the related Prospectus Supplement.
If so specified in the related Prospectus
Supplement, funds on deposit in the Pre-Funding
Account with respect to any Series will be
invested by the Trustee in Permitted Investments
or will be subject to a guaranteed rate or
investment agreement or other similar
arrangement, and investment earnings and any
applicable payment under any such investment
arrangement will be applied to pay interest on
the Certificates of such Series.
COMPANION SERIES............ If so specified in the related Prospectus
Supplement, a Series of Certificates may be
paired with another Series issued by the related
Trust (a "Companion Series") on or prior to the
commencement of an Accumulation Period or
Amortization Period for such Series. As the
Investor Interest of the Series having a
Companion Series is reduced, the Investor
Interest of the Companion Series will increase
by an equal amount. Upon payment in full of such
Series, the Investor Interest of the Companion
Series will have increased by the amount of the
Investor Interest paid to Certificateholders of
such Series. If a Pay Out Event occurs with
respect to the Series having a Companion Series
or with respect to the Companion Series when
such Series is in an Amortization Period or
Accumulation Period, the Investor Percentage in
respect of collections of Principal Receivables
for the Series and the Investor Percentage in
respect of collections of Principal Receivables
for the Companion Series may be reset as
specified in the related Prospectus Supplement.
Resetting of such Investor Percentage may have
the effect of reducing the amount of collections
of Principal Receivables allocable to the Series
that is paired with the Companion Series. While
the issuance of a Companion Series will be
subject to the conditions described under
"Description of the Certificates--Exchanges,"
there can be no assurance that the terms of a
Companion Series will not have an impact on the
timing or amount of payments received on the
Series with which it is paired. See "Maturity
Assumptions" and "Description of the
Certificates--Companion Series."
CREDIT ENHANCEMENT.......... Credit Enhancement with respect to a Series or
any Class thereof may be provided in the form or
forms of subordination, a letter of credit, a
cash collateral guaranty or account, a
collateral interest, a surety bond, an insurance
policy, a spread account, a reserve account or
other form of support as specified in the
related Prospectus Supplement. Credit
Enhancement may also be
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provided to a Class or Classes of different
Series by a cross- support feature which
requires that distributions of principal and/or
interest be made with respect to Certificates of
one or more Classes of a particular Series
before distributions are made to one or more
Classes of another Series.
The type, characteristics and amount of the
Credit Enhancement for any Series or Class will
be determined based on several factors,
including the characteristics of the Receivables
and Accounts included in the Trust Portfolio as
of the Closing Date with respect to such Series
and the desired rating for each Class, and will
be established on the basis of requirements of
each Rating Agency rating the Certificates of
such Series. If so specified in the related
Prospectus Supplement, any such Credit
Enhancement will apply only in the event of
certain types of losses and the protection
against losses provided by such Credit
Enhancement will be limited. The terms of the
Credit Enhancement with respect to a Series, and
the conditions under which the Credit
Enhancement may be increased, reduced or
replaced, will be described in the related
Prospectus Supplement. See "Credit Enhancement"
and "Risk Factors--Certificate Rating."
OPTIONAL REPURCHASE......... With respect to each Series of Certificates, the
Investor Interest will be subject to optional
repurchase by the Transferor on any Distribution
Date after the Investor Interest and the
Enhancement Invested Amount, if any, with
respect to such Series, is reduced to an amount
less than or equal to 5% of the initial Investor
Interest, if any, or such other amount specified
in the related Prospectus Supplement, if certain
conditions set forth in the related Agreement
are met. Unless otherwise specified in the
related Prospectus Supplement, the repurchase
price will be equal to the Investor Interest
(less the amount, if any, on deposit in any
Principal Funding Account with respect to such
Series), plus the Enhancement Invested Amount,
if any, with respect to such Series, plus
accrued and unpaid interest on the Certificates
and interest or other amounts payable on the
Enhancement Invested Amount or the Collateral
Interest, if any, through the day preceding the
Distribution Date on which the repurchase
occurs. See "Description of the Certificates--
Final Payment of Principal; Termination."
CERTAIN LEGAL ASPECTS OF
THE RECEIVABLES............
The Transferor will represent and warrant in each
Agreement that the transfer by it to the related
Trust is either a valid transfer and assignment
to such Trust of the related Receivables, or the
grant to such Trust of a security interest in
such Receivables. There are certain limited
circumstances in which a prior or subsequent
transferee of Receivables coming into existence
after the Closing Date could have an interest in
such Receivables with priority over such Trust's
interest. The Bank is subject to Delaware laws
applicable to state chartered banks. A Trust may
be liable for
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certain violations of consumer protection laws
that apply to the related Receivables. See
"Certain Legal Aspects of the Receivables."
TAX STATUS.................. Except to the extent otherwise specified in the
related Prospectus Supplement, counsel to the
Bank is of the opinion that under existing law
the Certificates of each Series will properly be
characterized as debt for United States ("U.S.")
federal income tax purposes. Except to the
extent otherwise specified in the related
Prospectus Supplement, the Certificate Owners
will agree to treat the Certificates as debt for
U.S. federal income tax purposes. See "Tax
Matters" for additional information concerning
the application of U.S. federal income tax laws.
ERISA CONSIDERATIONS........ Subject to the considerations described below and
except to the extent otherwise specified in the
related Prospectus Supplement, the Transferor
anticipates that each Class of Certificates will
be eligible for purchase by employee benefit
plan investors. Under a regulation issued by the
Department of Labor, the assets of each Trust
would not be deemed "plan assets" of an employee
benefit plan holding the Certificates of any
Class if certain conditions are met, including
that the Certificates of such Class must be
held, upon completion of the public offering
being made hereby and by the related Prospectus
Supplement, by at least 100 investors who are
independent of the Transferor and of one another
("Independent Investors"). Except to the extent
otherwise disclosed in the related Prospectus
Supplement, the Transferor expects that each
Class of Certificates will be held by at least
100 Independent Investors at the conclusion of
the initial public offering, although no
assurance can be given, and no monitoring or
other measures will be taken to ensure that such
condition will be met. The Transferor
anticipates that the other conditions of the
regulation will be met. If the assets of a Trust
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 the
Internal Revenue Code of 1986, as amended (the
"Code"), unless a statutory, regulatory or
administrative exemption is available. It is
uncertain whether existing exemptions from the
"prohibited transaction" rules of ERISA would
apply to all transactions involving such Trust's
assets. Accordingly, fiduciaries or other
persons contemplating purchasing Certificates on
behalf of or with "plan assets" of any employee
benefit plan should consult their counsel before
making a purchase. See "Employee Benefit Plan
Considerations."
CERTIFICATE RATING.......... It will be a condition to the issuance of the
certificates of each Series or Class thereof
offered pursuant to this Prospectus and the
related
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Prospectus Supplement (including each Series
that includes a Pre-Funding Account) that they
be rated in one of the four highest rating
categories by at least one nationally recognized
rating organization (each such rating agency
selected by the Transferor to rate any Series, a
"Rating Agency"). The rating or ratings
applicable to the Certificates of each Series or
Class thereof offered hereby will be set forth
in the related Prospectus Supplement.
Any rating assigned to the Certificates of a
Series or a Class by a Rating Agency will
reflect such Rating Agency's assessment of the
likelihood that Certificateholders of such
Series or Class will receive the payments of
interest and principal required to be made under
the Agreement, in the case of principal on or
prior to the scheduled maturity date set forth
in the related Prospectus Supplement, and in the
case of interest, on the applicable interest
payment dates. The ratings will be based
primarily on an assessment of the Receivables in
the Trust (including the eligibility criteria
for the transfer of Receivables in Additional
Accounts to the Trust), of the amounts held in
any trust account for the benefit of any Series
or Class (including in any Pre-Funding Account)
and the availability of any Enhancement with
respect to such Series or Class.
A rating is not a recommendation to buy, sell or
hold securities and may be subject to revision
or withdrawal at any time by the assigning
Rating Agency. Each rating should be evaluated
independently of any other rating. See "Risk
Factors--Certificate Rating."
LISTING..................... If so specified in the Prospectus Supplement
relating to a Series, application will be made
to list the Certificates of such Series, or any
Class thereof, on the Luxembourg Stock Exchange
or any other specified exchange.
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RISK FACTORS
Potential investors should consider, among other things, the following risk
factors in connection with the purchase of the Certificates.
Limited Liquidity. It is anticipated that, to the extent permitted, the
underwriters of any Series of Certificates offered hereby will make a market
in such Certificates, but in no event will any such underwriter be under an
obligation to do so. There is no assurance that a secondary market will
develop with respect to the Certificates of any Series offered hereby, or if
it does develop, that it will provide Certificateholders with liquidity of
investment or that it will continue for the life of such Certificates.
Transfer of Receivables. A court could treat the transfer of Receivables to
each Trust as the grant of a security interest in such Receivables for the
benefit of holders of Certificates issued by such Trust. The Transferor will
represent and warrant in each Agreement that the transfer of the Receivables
to the related Trust is either a valid assignment of the related Receivables
to such Trust or the grant to the related Trust of a security interest in such
Receivables. The Transferor will take, with respect to each Trust, certain
actions as are required under Delaware or New York law, as the case may be, to
perfect each such Trust's security interest in the related Receivables, and
the Transferor will warrant that, if the transfer to such Trust is deemed to
be a grant to such Trust of a security interest in the related Receivables,
the Trustee will have a first priority perfected security interest therein,
and, subject to the limitations described in the penultimate sentence of this
paragraph, in the proceeds thereof (subject, in each case, to certain
potential tax liens referred to under "Description of the Certificates--
Representations and Warranties"). Nevertheless, if the transfer of Receivables
to a Trust is deemed to create a security interest therein, a tax or
government lien or other nonconsensual lien on property of the Transferor
arising before Receivables come into existence may have priority over the
Trust's interest in such Receivables, and if the FDIC were appointed receiver
of the Transferor, the receiver's administrative expenses may also have
priority over the Trust's interest in such Receivables. In addition, while CMB
or Chase USA is the Servicer, collections will be commingled with such bank's
general funds and used for its benefit prior to each Distribution Date.
Accordingly, in the event of the insolvency of Chase USA or CMB, as the case
may be, the Trust may not have a perfected security interest in such
collections. If the short-term deposit rating of Chase USA or CMB, as the case
may be, is reduced below A-1 or P-1 by the applicable Rating Agency, such bank
will be obligated to cease commingling collections and commence depositing
collections into the Collection Account within two business days after the
date of processing. See "Certain Legal Aspects of the Receivables--Transfer of
Receivables."
Certain Matters Relating to Receivership. Chase USA is chartered as a
national bank and is primarily subject to regulation and supervision by the
United States Comptroller of the Currency (the "Comptroller"). If Chase USA
becomes insolvent or is in an unsound condition or if certain other
circumstances occur, the Comptroller is authorized to appoint the FDIC as
receiver. The Federal Deposit Insurance Act ("FDIA"), as amended by the
Financial Institutions Reform, Recovery and Enforcement Act of 1989
("FIRREA"), sets forth certain powers that the FDIC may exercise as receiver
for the Transferor. With respect to the appointment of a receiver or
conservator for the Transferor, subject to certain qualifications, a valid
perfected security interest of the Trustee in the Receivables should be
enforceable (to the extent of the Trust's "actual direct compensatory damages"
as described below) and payments to the Trust with respect to the Receivables
(up to the amount of such damages) should not be subject to an automatic stay
of payment or to recovery by such a conservator or receiver. If, however, the
conservator or receiver were to assert that the security interest was
unperfected or unenforceable, or were to require the Trustee to establish its
right to those payments by submitting to and completing the administrative
claims procedure established under FIRREA, or the conservator or receiver were
to request a stay of judicial proceedings with respect to the Transferor as
provided under FIRREA, delays in payments on the Certificates and possible
reductions in the amount of those payments could occur. In the event of a
repudiation of obligations by a conservator or receiver, FIRREA provides that
a claim for the repudiated obligation is limited to "actual direct
compensatory damages" determined as of the date of the appointment of the
conservator or receiver (which in most cases are expected to include the
outstanding principal on the Certificates plus interest accrued thereon to the
date of payment). The FDIC has not adopted a formal policy
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statement on payment of principal and interest on collateralized borrowings of
banks which are repudiated. The Transferor believes that the general practice
of the FDIC in such circumstances is to permit the collateral to be applied to
pay the principal owed plus interest at the contract rate up to the date of
payment, together with the costs of liquidation of the collateral if provided
for in the contract. In one case, however, involving the repudiation by the
Resolution Trust Corporation (the "RTC") of certain secured zero-coupon bonds
issued by a savings association, a United States federal district court held
that "actual direct compensatory damages" in the case of a marketable security
meant the market value of the repudiated bonds as of the date of repudiation.
If that court's view were applied to determine the Trust's "actual direct
compensatory damages" in the event a conservator or receiver of the Transferor
repudiated its obligations under the Pooling and Servicing Agreement, the
amount paid to Certificateholders could, depending upon circumstances existing
on the date of the repudiation, be less than the principal of the Certificates
and the interest accrued thereon to the date of payment. See "Certain Legal
Aspects of the Receivables--Certain Matters Relating to Receivership."
If a conservator or receiver were appointed for the Transferor, then a Pay
Out Event would occur with respect to all Series then outstanding and,
pursuant to the related Agreement, new Principal Receivables would not be
transferred to the related Trust, and the Trustee would sell the Receivables
(unless otherwise instructed by holders of more than 50% of the Investor
Interest of each Series of Certificates, or with respect to any Series with
more than one Class, of each Class, and any other Person specified in the
related Agreement or a Series Supplement), thereby causing early termination
of the Trust and a loss to Certificateholders of a Series if the net proceeds
of such sale allocable to such Series were insufficient to pay the
Certificateholders of such Series in full. If the only Pay Out Event to occur
is either the insolvency of the Transferor or the appointment of a conservator
or receiver for the Transferor, the conservator or receiver may have the power
to prevent the early sale, liquidation or disposition of the Receivables and
the commencement of the Rapid Amortization Period. A conservator or receiver
may also have the power to cause the early sale of the Receivables and the
early retirement of the Certificates of each Series or to prohibit the
continued transfer of Principal Receivables to a Trust. If no Servicer Default
other than the conservatorship or receivership of the Servicer exists, the
conservator or receiver for the Servicer may have the power to prevent either
the Trustee or the Certificateholders from appointing a successor Servicer
under the related Agreement. See "Certain Legal Aspects of the Receivables--
Certain Matters Relating to Receivership."
Consumer Protection Laws; Litigation. The Accounts and the Receivables are
subject to numerous federal, state and local consumer protection laws that
impose requirements on the making and collection of consumer loans. Congress
and the states may enact new laws and amendments to existing laws to regulate
further the credit card and consumer credit industry or to reduce finance
charges or other fees or charges applicable to credit card accounts. Such
laws, as well as any new laws or rulings which may be adopted, may adversely
affect the Servicer's ability to collect on the Receivables or maintain
previous levels of monthly periodic finance charges and other credit card
fees. In addition, during recent years, there has been increased consumer
awareness with respect to the level of finance charges and fees and other
practices of credit card issuers and other consumer revolving loan providers.
Federal or state legislation could be enacted which would impose additional
limitations on the monthly periodic finance charges or other fees or charges
relating to the Accounts. One potential effect of any legislation which
regulates the amount of interest and other charges that may be assessed on
credit card account balances would be to reduce the Portfolio Yield on the
Accounts. If such legislation were to result in a significant reduction in the
Portfolio Yield, a Pay Out Event could occur, in which case the Rapid
Amortization Period would commence. See "Description of the Certificates--Pay
Out Events."
Pursuant to each Agreement, the Transferor will covenant to accept
reassignment, subject to certain conditions described under "Description of
the Certificates--Representations and Warranties," of each Receivable that
does not comply in all material respects with all requirements of applicable
law. The Transferor will make certain other representations and warranties
relating to the validity and enforceability of the Receivables. However, it is
not anticipated that the Trustee will make any examination of the related
Receivables or the records relating thereto for the purpose of establishing
the presence or absence of defects, compliance with such representations and
warranties, or for any other purpose. The sole remedy if any such
representation or warranty is breached and such breach continues beyond the
applicable cure period is that the Transferor will
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be obligated to accept reassignment, subject to certain conditions described
under "Description of the Certificates--Representations and Warranties," of
the Receivables affected thereby. See "Description of the Certificates--
Representations and Warranties" and "Certain Legal Aspects of the
Receivables--Consumer Protection Laws."
Application of federal and state bankruptcy and debtor relief laws would
affect the interests of the Certificateholders in the Receivables if such laws
result in any Receivables being written off as uncollectible when there are no
funds available from any Credit Enhancement or other source. See "Description
of the Certificates--Defaulted Receivables; Rebates and Fraudulent Charges;
Investor Charge-Offs."
Competition in the Credit Card Industry. The credit card industry is highly
competitive. As new credit card issuers enter the market and issuers seek to
expand their share of the market, there is increased use of advertising,
target marketing and pricing competition. Each Trust will be dependent upon
the Transferor's continued ability to generate new Receivables. If the rate at
which new Receivables are generated declines significantly and the Transferor
is unable to designate Additional Accounts with respect to a Trust, a Pay Out
Event could occur with respect to each Series relating to such Trust, in which
case the Rapid Amortization Period with respect to each such Series would
commence.
Payments and Maturity. The Receivables may be paid at any time and there is
no assurance that there will be additional Receivables created in the Accounts
or that any particular pattern of cardholder repayments will occur. The
commencement and continuation of a Controlled Amortization Period, a Principal
Amortization Period or an Accumulation Period for a Series or Class thereof
with respect to a Trust will be dependent upon the continued generation of new
Receivables to be conveyed to such Trust. A significant decline in the amount
of Receivables generated could result in the occurrence of a Pay Out Event for
one or more Series and the commencement of the Rapid Amortization Period for
each such Series. Certificateholders should be aware that the Transferor's
ability to continue to compete in the current industry environment will affect
the Transferor's ability to generate new receivables to be conveyed to each
Trust and may also affect payment patterns. In addition, increased convenience
use (which occurs when cardholders pay their balances in full every month and
thus avoid all finance charges on their purchase balances) would decrease the
effective yield on the Accounts. In addition, changes in periodic finance
charges can alter the monthly payment rates of cardholders. A significant
decrease in such monthly payment rate could slow the return or accumulation of
principal during an Amortization Period or Accumulation Period. See "Maturity
Assumptions."
Social, Technological and Economic Factors. Changes in use of credit and
payment patterns by customers may result from a variety of social,
technological and economic factors. Social factors include potential changes
in consumers' attitudes toward financing purchases with debt. Technological
factors include new methods of payment, such as debit cards. Economic factors
include the rate of inflation, unemployment levels and relative
interest rates. Cardholders whose accounts are included in the Bank Portfolio
have billing addresses in all 50 states and the District of Columbia. The
Bank, however, is unable to determine and has no basis to predict whether, or
to what extent, social, technological or economic factors will affect future
use of credit or repayment patterns.
Effect of Subordination. With respect to Certificates of a Series having a
Class or Classes of Subordinated Certificates, unless otherwise specified in
the related Prospectus Supplement, payments of principal in respect of the
Subordinated Certificates of a Series will not commence until after the final
principal payment with respect to the Senior Certificates of such Series. In
addition, if so specified in the related Prospectus Supplement, if collections
of Finance Charge Receivables allocable to the Certificates of a Series are
insufficient to cover required amounts due with respect to the Senior
Certificates of such Series, the Investor Interest with respect to the
Subordinated Certificates will be reduced, resulting in a reduction of the
portion of collections of Finance Charge Receivables allocable to the
Subordinated Certificates in future periods and a possible delay or reduction
in principal and interest payments on the Subordinated Certificates. Moreover,
if so specified in the related Prospectus Supplement, in the event of a sale
of Receivables in a Trust due to the insolvency of the Transferor or the
appointment of a conservator or receiver for the Transferor, or due to the
inability of the Trustee to act as or find a successor Servicer after a
Servicer Default, the portion of the net proceeds of such sale allocable to
pay
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principal to the Certificates of a Series will be used first to pay amounts
due to the Senior Certificateholders and any remainder will be used to pay
amounts due to the Subordinated Certificateholders.
Effects of Prepayment Distinctions Among Classes. Classes of Certificates
may be issued to which may be allocated the risk of early repayment within a
Series. With respect to such a Class, a Holder of a Certificate of such Class
will be more likely to receive prepayment of his Certificate than would
otherwise be the case. In such event such Holder will not receive the benefit
of the Certificate Rate for the period of time originally expected on the
amount of any such repayment. There can be no assurance that the Holder will
be able to reinvest the proceeds at a similar rate of return and at a similar
risk level. Assuming that a Holder could identify an identical reinvestment
opportunity, an early repayment could benefit a Holder who acquired a
Certificate of such Class at a discount and harm a Holder who acquired a
Certificate of such Class at a premium.
Effect on Certain Pre-Funded Series of Ability to Generate Additional
Receivables. With respect to Certificates of a Series having a Class that
employs a Pre-Funding Account in anticipation of the Transferor transferring
additional Receivables to the related Trust, if, and to the extent that, the
requisite amount of such Receivables are not created during the Pre-Funding
Period specified in the related Prospectus Supplement, the Certificateholders
of such Class will receive the balance remaining in the Pre-Funding Account at
the end of the Pre-Funding Period as an early repayment of Certificate
principal. See "Risk Factors--Competition in the Credit Card Industry" and "--
Payments and Maturity" and "Description of Certificates--Funding Period." In
such event the Holder of such a Certificate will not receive the benefit of
the Certificate Rate for the period of time originally expected on the amount
of such early repayment. See "Risk Factors--Effects of Prepayment Distinctions
among Classes."
Ability to Change Terms of the Accounts. Pursuant to each Agreement, the
Transferor does not transfer to the related Trust the Accounts but only the
Receivables arising in the Accounts. As owner of the Accounts, the Transferor
retains the right to determine the monthly periodic finance charges and other
fees which will be applicable from time to time to the Accounts, to alter the
minimum monthly payment required on the Accounts and to change various other
terms with respect to the Accounts, including changing the annual percentage
rate from a fixed rate to a variable rate. The Bank offers cardholders the
option of having finance charges accrue based on a fixed or variable periodic
rate. The Bank currently allows its cardholders to switch from one rate option
to the other, but expects to discontinue this option by January 1997. To the
extent that there is an increase in the proportion of Receivables in variable
rate Accounts, the effective yield on such Accounts will be affected by
fluctuations in the prime rate, and decreases in the prime rate could reduce
the yield on such Accounts. A decrease in the monthly periodic finance charge
and a reduction in credit card or other fees would decrease the effective
yield on the Accounts with respect to a Trust and could result in the
occurrence of a Pay Out Event with respect to each Series relating to such
Trust and the commencement of the Rapid Amortization Period with respect to
each such Series. Unless otherwise specified in the related Prospectus
Supplement, under each Agreement the Transferor will agree that, except as
otherwise required by law or as is deemed by the Transferor to be necessary in
order to maintain its credit card business, based upon a good faith assessment
by it, in its sole discretion, of the nature of the competition in that
business, the Transferor will not reduce the annual percentage rate of the
monthly periodic finance charges assessed on the related Receivables or other
fees on the related Accounts if, as a result of such reduction, the Portfolio
Yield for any Series as of such date would be less than the Base Rate for such
Series. The terms "Portfolio Yield" and "Base Rate" for each Series will have
the meanings set forth in the Prospectus Supplement relating to each such
Series. In addition, unless otherwise specified in the related Prospectus
Supplement, each Agreement will provide that the Bank may change the terms of
the contracts relating to the related Accounts or its policies and procedures
with respect to the servicing thereof (including without limitation the
reduction of the required minimum monthly payment and the calculation of the
amount or the timing of finance charges, credit card fees, and charge offs),
if such change (i) would not, in the reasonable belief of the Transferor,
cause a Pay Out Event for any related Series to occur, and (ii) is made
applicable to the comparable segment of revolving credit card accounts owned
and serviced by the Transferor which have characteristics the same as or
substantially similar to the related Accounts which are subject to such
change. In servicing the Accounts, the Servicer will be required to exercise
the same care and apply the same policies that it exercises in handling
similar matters for its own comparable accounts. Except as specified above
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or in any Prospectus Supplement, there will be no restrictions on the
Transferor's ability to change the terms of the Accounts. There can be no
assurance that changes in applicable law, changes in the marketplace or
prudent business practice might not result in a determination by the
Transferor to take actions which would change the Account terms.
Basis Risk. A portion of the Accounts in a Trust will have finance charges
set at a variable rate above a designated prime rate or other designated
index. The Certificate Rate applicable to a Series of Certificates issued by
such Trust may be based upon an index other than such prime rate or other
designated index. If there is a decline in such prime rate or other designated
index which does not coincide with a decline in the index upon which the
Certificate Rate is based, the amount of collections of Finance Charge
Receivables on such Accounts may be reduced, whereas the amounts payable as
Monthly Interest on such Series of Certificates and other amounts required to
be funded out of collections of Finance Charge Receivables with respect to
such Series will not be similarly reduced.
Master Trust Considerations. Each Trust, as a master trust, may issue Series
from time to time. While the Principal Terms of any Series will be specified
in a Series Supplement, the provisions of a Series Supplement and, therefore,
the terms of any additional Series, will not be subject to the prior review by
or consent of, holders of the Certificates of any previously issued Series.
Such Principal Terms may include methods for determining applicable investor
percentages and allocating collections, provisions creating different or
additional security or other Credit Enhancement, provisions subordinating such
Series to another Series or other Series (if the Series Supplement relating to
such Series so permits) to such Series, and any other amendment or supplement
to the related Agreement which is made applicable only to such Series. It is a
condition precedent to the issuance of any additional Series by a Trust that
each Rating Agency that has rated any outstanding Series issued by such Trust
deliver written confirmation to the Trustee that such additional issuance will
not result in such Rating Agency reducing or withdrawing its rating on any
outstanding Series. There can be no assurance, however, that the Principal
Terms of any other Series, including any Series issued from time to time
hereafter, might not have an impact on the timing and amount of payments
received by a Certificateholder of any other Series. See "Description of the
Certificates--Exchanges."
Addition of Trust Assets. The Transferor expects, and in some cases will be
obligated, to designate Additional Accounts, the Receivables in which will be
conveyed to a Trust. Such Additional Accounts are expected to include accounts
originated using criteria different from those which were applied to the
Accounts designated on the Cut-Off Date related to such Trust or to
previously-designated Additional Accounts, because such accounts were
originated at a different date, under different underwriting criteria or by
different institutions, or represent a separate segment of the Bank's credit
card business. Consequently, there can be no assurance that Additional
Accounts designated in the future will be of the same credit quality as
previously-designated Accounts. In addition, each Agreement provides that the
Bank may add Participations to a Trust. The designation of Additional Accounts
and Participations will be subject to the satisfaction of certain conditions
described herein under "Description of the Certificates--Addition of Trust
Assets."
Control. Subject to certain exceptions, the Certificateholders of each
Series may take certain actions, or direct certain actions to be taken, under
the related Agreement or the related Series Supplement. However, the related
Agreement or related Series Supplement may provide that under certain
circumstances the consent or approval of a specified percentage of the
aggregate Investor Interest of other Series or of the Investor Interest of a
specified Class of such other Series will be required to direct certain
actions, including requiring the appointment of a successor Servicer following
a Servicer Default, amending the related Agreement in certain circumstances
and directing a repurchase of all outstanding Series upon the breach of
certain representations and warranties by the Transferor. Certificateholders
of such other Series may have interests which do not coincide in any way with
the interests of Certificateholders of the subject Series. In such instances,
it may be difficult for the Certificateholders of such Series to achieve the
results from the vote that they desire.
Certificate Rating. Any rating assigned to the Certificates of a Series or a
Class by a Rating Agency will reflect such Rating Agency's assessment of the
likelihood that Certificateholders of such Series or Class
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(including each Series that includes a Pre-Funding Account) will receive the
payments of interest and principal required to be made under the Agreement, in
the case of principal on or prior to the scheduled maturity date set forth in
the related Prospectus Supplement, and in the case of interest, on the
applicable interest payment dates. The ratings will be based primarily on an
assessment of the Receivables in the Trust (including the eligibility criteria
for the transfer of Receivables in Additional Accounts to the Trust), of the
amounts held in any trust account for the benefit of any Series or Class
(including in any Pre-Funding Account) and the availability of any Enhancement
with respect to such Series or Class. However, any such rating will not
address the possibility of the occurrence of a Pay Out Event with respect to
such Class or Series or the possibility of the imposition of United States
withholding tax with respect to non-U.S. Certificateholders. The rating will
not be a recommendation to purchase, hold or sell Certificates of such Series
or Class, and such rating will not comment as to the marketability of such
Certificates, any market price or suitability for a particular investor. There
is no assurance that any rating will remain for any given period of time or
that any rating will not be lowered or withdrawn entirely by a Rating Agency
if in such Rating Agency's judgment circumstances so warrant.
The Transferor will request a rating of each class of Certificates offered
hereby by at least one Rating Agency. There can be no assurance as to whether
any rating agency not requested to rate the Certificates will nonetheless
issue a rating with respect to any Series of Certificates or Class thereof,
and, if so, what such rating would be. A rating assigned to any Series of
Certificates or Class thereof by a rating agency that has not been requested
by the Transferor to do so may be lower than the rating assigned by a Rating
Agency pursuant to the Transferor's request. Only rating agencies that have
been requested to rate a particular Series will be a "Rating Agency" for
purposes of such Series.
Credit Enhancement. Although Credit Enhancement may be provided with respect
to a Series of Certificates or any Class thereof, the amount available will be
limited and will be subject to certain reductions. If the amount available
under any Credit Enhancement is reduced to zero, Certificateholders of the
Series or Class thereof covered by such Credit Enhancement will bear directly
the credit and other risks associated with their undivided interest in the
Trust. Unless otherwise specified in the related Prospectus Supplement, Credit
Enhancement available to one Series issued under a Trust will not be available
to any other Series under such Trust. See "Credit Enhancement."
Book-Entry Registration. Unless otherwise specified in the related
Prospectus Supplement, the Certificates of each Series initially will be
represented by one or more Certificates registered in the name of Cede, the
nominee for DTC, and will not be registered in the names of the Certificate
Owners or their nominee. Unless and until Definitive Certificates are issued
for a Series, Certificate Owners relating to such Series will not be
recognized by the Trustee as Certificateholders, as that term will be used in
each Agreement. Hence, until such time, Certificate Owners will only be able
to exercise the rights of Certificateholders indirectly through DTC, Cedel or
Euroclear and their participating organizations. See "Description of the
Certificates--Book-Entry Registration" and "--Definitive Certificates."
THE TRUSTS
Each Trust will be formed pursuant to an Agreement in accordance with the
laws of the State of New York, unless otherwise specified in the related
Prospectus Supplement. No Trust will engage in any business activity other
than acquiring and holding Receivables, issuing Series of Certificates and the
related Transferor Certificate, making payments thereon and engaging in
related activities (including, with respect to any Series, obtaining any
Enhancement and entering into an Enhancement agreement relating thereto). As a
consequence, no Trust is expected to have any need for additional capital
resources other than the assets of such Trust.
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CHASE USA'S CREDIT CARD ACTIVITIES
GENERAL
The Bank Portfolio consists of MasterCard and VISA accounts that were
originated prior to June 1, 1996 (the "Account Transfer Date") by Chemical
Bank (the "Chemical Bank Portfolio") and the portfolio of MasterCard and VISA
accounts that were originated prior to the Account Transfer Date by Chase USA
(the "Chase Portfolio") and the MasterCard and VISA accounts that have been
originated on or after the Account Transfer Date by Chase USA (the "New Chase
Portfolio"). On the Account Transfer Date, the MasterCard and VISA accounts
comprising the Chemical Bank Portfolio were transferred from Chemical Bank to
Chase USA.
The Receivables which the Bank will convey to each Trust pursuant to the
related Agreement have been and will be generated from transactions made by
holders of certain VISA and MasterCard credit card accounts, which are regular
accounts, and certain Gold VISA and MasterCard and GrandElite Gold VISA and
MasterCard credit card accounts, which are premium accounts, including in each
case cobranded accounts. Premium cards are targeted at individuals with higher
levels of income. The Bank services these accounts at its facilities located
in Hicksville, New York; Brooklyn, New York; Tempe, Arizona and Tampa,
Florida. Certain data processing and administrative functions associated with
the servicing of the Bank Portfolio are performed on behalf of the Bank
through a credit card processor, First Data Resources, Inc. ("FDR"), located
in Omaha, Nebraska. See "--Description of FDR."
Pursuant to a master pooling and servicing agreement dated as of June 1,
1991 between Chase USA, as seller and servicer, and Yasuda Bank and Trust
Company (U.S.A.) as trustee, the Chase Manhattan Credit Card Master Trust (the
"Chase Manhattan Trust") has issued several series of asset backed
certificates (each such series, a "Chase Manhattan Series") evidencing
undivided interests in receivables generated by certain accounts in the Chase
Portfolio (the "Securitized Chase Portfolio"). As long as any Chase Manhattan
Series remains outstanding, receivables in accounts which remain in the
Securitized Chase Portfolio will not be available for addition to the Trusts,
although the Transferor would be permitted to add Participations in the Chase
Manhattan Trust to the assets of the Trusts. See "Description of the
Certificates--Addition of Trust Assets."
Accounts in the Chase Portfolio which are not in the Securitized Chase
Portfolio have been added and are expected to be added in the future and
accounts in the New Chase Portfolio are expected to be added, at some time in
the future, to the Trusts. There can be no assurance, however, that such
accounts will be added or that, if added, the receivables in such accounts
will constitute a material portion of the Receivables in the Trusts.
In addition, accounts in the Chase Portfolio, the Chemical Portfolio and the
New Chase Portfolio were originated under policies and procedures which
differed from each other in certain respects. The Bank does not expect any of
these differences to have a material adverse effect on the credit quality of
the Receivables in the Trusts or on the interests of the Certificateholders.
ACQUISITION AND USE OF CREDIT CARD ACCOUNTS
The accounts were generated under the VISA U.S.A., Inc. ("VISA") or
MasterCard International Inc. ("MasterCard International") programs and were
originated, purchased by, or otherwise transferred to, the Bank. The Bank is a
member of VISA and of MasterCard International. MasterCard International and
VISA license their respective marks permitting financial institutions to issue
credit cards to their customers. In addition, MasterCard International and
VISA provide clearing services facilitating exchange of payments among member
institutions and networks linking members' credit authorization systems.
The VISA and MasterCard credit cards are issued as part of the worldwide
VISA and MasterCard International systems, and transactions creating the
receivables through the use of the credit cards are processed through the VISA
and MasterCard International authorization and settlement systems.
The VISA and MasterCard credit cards from which the Accounts were
established may be used to purchase goods and services, to obtain cash
advances and to consolidate and transfer account balances from other credit
cards. Cardholders make purchases when using a 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, from an automated teller machine, by a
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check drawn on an Account or through the use of overdraft protection. Amounts
due with respect to purchases, cash advances and transfers of account balances
will be included in the Receivables.
The VISA and MasterCard credit card accounts owned by the Bank were
principally generated through: (a) direct mail and telemarketing solicitation
for accounts on a pre-screened credit basis, (b) applications mailed directly
to prospective cardholders, (c) applications made available to prospective
cardholders at the Bank's branch banking facilities and point of sale outlets,
(d) applications generated by advertising on television, radio and in
magazines and (e) purchases of accounts from other credit card issuers.
In each case where an account is generated through an application, the Bank
reviews the application for completeness and creditworthiness. Applications
provide information to the Bank on the applicant's employment history, income
and residence status. In addition to reviewing the application, the Bank
obtains a credit report issued by an independent credit reporting agency with
respect to the applicant. In the event there are discrepancies between the
application and the credit report, the Bank may resolve the inconsistency
regarding the applicant by contacting employers or credit references. The Bank
generally evaluates the ability of an applicant for a VISA or MasterCard
credit card account to repay credit card balances by applying a credit scoring
system using models developed by independent consulting firms and proprietary
models and data. Credit scoring is intended to provide a general indication,
based on the information available, including data provided from applications
and credit bureaus, of the applicant's likelihood to repay his or her
obligations. Credit scoring assigns values to the information provided in each
applicant's application and credit bureau report and then estimates the
associated credit risk. The score at which an applicant will be approved
correlates to the Bank's credit risk tolerance at the time of approval. The
Bank personnel and outside consultants regularly review the predictive
accuracy of the scoring models.
Once an application to open an account is approved an initial credit limit
is established for the account based on the applicant's credit score and the
applicant's level of income. At least once per year a systematic evaluation of
cardholder payment and behavioral information is used to determine eligibility
for automatic credit line increases. Credit limits may also be adjusted at the
request of the applicant, subject to the Bank's independent evaluation of the
applicant's payment and usage history.
The Bank also generates new accounts through direct mail and telemarketing
solicitation campaigns directed at individuals who have been pre-screened by
the Bank. A list of prospects from a variety of sources are screened at one or
more credit bureaus in accordance with the Bank's credit criteria, including
previous payment patterns and longevity of account relationships. Individuals
qualifying for pre-screened direct mail or telemarketing solicitation are
conditionally offered the Bank's credit card without having to complete a
detailed application. Various credit limits are offered to members of the
group being solicited, which are based upon the prospective cardholder's
credit profile and the level of existing and potential indebtedness relative
to inferred income based on geographic and demographic characteristics.
Each cardholder is subject to an agreement governing the terms and
conditions of the accounts. Pursuant to such agreement, the Bank reserves the
right to change or terminate any terms, conditions, services or features of
the accounts (including increasing or decreasing daily periodic finance
charges, other charges or minimum payments) and to sell or transfer the
accounts and any amounts owed on such accounts to another creditor.
The Bank has added, and may continue to add, accounts to its portfolio by
purchasing credit card accounts from other financial institutions. Credit card
accounts that have been purchased by the Bank were originally opened using
criteria established by the institution from which the accounts were purchased
or by the institution from which the selling institution originally purchased
the accounts and may not have been subject to the same level of credit review
as accounts established by the Bank. Following acquisition, purchased accounts
are evaluated against the same criteria utilized by the Bank to maintain Bank-
originated accounts to determine whether any of the purchased accounts should
be closed immediately. Any of the purchased accounts failing the criteria are
closed and no further purchases or cash advances are authorized. All other
such accounts remain open, subject to the same criteria the Bank uses to
evaluate Bank-originated accounts. The credit limits on such accounts are
based initially on the limits established or maintained by the selling
institution. Following acquisition, credit limits on purchased accounts will
be adjusted based on the criteria applied to Bank-originated accounts.
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BILLING AND PAYMENTS
The Accounts have various billing and payment structures, including varying
minimum payment levels and fees. Monthly billing statements are sent by the
Bank, using FDR as its service bureau, to cardholders. The following
information reflects the current billing and payment characteristics of the
Accounts. When an account is established, it is randomly assigned to a billing
cycle. Currently, there are 20 billing cycles. Each billing cycle has a
separate monthly billing date at which time the activity in the related
accounts during the month ending on such billing date are processed and billed
to cardholders.
The Bank determines the minimum monthly payment with respect to each account
by multiplying the combined new balance of purchases and cash advances, less
any disputed amounts, by any of (i) 2.000% ( 1/50 expressed as a percentage),
(ii) 2.083% ( 1/48 expressed as a percentage) or (iii) 1.666% ( 1/60 expressed
as a percentage), depending upon the account. Beginning in January 1997, the
Bank expects to calculate the minimum monthly payment for the majority of
accounts by multiplying the combined new balance of purchases and cash
advances, less any disputed amounts, by 2.000% ( 1/50 expressed as a
percentage). If the amount so calculated is less than $10.00 it is increased
to $10.00. The sum of such amount and any past due amounts equals the minimum
payment amount. The minimum payment, however, is never more than the new
balance.
A daily periodic finance charge is assessed on certain Principal Receivables
for each billing cycle. Daily periodic finance charges for a billing cycle are
not assessed on Principal Receivables which arise from new purchases made
during such billing cycle if either on the first day of such billing cycle
there was no purchase balance outstanding or if the purchase balance
outstanding on the first day of such billing cycle (including any minimum
payment due with respect to cash advances) is paid in full during such billing
cycle or if on the last day of such billing cycle there is no purchase balance
outstanding. The daily periodic finance charge assessed on cash advances and
applicable purchase balances is calculated by multiplying (i) the average
daily cash advance and applicable purchase balance during the billing cycle by
(ii) the applicable daily periodic finance charge by (iii) the number of days
in the billing cycle. Cash advances are included in the average daily cash
advance balance and purchases are included in the average daily purchase
balance from the date such advance or purchase occurs or, in certain
circumstances, on the first day of the billing cycle following the billing
cycle in which such advance or purchase occurs. The annual percentage rate for
fixed rate accounts ranges from 14.5% per annum to 18.8% per annum. The
current annual percentage rate for variable rate accounts is based on the Wall
Street Journal prime rate plus a spread ranging from 9.0% to 11.4%. To the
extent that the amount of any finance charge applicable to an account balance
is less than $0.50, the Bank increases such amount to $0.50.
The Bank may change the periodic finance charge rate at any time. In
addition, cardholders currently have the option of electing to switch the
applicable rate from fixed to variable and vice versa, effective for
transactions on or after the date the election is processed, although such
option is expected to be discontinued by January 1997.
The Bank generally assesses an annual membership fee of $20.00 for regular
accounts, $40.00 for premium fixed rate accounts and $45.00 for premium
variable rate accounts. The Bank currently allows cardholders to request a
refund of the unused portion of the annual fee if the account is closed within
the first six months after it is opened and it is not delinquent and the
account balance does not exceed the credit limit, but expects to discontinue
this option by January 1997. The Bank may waive the annual membership fees, or
a portion thereof, in connection with solicitations of new accounts (and has
done so for portions of recent solicitations) or when the Bank determines a
waiver to be necessary to operate its credit card business on a competitive
basis. In addition to the annual membership fee, the Bank may charge accounts
certain other fees including: (i) a late fee of $18.00 with respect to any
unpaid monthly payment if the Bank does not receive the required minimum
monthly payment by the payment due date set forth on the monthly billing
statement and the amount of the past due payment is $2.00 or more (provided
that no late fee is assessed if the minimum payment is paid prior to the first
day of the following billing cycle, including any minimum payment due with
respect to cash advances); (ii) a cash advance fee of 2% of the amount of each
cash advance, but such cash advance fee shall not be less than $2.00 nor
greater than $20.00; (iii) a fee of $15.00 for each check written on an
account (a cash advance) which is returned to the Bank as a result of the
account being delinquent or overdrawn; (iv) a fee of $18.00 with respect
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to each check submitted by a cardholder in payment of an account which is
dishonored and (v) an overlimit charge of $18.00 if, at the end of the billing
cycle, the total amount owed for principal, or on and after January 1, 1997
the total amount owed for principal and finance charges, in respect of
purchases and cash advances exceeds the cardholder's credit line.
Payments by cardholders to the Bank on the Accounts are processed and
applied first to any billed fees and other amounts not subject to finance
charges, next to billed and unpaid finance charges and then to billed and
unpaid transactions in the order determined by the Bank. Any excess is applied
to unbilled transactions in the order determined by the Bank and then to
unbilled finance charges. There can be no assurance that daily periodic
finance charges, fees and other charges will remain at current levels in the
future. See "Description of the Certificates--Collection and Other Servicing
Procedures."
COLLECTION OF DELINQUENT ACCOUNTS
The Bank considers an account delinquent if a payment due thereunder is not
received by the Bank by the date of the statement following the statement on
which the amount is first stated to be due. The Bank classifies an account as
"over limit" if its posted balance exceeds its credit limit.
Efforts to collect delinquent credit card receivables are made by the Bank's
personnel and collection agencies and attorneys retained by the Bank.
Collection procedures are determined by an adaptive control system that uses
statistical models and basic account financial information to determine the
steps to be followed at various stages of delinquency. Generally, the Bank
includes a request for payment of overdue amounts on billing statements issued
after the account becomes delinquent. In addition, after a period determined
by the control system, the Bank mails a separate notice to the cardholder
notifying him or her of the delinquency and possible revocation of the credit
card and requesting payment of the delinquent amount. Collection personnel
generally initiate telephone contact with cardholders whose credit card
accounts have become 30 days or more delinquent. In the event that initial
telephone contact fails to resolve the delinquency, the Bank continues to
contact the cardholder by telephone and by mail. Based upon the control
system, the Bank may suspend an account as early as the date on which such
account becomes 30 days or more delinquent and generally does so by the time
the account becomes 50 days delinquent. 100 days after an account becomes
delinquent the credit card is automatically canceled. Based on the Bank's
analysis of a cardholder's behavior through the control system, the Bank may
take any or all of the above actions at an earlier point in time. In some
cases, depending on the financial profile of the cardholder and the stated
reason for and magnitude of a delinquency, the Bank may enter into
arrangements with a delinquent cardholder to extend or otherwise change the
payment schedule.
The Bank's policy is to charge off an account during the billing cycle
immediately following the cycle in which such account became one hundred fifty
(150) days delinquent. If the Bank receives notice that a cardholder is the
subject of a bankruptcy proceeding, the Bank charges off such cardholder's
account upon the earlier of seventy-five (75) days after receipt of such
notice and the time period set forth in the previous sentence.
Under the terms of an Agreement, Recoveries may be included in the assets of
the Trust to the extent, if any, specified in the applicable Supplement for
any Series.
DESCRIPTION OF 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.
INTERCHANGE
Creditors participating in the VISA and MasterCard associations receive
certain fees ("Interchange") as partial compensation for taking credit risk,
absorbing fraud losses and funding receivables for a limited period prior to
initial billing. Under the VISA and MasterCard systems, a portion of
Interchange in connection with cardholder charges for goods and services is
passed from banks which clear the transactions for merchants to credit card
issuing banks. Interchange fees are set annually by MasterCard and VISA and
are based on the number of credit card transactions and the amount charged per
transaction. MasterCard and VISA may from time
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to time change the amount of Interchange reimbursed to banks issuing their
credit cards. The Transferor will be required, pursuant to the terms of the
Agreement, to transfer to the Trust a percentage of Interchange. Interchange
will be allocated to the Trust, on the basis of the percentage equivalent of
the ratio which the amount of purchases of merchandise and services relating
to the Accounts made during such Monthly Period bears to the total amount of
purchases of merchandise and services relating to the Bank Portfolio with
respect to such Monthly Period. Interchange allocated to the Trust will be
treated as collections of Finance Charge Receivables.
RECOVERIES
The Transferor will be required, pursuant to the terms of the Agreement, to
transfer to the Trust a percentage of the Recoveries. Recoveries will be
allocated to the Trust on the basis of the percentage equivalent of the ratio
which the amount of the aggregate principal amount of Principal Receivables
(prior to giving effect to any reduction thereof for Finance Charge
Receivables which are Discount Option Receivables) bears to the aggregate
principal balance of the Bank Portfolio. Recoveries allocated to the Trust
will be treated as collections of Finance Charge Receivables.
THE RECEIVABLES
The Receivables conveyed to each Trust will arise in Accounts selected from
the Bank Portfolio on the basis of criteria set forth in the related Agreement
as applied on the relevant Cut-Off Date and, with respect to Additional
Accounts, as of the related date of their designation (the "Trust Portfolio").
The Transferor will have the right (subject to certain limitations and
conditions set forth therein), and in some circumstances will be obligated, to
designate from time to time Additional Accounts and to transfer to the related
Trust all Receivables of such Additional Accounts, whether such Receivables
are then existing or thereafter created, or to transfer to such Trust
Participations in lieu of such Receivables or in addition thereto. Any
Additional Accounts designated pursuant to an Agreement must be Eligible
Accounts as of the date the Transferor designates such accounts as Additional
Accounts. Furthermore, pursuant to each Agreement, the Transferor has the
right (subject to certain limitations and conditions) to designate certain
Accounts as Removed Accounts and to require the Trustee to reconvey all
receivables in such Removed Accounts to the Transferor, whether such
Receivables are then existing or thereafter created. Throughout the term of
each Trust, the related Accounts from which the Receivables arise will be the
Accounts designated by the Transferor on the relevant Cut-Off Date plus any
Additional Accounts minus any Removed Accounts. With respect to each Series of
Certificates, the Transferor will represent and warrant to the related Trust
that, as of the Closing Date and the date Receivables are conveyed to the
Trust, such Receivables meet certain eligibility requirements. See
"Description of the Certificates--Representations and Warranties."
The Prospectus Supplement relating to each Series of Certificates will
provide certain information about the related Trust Portfolio as of the date
specified. Such information will include, but not be limited to, the amount of
Principal Receivables, the amount of Finance Charge Receivables, the range of
principal balances of the Accounts and the average thereof, the range of
credit limits of the Accounts and the average thereof, the geographic
distribution of the Accounts, the types of Accounts and delinquency statistics
relating to the Accounts.
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MATURITY ASSUMPTIONS
Unless otherwise specified in the related Prospectus Supplement, for each
Series, following the Revolving Period, collections of Principal Receivables
are expected to be distributed to the Certificateholders of such Series or any
specified Class thereof on each specified Distribution Date during the
Controlled Amortization Period or the Principal Amortization Period, or are
expected to be accumulated for payment to Certificateholders of such Series or
any specified Class thereof during the Accumulation Period and distributed on
a Scheduled Payment Date; provided, however, that, if the Rapid Amortization
Period commences, collections of Principal Receivables will be paid to
Certificateholders in the manner described herein and in the related
Prospectus Supplement. The related Prospectus Supplement will specify when the
Controlled Amortization Period, the Principal Amortization Period or
Accumulation Period, as applicable, will commence, the principal payments
expected or available to be received or accumulated during such Controlled
Amortization Period, Principal Amortization Period or Accumulation Period, or
on the Scheduled Payment Date, as applicable, the manner and priority of
principal accumulations and payments among the Classes of a Series of
Certificates, the payment rate assumptions on which such expected principal
accumulations and payments are based and the Pay Out Events which, if any were
to occur, would lead to the commencement of a Rapid Amortization Period or, if
so specified in the related Prospectus Supplement, a Rapid Accumulation
Period.
No assurance can be given, however, that the Principal Receivables allocated
to be paid to Certificateholders or the holders of any specified Class thereof
will be available for distribution or accumulation for payment to
Certificateholders on each Distribution Date during the Controlled
Amortization Period, the Principal Amortization Period or Accumulation Period,
or on the Scheduled Payment Date, as applicable. In addition, the Transferor
can give no assurance that the payment rate assumptions for any Series will
prove to be correct. The related Prospectus Supplement will provide certain
historical data relating to payments by cardholders, total charge-offs and
other related information relating to the Bank Portfolio. There can be no
assurance that future events will be consistent with such historical data.
The amount of collections of Receivables may vary from month to month due to
seasonal variations, general economic conditions and payment habits of
individual cardholders. There can be no assurance that collections of
Principal Receivables with respect to any Trust Portfolio, and thus the rate
at which the related Certificateholders could expect to receive or accumulate
payments of principal on their Certificates during an Amortization Period or
Accumulation Period, or on any Scheduled Payment Date, as applicable, will be
similar to any historical experience set forth in a related Prospectus
Supplement. If a Pay Out Event occurs, the average life and maturity of such
Series of Certificates could be significantly reduced.
The actual payment rate for any Series of Certificates may be slower than
the payment rate used to determine the amount of collections of Principal
Receivables scheduled or available to be distributed or accumulated for later
payment to Certificateholders or any specified Class thereof during the
Controlled Amortization Period, the Principal Amortization Period or
Accumulation Period or on the Scheduled Payment Date, as applicable, or a Pay
Out Event may occur which would initiate the Rapid Amortization Period. There
can be no assurance that the actual number of months elapsed from the date of
issuance of such Series of Certificates to the final Distribution Date with
respect to the Certificates will equal the expected number of months. In
addition if, after the issuance of a Series, a related Companion Series is
issued and a Rapid Amortization Period commences, payments to the Holders of
such Series may be delayed. See "Description of the Certificates--Companion
Series."
USE OF PROCEEDS
The net proceeds from the sale of each Series of Certificates offered hereby
will be paid to the Transferor. The Transferor will use such proceeds for its
general corporate purposes.
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CHASE USA
Chase USA, a wholly-owned banking subsidiary of The Chase Manhattan
Corporation (the "Corporation"), was originally incorporated under the laws of
Delaware in 1982 and is headquartered in Wilmington, Delaware. Chase USA is
currently chartered as a national bank and as such is regulated primarily by
the Comptroller. Chase USA's activities are predominantly related to credit
card lending and other forms of unsecured consumer lending.
The Corporation is a bank holding company the principal bank subsidiary of
which is The Chase Manhattan Bank, a New York State bank.
The principal executive office of Chase USA is located at 802 Delaware
Avenue, Wilmington, Delaware 19801, telephone number (302) 575-5000.
DESCRIPTION OF THE CERTIFICATES
The Certificates will be issued in Series. Each Series will represent an
interest in the specified Trust other than the interests represented by any
other Series of Certificates issued by such Trust (which may include Series
offered pursuant to this Prospectus) and the Transferor Certificate. Each
Series will be issued pursuant to an Agreement entered into by the Bank and
the Trustee named in the related Prospectus Supplement and a Series Supplement
to the Agreement. The Prospectus Supplement for each Series will describe any
provisions of the particular Agreement relating to such Series which may
differ materially from the Agreement filed as an exhibit to the Registration
Statement. The following is a summary of the provisions common to each Series
of Certificates. The summaries are qualified in their entirety by reference to
the provisions of the related Agreement and Series Supplement.
GENERAL
The Certificates of each Series will represent undivided interests in
certain assets of the related Trust, including the right to the applicable
Investor Percentage of all cardholder payments on the Receivables in such
Trust. Unless otherwise specified in the related Prospectus Supplement, the
Investor Interest for each Series of Certificates on any date will be equal to
the initial Investor Interest as of the related Closing Date for such Series
(increased by the principal balance of any Certificates of such Series issued
after the Closing Date for such Series) minus the amount of principal paid to
the related Certificateholders prior to such date and minus the amount of
unreimbursed Investor Charge-Offs with respect to such Certificates prior to
such date. If so specified in the Prospectus Supplement relating to any Series
of Certificates, under certain circumstances the Investor Interest may be
further adjusted by the amount of principal allocated to Certificateholders,
the funds on deposit in any specified account, and any other amount specified
in the related Prospectus Supplement.
Each Series of Certificates may consist of one or more Classes, one or more
of which may be Senior Certificates and one or more of which may be
Subordinated Certificates. Each Class of a Series will evidence the right to
receive a specified portion of each distribution of principal or interest or
both. The Investor Interest with respect to a Series with more than one Class
will be allocated among the Classes as described in the related Prospectus
Supplement. The Certificates of a Class may differ from Certificates of other
Classes of the same Series in, among other things, the amounts allocated to
principal payments, maturity date, Certificate Rate and the availability of
Enhancement.
For each Series of Certificates, payments of interest and principal will be
made on Distribution Dates specified in the related Prospectus Supplement to
Certificateholders in whose names the Certificates were registered on the
record dates (each, a "Record Date") specified in the related Prospectus
Supplement. Interest will be distributed to Certificateholders in the amounts,
for the periods and on the dates specified in the related Prospectus
Supplement.
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For each Series of Certificates, the Transferor initially will own the
Transferor Certificate. The Transferor Certificate will represent the
undivided interest in each Trust not represented by the Certificates issued
and outstanding under such Trust or the rights, if any, of any Credit
Enhancement Providers to receive payments from each Trust. The holder of the
Transferor Certificate will have the right to a percentage (the "Transferor
Percentage") of all cardholder payments from the Receivables in the Trust. If
provided in the related Agreement and Prospectus Supplement, the Transferor
Certificate may be transferred in whole or in part subject to certain
limitations and conditions set forth therein. See "--Certain Matters Regarding
the Transferor and the Servicer."
Unless otherwise specified in the related Prospectus Supplement, with
respect to each Series of Certificates, during the Revolving Period, the
amount of the Investor Interest in the Trust will remain constant except under
certain limited circumstances. See "--Defaulted Receivables; Rebates and
Fraudulent Charges; Investor Charge-Offs." The amount of Principal Receivables
in each Trust, however, will vary each day as new Principal Receivables are
created and others are paid. The amount of the Transferor Interest will
fluctuate each day, therefore, to reflect the changes in the amount of the
Principal Receivables in the Trust. When a Series is amortizing, the Investor
Interest of such Series will decline as customer payments of Principal
Receivables are collected and distributed to or accumulated for distribution
to the Certificateholders. As a result, the Transferor Interest will generally
increase to reflect reductions in the Investor Interest for such Series and
will also change to reflect the variations in the amount of Principal
Receivables in the related Trust. The Transferor Interest in each Trust may
also be reduced as the result of an Exchange. See "--Exchanges."
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 Bank, the "Depository") except as set forth below.
Unless otherwise specified in the related Prospectus Supplement, with respect
to each Series of Certificates, beneficial interests in the Certificates will
be available for purchase in minimum denominations of $1,000 and integral
multiples thereof in book-entry form only. The Transferor has been informed by
DTC that DTC's nominee will be Cede. Accordingly, Cede is expected to be the
holder of record of each Series of Certificates. No Certificate Owner
acquiring an interest in the Certificates will be entitled to receive a
certificate representing such person's interest in the Certificates. Unless
and until Definitive Certificates are issued for any Series under the limited
circumstances described herein, all references herein to actions by
Certificateholders shall refer to actions taken by DTC upon instructions from
its Participants (as defined below), and all references herein to
distributions, notices, reports and statements to Certificateholders shall
refer to distributions, notices, reports and statements to DTC or Cede, as the
registered holder of the Certificates, as the case may be, for distribution to
Certificate Owners in accordance with DTC procedures. See "--Book-Entry
Registration" and "--Definitive Certificates."
If so specified in the Prospectus Supplement relating to a Series,
application will be made to list the Certificates of such Series, or all or a
portion of any Class thereof, on the Luxembourg Stock Exchange or any other
specified exchange.
BOOK-ENTRY REGISTRATION
Unless otherwise specified in the related Prospectus Supplement, with
respect to each Series of Certificates, Certificateholders may hold their
Certificates through DTC (in the United States) or Cedel or Euroclear (in
Europe) if they are participants of such systems, or indirectly through
organizations that are participants in such systems.
Cede, as nominee for DTC, will hold the global Certificates. Cedel and
Euroclear will hold omnibus positions on behalf of the Cedel Participants and
the Euroclear Participants, respectively, through customers' securities
accounts in Cedel's and Euroclear's names on the books of their respective
depositaries (collectively, the "Depositaries") which in turn will hold such
positions in customers' securities accounts in the Depositaries' names on the
books of DTC.
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DTC is a limited-purpose trust company organized under the New York Banking
Law, a "banking organization" within the meaning of the New York Banking Law,
a member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Exchange Act. DTC
holds securities for its Participants ("DTC Participants") and facilitates the
clearance and settlement among Participants of securities transactions, such
as transfers and pledges, in deposited securities through electronic book-
entry changes in Participants' accounts, thereby eliminating the need for
physical movement of securities certificates. Participants include securities
brokers and dealers, banks, trust companies, clearing corporations and certain
other organizations. Indirect access to the DTC system is also available to
others such as securities brokers and dealers, banks, and trust companies that
clear through or maintain a custodial relationship with a Participant, either
directly or indirectly ("Indirect Participants"). The rules applicable to DTC
and its Participants are on file with the Securities and Exchange Commission.
Transfers between DTC Participants will occur in accordance with DTC rules.
Transfers between Cedel Participants and Euroclear Participants will occur in
the ordinary way in accordance with their applicable rules and operating
procedures.
Cross-market transfers between persons holding directly or indirectly
through DTC, on the one hand, and directly or indirectly through Cedel
Participants or Euroclear Participants, on the other, will be effected in DTC
in accordance with DTC rules on behalf of the relevant European international
clearing system by its Depositary; however, such cross-market transactions
will require delivery of instructions to the relevant European international
clearing system by the counterparty in such system in accordance with its
rules and procedures and within its established deadlines (European time). The
relevant European international clearing system will, if the transaction meets
its settlement requirements, deliver instructions to its Depositary to take
action to effect final settlement on its behalf by delivering or receiving
securities in DTC, and making or receiving payment in accordance with normal
procedures for same-day funds settlement applicable to DTC. Cedel Participants
and Euroclear Participants may not deliver instructions directly to the
Depositaries.
Because of time-zone differences, credits of securities in Cedel or
Euroclear as a result of a transaction with a DTC Participant will be made
during the subsequent securities settlement processing, dated the business day
following the DTC settlement date, and such credits or any transactions in
such securities settled during such processing will be reported to the
relevant Cedel Participant or Euroclear Participant on such day. Cash received
in Cedel or Euroclear as a result of sales of securities by or through a Cedel
Participant or a Euroclear Participant will be received with value on the DTC
settlement date but will be available in the relevant Cedel or Euroclear cash
account only as of the business day following settlement in DTC.
Purchases of Certificates under the DTC system must be made by or through
DTC Participants, which will receive a credit for the Certificates on DTC's
records. The ownership interest of each actual Certificate Owner is in turn to
be recorded on the DTC Participants' and Indirect Participants' records.
Certificate Owners will not receive written confirmation from DTC of their
purchase, but Certificate Owners are expected to receive written confirmations
providing details of the transaction, as well as periodic statements of their
holdings, from the DTC Participant or Indirect Participant through which the
Certificate Owner entered into the transaction. Transfers of ownership
interests in the Certificates are to be accomplished by entries made on the
books of DTC Participants acting on behalf of Certificate Owners. Certificate
Owners will not receive certificates representing their ownership interest in
Certificates, except in the event that use of the book-entry system for the
Certificates is discontinued.
To facilitate subsequent transfers, all Certificates deposited by DTC
Participants with DTC are registered in the name of DTC's nominee, Cede. The
deposit of Certificates with DTC and their registration in the name of Cede
effects no change in beneficial ownership. DTC has no knowledge of the actual
Certificate Owners of the Certificates; DTC's records reflect only the
identity of the Participants to whose accounts such Certificates are credited,
which may or may not be the Certificate Owners. The DTC Participants will
remain responsible for keeping account of their holdings on behalf of their
customers.
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Conveyance of notices and other communications by DTC to DTC Participants,
by DTC Participants to Indirect Participants, and by DTC Participants and
Indirect Participants to Certificate Owners will be governed by arrangements
among them, subject to any statutory or regulatory requirements as may be in
effect from time to time.
Neither DTC nor Cede will consent or vote with respect to Certificates.
Under its usual procedures, DTC mails an omnibus proxy to the issuer as soon
as possible after the record date, which assigns Cede's consenting or voting
rights to those DTC Participants to whose accounts the Certificates are
credited on the record date (identified in a listing attached thereto).
Principal and interest payments on the Certificates will be made to DTC.
DTC's practice is to credit Participants' accounts on the applicable
Distribution Date in accordance with their respective holdings shown on DTC's
records unless DTC has reason to believe that it will not receive payment on
such Distribution Date. Payments by DTC Participants to Certificate Owners
will be governed by standing instructions and customary practices, as is the
case with securities held for the accounts of customers in bearer form or
registered in "street name" and will be the responsibility of such DTC
Participant and not of DTC, the Trustee or the Transferor, subject to any
statutory or regulatory requirements as may be in effect from time to time.
Payment of principal and interest to DTC is the responsibility of the Trustee,
disbursement of such payments to DTC Participants shall be the responsibility
of DTC, and disbursement of such payments to Certificate Owners shall be the
responsibility of DTC Participants and Indirect Participants.
DTC may discontinue providing its services as securities depository with
respect to the Certificates at any time by giving reasonable notice to the
Transferor or the Trustee. Under such circumstances, in the event that a
successor securities depository is not obtained, Definitive Certificates are
required to be printed and delivered. The Transferor may decide to discontinue
use of the system of book-entry transfers through DTC (or a successor
securities depository). In that event, Definitive Certificates will be
delivered to Certificateholders. See "--Definitive Certificates."
The information in this section concerning DTC and DTC's book-entry system
has been obtained from sources that the Transferor believes to be reliable,
but the Transferor takes no responsibility for the accuracy thereof.
Cedel Bank, societe anonyme ("Cedel") is incorporated under the laws of
Luxembourg as a professional depository. Cedel holds securities for its
participating organizations ("Cedel Participants") and facilitates the
clearance and settlement of securities transactions between Cedel Participants
through electronic book-entry changes in accounts of Cedel Participants,
thereby eliminating the need for physical movement of certificates.
Transactions may be settled in Cedel in any of 36 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 34 currencies,
including United States dollars. The Euroclear System includes
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various other services, including securities lending and borrowing and
interfaces with domestic markets in several countries generally similar to the
arrangements for cross-market transfers with DTC described above. The
Euroclear System is operated by Morgan Guaranty Trust Company of New York's
Brussels, Belgium office (the "Euroclear Operator" or "Euroclear"), under
contract with Euro-clear 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 "Tax Matters." Cedel or the Euroclear Operator, as the case
may be, will take any other action permitted to be taken by a
Certificateholder under 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
Unless otherwise specified in the related Prospectus Supplement, the
Certificates of each Series will be issued as Definitive Certificates in fully
registered, certificated form to Certificate Owners or their nominees rather
than to DTC or its nominee, only if (i) the Transferor advises the Trustee for
such Series in writing that DTC is no longer willing or able to discharge
properly its responsibilities as Depository with respect to such Series of
Certificates, and the Trustee or the Transferor is unable to locate a
qualified successor, (ii) the Transferor, at its option, advises the Trustee
in writing that it elects to terminate the book-entry system through DTC or
(iii) after the occurrence of a Servicer Default, Certificate Owners
representing not less than 50% (or such other percentage specified in the
related Prospectus Supplement) of the Investor Interest advise the Trustee and
DTC through Participants in writing that the continuation of a book-entry
system through DTC (or a successor thereto) is no longer in the best interest
of the Certificate Owners.
Upon the occurrence of any of the events described in the immediately
preceding paragraph, DTC is required to notify all Participants of the
availability through DTC of Definitive Certificates. Upon surrender by
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DTC of the definitive certificate representing the Certificates and
instructions for re-registration, the Trustee will issue the Certificates as
Definitive Certificates, and thereafter the Trustee will recognize the holders
of such Definitive Certificates as holders under the Agreement ("Holders").
Distribution of principal and interest on the Certificates will be made by
the Trustee directly to Holders of Definitive Certificates in accordance with
the procedures set forth herein and in the Agreement. Interest payments and
any principal payments on each Distribution Date will be made to Holders in
whose names the Definitive Certificates were registered at the close of
business on the related Record Date. Distributions will be made by check
mailed to the address of such Holder as it appears on the register maintained
by the Trustee or, if such Holder holds more than an aggregate principal
amount of such Definitive Certificates to be specified in the Agreement, by
wire transfer to such Holder's account. The final payment on any Certificate
(whether Definitive Certificates or the Certificates registered in the name of
Cede representing the Certificates), however, will be made only upon
presentation and surrender of such Certificate at the office or agency
specified in the notice of final distribution to Certificateholders. The
Trustee will provide such notice to registered Certificateholders not later
than the fifth day of the month of such final distributions. In addition, if
the Certificates are listed on the Luxembourg Stock Exchange, payments of
principal and interest, including the final payment on any Certificate, will
also be made at the offices of Banque Generale du Luxembourg, S.A.
Definitive Certificates will be transferable and exchangeable at the offices
of any of the Transfer Agents and Registrars, which shall initially be CMB and
the Trustee. No service charge will be imposed for any registration of
transfer or exchange, but the Transfer Agent and Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge imposed in
connection therewith. The Transfer Agent and Registrar shall not be required
to register the transfer or exchange of Definitive Certificates for a period
of fifteen days preceding the due date for any payment with respect to such
Definitive Certificates.
INTEREST PAYMENTS
For each Series of Certificates and Class thereof, interest will accrue from
the date specified in the applicable Prospectus Supplement on the applicable
Investor Interest at the applicable Certificate Rate, which may be a fixed,
floating or other type of rate as specified in the related Prospectus
Supplement. Interest will be distributed to Certificateholders on the
Distribution Dates specified in the related Prospectus Supplement. Interest
payments on any Distribution Date will be funded from collections of Finance
Charge Receivables allocated to the Investor Interest during the preceding
Monthly Period or Periods and may be funded from certain investment earnings
on funds held in accounts of the related Trust and, from any applicable Credit
Enhancement, if necessary, or certain other amounts as specified in the
related Prospectus Supplement. If the Distribution Dates for payment of
interest for a Series or Class occur less frequently than monthly, such
collections or other amounts (or the portion thereof allocable to such Class)
may be deposited in one or more trust accounts (each, an "Interest Funding
Account") pending distribution to the Certificateholders of such Series or
Class, as described in the related Prospectus Supplement. If a Series has more
than one class of Certificates, each such Class may have a separate Interest
Funding Account. The Prospectus Supplement relating to each Series of
Certificates and each Class thereof will describe the amounts and sources of
interest payments to be made, the Certificate Rate for each Class thereof,
and, for a Series or each Class thereof bearing interest at a floating
Certificate Rate, the initial Certificate Rate, the dates and the manner for
determining subsequent Certificate Rates, the formula, index or other method
by which such Certificate Rates are determined and any cap or other
limitations on any Certificate Rate.
PRINCIPAL PAYMENTS
Unless otherwise specified in the related Prospectus Supplement, during the
Revolving Period for each Series of Certificates (which begins on the Closing
Date relating to such Series and ends on the day before an Amortization Period
or Accumulation Period begins), no principal payments will be made to the
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Certificateholders of such Series. During the Controlled Amortization Period,
Principal Amortization Period or Accumulation Period, as applicable, which
will be scheduled to begin on the date specified in, or determined in the
manner specified in, the related Prospectus Supplement, and during the Rapid
Amortization Period, which will begin upon the occurrence of a Pay Out Event,
principal will be paid to the Certificateholders in the amounts and on
Distribution Dates specified in the related Prospectus Supplement or will be
accumulated in a Principal Funding Account for later distribution to
Certificateholders on the Schedule Payment Date in the amounts specified in
the related Prospectus Supplement. Principal payments for any Series or Class
thereof will be funded from collections of Principal Receivables received
during the related Monthly Period or Periods as specified in the related
Prospectus Supplement and allocated to such Series or Class and from certain
other sources specified in the related Prospectus Supplement. In the case of a
Series with more than one Class of Certificates, the Certificateholders of one
or more Classes may receive payments of principal at different times. The
related Prospectus Supplement will describe the manner, timing and priority of
payments of principal to Certificateholders of each Class.
Funds on deposit in any Principal Funding Account applicable to a Series may
be subject to a guaranteed rate agreement or guaranteed investment contract or
other arrangement specified in the related Prospectus Supplement intended to
assure a minimum rate of return on the investment of such funds. In order to
enhance the likelihood of the payment in full of the principal amount of a
Series of Certificates or Class thereof at the end of an Accumulation Period,
such Series of Certificates or Class thereof may be subject to a principal
payment guaranty or other similar arrangement specified in the related
Prospectus Supplement.
TRANSFER AND ASSIGNMENT OF RECEIVABLES
The Transferor will transfer and assign at the time of formation of each
Trust all of its right, title and interest in and to the Receivables in the
related Accounts and all Receivables thereafter created in such Accounts.
In connection with each such initial transfer and in connection with each
subsequent transfer of Receivables to a Trust, the Transferor will indicate in
its computer files that the related Receivables have been conveyed to such
Trust. In addition, the Transferor will provide to the Trustee with respect to
each Trust computer files or microfiche lists, containing a true and complete
list showing each related Account, identified by account number and by total
outstanding balance on the date of transfer. The Transferor will not deliver
to the related Trustee any other records or agreements relating to the
Accounts or the Receivables, except in connection with additions or removals
of Accounts. Except as stated above, the records and agreements relating to
the Accounts and the Receivables maintained by the Transferor or the Servicer
are not and will not be segregated by the Transferor or the Servicer from
other documents and agreements relating to other credit card accounts and
receivables and are not and will not be stamped or marked to reflect the
transfer of the Receivables to a Trust, but the computer records of the
Transferor are and will be required to be marked to evidence such transfer.
The Transferor will file with respect to each Trust Uniform Commercial Code
financing statements with respect to the Receivables meeting the requirements
of applicable state law. See "Risk Factors--Transfer of Receivables" and
"Certain Legal Aspects of the Receivables."
EXCHANGES
For each Series of Certificates, the related Agreement will provide for the
related Trustee to issue two types of certificates: (i) one or more Series of
Certificates which are transferable and have the characteristics described
below and (ii) the Transferor Certificate, a certificate which evidences the
Transferor Interest, which initially will be held by the Transferor and will
be transferable only as provided in the related Agreement. The related
Prospectus Supplement may also provide that, pursuant to any one or more
Series Supplements, the holder of the Transferor Certificate may tender such
Transferor Certificate, or the Transferor Certificate and the Certificates
evidencing any Series of Certificates issued by such Trust, to the related
Trustee in exchange for one or more new Series (which may include Series
offered pursuant to this Prospectus) and a reissued Transferor Certificate.
Pursuant to each Agreement, the holder of the Transferor Certificate may
define, with respect to any newly issued Series, all Principal Terms of such
new Series. Upon the issuance of an additional Series of Certificates, none of
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the Transferor, the Servicer, the Trustee or the related Trust will be
required or will intend to obtain the consent of any Certificateholder of any
other Series previously issued by such Trust. However, as a condition of an
Exchange, the holder of the Transferor Certificate will deliver to the Trustee
written confirmation that the Exchange will not result in the reduction or
withdrawal by any Rating Agency of its rating of any outstanding Series. The
Transferor may offer any Series under a Disclosure Document in offerings
pursuant to this Prospectus or in transactions either registered under the
Securities Act or exempt from registration thereunder directly, through one or
more other underwriters or placement agents, in fixed-price offerings or in
negotiated transactions or otherwise.
Unless otherwise specified in the related Prospectus Supplement, the holder
of the Transferor Certificate may perform Exchanges and define Principal Terms
such that each Series issued under a Trust has a period during which
amortization or accumulation of the principal amount thereof is intended to
occur which may have a different length and begin on a different date than
such period for any other Series. Further, one or more Series may be in their
amortization or accumulation periods while other Series are not. Moreover,
each Series may have the benefit of a Credit Enhancement which is available
only to such Series. Under the related Agreement, the Trustee shall hold any
such form of Credit Enhancement only on behalf of the Series with respect to
which it relates. The holder of the Transferor Certificate may deliver a
different form of Credit Enhancement agreement with respect to each Series.
The holder of the Transferor Certificate may specify different certificate
rates and monthly servicing fees with respect to each Series (or a particular
Class within such Series). The holder of the Transferor Certificate will also
have the option under the related Agreement to vary between Series the terms
upon which a Series (or a particular Class within such Series) may be
repurchased by the Transferor. Additionally, certain Series may be
subordinated to other Series, or Classes within a Series may have different
priorities. There will be no limit to the number of Exchanges that may be
performed under a related Agreement.
Unless otherwise specified in the related Prospectus Supplement, an Exchange
may only occur upon the satisfaction of certain conditions provided in the
related Agreement. Under each Agreement, the holder of the Transferor
Certificate may perform an Exchange by notifying the Trustee at least five
days in advance of the date upon which the Exchange is to occur. Under each
Agreement, the notice will state the designation of any Series to be issued on
the date of the Exchange and, with respect to each such Series (and, if
applicable, each Class thereof): (i) its initial principal amount (or method
for calculating such amount) which amount may not be greater than the current
principal amount of the Transferor Certificate, (ii) its certificate rate (or
method of calculating such rate) and (iii) the provider of Credit Enhancement,
if any, which is expected to provide support with respect to it. Each
Agreement will provide that on the date of the Exchange the Trustee will
authenticate any such Series only upon delivery to it of the following, among
others, (i) a Series Supplement specifying the Principal Terms of such Series,
(ii) (a) an opinion of counsel to the effect that, unless otherwise stated in
the related Series Supplement, the certificates of such Series will be
characterized as indebtedness for federal income tax purposes and (b) a Tax
Opinion, (iii) if required by the related Series Supplement, the form of
Credit Enhancement, (iv) if Credit Enhancement is required by the Series
Supplement, an appropriate Credit Enhancement agreement executed by the
Transferor and the issuer of the Credit Enhancement, (v) written confirmation
from each Rating Agency that the Exchange will not result in such Rating
Agency's reducing or withdrawing its rating on any then outstanding Series
rated by it, (vi) an officer's certificate of the Transferor to the effect
that after giving effect to the Exchange the Transferor would not be required
to add Additional Accounts pursuant to the related Agreement and the
Transferor Interest would be at least equal to the Minimum Transferor Interest
and (vii) the existing Transferor Certificate and, if applicable, the
certificates representing the Series to be exchanged. Upon satisfaction of
such conditions, the Trustee will cancel the existing Transferor Certificate
and the certificates of the exchanged Series, if applicable, and authenticate
the new Series and a new Transferor Certificate.
REPRESENTATIONS AND WARRANTIES
Unless otherwise specified in the Prospectus Supplement relating to a Series
of Certificates, the Transferor will make in each Agreement, certain
representations and warranties to the Trust to the effect that, among other
things, (a) as of the Closing Date, the Transferor was duly incorporated and
in good standing and that it has the
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authority to consummate the transactions contemplated by the related Agreement
and (b) as of the relevant Cut-Off Date (or as of the date of the designation
of Additional Accounts), each Account was an Eligible Account (as defined
below). If so provided in the related Prospectus Supplement, if (i) any of
these representations and warranties proves to have been incorrect in any
material respect when made, and continues to be incorrect for 60 days after
notice to the Transferor by the related Trustee or to the Transferor and the
related Trustee by the Certificateholders holding more than 50% of the
Investor Interest of the related Series, and (ii) as a result the interests of
the Certificateholders are materially and adversely affected, and continue to
be materially and adversely affected during such period, then the Trustee or
Certificateholders holding more than 50% of the Investor Interest may give
notice to the Transferor (and to the related Trustee in the latter instance)
declaring that a Pay Out Event has occurred, thereby commencing the Rapid
Amortization Period.
Unless otherwise specified in the Prospectus Supplement relating to a Series
of Certificates, the Transferor will make in each Agreement representations
and warranties to the related Trust relating to the Receivables in such Trust
to the effect, among other things, that (a) as of the Closing Date of the
initial Series of Certificates issued by such Trust, each of the Receivables
then existing is an Eligible Receivable (as defined below) and (b) as of the
date of creation of any new Receivable, such Receivable is an Eligible
Receivable and the representation and warranty set forth in clause (b) in the
immediately following paragraph is true and correct with respect to such
Receivable. In the event (i) of a breach of any representation and warranty
set forth in this paragraph, within 60 days, or such longer period as may be
agreed to by the Trustee, of the earlier to occur of the discovery of such
breach by the Transferor or Servicer or receipt by the Transferor of written
notice of such breach given by the Trustee, or, with respect to certain
breaches relating to prior liens, immediately upon the earlier to occur of
such discovery or notice and (ii) that as a result of such breach, the
Receivables in the related Accounts are charged off as uncollectible, the
Trust's rights in, to or under the Receivables or its proceeds are impaired or
the proceeds of such Receivables are not available for any reason to the Trust
free and clear of any lien, the Transferor shall accept reassignment of each
Principal Receivable as to which such breach relates (an "Ineligible
Receivable") on the terms and conditions set forth below; provided, however,
that no such reassignment shall be required to be made with respect to such
Ineligible Receivable if, on any day within the applicable period (or such
longer period as may be agreed to by the Trustee), the representations and
warranties with respect to such Ineligible Receivable shall then be true and
correct in all material respects. The Transferor shall accept reassignment of
each such Ineligible Receivable by directing the Servicer to deduct the amount
of each such Ineligible Receivable from the aggregate amount of Principal
Receivables used to calculate the Transferor Interest. In the event that the
exclusion of an Ineligible Receivable from the calculation of the Transferor
Interest would cause the Transferor Interest to be a negative number, on the
date of reassignment of such Ineligible Receivable the Transferor shall make a
deposit in the Principal Account in immediately available funds in an amount
equal to the amount by which the Transferor Interest would be reduced below
zero. Any such deduction or deposit shall be considered a repayment in full of
the Ineligible Receivable. The obligation of the Transferor to accept
reassignment of any Ineligible Receivable is the sole remedy respecting any
breach of the representations and warranties set forth in this paragraph with
respect to such Receivable available to the Certificateholders or the Trustee
on behalf of Certificateholders.
Unless otherwise specified in the Prospectus Supplement relating to a Series
of Certificates, the Transferor will make in each Agreement representations
and warranties to the related Trust to the effect, among other things, that as
of the Closing Date of the initial Series of Certificates issued by such Trust
(a) the related Agreement will constitute a legal, valid and binding
obligation of the Transferor and (b) the transfer of Receivables by it to the
Trust under the Agreement will constitute either a valid transfer and
assignment to the Trust of all right, title and interest of the Transferor in
and to the Receivables (other than Receivables in Additional Accounts),
whether then existing or thereafter created and the proceeds thereof
(including amounts in any of the accounts established for the benefit of
Certificateholders) or the grant of a first priority perfected security
interest in such Receivables (except for certain tax liens) and the proceeds
thereof (including amounts in any of the accounts established for the benefit
of Certificateholders), which is effective as to each such Receivable upon the
creation thereof. In the event of a breach of any of the representations and
warranties described in this paragraph, either the Trustee or the Holders of
Certificates evidencing undivided interests in the Trust aggregating more than
50% of the aggregate Investor Interest of all Series outstanding under such
Trust may direct the Transferor to accept
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reassignment of the Trust Portfolio within 60 days of such notice, or within
such longer period specified in such notice. The Transferor will be obligated
to accept reassignment of such Receivables on a Distribution Date occurring
within such applicable period. Such reassignment will not be required to be
made, however, if at any time during such applicable period, or such longer
period, the representations and warranties shall then be true and correct in
all material respects. The deposit amount for such reassignment will be equal
to the Investor Interest and Enhancement Invested Amount, if any, for each
Series outstanding under such Trust on the last day of the Monthly Period
preceding the Distribution Date on which the reassignment is scheduled to be
made less the amount, if any, previously allocated for payment of principal to
such Certificateholders or such holders of the Enhancement Invested Amount or
the Collateral Interest, if any, on such Distribution Date, plus an amount
equal to all accrued and unpaid interest less the amount, if any, previously
allocated for payment of such interest on such Distribution Date. The payment
of the reassignment deposit amount and the transfer of all other amounts
deposited for the preceding month in the Distribution Account will be
considered a payment in full of the Investor Interest and the Enhancement
Invested Amount, if any, for each such Series required to be repurchased and
will be distributed upon presentation and surrender of the Certificates for
each such Series. The obligation of the Transferor to make any such deposit
will constitute the sole remedy respecting a breach of the representations and
warranties available to the Trustee or such Certificateholders.
Unless otherwise specified in the related Prospectus Supplement, with
respect to each Series of Certificates, an "Eligible Account" will mean, as of
the relevant Cut-Off Date (or, with respect to Additional Accounts, as of
their date of designation for inclusion in the related Trust), each Account
owned by the Transferor (a) which was in existence and maintained with the
Transferor, (b) which is payable in United States dollars, (c) the customer of
which has provided, as his most recent billing address, an address located in
the United States or its territories or possessions, (d) which has not been
classified by the Transferor as counterfeit, deleted, fraudulent, stolen or
lost, (e) which has either been originated by the Transferor or acquired by
the Transferor from other institutions and (f) which has not been charged off
by the Transferor in its customary and usual manner for charging off such
Account as of the Cut-Off Date and, with respect to Additional Accounts, as of
their date of designation for inclusion in the Trust. Under each Agreement,
the definition of Eligible Account may be changed by amendment to such
Agreement without the consent of the related Certificateholders if (i) the
Transferor delivers to the Trustee a certificate of an authorized officer to
the effect that, in the reasonable belief of the Transferor, such amendment
will not as of the date of such amendment adversely affect in any material
respect the interest of such Certificateholders and (ii) such amendment will
not result in a withdrawal or reduction of the rating of any outstanding
Series under the related Trust.
Unless otherwise specified in the related Prospectus Supplement, with
respect to each Series of Certificates, an "Eligible Receivable" will be
defined to mean each Receivable (a) which has arisen under an Eligible
Account, (b) which was created in compliance, in all material respects, with
all requirements of law applicable to the Transferor, and pursuant to a credit
card agreement which complies in all material respects with all requirements
of law applicable to the Transferor, (c) with respect to which all consents,
licenses or authorizations of, or registrations with, any governmental
authority required to be obtained or given by the Transferor in connection
with the creation of such Receivable or the execution, delivery, creation and
performance by the Transferor of the related credit card agreement have been
duly obtained or given and are in full force and effect as of the date of the
creation of such Receivable, (d) as to which, at the time of its creation, the
Transferor or the related Trust has good title free and clear of all liens and
security interests arising under or through the Transferor (other than certain
tax liens for taxes not then due or which the Transferor is contesting), (e)
which is the legal, valid and binding payment obligation of the obligor
thereon, legally enforceable against such obligor in accordance with its terms
(with certain bankruptcy-related exceptions) and (f) which constitutes an
"account" or "general intangible" under Article 9 of the UCC as then in effect
in the State of Delaware.
Unless otherwise specified in the Prospectus Supplement relating to a Series
of Certificates, it will not be required or anticipated that the Trustee will
make any initial or periodic general examination of the Receivables or any
records relating to the Receivables for the purpose of establishing the
presence or absence of defects, compliance with the Transferor's
representations and warranties or for any other purpose. The Servicer,
however,
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will deliver to the Trustee on or before March 31 of each year (or such other
date specified in the related Prospectus Supplement) an opinion of counsel
with respect to the validity of the security interest of the Trust in and to
the Receivables and certain other components of the Trust.
ADDITION OF TRUST ASSETS
As described above under "The Receivables," the Transferor will have the
right to designate for each Trust, from time to time, Additional Accounts to
be included as Accounts with respect to such Trust. In addition, the
Transferor will be required to designate Additional Accounts under the
circumstances and in the amounts specified in the related Prospectus
Supplement. The Transferor will convey to the related Trust its interest in
all Receivables of such Additional Accounts, whether such Receivables are then
existing or thereafter created.
Each Additional Account must be an Eligible Account at the time of its
designation. However, Additional Accounts may not be of the same credit
quality as the initial Accounts. Additional Accounts may have been originated
by the Transferor using credit criteria different from those which were
applied by the Transferor to the initial Accounts or may have been acquired by
the Transferor from an institution which may have had different credit
criteria.
In addition to or in lieu of Additional Accounts, the Transferor will be
permitted to add to the related Trust participations representing undivided
interests in a pool of assets primarily consisting of receivables arising
under consumer revolving credit card accounts owned by the Transferor and
collections thereon ("Participations"). Participations may be evidenced by one
or more certificates of ownership issued under a separate pooling and
servicing agreement or similar agreement (a "Participation Agreement") entered
into by the Transferor which entitles the certificateholder to receive
percentages of collections generated by the pool of assets subject to such
Participation Agreement from time to time and to certain other rights and
remedies specified therein. Participations may have their own credit
enhancement, pay out events, servicing obligations and servicer defaults, all
of which are likely to be enforceable by a separate trustee under the
Participation Agreement and may be different from those specified herein. The
rights and remedies of the related Trust as the holder of a Participation (and
therefore the Certificateholders) will be subject to all the terms and
provisions of the related Participation Agreement. Each Agreement may be
amended to permit the addition of a Participation in a Trust without the
consent of the related Certificateholders if (i) the Transferor delivers to
the Trustee a certificate of an authorized officer to the effect that, in the
reasonable belief of the Transferor, such amendment will not as of the date of
such amendment adversely affect in any material respect the interest of such
Certificateholders, and (ii) such amendment will not result in a withdrawal or
reduction of the rating of any outstanding Series under the related Trust. To
the extent required pursuant to the Securities Act, any Participations
transferred to a Trust will (a) have been (i) registered under the Securities
Act or (ii) held for at least the Rule 144(k) holding period, and (b) will be
acquired in secondary market transactions not from the issuer or an affiliate.
Except as described in the following paragraph, a conveyance by the
Transferor to a Trust of Receivables in Additional Accounts or Participations
is subject to the following conditions, among others: (i) the Transferor shall
give the Trustee, each Rating Agency and the Servicer written notice that such
Additional Accounts or Participations will be included, which notice shall
specify the approximate aggregate amount of the Receivables or interests
therein to be transferred; (ii) the Transferor shall have delivered to the
Trustee a written assignment (including an acceptance by the Trustee on behalf
of the Trust for the benefit of the Certificateholders) as provided in the
Agreement relating to such Additional Accounts or Participations (the
"Assignment") and, the Transferor shall have delivered to the Trustee a
computer file or microfiche list, dated the date of such Assignment,
containing a true and complete list of such Additional Accounts or
Participations; (iii) the Transferor shall represent and warrant that (x) each
Additional Account is, as of the Addition Date, an Eligible Account, and each
Receivable in such Additional Account is, as of the Addition Date, an Eligible
Receivable, (y) no selection procedures believed by the Transferor to be
materially adverse to the interests of the Certificateholders were utilized in
selecting the Additional Accounts from the available Eligible Accounts from
the Bank Portfolio, and (z) as of the Addition Date, the Transferor is not
insolvent; (iv) the Transferor shall deliver certain opinions of counsel with
respect to the transfer of the Receivables in the Additional Accounts or
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the Participations to the Trust and (v) under certain circumstances, if any,
specified in the related Prospectus Supplement with respect to Additional
Accounts and in all cases with respect to Participations, each Rating Agency
then rating any Series of Certificates outstanding under such Trust shall have
consented to the addition of such Additional Accounts or Participations.
If specified in the related Prospectus Supplement, additional Accounts may
be automatically added to the Accounts on an ongoing basis; provided, however,
that such automatic inclusion and transfer shall not occur with respect to any
such account if: (i) such account does not qualify as an Eligible Account or
(ii) the Transferor otherwise designates such account as an account which is
not to be included as an Account. The Transferor will deliver to the Trustee a
computer file or microfiche list of all such included Accounts. In connection
with any such automatic addition of Additional Accounts, the Transferor will
be required to satisfy the conditions specified in clause (iii) in the
preceding paragraph.
In addition to the periodic reports otherwise required to be filed by the
Servicer with the Commission pursuant to the Exchange Act, the Servicer
intends to file, on behalf of each Trust, a Report on Form 8-K with respect to
any addition to a Trust of Receivables in Additional Accounts or
Participations that would have a material effect on the composition of the
assets of such Trust.
REMOVAL OF ACCOUNTS
Unless otherwise specified in the Prospectus Supplement relating to a Series
of Certificates, subject to the conditions set forth in the next succeeding
sentence, the Transferor may, but shall not be obligated to, designate from
time to time (which may be restricted to certain periods if so specified in
the related Prospectus Supplement) certain Accounts to be Removed Accounts,
all Receivables in which shall be subject to deletion and removal from the
related Trust; provided, however, that the Transferor shall not make more than
one such designation in any Monthly Period. The Transferor will be permitted
to designate and require reassignment to it of the Receivables from Removed
Accounts only upon satisfaction of the following conditions: (i) the removal
of any Receivables of any Removed Accounts shall not, in the reasonable belief
of the Transferor, cause a Pay Out Event to occur; (ii) the Transferor shall
have delivered to the related Trustee for execution a written assignment and a
computer file or microfiche list containing a true and complete list of all
Removed Accounts identified by account number and the aggregate amount of the
Receivables in such Removed Accounts; (iii) the Transferor shall represent and
warrant that no selection procedures believed by the Transferor to be
materially adverse to the interests of the holders of any Series of
Certificates outstanding under such Trust were utilized in selecting the
Removed Accounts to be removed from such Trust; (iv) each Rating Agency then
rating each Series of Certificates outstanding under such Trust shall have
received notice of such proposed removal of Accounts and the Transferor shall
have received notice from each such Rating Agency that such proposed removal
will not result in a downgrade of its then current rating for any such Series;
(v) the aggregate amount of Principal Receivables of the Accounts then
existing less the aggregate amount of Principal Receivables of the Removed
Accounts shall not be less than the amount, if any, specified for any period
specified; (vi) the Principal Receivables of the Removed Accounts shall not
equal or exceed 5% (or such other percentage specified in the related
Prospectus Supplement) of the aggregate amount of the Principal Receivables in
such Trust at such time; provided, that if any Series has been paid in full,
the Principal Receivables in such Removed Accounts may equal or approximately
equal the initial Investor Interest or Full Investor Interest, as applicable,
of such Series; (vii) such other conditions as are specified in the related
Prospectus Supplement; and (viii) the Transferor shall have delivered to the
Trustee an officer's certificate confirming the items set forth in clauses (i)
through (vii) above. Notwithstanding the above, the Transferor will be
permitted to designate as a Removed Account without the consent of the related
Trustee, Certificateholders or Rating Agencies any Account that has a zero
balance and which the Transferor will remove from its computer file.
COLLECTION AND OTHER SERVICING PROCEDURES
For each Series of Certificates, the Servicer will be responsible for
servicing and administering the Receivables in accordance with the Servicer's
policies and procedures for servicing credit card receivables comparable to
the Receivables. The Servicer will be required to maintain fidelity bond
coverage insuring against
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losses through wrongdoing of its officers and employees who are involved in
the servicing of credit card receivables covering such actions and in such
amounts as the Servicer believes to be reasonable from time to time.
DISCOUNT OPTION
The Transferor may at any time designate a specified fixed or variable
percentage as specified in the related Prospectus Supplement (the "Discount
Percentage") of the amount of Receivables arising in the Accounts with respect
to the related Trust on and after the date such option is exercised that
otherwise would have been treated as Principal Receivables to be treated as
Finance Charge Receivables (the "Discount Option Receivables"). Such
designation will become effective upon satisfaction of the requirements set
forth in the related Agreement, including confirmation by each Rating Agency
in writing of its then current rating on each outstanding Series of the
related Trust. Collections of Receivables to which such Discount Option is
applicable that otherwise would be Principal Receivables will be deemed
collections of Finance Charge Receivables and will be applied accordingly,
unless otherwise provided in the related Prospectus Supplement.
TRUST ACCOUNTS
Unless otherwise specified in the Prospectus Supplement relating to a Trust,
the related Trustee will establish and maintain in the name of the Trust two
separate accounts in a segregated trust account (which need not be a deposit
account), a "Finance Charge Account" and a "Principal Account," for the
benefit of the Certificateholders of all related Series, including any Series
offered pursuant to this Prospectus. Each Agreement will provide that the
Trustee shall have the power to establish series accounts in Series
Supplements, including an Interest Funding Account, a Principal Funding
Account, a Pre-Funding Account or such other account specified in the related
Series Supplement, each of which series accounts shall be held for the benefit
of the Certificateholders of the related Series and for the purposes set forth
in the related Prospectus Supplement. The Trustee will also establish a
"Distribution Account" which shall be an Eligible Deposit Account. The
Servicer will establish and maintain, in the name of the Trust, for the
benefit of Certificateholders of all Series issued thereby including any
Series offered pursuant to this Prospectus, a Collection Account, which will
be an Eligible Deposit Account. "Eligible Deposit Account" means 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 accounts,
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" means (a)
the Servicer, (b) a depository institution (which may be the Trustee or an
affiliate) organized under the laws of the United States or any one of the
states thereof which at all times (i) has a certificate of deposit rating of
"P-1" by Moody's Investors Service, Inc. ("Moody's"), (ii) has either (x) a
long-term unsecured debt rating of "AAA" by Standard & Poor's or (y) a
certificate of deposit rating of "A-1+" by Standard & Poor's Ratings Service
("Standard & Poor's") and (iii) is a member of the FDIC or (c) any other
institution that is acceptable to the Rating Agencies. Unless otherwise
specified in the related Prospectus Supplement, funds in the Principal Account
and the Finance Charge Account for each Trust will be invested, at the
direction of the Servicer, in (i) obligations fully guaranteed by the United
States of America, (ii) demand deposits, time deposits or certificates of
deposit of depository institutions or trust companies, the certificates of
deposit of which have a rating in the highest rating category from Moody's and
Standard & Poor's (unless otherwise specified in the related Prospectus
Supplement), (iii) commercial paper having, at the time of the Trust's
investment, a rating in the highest rating category from Moody's and Standard
& Poor's (unless otherwise specified in the related Prospectus Supplement),
(iv) bankers' acceptances issued by any depository institution or trust
company described in clause (ii) above, (v) certain repurchase agreements
transacted with either (a) an entity subject to the United States federal
bankruptcy code or (b) a financial institution insured by the FDIC or any
broker-dealer with "retail customers" that is under the jurisdiction of the
Securities Investors Protection Corp. and (vi) any other investment that by
its terms converts to cash within a finite time period if the Rating Agency
confirms in writing that such investment will not adversely affect its then
current rating or ratings of the Investor Certificates
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(such investments, "Permitted Investments"). Unless otherwise specified in the
related Prospectus Supplement, any earnings (net of losses and investment
expenses) on funds in the Finance Charge Account or the Principal Account will
be paid to the Transferor. Funds in any other series account established by a
Series Supplement may be invested in Permitted Investments or otherwise as
provided in the related Prospectus Supplement. The Servicer will have the
revocable power to withdraw funds from the Collection Account and to instruct
the Trustee to make withdrawals and payments from the Finance Charge Account
and the Principal Account for the purpose of carrying out the Servicer's
duties under the Agreement. Unless otherwise specified in the related
Prospectus Supplement, CMB will be the paying agent (the "Paying Agent") and
will have the revocable power to withdraw funds from the Distribution Account
for the purpose of making distributions to the Certificateholders.
FUNDING PERIOD
For any Series of Certificates, the related Prospectus Supplement may
specify that during a Funding Period specified in such Prospectus Supplement,
the Pre-Funding Amount, which may be up to 100% of the aggregate principal
amount of the Certificates of such Series, will be held in a Pre-Funding
Account pending the transfer of additional Receivables to the Trust or pending
the reduction of the Investor Interests of other Series issued by the related
Trust. The Prospectus Supplement relating to a Series of Certificates will
specify that the Funding Period for such Series will end on a specified date
certain or earlier under certain circumstances, such as the commencement of
the Rapid Amortization Period. The actual length of a Funding Period for a
Series may be contingent upon another event such as the generation by the
Transferor of additional Principal Receivables or the term of the Amortization
Period or Accumulation Period of a related Companion Series. Generally, the
Amortization Period or Accumulation Period of a related Companion Series will
depend upon the payment rate of the Receivables in the Trust. See "Maturity
Assumptions." Until the end of the Funding Period of a Series paired with a
related Companion Series, the Certificates of such Series will evidence an
undivided interest in Receivables to the extent of the Investor Interest in
such Series and in funds on deposit in the Pre-Funding Account and Permitted
Investments of such funds to the extent of the difference between the Full
Investor Interest and the initial Investor Interest. The related Prospectus
Supplement will specify the initial Investor Interest with respect to such
Series, the Full Investor Interest and the date by which the Investor Interest
is expected to equal the Full Investor Interest. The Investor Interest will
increase as Receivables are delivered to the related Trust or as the Investor
Interests of other Series of the related Trust are reduced. The Investor
Interest may also decrease due to Investor Charge-Offs.
During the Funding Period, funds on deposit in the Pre-Funding Account for a
Series of Certificates will be withdrawn and paid to the Transferor to the
extent of any increases in the Investor Interest. In the event that the
Investor Interest does not for any reason equal the Full Investor Interest by
the end of the Funding Period, any amount remaining in the Pre-Funding Account
and any additional amounts specified in the related Prospectus Supplement will
be payable to the Certificateholders of such Series in the manner and at such
time as set forth in the related Prospectus Supplement. Such event will result
in an early repayment of Certificate principal and the Certificateholders of
such Series will not receive the benefit of the Certificate Rate for the
period of time originally expected on the amount of such early repayment.
If so specified in the related Prospectus Supplement, monies in the Pre-
Funding Account will be invested by the Trustee in Permitted Investments or
will be subject to a guaranteed rate or investment agreement or other similar
arrangement, and, in connection with each Distribution Date during the Funding
Period, investment earnings on funds in the Pre-Funding Account during the
related Monthly Period will be withdrawn from the Pre-Funding Account and
deposited, together with any applicable payment under a guaranteed rate or
investment agreement or other similar arrangement, into the Finance Charge
Account for distribution in respect of interest on the Certificates of the
related Series in the manner specified in the related Prospectus Supplement.
COMPANION SERIES
If so provided in the Prospectus Supplement relating to a Series, each such
Series is subject to being paired with a Companion Series issued by the
related Trust on or prior to the commencement of the Amortization Period
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or Accumulation Period for such Series. As the Investor Interest of the Series
having a Companion Series is reduced, the Investor Interest in the related
Trust of the Companion Series will be increased. If a Pay Out Event occurs
with respect to the Series having a Companion Series or with respect to the
Companion Series when the Series is in an Amortization Period, the Investor
Percentage in respect of collections of Principal Receivables for the Series
and the Investor Percentage in respect of collections of Principal Receivables
for the Companion Series may be reset as provided in the related Prospectus
Supplement. Resetting of such Investor Percentage may have the effect of
reducing the amount of collections of Principal Receivables allocable to the
Series that is paired with the Companion Series. While the issuance of a
Companion Series will be subject to the conditions described under "--
Exchanges," there can be no assurance that the terms of a Companion Series
might not have an impact on the timing or amount of payments received on the
Series with which it is paired. See "Maturity Assumptions."
INVESTOR PERCENTAGE AND TRANSFEROR PERCENTAGE
For each Trust, the Servicer will allocate between the Investor Interest of
each Series issued by such Trust (and between each Class of each Series) and
the Transferor Interest, and, in certain circumstances, the interest of
certain Credit Enhancement Providers, all amounts collected on Finance Charge
Receivables, all amounts collected on Principal Receivables and all
Receivables in Defaulted Accounts. The Servicer will make each allocation by
reference to the applicable Investor Percentage of each Series and the
Transferor Percentage, and, in certain circumstances, the percentage interest
of certain Credit Enhancement Providers (the "Credit Enhancement Percentage")
with respect to such Series. The Prospectus Supplement relating to a Series
will specify the Investor Percentage and, if applicable, the Credit
Enhancement Percentage (or the method of calculating such percentage) with
respect to the allocations of collections of Principal Receivables, Finance
Charge Receivables and Receivables in Defaulted Accounts during the Revolving
Period, any Amortization Period and the Accumulation Period, as applicable. In
addition, for each Series of Certificates having more than one Class, the
related Prospectus Supplement will specify the method of allocation between
each Class.
The Transferor Percentage will, in all cases, be equal to 100% minus the
aggregate Investor Percentages and, if applicable, the Credit Enhancement
Percentages, for all Series then outstanding.
APPLICATION OF COLLECTIONS
Unless otherwise specified in the related Prospectus Supplement, except as
otherwise provided below, the Servicer will deposit into the Collection
Account for the related Trust, no later than the second business day (or such
other day specified in the related Prospectus Supplement) following the date
of processing, any payment collected by the Servicer on the Receivables. On
the same day as any such deposit is made, the Servicer will make the deposits
and payments to the accounts and parties as indicated below; provided,
however, that for as long as CMB remains the Servicer under the related
Agreement, and (a)(i) the Servicer provides to the Trustee a letter of credit
or other credit support acceptable to each Rating Agency and (ii) the
Transferor shall not have received a notice from the Rating Agency that such
letter of credit would result in the lowering of such Rating Agency's then
existing rating of the related Series (and if a Trust has issued more than one
Series, any Series of certificates then issued and outstanding thereunder), or
(b) the Servicer has and maintains a minimum certificate of deposit rating of
P-1 by Moody's and A-1 by Standard & Poor's unless otherwise specified in the
related Prospectus Supplement and deposit insurance provided by either the
Bank Insurance Fund ("BIF") or the Savings Association Insurance Fund
("SAIF"), then the Servicer may make such deposits and payments on a monthly
or other periodic basis on the Transfer Date in an amount equal to the net
amount of such deposits and payments which would have been made had the
conditions of this proviso not applied.
Unless otherwise specified in the related Prospectus Supplement,
notwithstanding anything in the related Agreement to the contrary, whether the
Servicer is required to make monthly or daily deposits from the Collection
Account into the Finance Charge Account or the Principal Account, with respect
to any Monthly Period, (i) the Servicer will only be required to deposit
Collections from the Collection Account into the Finance Charge Account, the
Principal Account or any series account established by a related Series
Supplement up to
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the required amount to be deposited into any such account or, without
duplication, distributed on or prior to the related Distribution Date to
Certificateholders or to the provider of Enhancement and (ii) if at any time
prior to such Distribution Date the amount of Collections deposited in the
Collection Account exceeds the amount required to be deposited pursuant to
clause (i) above, the Servicer will be permitted to withdraw the excess from
the Collection Account.
Unless otherwise specified in the related Prospectus Supplement, the
Servicer will withdraw the following amounts from the Collection Account for
application as indicated:
(a) an amount equal to the Transferor Percentage of the aggregate amount
of such deposits in respect of Principal Receivables and Finance Charge
Receivables, respectively, will be paid or held for payment to the holder
of the Transferor Certificate, provided that if after giving effect to the
inclusion in the related Trust of all Receivables on or prior to such date
of processing the Transferor Interest would be reduced below the Minimum
Transferor Interest the excess will be deposited in the Principal Account
or other specified account and will be used as described in the related
Prospectus Supplement, including for payment to other Series of
Certificates issued by the related Trust;
(b) an amount equal to the applicable Investor Percentage of the
aggregate amount of such deposits in respect of Finance Charge Receivables
will be deposited into the Finance Charge Account for allocation and
distribution as described in the related Prospectus Supplement;
(c) during the Revolving Period, an amount equal to the applicable
Investor Percentage of the aggregate amount of such deposits in respect of
Principal Receivables will be invested or held for investment in Principal
Receivables, provided that if after giving effect to the inclusion in the
related Trust of all Receivables on or prior to such date of processing the
Transferor Interest would be reduced below the Minimum Transferor Interest
the excess will be deposited in the Principal Account or other specified
account and will be used as described in the related Prospectus Supplement,
including for payment to other Series of Certificates issued by the related
Trust;
(d) during the Controlled Amortization Period or Accumulation Period, as
applicable, an amount equal to the applicable Investor Percentage of such
deposits in respect of Principal Receivables up to the amount, if any, as
specified in the related Prospectus Supplement will be deposited in the
Principal Account or Principal Funding Account, as applicable, for
allocation and distribution to Certificateholders as described in the
related Prospectus Supplement, provided that if collections of Principal
Receivables exceed the principal payments which may be allocated or
distributed to Certificateholders, the amount of such excess will be paid
to the holder of the Transferor Certificate until the Transferor Interest
is reduced to the Minimum Transferor Interest, and thereafter will be
deposited in the Principal Account or other specified account and will be
used as described in the related Prospectus Supplement, including for
payment to other Series of Certificates issued by the related Trust; and
(e) during the Principal Amortization Period, if applicable, and the
Rapid Amortization Period, an amount equal to the applicable Investor
Percentage of such deposits in respect of Principal Receivables will be
deposited into the Principal Account for application and distribution as
provided in the related Prospectus Supplement.
In the case of a Series of Certificates having more than one Class, the
amounts in the Collection Account will be allocated and applied to each Class
in the manner and order of priority described in the related Prospectus
Supplement.
Any amounts collected in respect of Principal Receivables and not paid to
the Transferor because the Transferor Interest is zero as described above
(with respect to each Series, "Unallocated Principal Collections"), together
with any adjustment payments as described below, will be paid to and held in
the Principal Account and paid to the Transferor if and to the extent that the
Transferor Interest is equal to or greater than zero. If an Amortization
Period or Accumulation Period has commenced, Unallocated Principal Collections
will be held for distribution to the Certificateholders on the related
Distribution Date or accumulated for distribution on the
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Scheduled Payment Date, as applicable, and distributed to the
Certificateholders of each Class or held for and distributed to the
Certificateholders of other Series of Certificates issued by the related Trust
in the manner and order of priority specified in the related Prospectus
Supplement.
SHARED EXCESS FINANCE CHARGE COLLECTIONS
Any Series offered hereby may be included in 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 so specified in the related Prospectus Supplement, the
Certificateholders of a Series within a Group or any Class thereof may be
entitled to receive all or a portion of Excess Finance Charge Collections with
respect to another Series within such Group to cover any shortfalls with
respect to amounts payable from collections of Finance Charge Receivables
allocable to such Series or Class. See "--Application of Collections" and "--
Defaulted Receivables; Rebates and Fraudulent Charges; Investor Charge-Offs."
SHARED PRINCIPAL COLLECTIONS
If so specified in the related Prospectus Supplement, to the extent that
collections of Principal Receivables and certain other amounts that are
allocated to the Investor Interest of any Series are not needed to make
payments or deposits with respect to such Series, such collections will
constitute Shared Principal Collections and will be applied to cover principal
payments due to or for the benefit of Certificateholders of other Series. If
so specified in the related Prospectus Supplement, the allocation of Shared
Principal Collections may be among Series within a Group. Any such
reallocation will not result in a reduction in the Investor Interest of the
Series to which such collections were initially allocated.
DEFAULTED RECEIVABLES; REBATES AND FRAUDULENT CHARGES; INVESTOR CHARGE-OFFS
Unless otherwise specified in the related Prospectus Supplement, for each
Series of Certificates, on the fourth business day preceding each Transfer
Date (the "Determination Date"), the Servicer will calculate the aggregate
Investor Default Amount for the preceding Monthly Period, which will be equal
to the aggregate amount of the Investor Percentage of Principal Receivables in
Defaulted Accounts; that is, Accounts which in such Monthly Period were
written off as uncollectible in accordance with the Servicer's policies and
procedures for servicing credit card receivables, comparable to the
Receivables. In the case of a Series of Certificates having more than one
Class, the Investor Default Amount will be allocated among the Classes in the
manner described in the related Prospectus Supplement. If so provided in the
related Prospectus Supplement, an amount equal to the Investor Default amount
for any Monthly Period may be paid from other amounts, including collections
in the Finance Charge Account or from Credit Enhancement, and applied to pay
principal to Certificateholders or the holder of the Transferor Certificate,
as appropriate. In the case of a Series of Certificates having one or more
Classes of Subordinated Certificates, the related Prospectus Supplement may
provide that all or a portion of amounts otherwise allocable to such
Subordinated Certificates may be paid to the Senior Certificateholders to make
up any Investor Default Amount allocable to such Senior Certificateholders.
With respect to each Series of Certificates, the Investor Interest with
respect to such Series will be reduced by the amount of Investor Charge-Offs
for any Monthly Period. Investor Charge-Offs will be reimbursed on any
Distribution Date to the extent amounts on deposit in the Finance Charge
Account and otherwise available therefor exceed such interest, fees and any
aggregate Investor Default Amount payable on such date. Such reimbursement of
Investor Charge-Offs will result in an increase in the Investor Interest with
respect to such Series. In the case of a Series of Certificates having more
than one Class, the related Prospectus Supplement will describe the manner and
priority of allocating Investor Charge-Offs and reimbursements thereof among
the Investor Interests of the several Classes.
If the Servicer adjusts the amount of any Principal Receivable because of
transactions occurring in respect of a rebate or refund to a cardholder, or
because such Principal Receivable was created in respect of merchandise which
was refused or returned by a cardholder, then the amount of the Transferor
Interest in the related Trust
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will be reduced, on a net basis, by the amount of the adjustment. In addition,
the Transferor Interest in such Trust will be reduced, on a net basis, as a
result of transactions in respect of any Principal Receivable which was
discovered as having been created through a fraudulent or counterfeit charge.
In the event that the exclusion of such Receivables from the calculation of
the Transferor Interest at such time would cause the Transferor Interest to be
less than the Minimum Transferor Interest, the Transferor will be required to
pay an amount equal to such deficiency to the Principal Account.
DEFEASANCE
If so specified in the Prospectus Supplement relating to a Series, the
Transferor may terminate its substantive obligations in respect of such Series
or the related Trust by depositing with the Trustee, from amounts
representing, or acquired with, collections of Receivables, money or Permitted
Investments sufficient to make all remaining scheduled interest and principal
payments on such Series or all outstanding Series of Certificates of such
Trust, as the case may be, on the dates scheduled for such payments and to pay
all amounts owing to any Credit Enhancement Provider with respect to such
Series or all outstanding Series, as the case may be, if such action would not
result in a Pay Out Event for any Series. Prior to its first exercise of its
right to substitute money or Permitted Investments for Receivables, the
Transferor will deliver to the Trustee (i) an opinion of counsel to the effect
that such deposit and termination of obligations will not result in the
related Trust being required to register as an "investment company" within the
meaning of the Investment Company Act of 1940, as amended and (ii) a Tax
Opinion.
FINAL PAYMENT OF PRINCIPAL; TERMINATION
With respect to each Series, the Certificates will be subject to optional
repurchase by the Transferor on any Distribution Date after the total Investor
Interest of such Series and the Enhancement Invested Amount, if any, with
respect to such Series, is reduced to an amount less than or equal to 5% of
the initial Investor Interest, if any (or such other amount specified in the
related Prospectus Supplement), if certain conditions set forth in the related
Agreement are met. Unless otherwise specified in the related Prospectus
Supplement, the repurchase price will be equal to the total Investor Interest
of such Series (less the amount, if any, on deposit in any Principal Funding
Account with respect to such Series), plus the Enhancement Invested Amount, if
any, with respect to such Series, plus accrued and unpaid interest on the
Certificates and interest or other amounts payable on the Enhancement Invested
Amount or the Collateral Interest, if any, through the day preceding the
Distribution Date on which the repurchase occurs.
The Certificates of each Series will be retired on the day following the
Distribution Date on which the final payment of principal is scheduled to be
made to the Certificateholders, whether as a result of optional reassignment
to the Transferor or otherwise. Each Prospectus Supplement will specify the
final date on which principal and interest with respect to the related Series
of Certificates will be scheduled to be distributed (the "Series Termination
Date"); provided, however, that the Certificates may be subject to prior
termination as provided above. If the Investor Interest is greater than zero
on the Series Termination Date, the Trustee or Servicer may be required to
sell or cause to be sold certain Receivables in the manner provided in the
related Agreement and Series Supplement and to pay the net proceeds of such
sale and any collections on the Receivables, in an amount at least equal to
the sum of the Investor Interest and the Enhancement Invested Amount, if any,
with respect to such Series plus accrued interest due thereon.
Unless the Servicer and the holder of the Transferor Certificate instruct
the Trustee otherwise, each Trust will terminate on the earlier of (a) the day
after the Distribution Date on which the aggregate Investor Interest and
Enhancement Invested Amount or Collateral Interest, if any, with respect to
each Series outstanding is zero, (b) August 31, 2016, or (c) if the
Receivables are sold, disposed of or liquidated following the occurrence of an
Insolvency Event, immediately following such sale, disposition or liquidation
(such date, the "Trust Termination Date"). Upon the termination of each Trust
and the surrender of the Transferor Certificate, the Trustee shall convey to
the holder of the Transferor Certificate all right, title and interest of the
Trust in and to the Receivables and other funds of the Trust.
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PAY OUT EVENTS
Unless otherwise specified in the related Prospectus Supplement, as
described above, the Revolving Period will continue through the date specified
in the related Prospectus Supplement unless a Pay Out Event occurs prior to
such date. A Pay Out Event occurs with respect to all Series issued by a Trust
upon the occurrence of either of the following events:
(a) certain events of insolvency or receivership relating to the
Transferor;
(b) the Transferor is unable for any reason to transfer Receivables to
such Trust in accordance with the provisions of the related Agreement; or
(c) such Trust becomes an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
In addition, a Pay Out Event may occur with respect to any Series upon the
occurrence of any other event specified in the related Prospectus Supplement.
On the date on which a Pay Out Event is deemed to have occurred, the Rapid
Amortization Period will commence. If, because of the occurrence of a Pay Out
Event, the Rapid Amortization Period begins earlier than the scheduled
commencement of an Amortization Period or prior to a Scheduled Payment Date,
Certificateholders will begin receiving distributions of principal earlier
than they otherwise would have, which may shorten the average life of the
Certificates.
In addition to the consequences of a Pay Out Event discussed above, unless
otherwise specified in the related Prospectus Supplement, if pursuant to
certain provisions of federal law, the Transferor voluntarily enters
liquidation or a receiver is appointed for the Transferor, on the day of such
event the Transferor will immediately cease to transfer Principal Receivables
to the Trust and promptly give notice to the Trustee of such event. Within 15
days, the Trustee will publish a notice of the liquidation or the appointment
stating that the Trustee intends to sell, dispose of, or otherwise liquidate
the Receivables in a commercially reasonable manner. Unless otherwise
instructed within a specified period by Certificateholders representing
undivided interests aggregating more than 50% of the Investor Interest of each
such Series (or if any Series has more than one Class, of each Class, and any
other Person specified in the related Agreement or a Series Supplement) issued
and outstanding, the Trustee will sell, dispose of, or otherwise liquidate the
Receivables in a commercially reasonable manner and on commercially reasonable
terms. The proceeds from the sale, disposition or liquidation of the
Receivables will be treated as collections of the Receivables and applied as
specified above in "--Application of Collections" and in the related
Prospectus Supplement.
If the only Pay Out Event to occur is either the insolvency of the
Transferor or the appointment of a conservator or receiver for the Transferor,
the conservator or receiver may have the power to prevent the early sale,
liquidation or disposition of the Receivables and the commencement of the
Rapid Amortization Period. In addition, a conservator or receiver may have the
power to cause the early sale of the Receivables and the early retirement of
the Certificates. See "Certain Legal Aspects of the Receivables--Certain
Matters Relating to Receivership."
SERVICING COMPENSATION AND PAYMENT OF EXPENSES
Unless otherwise specified in the related Prospectus Supplement, for each
Series of Certificates, the Servicer's compensation for its servicing
activities and reimbursement for its expenses will take the form of the
payment to it of the Servicing Fee payable at the times and in the amounts
specified in the related Prospectus Supplement. The Investor Servicing Fee
will be funded from collections of Finance Charge Receivables allocated to the
Investor Interest and will be paid each month, or on such other specified
periodic basis, from amounts so allocated and on deposit in the Finance Charge
Account (which, if so specified in the related Prospectus Supplement, may
include all or a portion of the Interchange arising from the Accounts) or, in
certain limited circumstances, from amounts available from Enhancement and
other sources, if any. The remainder of the servicing fee for each Trust will
be allocable to the Transferor Interest, the Investor Interests of any other
Series issued by such Trust and the interest represented by the Enhancement
Invested Amount or the Collateral Interest,
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if any, with respect to such Series, as described in the related Prospectus
Supplement. Neither the Trust nor the Certificateholders will have any
obligation to pay the portion of the servicing fee allocable to the Transferor
Interest.
The Servicer will pay from its servicing compensation certain expenses
incurred in connection with servicing the Receivables including, without
limitation, payment of the fees and disbursements of the Trustee and
independent certified public accountants and other fees which are not
expressly stated in the Agreement to be payable by the related Trust or the
Certificateholders other than federal, state and local income and franchise
taxes, if any, of the Trust.
CERTAIN MATTERS REGARDING THE TRANSFEROR AND THE SERVICER
With respect to each Series of Certificates, the Servicer may not resign
from its obligations and duties under the related Agreement, except upon
determination that performance of its duties is no longer permissible under
applicable law. No such resignation will become effective until the Trustee or
a successor to the Servicer has assumed the Servicer's responsibilities and
obligations under the related Agreement. CMB has delegated some of its
servicing duties to FDR and substantially all of its other servicing duties to
the Bank; however, such delegation does not relieve it of its obligation to
perform such duties in accordance with the related Agreement.
Each Agreement will provide that the Servicer will indemnify the related
Trust and Trustee from and against any reasonable loss, liability, expense,
damage or injury suffered or sustained by reason of any acts or omissions or
alleged acts or omissions of the Servicer with respect to the activities of
the Trust or the Trustee; provided, however, that the Servicer shall not
indemnify (a) the Trustee for liabilities imposed by reason of fraud,
negligence, or willful misconduct by the Trustee in the performance of its
duties under the Agreement, (b) the Trust, the Certificateholders or the
Certificate Owners for liabilities arising from actions taken by the Trustee
at the request of Certificateholders, (c) the Trust, the Certificateholders or
the Certificate Owners for any losses, claims, damages or liabilities incurred
by any of them in their capacities as investors, including without limitation,
losses incurred as a result of defaulted Receivables or Receivables which are
written off as uncollectible or (d) the Trust, the Certificateholders or the
Certificate Owners for any liabilities, costs or expenses of the Trust, the
Certificateholders or the Certificate Owners arising under any tax law,
including without limitation, any federal, state or local income or franchise
tax or any other tax imposed on or measured by income (or any interest or
penalties with respect thereto or arising from a failure to comply therewith)
required to be paid by the Trust, the Certificateholders or the Certificate
Owners in connection with the Agreement to any taxing authority.
In addition, each Agreement will provide that, subject to certain
exceptions, the Transferor will indemnify an injured party for any losses,
claims, damages or liabilities (other than those incurred by a
Certificateholder as an investor in the Certificates or those which arise from
any action of a Certificateholder) arising out of or based upon the
arrangement created by the Agreement as though the Agreement created a
partnership under the New York Revised Limited Partnership Act in which the
Transferor is a general partner.
Each Agreement will provide that neither the Transferor nor the Servicer nor
any of their respective directors, officers, employees or agents will be under
any other liability to the related Trust, Trustee, Certificateholders or any
other person for any action taken, or for refraining from taking any action,
in good faith pursuant to the Agreement. Neither the Transferor, the Servicer,
nor any of their respective directors, officers, employees or agents will be
protected against any liability which would otherwise be imposed by reason of
willful misfeasance, bad faith or gross negligence of the Transferor, the
Servicer or any such person in the performance of its duties or by reason of
reckless disregard of obligations and duties thereunder. In addition, each
Agreement will provide that the Servicer is not under any obligation to appear
in, prosecute or defend any legal action which is not incidental to its
servicing responsibilities under the Agreement and which in its opinion may
expose it to any expense or liability.
Each Agreement will provide that, in addition to Exchanges, if applicable,
the Bank may transfer its interest in all or a portion of the Transferor
Certificate, provided that prior to any such transfer (a) the Trustee receives
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written notification from each Rating Agency that such transfer will not
result in a lowering of its then existing rating of the Certificates of each
outstanding Series rated by it and (b) the Trustee receives a Tax Opinion.
Any person into which, in accordance with each Agreement, the Transferor or
the Servicer may be merged or consolidated or any person resulting from any
merger or consolidation to which the Transferor or the Servicer is a party, or
any person succeeding to the business of the Transferor or the Servicer, upon
execution of a supplement to the Agreement and delivery of an opinion of
counsel with respect to the compliance of the transaction with the applicable
provisions of the Agreement, will be the successor to the Transferor or the
Servicer, as the case may be, under the Agreement.
SERVICER DEFAULT
Unless otherwise specified in the related Prospectus Supplement, in the
event of any Servicer Default (as defined below), either the Trustee or
Certificateholders representing undivided interests aggregating more than 50%
of the Investor Interests for all Series of Certificates of the related Trust,
by written notice to the Servicer (and to the Trustee if given by the
Certificateholders), may terminate all of the rights and obligations of the
Servicer as servicer under the Agreement and in and to the Receivables and the
proceeds thereof and the Trustee may appoint a new Servicer (a "Service
Transfer"). The rights and interest of the Transferor under the related
Agreement and in the Transferor Interest will not be affected by such
termination. The related Trustee shall as promptly as possible appoint a
successor Servicer. If no such Servicer has been appointed and has accepted
such appointment by the time the Servicer ceases to act as Servicer, all
authority, power and obligations of the Servicer under the Agreement shall
pass to and be vested in the Trustee. If the Trustee is unable to obtain any
bids from eligible servicers and the Servicer delivers an officer's
certificate to the effect that it cannot in good faith cure the Servicer
Default which gave rise to a transfer of servicing, and if the Trustee is
legally unable to act as successor Servicer, then the Trustee shall give the
Transferor the right of first refusal to purchase the Receivables on terms
equivalent to the best purchase offer as determined by the Trustee.
Unless otherwise specified in the related Prospectus Supplement, "Servicer
Default" under any Agreement refers to any of the following events:
(a) failure by the Servicer to make any payment, transfer or deposit, or
to give instructions to the Trustee to make certain payments, transfers or
deposits, on the date the Servicer is required to do so under the related
Agreement or any Series Supplement (or within the applicable grace period,
which shall not exceed 10 business days);
(b) failure on the part of the Servicer duly to observe or perform in any
respect any other covenants or agreements of the Servicer which has a
material adverse effect on the Certificateholders of any Series issued and
outstanding under such Trust and which continues unremedied for a period of
60 days after written notice and continues to have a material adverse
effect on such Certificateholders; or the delegation by the Servicer of its
duties under the Agreement, except as specifically permitted thereunder;
(c) any representation, warranty or certification made by the Servicer in
the Agreement, or in any certificate delivered pursuant to the Agreement,
proves to have been incorrect when made which has a material adverse effect
on the Certificateholders of any Series issued and outstanding under such
Trust, and which continues to be incorrect in any material respect for a
period of 60 days after written notice and continues to have a material
adverse effect on such Certificateholders;
(d) the occurrence of certain events of bankruptcy, insolvency or
receivership of the Servicer, or
(e) such other event specified in the related Prospectus Supplement.
Unless otherwise stated in the related Prospectus Supplement,
notwithstanding the foregoing, a delay in or failure of performance referred
to in clause (a) above for a period of 10 business days, or referred to under
clause (b) or (c) for a period of 60 business days, shall not constitute a
Servicer Default if such delay or failure could not be prevented by the
exercise of reasonable diligence by the Servicer and such delay or failure was
caused by an act of God or other similar occurrence. Upon the occurrence of
any such event, the Servicer shall not be
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relieved from using its best efforts to perform its obligations in a timely
manner in accordance with the terms of the Agreement, and the Servicer shall
provide the Trustee, any provider of Enhancement and/or any issuer of any
third-party Credit Enhancement (a "Credit Enhancement Provider"), the
Transferor and the holders of Certificates of each Series issued and
outstanding under the related Trust prompt notice of such failure or delay by
it, together with a description of the cause of such failure or delay and its
efforts to perform its obligations.
In the event of a Servicer Default, if a conservator or receiver is
appointed for the Servicer and no Servicer Default other than such
conservatorship or receivership or the insolvency of the Servicer exists, the
conservator or receiver may have the power to prevent either Trustee or the
majority of the Certificateholders from effecting a Service Transfer.
REPORTS TO CERTIFICATEHOLDERS
Unless otherwise specified in the related Prospectus Supplement, for each
Series of Certificates, on each Distribution Date, or as soon thereafter as is
practicable, as specified in the related Prospectus Supplement, the Paying
Agent will forward to each Certificateholder of record a statement prepared by
the Servicer setting forth, among other things: (a) the total amount
distributed, (b) the amount of distribution on such Distribution Date
allocable to principal on the Certificates, (c) the amount of such
distribution allocable to interest on the Certificates, (d) the amount of
collections of Principal Receivables processed during the preceding month or
months since the last Distribution Date and allocated in respect of the
Certificates, (e) the aggregate amount of Principal Receivables, the Investor
Interest and the Investor Interest as a percentage of the aggregate amount of
the Principal Receivables in the Trust as of the end of the last day of the
preceding Monthly Period or Periods since the last Distribution Date, (f) the
aggregate outstanding balance of Accounts which are at least a specified
number of days delinquent by class of delinquency as of the end of the last
day of the preceding Monthly Period or Periods since the last Distribution
Date, (g) the aggregate Investor Default Amount for the preceding Monthly
Period or Periods since the last Distribution Date, (h) the amount of Investor
Charge-Offs for the preceding Monthly Period or Periods since the last
Distribution Date and the amount of reimbursements of previous Investor
Charge-Offs for the preceding Monthly Period or Periods since the last
Distribution Date, (i) the amount of the Investor Servicing Fee for the
preceding Monthly Period or Periods since the last Distribution Date, (j) the
amount available under any Enhancement and Credit Enhancement, if any, as of
the close of business on such Distribution Date, (k) the "pool factor" as of
the end of the related Record Date (consisting of a seven-digit decimal
expressing the ratio of the Investor Interest to the initial Investor
Interest), (l) the aggregate amount of collections on Finance Charge
Receivables and annual membership fees processed during the preceding Monthly
Period or Periods since the last Distribution Date, (m) the Portfolio Yield
for the preceding Monthly Period or Periods since the last Distribution Date
and (n) certain information relating to the floating or variable Certificate
Rates, if applicable, for the Monthly Period or Periods ending on such
Distribution Date. In the case of a Series of Certificates having more than
one Class, the statements forwarded to Certificateholders will provide
information as to each Class of Certificates, as appropriate.
On or before January 31 of each calendar year or such other date as
specified in the related Prospectus Supplement, the Paying Agent will furnish
to each person who at any time during the preceding calendar year was a
Certificateholder of record, a statement prepared by the Servicer containing
the information required to be contained in the regular monthly report to
Certificateholders, as set forth in clauses (a), (b) and (c) above aggregated
for such calendar year or the applicable portion thereof during which such
person was a Certificateholder, together with such other customary information
(consistent with the treatment of the Certificates as debt) as the Trustee or
the Servicer deems necessary or desirable to enable the Certificateholders to
prepare their United States tax returns.
EVIDENCE AS TO COMPLIANCE
Each Agreement will provide that on or before March 31 of each calendar
year, or such other date as specified in the related Prospectus Supplement,
the Servicer will cause a firm of independent certified public accountants to
furnish (i) a report to the effect that such accounting firm has examined
management's assertion
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that, as of the date of such report, the system of internal control over
servicing of securitized credit card receivables met the criteria for
effective internal control described in the report entitled "Internal
Control--Integrated Framework" issued by the Committee of Sponsoring
Organizations of the Treadway Commission ("COSO") and that in their opinion,
management's assertion is fairly stated, in all material respects and (ii) a
report, prepared using generally accepted attestation standards to the effect
that such accountants have randomly selected at least two of the monthly
certificates forwarded by the Servicer during the period covered by such
report (which shall be the twelve-month period ending on December 31 of the
preceding calendar year) and have compared the amounts set forth therein with
the Servicer's computer reports which were the source of such amounts and
found them to be in agreement or shall disclose any exceptions noted and that
such firm has recalculated the mathematical accuracy of amounts derived in the
monthly certificates.
Each Agreement will provide for delivery to the Trustee on or before August
31 of each calendar year, or such other date as specified in the related
Prospectus Supplement, of an annual statement signed by an officer of the
Servicer to the effect that the Servicer has fully performed its obligations
under the Agreement throughout the preceding year, or, if there has been a
default in the performance of any such obligation, specifying the nature and
status of the default.
AMENDMENTS
Unless otherwise specified in the related Prospectus Supplement, each
Agreement and any Series Supplement may be amended by the Transferor, the
Servicer and the related Trustee, without the consent of Certificateholders of
any Series then outstanding, to cure any ambiguity, to revise certain exhibits
and schedules, to correct or supplement any provision therein which may be
inconsistent with any other provision therein, or to add any other provisions
with respect to matters or questions arising thereunder which are not
inconsistent with the provisions of such Agreement or Series Supplement. No
such amendment, however, may adversely affect in any material respect the
interests of the Certificateholders of any Series then outstanding.
Each Agreement and any related Series Supplement may be amended by the
Transferor, the Servicer and the related Trustee without the consent of any of
the Certificateholders of any Series then outstanding for the purpose of
adding, changing or eliminating any provision thereof or any right of the
holders of Certificates thereunder, provided that (i) the Servicer shall have
furnished the Trustee with an officer's certificate to the effect that the
amendment will not materially and adversely affect the interests of any
Certificateholder, (ii) such amendment will not cause the Trust to be
characterized as a corporation for federal income tax purposes or otherwise
have a material adverse effect on the federal income taxation of any Series
and (iii) the Servicer shall have given each Rating Agency ten business days'
prior written notice of such amendment and shall have received written
confirmation from each Rating Agency that the rating of the Certificates of
any Series will not be reduced or withdrawn as a result of such amendment. No
such amendment, however, may effect any of the amendments that require
unanimous Certificateholder consent as set forth in the next paragraph, or (i)
reduce in any manner the amount of, or delay the timing of, distributions
which are required to be made on Certificates of any Series, (ii) change the
definition of or the manner of calculating the interest of any
Certificateholder of any Series, (iii) alter the requirements for changing the
percentage by which the Minimum Transferor Interest for Certificates of any
Series is determined, (iv) change the manner in which the Transferor Interest
of any Series is determined or (v) reduce the percentage required in the
following paragraphs to consent to such amendment.
Each Agreement may also be amended by the Transferor, the Servicer and the
related Trustee with the consent of the holders of the Certificates evidencing
undivided interests aggregating more than 50% of the Investor Interest of each
Series adversely affected for the purpose of adding any provisions to,
changing in any manner or eliminating any of the provisions of the Agreement
or of modifying in any manner the rights of holders of Certificates. No such
amendment, however, may (a) reduce in any manner the amount of, or delay the
timing of, distributions required to be made on any Certificate of such Series
without the consent of all the related Certificateholders, (b) change the
definition of or the manner of calculating the Investor Interest, the Investor
Percentage or the Investor Default Amount of such Series without the consent
of each holder of Certificates adversely affected thereby or (c) reduce the
aforesaid percentage of undivided interests the holders of which are
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required to consent to any such amendment, without the consent of each holder
of Certificates of all Series affected thereby.
LIST OF CERTIFICATEHOLDERS
With respect to each Series of Certificates, upon written request of
Certificateholders of record representing undivided interests in the Trust
aggregating not less than 10% (or such other percentage specified in the
related Prospectus Supplement) of the Investor Interest, the Trustee after
having been adequately indemnified by such Certificateholders for its costs
and expenses, and having given the Servicer notice that such request has been
made, will afford such Certificateholders access during business hours to the
current list of Certificateholders of the Trust for purposes of communicating
with other Certificateholders with respect to their rights under the
Agreement. See "--Book-Entry Registration" and "--Definitive Certificates"
above.
THE TRUSTEE
The Prospectus Supplement for each Series will specify the Trustee under the
related Agreement. The Transferor, the Servicer and their respective
affiliates may from time to time enter into normal banking and trustee
relationships with the Trustee and its affiliates. The Trustee, the
Transferor, the Servicer and any of their respective affiliates may hold
Certificates in their own names. In addition, for purposes of meeting the
legal requirements of certain local jurisdictions, the Trustee shall have the
power to appoint a co-trustee or separate trustees of all or any part of the
Trust. In the event of such appointment, all rights, powers, duties and
obligations conferred or imposed upon the Trustee by the Agreement shall be
conferred or imposed upon the Trustee and such separate trustee or co-trustee
jointly, or, in any jurisdiction in which the Trustee shall be incompetent or
unqualified to perform certain acts, singly upon such separate trustee or co-
trustee who shall exercise and perform such rights, powers, duties and
obligations solely at the direction of the Trustee.
The Trustee may resign at any time, in which event the Transferor will be
obligated to appoint a successor Trustee. The Transferor may also remove the
Trustee if the Trustee ceases to be eligible to continue as such under the
Agreement or if the Trustee becomes insolvent. In such circumstances, the
Transferor will be obligated to appoint a successor Trustee. Any resignation
or removal of the Trustee and appointment of a successor Trustee does not
become effective until acceptance of the appointment by the successor Trustee.
CREDIT ENHANCEMENT
GENERAL
For any Series, Credit Enhancement may be provided with respect to one or
more Classes thereof. Credit Enhancement may be in the form of the
subordination of one or more Classes of the Certificates of such Series, a
letter of credit, the establishment of a cash collateral guaranty or account,
a collateral interest, a surety bond, an insurance policy, a spread account, a
reserve account, the use of cross support features or another method of Credit
Enhancement described in the related Prospectus Supplement, or any combination
of the foregoing. If so specified in the related Prospectus Supplement, any
form of Credit Enhancement may be structured so as to be drawn upon by more
than one Class to the extent described therein.
Unless otherwise specified in the related Prospectus Supplement for a
Series, the Credit Enhancement will not provide protection against all risks
of loss and will not guarantee repayment of the entire principal balance of
the Certificates and interest thereon. If losses occur which exceed the amount
covered by the Credit Enhancement or which are not covered by the Credit
Enhancement, Certificateholders will bear their allocable share of
deficiencies.
If Credit Enhancement is provided with respect to a Series, the related
Prospectus Supplement will include a description of (a) the amount payable
under such Credit Enhancement, (b) any conditions to payment thereunder not
otherwise described herein, (c) the conditions (if any) under which the amount
payable under such Credit Enhancement may be reduced and under which such
Credit Enhancement may be terminated or replaced and (d) any material
provision of any agreement relating to such Credit Enhancement. Additionally,
the related
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Prospectus Supplement may set forth information with respect to any Credit
Enhancement Provider, including (i) a brief description of its principal
business activities, (ii) its principal place of business, place of
incorporation and the jurisdiction under which it is chartered or licensed to
do business, (iii) if applicable, the identity of regulatory agencies which
exercise primary jurisdiction over the conduct of its business and (iv) its
total assets, and its stockholders' or policy holders' surplus, if applicable,
and other appropriate financial information as of the date specified in the
Prospectus Supplement. If so specified in the related Prospectus Supplement,
Credit Enhancement with respect to a Series may be available to pay principal
of the Certificates of such Series following the occurrence of certain Pay Out
Events with respect to such Series. In such event, the Credit Enhancement
Provider may have an interest in certain cash flows in respect of the
Receivables to the extent described in such Prospectus Supplement (the
"Enhancement Invested Amount").
SUBORDINATION
If so specified in the related Prospectus Supplement, one or more of any
Series will be subordinated as described in the related Prospectus Supplement
to the extent necessary to fund payments with respect to the Senior
Certificates. The rights of the holders of any such Subordinated Certificates
to receive distributions of principal and/or interest on any Distribution Date
for such Series will be subordinated in right and priority to the rights of
the holders of Senior Certificates, but only to the extent set forth in the
related Prospectus Supplement. If so specified in the related Prospectus
Supplement, subordination may apply only in the event of certain types of
losses not covered by another Credit Enhancement. The related Prospectus
Supplement 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 be applicable, the manner,
if any, in which the amount of subordination will decrease over time, and the
conditions under which amounts available from payments that would otherwise be
made to holders of such Subordinated Certificates will be distributed to
holders of Senior Certificates. If collections of Receivables otherwise
distributable to holders of a Subordinated Class of a Series will be used as
support for a Class of another Series, the related Prospectus Supplement will
specify the manner and conditions for applying such a cross-support feature.
LETTER OF CREDIT
If so specified in the related Prospectus Supplement, support for a Series
or one or more Classes thereof will be provided by one or more letters of
credit. A letter of credit may provide limited protection against certain
losses in addition to or in lieu of other Credit Enhancement. The issuer of
the letter of credit (the "L/C Bank") will be obligated to honor demands with
respect to such letter of credit, to the extent of the amount available
thereunder, to provide funds under the circumstances and subject to such
conditions as are specified in the related Prospectus Supplement.
CASH COLLATERAL GUARANTY OR ACCOUNT
If so specified in the related Prospectus Supplement, support for a Series
or one or more Classes thereof will be provided by a guaranty (the "Cash
Collateral Guaranty") secured by the deposit of cash or certain permitted
investments in an account (the "Cash Collateral Account") reserved for the
beneficiaries of the Cash Collateral Guaranty or by a Cash Collateral Account
alone. The amount available pursuant to the Cash Collateral Guaranty or the
Cash Collateral Account will be the lesser of amounts on deposit in the Cash
Collateral Account and an amount specified in the related Prospectus
Supplement. The related Prospectus Supplement will set forth the circumstances
under which payments are made to beneficiaries of the Cash Collateral Guaranty
from the Cash Collateral Account or from the Cash Collateral Account directly.
COLLATERAL INTEREST
If so specified in the related Prospectus Supplement, support for a Series
or one or more Classes thereof will be provided initially by an undivided
interest in the Trust (the "Collateral Interest") in an amount initially equal
to a percentage of the Certificates of such Series as specified in the
Prospectus Supplement. Such Series may also have the benefit of a Cash
Collateral Guaranty or Cash Collateral Account with an initial amount on
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deposit therein, if any, as specified in the Prospectus Supplement which will
be increased (i) to the extent the Transferor elects, subject to certain
conditions specified in the related Prospectus Supplement, to apply
collections of Principal Receivables allocable to the Collateral Interest to
decrease the Collateral Interest, (ii) to the extent collections of Principal
Receivables allocable to the Collateral Interest are required to be deposited
into the Cash Collateral Account as specified in the related Prospectus
Supplement and (iii) to the extent excess collections of Finance Charge
Receivables are required to be deposited into the Cash Collateral Account as
specified in the related Prospectus Supplement. The total amount of the Credit
Enhancement available pursuant to the Collateral Interest and, if applicable,
the Cash Collateral Guaranty or Cash Collateral Account will be the lesser of
the sum of the Collateral Interest and the amount on deposit in the Cash
Collateral Account and an amount specified in the related Prospectus
Supplement. The related Prospectus Supplement will set forth the circumstances
under which payments which otherwise would be made to holders of the
Collateral Interest will be distributed to holders of Certificates and, if
applicable, the circumstances under which payment will be made under the Cash
Collateral Guaranty or under the Cash Collateral Account.
SURETY BOND OR INSURANCE POLICY
If so specified in the related Prospectus Supplement, insurance with respect
to a Series or one or more Classes thereof will be provided by one or more
insurance companies. Such insurance will guarantee, with respect to one or
more Classes of the related Series, distributions of interest or principal in
the manner and amount specified in the related Prospectus Supplement.
If so specified in the related Prospectus Supplement, a surety bond will be
purchased for the benefit of the holders of any Series or Class or such Series
to assure distributions of interest or principal with respect to such Series
or Class of Certificates in the manner and amount specified in the related
Prospectus Supplement.
SPREAD ACCOUNT
If so specified in the related Prospectus Supplement, support for a Series
or one or more Classes thereof will be provided by the periodic deposit of
certain available excess cash flow from the Trust assets into an account (the
"Spread Account") intended to assist with subsequent distribution of interest
and principal on the Certificates of such Class or Series in the manner
specified in the related Prospectus Supplement.
RESERVE ACCOUNT
If so specified in the related Prospective Supplement, support for a Series
or one or more Classes thereof will be provided by the establishment of a
reserve account (the "Reserve Account"). The Reserve Account may be funded, to
the extent provided in the related Prospectus Supplement, by an initial cash
deposit, the retention of certain periodic distributions of principal or
interest or both otherwise payable to one or more Classes or Certificates,
including the Subordinated Certificates, or the provision of a letter of
credit, guarantee, insurance policy or other form of credit or any combination
thereof. The Reserve Account will be established to assist with the subsequent
distribution of principal or interest on the Certificates of such Series or
Class thereof in the manner provided in the related Prospectus Supplement.
CERTAIN LEGAL ASPECTS OF THE RECEIVABLES
TRANSFER OF RECEIVABLES
The Transferor will represent and warrant in each Agreement that the
transfer of Receivables by it to the related Trust is either a valid transfer
and assignment to such Trust of all right, title and interest of the
Transferor in and to the related Receivables, except for the interest of the
Transferor as holder of the Transferor Certificate, or the grant to the Trust
of a security interest in such Receivables. The Transferor will also represent
and warrant in each Agreement that, in the event the transfer of Receivables
by the Transferor to the related Trust is deemed to create a security interest
under the Uniform Commercial Code as in effect in The State of Delaware (the
"UCC") there will exist a valid, subsisting and enforceable first priority
perfected security interest in such Receivables created thereafter in favor of
such Trust on and after their creation, except for certain tax and other
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governmental liens, subject to the limitations described below. For a
discussion of the Trust's rights arising from a breach of these warranties,
see "Description of Certificates--Representations and Warranties."
The Transferor will represent as to Receivables to be conveyed, that the
Receivables are "accounts" or "general intangibles" for purposes of the UCC.
Both the transfer and assignment of accounts and chattel paper 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 an appropriate financing statement is required
to perfect the security interest of the related Trust. If a transfer of
general intangibles is deemed to create a security interest, the UCC applies
and filing an appropriate financing statement or statements is also required
in order to perfect the Trust's security interest. Financing statements
covering the Receivables have been and will be filed with the appropriate
governmental authority to protect the interests of the related Trust in the
Receivables. If a transfer of general intangibles is deemed to be a sale, then
the UCC is not applicable and no further action under the UCC is required to
protect the Trust's interest from third parties.
There are certain limited circumstances under the UCC in which a prior or
subsequent transferee of Receivables coming into existence after a Closing
Date could have an interest in such Receivables with priority over such
Trust's interest. Under each Agreement, however, the Transferor will represent
and warrant that it transferred the Receivables to the Trust free and clear of
the lien of any third party. In addition, the Transferor has covenanted and
will covenant that it will not sell, pledge, assign, transfer or grant any
lien on any Receivable (or any interest therein) other than to the Trust. A
tax or government lien or other nonconsensual lien on property of the
Transferor arising prior to the time a Receivable comes into existence may
also have priority over the interest of the Trust in such Receivable. In
addition, if the FDIC were appointed as receiver of the Transferor, certain
administrative expenses of the receiver may also have priority over the
interest of the Trust in such Receivable. In addition, while CMB is the
Servicer, collections will be commingled with CMB's general funds and used for
CMB's benefit prior to each Distribution Date. Accordingly, in the event of
the insolvency of CMB, the Trust may not have a perfected security interest in
such collections. If the short-term deposit rating of CMB is reduced below A-1
or P-1 by the applicable Rating Agency, CMB will be obligated to cease
commingling collections and commence depositing collections into the
Collection Account within two business days after the date of processing.
CERTAIN MATTERS RELATING TO RECEIVERSHIP
The Bank is chartered as a national banking corporation and is subject to
regulation and supervision by the Comptroller. If the Bank becomes insolvent
or is in an unsound condition or if certain other circumstances occur, the
Comptroller is authorized to appoint the FDIC as receiver.
FIRREA sets forth certain powers that the FDIC may exercise as receiver for
the Bank. To the extent that (i) the Transferor granted a security interest in
the Receivables to the Trust, (ii) the interest was validly perfected before
the Transferor's insolvency, (iii) the interest was not taken or granted in
contemplation of the Transferor's insolvency or with the intent to hinder,
delay or defraud the Transferor or its creditors, (iv) the Pooling and
Servicing Agreement is continuously a record of the Bank, and (v) the Pooling
and Servicing Agreement represent a bona fide and arm's length transaction
undertaken for adequate consideration in the ordinary course of business and
that the Trustee is the secured party and is not an insider or affiliate of
the Transferor, such valid perfected security interest of the Trustee would be
enforceable (to the extent of the Trust's "actual direct compensatory
damages") notwithstanding the insolvency of, or the appointment of a receiver
or conservator for, the Transferor and payments to the Trust with respect to
the Receivables (up to the amount of such damages) should not be subject to an
automatic stay of payment or to recovery by the FDIC as conservator or
receiver of the Transferor. If, however, the FDIC were to assert that the
security interest was unperfected or unenforceable or were to require the
Trustee to establish its right to those payments by submitting to and
completing the administrative claims procedure established under FIRREA, or
the conservator or receiver were to request a stay of proceedings with respect
to the Transferor as provided under FIRREA, delays in payments on the
Certificates and possible reductions in the amount of those payments could
occur. The FDIA does not define the term "actual direct compensatory damages."
On April 10, 1990, the RTC, formerly a sister agency of the FDIC, adopted a
statement of policy (the "RTC Policy Statement") with respect to the payment
of interest on collateralized
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borrowings. The RTC Policy Statement states that interest on such borrowings
will be payable at the contract rate up to the date of the redemption or
payment by the conservator, receiver, or the trustee of an amount equal to the
principal owed plus the contract rate of interest up to the date of such
payment or redemption, plus any expenses of liquidation if provided for in the
contract, to the extent secured by the collateral. In a 1993 case involving
zero-coupon bonds, however, a federal district court held that the RTC was
instead obligated to pay bondholders the fair market value of repudiated bonds
as of the date of repudiation. The FDIC itself has not adopted a policy
statement on payment of interest on collateralized borrowings.
Upon the appointment of a conservator or receiver or upon a voluntary
liquidation with respect to the Transferor, the Transferor will promptly give
notice thereof to each Trustee and a Pay Out Event will occur with respect to
all Series then outstanding under the related Trust. Pursuant to each
Agreement, newly created Principal Receivables will not be transferred to the
related Trust on and after any such appointment or voluntary liquidation, and
the Trustee will proceed to sell, dispose of or otherwise liquidate the
Receivables in a commercially reasonable manner and on commercially reasonable
terms, unless otherwise instructed within a specified period by holders of
Certificates representing undivided interests aggregating more than 50% of the
Investor Interest of each Series (or if any Series has more than one Class, of
each Class, and any other Person specified in the related Agreement or a
Series Supplement), or unless otherwise required by the FDIC as receiver or
conservator of the Bank. Under the Agreement, the proceeds from the sale of
the Receivables would be treated as collections of the Receivables and the
Investor Percentage of such proceeds would be distributed to the
Certificateholders. This procedure could be delayed, as described above. If
the only Pay Out Event to occur is either the insolvency of the Transferor or
the appointment of a conservator or receiver for the Transferor, the
conservator or receiver may have the power to prevent the early sale,
liquidation or disposition of the Receivables and the commencement of the
Rapid Amortization Period. In addition, a conservator or receiver may have the
power to cause the early sale of the Receivables and the early retirement of
the Certificates or to prohibit the continued transfer of Principal
Receivables to the Trust. However, if no Servicer Default other than the
conservatorship or receivership of the Servicer exists, the conservator or
receiver for the Servicer may have the power to prevent either the Trustee or
the Certificateholders from appointing a successor Servicer under the related
Agreement. See "Description of the Certificates--Pay Out Events."
CONSUMER PROTECTION LAWS
The relationships of the cardholder and credit card issuer and the lender
are extensively regulated by federal and state consumer protection laws. With
respect to credit cards issued by CMB or Chase USA, the most significant laws
include the federal Truth-in-Lending, Equal Credit Opportunity, Fair Credit
Reporting, Fair Debt Collection Practice and Electronic Funds Transfer Acts.
These statutes impose disclosure requirements when a credit card account is
advertised, when it is opened, at the end of monthly billing cycles, and at
year end. In addition, these statutes limit customer liability for
unauthorized use, prohibit certain discriminatory practices in extending
credit, and impose certain limitations on the type of account-related charges
that may be assessed. Cardholders are entitled under these laws to have
payments and credits applied to the credit card accounts promptly, to receive
prescribed notices and to require billing errors to be resolved promptly. A
Trust may be liable for certain violations of consumer protection laws that
apply to the related Receivables, either as assignee from the Transferor with
respect to obligations arising before transfer of the Receivables to such
Trust or as a party directly responsible for obligations arising after the
transfer. In addition, a cardholder may be entitled to assert such violations
by way of set-off against his obligation to pay the amount of Receivables
owing. The Transferor will warrant in each Agreement that all related
Receivables have been and will be created in compliance with the requirements
of such laws. The Servicer will also agree in each Agreement to indemnify the
Trust, among other things, for any liability arising from such violations
caused by the Servicer. For a discussion of the Trust's rights arising from
the breach of these warranties, see "Description of the Certificates--
Representations and Warranties."
Application of federal and state bankruptcy and debtor relief laws would
affect the interests of the Certificateholders if such laws result in any
related Receivables being written off as uncollectible when the amount
available under any Credit Enhancement is equal to zero. See "Description of
the Certificates--Defaulted Receivables; Rebates and Fraudulent Charges;
Investor Charge-Offs."
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TAX MATTERS
GENERAL
The following is a general discussion of the material U.S. federal income
tax consequences relating to the purchase, ownership and disposition of a
Certificate. This discussion is based on present provisions of the Internal
Revenue Code of 1986 as amended (the "Code"), the regulations promulgated
thereunder, and judicial or ruling authorities, all of which are subject to
change, which change may be retroactive. The discussion does not address all
of the tax consequences relevant to a particular Certificate Owner in light of
that Certificate Owner's circumstances, and some Certificate Owners may be
subject to special tax rules and limitations not discussed below. Each
prospective Certificate Owner is urged to consult its own tax adviser in
determining the federal, state, local and foreign income and any other tax
consequences of the purchase, ownership and disposition of a Certificate. No
ruling on any of the issues discussed below will be sought from the Internal
Revenue Service (the "IRS").
For purposes of this discussion, "U.S. Person" means (i) a citizen or
resident of the United States, (ii) a corporation or partnership created or
organized in the United States or under the laws of the United States or of
any state, (iii) an estate the income of which is subject to United States
federal income taxation regardless of its source or (iv) a trust the income of
which is subject to United States federal income taxation regardless of its
source; provided, however, that for tax years beginning after December 31,
1996 (and, if a trustee so elects, for tax years ending after August 20,
1996), a "U.S. Person" shall include any trust if a court within the United
States is able to exercise primary supervision over the administration of such
trust and one or more United States fiduciaries have the authority to control
all substantial decisions of such trust. The term "U.S. Certificate Owner"
includes any U.S. Person and any other person to the extent that the income
attributable to a Certificate is effectively connected with that person's
conduct of a U.S. trade or business. For purposes of this discussion, the term
"non-U.S. Certificate Owner" means any person other than a U.S. Certificate
Owner.
TREATMENT OF THE CERTIFICATES AS DEBT
The Transferor and the Certificate Owners will express in each 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 an Agreement, and each investor, by the acceptance of a
beneficial interest in a Certificate, will agree to treat the Certificates as
debt for U.S. federal, state and local income and franchise tax purposes.
However, each Agreement generally refers to the transfer of Receivables as a
"sale," and because different criteria are used in determining the nontax
accounting treatment of the transaction, the Transferor will treat each
Agreement, for certain nontax accounting purposes, as causing a transfer of an
ownership interest in the Receivables and not as creating a debt obligation.
A basic premise of U.S. federal income tax law is that the economic
substance of a transaction generally determines the tax consequences. The form
of a transaction, while a relevant factor, is not conclusive evidence of its
economic substance. In appropriate circumstances, the courts have allowed
taxpayers, as well as the IRS, to treat a transaction in accordance with its
economic substance, as determined under U.S. federal income tax law, even
though the participants in the transaction have characterized it differently
for nontax 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 seller has relinquished (and the purchaser has
obtained) substantial incidents of ownership in the property. Among those
factors, the primary factors 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. Based upon its analysis of such
factors, Simpson Thacher & Bartlett, a partnership which includes professional
corporations ("Tax Counsel"), is of the opinion that, although no transaction
closely comparable to that contemplated herein has been the subject of any
Treasury regulation, revenue ruling or judicial decision, the Certificates
will properly be characterized for U.S. federal income tax purposes as
indebtedness secured by the Receivables. In the further opinion of Tax
Counsel, each Trust will not be an association or publicly traded partnership
taxable as a corporation for such purposes. Except where indicated to the
contrary, the following discussion assumes that the Certificates are debt for
federal income tax purposes.
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TAXATION OF INTEREST INCOME OF U.S. CERTIFICATE OWNERS
General. If the Certificates are considered to have been issued with
"original issue discount" ("OID") within the meaning of Section 1273(a) of the
Code, a U.S. Certificate Owner will be subject to special tax accounting rules
which will require them to include such OID in income on an economic accrual
basis (using the constant-yield-to-maturity method described in Code Section
1272(a)) regardless of the U.S. Certificate Owner's regular method (i.e., cash
or accrual) of tax accounting. The stated interest on the Certificates will be
considered OID (and, thus, a U.S. Certificate Owner will be required to
include such interest in income on an economic accrual basis) unless such
interest is "unconditionally payable."
Under the applicable Treasury regulations, the stated interest on the
Certificates will be considered to be "unconditionally payable" only if the
terms and conditions of the Certificates make the likelihood of late payment
or nonpayment of interest on the Certificates a "remote contingency." Since
the Trust and the Trustee have no discretion to withhold, delay or otherwise
defer scheduled monthly payments of interest on the Certificates (provided the
Trust has sufficient cash on hand to allow the Trustee to make such interest
payments) the Transferor intends to take the position that late payment or
non-payment of stated interest on the Certificates is a remote contingency.
Accordingly, a U.S. Certificate Owner should include stated interest on a
Certificate in gross income in accordance with such U.S. Certificate Owner's
method of tax accounting.
Original Issue Discount. If stated interest on the Certificates is not
considered "unconditionally payable" or the Certificates are issued with OID,
the provisions of sections 1271 through 1273 and 1275 of 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 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 for any partial principal
payments).
Market Discount. A U.S. Certificate Owner who purchases 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 a Certificate at a
premium may elect to amortize and deduct 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 sale or exchange of a Certificate, a U.S. Certificate Owner generally
will recognize gain or loss equal to the difference between the amount
realized on the sale or exchange and the U.S. Certificate Owner's adjusted
basis in the Certificate. The adjusted basis in the Certificate will equal its
cost, increased by any OID or market discount includible in income with
respect to the Certificate prior to its sale and reduced by any principal
payments previously received with respect to the Certificate and any amortized
premium. Subject to the market discount rules, gain or loss will be capital
gain or loss if the Certificate was held as a capital asset. Capital losses
generally may be used only to offset capital gains.
POSSIBLE ALTERNATIVE CHARACTERIZATIONS
Although as described above, it is the opinion of Tax Counsel that the
Certificates will properly be characterized as debt for federal income tax
purposes, such opinion is not binding on the IRS and thus no
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assurance can be given that such a characterization will prevail. If the IRS
were to contend successfully that some or all of the Certificates or any
Collateral Interest were not debt obligations for federal income tax purposes,
all or a portion of the related Trust could be classified as a partnership or
an association taxable as a corporation for such purposes. Because in the
opinion of Tax Counsel 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, no attempt will
be made to comply with any IRS reporting or other requirements that would
apply if all or a portion of a Trust were treated as a partnership or a
corporation.
If a Trust were treated in whole or in part as a partnership in which some
or all holders of publicly offered Certificates were partners, that
partnership could be classified as a publicly traded partnership taxable as a
corporation. If such a partnership nevertheless were not treated as a publicly
traded partnership, that partnership would not be subject to federal income
tax. Rather, each item of income, gain, loss and deduction of the partnership
generated through the ownership of the related Receivables would be taken into
account directly in computing taxable income of the Transferor (or the holder
of the Transferor Certificate) and any Certificate Owners treated as partners
in accordance with their respective partnership interests therein. The amount
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. Moreover, unless the partnership were treated as
engaged in a trade or business, an individual's share of expenses of the
partnership would be miscellaneous itemized deductions that, in the aggregate,
are allowed as deductions only to the extent they exceed two percent of the
individual's adjusted gross income, and would be subject to reduction under
section 68 of the Code if the individual's adjusted gross income exceeded
certain limits. As a result, the individual may be taxed on a greater amount
of income than the stated rate on the Certificates. In addition, if the
partnership is a "publicly traded partnership" (as defined in section
469(k)(2) of the Code), even if it qualifies for exemption from taxation as a
corporation, all or a portion of any taxable income allocated to a Certificate
Owner that is a pension, profit sharing or employee benefit plan or other tax
exempt entity (including an individual retirement account) may, under certain
circumstances, constitute "unrelated business taxable income" which generally
would be taxable to the holder under the Code.
If the arrangement created by an Agreement were treated in whole or in part
as a publicly traded partnership or an association taxable as a corporation,
that entity would be subject to federal income tax at corporate tax rates on
its taxable income generated by ownership of the related Receivables. That tax
could 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, those distributions by
such corporation would be treated as dividends for tax purposes to Certificate
Owners not treated as holding debt to the extent of the current and
accumulated earnings and profits of the deemed corporation.
NON-U.S. CERTIFICATE OWNERS
Under present U.S. federal income and estate tax law, and subject to the
discussion below concerning backup withholding:
(a) no withholding of U.S. federal income tax will be required with
respect to the payment by the Transferor or any Paying Agent of principal
or interest on a Certificate owned by a non-U.S. Certificate Owner,
provided (i) that the beneficial owner does not actually or constructively
own 10% or more of the total combined voting power of all classes of stock
of the Transferor entitled to vote within the meaning of section 871(h)(3)
of the Code and the regulations thereunder, (ii) the beneficial owner is
not a controlled foreign corporation that is related to the Transferor
through stock ownership, (iii) the beneficial owner is not a bank whose
receipt of interest on a Certificate is described in section 881(c)(3)(A)
of the Code and (iv) the beneficial owner satisfies the statement
requirement (described generally below) set forth in section 871(h) and
section 881(c) of the Code and the regulations thereunder;
(b) no withholding of U.S. federal income tax will be required with
respect to any gain or income realized by a non-U.S. Certificate Owner upon
the sale, exchange or retirement of a Certificate; and
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(c) a Certificate beneficially owned by an individual who at the time of
death is a non-U.S. Certificate Owner will not be subject to U.S. federal
estate tax as a result of such individual's death, provided that such
individual does not actually or constructively own 10% or more of the total
combined voting power of all classes of stock of the Transferor entitled to
vote within the meaning of section 871(h)(3) of the Code and provided that
the interest payments with respect to such Certificate would not have been,
if received at the time of such individual's death, effectively connected
with the conduct of a United States trade or business by such individual.
To satisfy the requirement referred to in (a)(iv) above, the beneficial
owner of such Certificate, or a financial institution holding the Certificate
on behalf of such owner, must provide, in accordance with specified
procedures, a paying agent of the Transferor with a statement to the effect
that the beneficial owner is not a U.S. person, citizen or resident. Pursuant
to current temporary Treasury regulations, these requirements will be met if
(1) the beneficial owner provides his name and address, and certifies, under
penalties of perjury, that he is not a U.S. person, citizen or resident (which
certification may be made on an Internal Revenue Service Form W-8 (or
successor form) or (2) a financial institution holding the Certificate on
behalf of the beneficial owner certifies, under penalties of perjury, that
such statement has been received by it and furnishes the Transferor or any
Paying Agent with a copy thereof.
Payments to non-U.S. Certificate Owners not meeting the requirements of
paragraph (a) above and thus subject to withholding of U.S. federal income tax
may nevertheless be exempt from such withholding if the beneficial owner of
the Certificate provides the Transferor or any Paying Agent with a properly
executed (1) Internal Revenue Service Form 1001 (or successor form) claiming
an exemption from such withholding tax under the benefit of a tax treaty or
(2) Internal Revenue Service Form 4224 (or successor form) stating that
interest paid on the Certificate is not subject to such withholding tax
because it is effectively connected with the owner's conduct of a trade or
business in the United States.
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, in
the case of a non-U.S. Certificate Owner that is a corporation, 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 in the case of a non-U.S. Certificate Owner that is an
individual. If some or all of the Certificates were treated as stock in a
corporation or as equity interests in a "publicly traded partnership," any
related dividend distributions to a non-U.S. Certificate Owner generally would
be subject to withholding tax at the rate of 30 percent, unless that rate were
reduced by an applicable tax treaty.
INFORMATION REPORTING AND BACKUP WITHHOLDING
Backup withholding of U.S. federal income tax at a rate of 31 percent may
apply to payments made in respect of a Certificate to a registered owner who
is not an "exempt recipient" and who fails to provide certain identifying
information (such as the registered owner's taxpayer identification number) in
the manner required. Generally, individuals are not exempt recipients whereas
corporations and certain other entities are exempt recipients. Payments made
in respect of a U.S. Certificate Owner must be reported to the IRS, unless the
U.S. Certificate Owner is an exempt recipient or otherwise establishes an
exemption. Compliance with the identification procedures (described in the
preceding section) would establish an exemption from backup withholding for a
non-U.S. Certificate Owner who is not an exempt recipient.
In addition, upon the sale of a certificate to (or through) a "broker," the
broker must withhold 31 percent of the entire purchase price, unless either
(i) the broker determines that the seller is a corporation or other exempt
recipient or (ii) the seller provides certain identifying information in the
required manner, and in the case of a non-U.S. Certificate Owner certifies
that the seller is a non-U.S. Certificate Owner (and certain other conditions
are met). Such a sale must also be reported by the broker to the IRS, unless
either (i) the broker determines that
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the seller is an exempt recipient or (ii) the seller certifies its non-U.S.
status (and certain other conditions are met). Certification of the registered
owner's non-U.S. status normally would be made on Form W-8 under penalties of
perjury, although in certain cases under proposed Treasury regulations it may
be possible to submit other documentary evidence. As defined by Treasury
Regulations, the term "broker" includes all persons who stand ready to effect
sales made by others in the ordinary course of a trade or business, as well as
brokers and dealers registered as such under the laws of the United States or
a state. These requirements generally will apply to a U.S. office of a broker,
and the information reporting requirements generally will apply to a foreign
office of a U.S. broker as well as to a foreign office of a foreign broker (i)
that is a controlled foreign corporation within the meaning of section 957(a)
of the Code or (ii) 50 percent or more of whose gross income from all sources
for the three year period ending with the close of its taxable year preceding
the payment (or for such part of the period that the foreign broker has been
in existence) was effectively connected with the conduct of a trade or
business within the United States.
Any amounts withheld under the backup withholding rules from a payment to a
Certificate Owner would be allowed as a refund or a credit against such
Certificate Owner's U.S. federal income tax, provided that the required
information is furnished to the IRS.
RECENT LEGISLATION
Recent legislation passed by Congress and signed into law by the President
on August 20, 1996 adds Sections 860H through 860L to the Code (the "FASIT
Provisions") which will provide for a new type of entity for federal income
tax purposes known as a "financial asset securitization investment trust" (a
"FASIT"). The legislation providing for the new FASIT entity, however, is not
to be effective until September 1, 1997, and many technical issues are to be
addressed in Treasury regulations yet to be drafted. On or after September 1,
1997 any Chase Credit Card Master Trust may elect, pursuant to the transition
rules set forth in the FASIT legislation, to be taxed under the FASIT
Provisions; provided, however that any such election shall be made only in
accordance with the amendment provisions of the Pooling and Servicing
Agreement.
STATE AND LOCAL TAXATION
The discussion above does not address the tax consequences of the purchase,
ownership or disposition of a Certificate under any state or local tax law.
Each investor should consult its own tax adviser regarding state and local tax
consequences.
EMPLOYEE BENEFIT PLAN CONSIDERATIONS
ERISA and the Code impose certain requirements on those employee benefit
plans to which they apply ("Plans") and on those persons who are fiduciaries
with respect to such Plans. In accordance with ERISA's general fiduciary
standards, before investing in Certificates, a Plan fiduciary should determine
whether such an investment (i) is permitted under the governing Plan
instruments; (ii) is appropriate for the Plan in view of its overall
investment policy and the composition and diversification of its portfolio;
and (iii) is prudent considering the factors discussed in this prospectus.
Section 406 of ERISA and Section 4975 of the Code prohibit certain
transactions involving the assets of a Plan and persons who have certain
specified relationships to the Plan ("parties in interest" within the meaning
of ERISA or "disqualified persons" within the meaning of the Code). Prohibited
transactions may generate excise taxes and other liabilities. Thus, a Plan
fiduciary considering an investment in Offered Certificates should also
consider whether such an investment might constitute or give rise to a
prohibited transaction under ERISA or the Code.
For example, regardless of whether the Trust was deemed to hold "plan
assets" of Plans that are Certificate Owners (as discussed below), the
purchase of Certificates by a Plan with respect to which the Transferor, the
Trustee, or underwriters or any of their affiliates is a "party in interest"
under ERISA or a "disqualified person" under the Code could constitute a
prohibited transaction under the Code or ERISA unless an exemption is
applicable. Accordingly, fiduciaries of a Plan with respect to which the
Transferor, the Trustee, or underwriters or any of their affiliates is a
"party in interest" or "disqualified person" should consult their own counsel
concerning the propriety of the investment prior to making the purchase.
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Certain transactions involved in the operation of the Trust might also be
deemed to constitute prohibited transactions under ERISA and the Code, if
assets of the Trust were deemed to be assets of an investing Plan. The U.S.
Department of Labor (the "DOL") has issued a regulation (the "Regulation")
concerning whether or not a Plan's assets would be deemed to include an
interest in the underlying assets of an entity (such as the Trust) for
purposes of the reporting and disclosure and fiduciary responsibility
provisions of ERISA. If assets of the Trust were deemed to be assets of an
investing Plan, any person who is a "fiduciary," as described in the preceding
paragraph, with respect to Trust assets will be a fiduciary of the investing
Plan, thus increasing the scope of activities which could be considered
prohibited transactions under ERISA and the Code. If investments by Plans are
made in the Trust, the Trust could be deemed to hold plan assets unless one of
the exceptions contained in the Regulation is applicable to the Trust.
The Regulation contains an exception which provides that if a Plan acquires
a "publicly-offered security," the issuer of the security is not deemed to
hold plan assets solely by reason of such acquisition. A publicly-offered
security is a security that is (i) freely transferable, (ii) part of a class
of securities that is owned by 100 or more investors independent of the issuer
and of one another and (iii) either is (A) part of a class of securities
registered under section 12(b) or 12(g) of the Securities Exchange Act of
1934, or (B) sold to the plan as part of an offering of securities to the
public pursuant to an effective registration statement under the Securities
Act of 1933 and the class of securities of which such security is a part is
registered under the Securities Exchange Act of 1934 within 120 days (or such
later time as may be allowed by the Securities and Exchange Commission) after
the end of the fiscal year of the issuer during which the offering of such
securities to the public occurred. Although it is anticipated that the
conditions of this exception may be met with respect to certain Classes of
Certificates, no assurance can be given, and no monitoring or other measures
will be taken to ensure that the exception will be met with respect to any
such Class.
The Regulation also states that an entity's assets will not be deemed to be
plan assets if equity participation in the entity by "benefit plan investors"
(e.g. employee welfare benefit plans and employee pension benefit plans
defined pursuant to Section 3(3) of ERISA, trusts described in Section 401(a)
of the Code or a plan described in Section 403(a) of the Code, which trust or
plan is exempt from tax under Section 501(a) of the Code, an individual
retirement account or annuity under Section 408 of the Code and any entity
whose underlying assets include plan assets by reason of a plan's investment
in the entity) is not "significant." Equity participation in an entity by
benefit plan investors is not significant on any date if, immediately after
the most recent acquisition of any equity interests in the entity, less than
25% of the value of each class of equity interests in the entity (excluding
the value of any equity interests held by the Transferor, the Trustee or its
affiliates) is held by benefit plan investors. No assurance can be given as to
whether the value of any class of equity interests in the Trust held by
benefit plan investors will be less than 25%, or whether the value will remain
below 25%.
If the Trust were deemed to hold "plan assets" of Plans that are Certificate
Owners, transactions involving the Trust and "parties in interest" or
"disqualified persons" with respect to such Plans might be prohibited under
Section 406 of ERISA and Section 4975 of the Code unless an exemption is
applicable.
In light of the foregoing, fiduciaries of a Plan considering the purchase of
Certificates should consult their own counsel regarding whether the assets of
the Trust which are represented by the Certificates would be considered plan
assets, the consequences that would apply if the Trust's assets were
considered plan assets and the applicability of exemptive relief from the
prohibited transaction rules.
PLAN OF DISTRIBUTION
The Transferor may sell Certificates (a) through underwriters or dealers,
(b) directly to one or more purchasers, or (c) through agents. The related
Prospectus Supplement will set forth the terms of the offering of any
Certificates offered hereby, including, without limitation, the names of any
underwriters, the purchase price of such Certificates and the proceeds to the
Transferor from such sale, any underwriting discounts and other items
constituting underwriters' compensation, any initial public offering price and
any discounts or concessions allowed or reallowed or paid to dealers.
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If underwriters are used in a sale of any Certificates of a Series offered
hereby, such Certificates will 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 to be determined at the time of sale or at the time of
commitment therefor. Such Certificates may be offered to the public either
through underwriting syndicates represented by managing underwriters or by
underwriters without a syndicate. Unless otherwise set forth in the related
Prospectus Supplement, the obligations of the underwriters to purchase such
Certificates will be subject to certain conditions precedent, and the
underwriters will be obligated to purchase all of such Certificates if any of
such Certificates are purchased. Any initial public offering price and any
discounts or concessions allowed or reallowed or paid to dealers may be
changed from time to time.
Certificates may also be sold directly by the Transferor or through agents
designated by the Transferor from time to time. Any agent involved in the
offer or sale of Certificates will be named, and any commissions payable by
the Transferor to such agent will be set forth, in the related Prospectus
Supplement. Unless otherwise indicated in the related Prospectus Supplement,
any such agent will act on a best efforts basis for the period of its
appointment.
Any underwriters, agents or dealers participating in the distribution of
Certificates may be deemed to be underwriters, and any discounts or
commissions received by them on the sale or resale of Certificates may be
deemed to be underwriting discounts and commissions, under the Securities Act.
Agents and underwriters may be entitled under agreements entered into with the
Transferor to indemnification by the Transferor against certain civil
liabilities, including liabilities under the Securities Act, or to
contribution with respect to payments that the agents or underwriters may be
required to make in respect thereof. Agents and underwriters may be affiliates
or customers of, engage in transactions with, or perform services for, the
Transferor or its affiliates in the ordinary course of business.
Each underwriting agreement will provide that the Transferor will indemnify
the related underwriters against certain liabilities, including liabilities
under the Securities Act of 1933, as amended.
LEGAL MATTERS
Certain legal matters relating to the issuance of the Certificates will be
passed upon for the Transferor by Simpson Thacher & Bartlett (a partnership
which includes professional corporations), New York, New York. Certain legal
matters relating to the issuance of the Certificates will be passed upon for
the Underwriters by Skadden, Arps, Slate, Meagher & Flom LLP, New York, New
York. Helene L. Kaplan, of counsel to Skadden, Arps, Slate, Meagher & Flom
LLP, is a member of the Board of Directors of The Chase Manhattan Bank and
owns 3,400 shares of the Corporation's common stock, with the associated
rights attached thereto.
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INDEX OF TERMS FOR PROSPECTUS
<TABLE>
<CAPTION>
PAGE
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<S> <C>
Account Transfer Date................................................ 4, 28, 32
Accounts............................................................. 1
Accumulation Period.................................................. 13
Additional Accounts.................................................. 5
Additional Interest.................................................. 16
Agreement............................................................ 4
Amortization Period.................................................. 6
Assignment........................................................... 44
Bank................................................................. 1
Bank Portfolio....................................................... 4
Banking organization................................................. 36
Base Rate............................................................ 25
BIF.................................................................. 48
Cash Collateral Account.............................................. 58
Cash Collateral Guaranty............................................. 58
Cede................................................................. 2
Cedel................................................................ 37
Cedel Participants................................................... 37
Certificate Owners................................................... 2
Certificate Rate..................................................... 6
Certificateholders................................................... 2
Certificates......................................................... 1, 4
Chase Manhattan Trust................................................ 28
Chase Portfolio...................................................... 4, 28
Chase Manhattan Series............................................... 28
Chase USA............................................................ 1
Chemical Bank Portfolio.............................................. 4, 28
Class................................................................ 1, 4
Clearing agency...................................................... 36
Clearing corporation................................................. 36
Closing Date......................................................... 11
CMB.................................................................. 1, 10
Code................................................................. 20, 62, 63
Collateral Interest.................................................. 58
Collection Account................................................... 10
Commission........................................................... 2
Companion Series..................................................... 18
Comptroller.......................................................... 22
Controlled Accumulation Amount....................................... 13
Controlled Amortization Amount....................................... 12
Controlled Amortization Period....................................... 12
Controlled Deposit Amount............................................ 13
Controlled Distribution Amount....................................... 12
Cooperative.......................................................... 38
Corporation.......................................................... 10, 34
COSO................................................................. 56
Credit Enhancement................................................... 5
Credit Enhancement Percentage........................................ 48
Credit Enhancement Provider.......................................... 55
</TABLE>
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<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
Cut-Off Date.............................................................. 7
Defaulted Accounts........................................................ 7
Definitive Certificates................................................... 10
Depositaries.............................................................. 35
Depository................................................................ 35
Determination Date........................................................ 50
Disclosure Document....................................................... 9
Discount Option Receivables............................................... 46
Discount Percentage....................................................... 46
Distribution Account...................................................... 46
Distribution Date......................................................... 11
DOL....................................................................... 67
DTC....................................................................... 2
DTC Participants.......................................................... 36
Eligible Deposit Account.................................................. 46
Eligible Account.......................................................... 43
Eligible Institution...................................................... 46
Eligible Receivable....................................................... 43
Enhancement............................................................... 5
Enhancement Invested Amount............................................... 58
ERISA..................................................................... 20
Euroclear................................................................. 38
Euroclear Operator........................................................ 38
Euroclear Participants.................................................... 37
Excess Finance Charge Collections......................................... 16
Exchange.................................................................. 9
Exchange Act.............................................................. 2
FASIT..................................................................... 66
FASIT Provisions.......................................................... 66
FDIA...................................................................... 22
FDIC...................................................................... 7
FDR....................................................................... 28
Finance Charge Account.................................................... 46
Finance Charge Receivables................................................ 7
FIRREA.................................................................... 22
Full Investor Interest.................................................... 17
Funding Period............................................................ 17
Group..................................................................... 15
Holders................................................................... 39
Independent Investors..................................................... 20
Indirect Participants..................................................... 36
Ineligible Receivable..................................................... 42
Interchange............................................................... 5, 31
Interest Funding Account.................................................. 39
Interest Period........................................................... 11
Investor Charge-Off....................................................... 16
Investor Default Amount................................................... 16
Investor Interest......................................................... 6
Investor Percentage....................................................... 7
Investor Servicing Fee.................................................... 16
IRS....................................................................... 62
</TABLE>
70
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<TABLE>
<CAPTION>
PAGE
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<S> <C>
L/C Bank................................................................. 58
MasterCard International................................................. 28
Minimum Transferor Interest.............................................. 8
Monthly Interest......................................................... 16
Monthly Period........................................................... 11
Moody's.................................................................. 46
New Chase Portfolio...................................................... 4, 28
Non-U.S. Certificate Owner............................................... 62
OID...................................................................... 63
Participation Agreement.................................................. 44
Participations........................................................... 5, 44
Pay Out Event............................................................ 14
Paying Agent............................................................. 47
Permitted Investments.................................................... 47
Plans.................................................................... 66
Portfolio Yield.......................................................... 25
Pre-Funding Account...................................................... 17
Pre-Funding Amount....................................................... 17
Principal Account........................................................ 46
Principal Amortization Period............................................ 13
Principal Commencement Date.............................................. 12
Principal Funding Account................................................ 13
Principal Receivables.................................................... 7
Principal Terms.......................................................... 9
Prospectus Supplement.................................................... 1
Rapid Accumulation Period................................................ 14
Rapid Amortization Period................................................ 15
Rating Agency............................................................ 20, 27
Receivables.............................................................. 1, 4
Record Date.............................................................. 34
Regulation............................................................... 67
Removed Accounts......................................................... 8
Reserve Account.......................................................... 59
Revolving Period......................................................... 11
RTC...................................................................... 23
RTC Policy Statement..................................................... 60
SAIF..................................................................... 48
Scheduled Payment Date................................................... 12
Securities Act........................................................... 2, 9
Securitized Chase Portfolio.............................................. 28
Senior Certificates...................................................... 6
Series................................................................... 1, 4
Series Supplement........................................................ 4
Series Termination Date.................................................. 51
Service Transfer......................................................... 54
Servicer................................................................. 10
Servicer Default......................................................... 54
Servicing Fee............................................................ 10
Shared Principal Collections............................................. 16
Spread Account........................................................... 59
Standard & Poor's........................................................ 46
</TABLE>
71
<PAGE>
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Subordinated Certificates.................................................. 6
Tax Counsel................................................................ 62
Tax Opinion................................................................ 9
Terms and Conditions....................................................... 38
Transfer Date.............................................................. 13
Transferor................................................................. 6
Transferor Certificate..................................................... 8
Transferor Interest........................................................ 6
Transferor Percentage...................................................... 35
Trust...................................................................... 1, 4
Trust Portfolio............................................................ 32
Trust Termination Date..................................................... 51
Trustee.................................................................... 4
U.S. ...................................................................... 20
U.S. Certificate Owner..................................................... 62
U.S. Person................................................................ 62
UCC........................................................................ 59
Unallocated Principal Collections.......................................... 49
VISA....................................................................... 28
</TABLE>
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ANNEX I
GLOBAL CLEARANCE, SETTLEMENT AND TAX DOCUMENTATION PROCEDURES
Except in certain limited circumstances, the globally offered Chase Credit
Card Master Trusts Asset Backed Certificates (the "Global Securities") to be
issued in Series from time to time (each, a "Series") will be available only
in book-entry form. Investors in the Global Securities may hold such Global
Securities through any of The Depository Trust Company ("DTC"), Cedel or
Euroclear. The Global Securities will be tradeable as home market instruments
in both the European and U.S. domestic markets. Initial settlement and all
secondary trades will settle in same day funds.
Secondary market trading between investors holding Global Securities through
Cedel and Euroclear will be conducted in the ordinary way in accordance with
their normal rules and operating procedures and in accordance with
conventional eurobond practice (i.e., seven calendar day settlement).
Secondary market trading between investors holding Global Securities through
DTC will be conducted according to the rules and procedures applicable to U.S.
corporate debt obligations.
Secondary cross-market trading between Cedel or Euroclear and DTC
Participants holding Certificates will be effected on a delivery-against-
payment basis through the respective Depositaries of Cedel and Euroclear (in
such capacity) and as DTC Participants.
Non-U.S. holders (as described below) of Global Securities will be subject
to U.S. withholding taxes unless such holders meet certain requirements and
deliver appropriate U.S. tax documents to the securities clearing
organizations or their participants.
INITIAL SETTLEMENT
All Global Securities will be held in book-entry form by DTC in the name of
Cede & Co. as nominee of DTC. Investors' interests in the Global Securities
will be represented through financial institutions acting on their behalf as
direct and indirect Participants in DTC. As a result, Cedel and Euroclear will
hold positions on behalf of their participants through their respective
Depositaries, which in turn will hold such positions in accounts as DTC
Participants.
Custody accounts of investors electing to hold their Global Securities
through DTC will be credited with their holdings against payment in same-day
funds on the settlement date.
Investors electing to hold their Global Securities through Cedel or
Euroclear accounts will follow the settlement procedures applicable to
conventional eurobonds, except that there will be no temporary global security
and no "lock-up" or restricted period. Global Securities will be credited to
the securities custody accounts on the settlement date against payment in
same-day funds.
SECONDARY MARKET TRADING
Since the purchaser determines the place of delivery, it is important to
establish at the time of the trade where both the purchaser's and seller's
accounts are located to ensure that settlement can be made on the desired
value date.
Trading between DTC Participants. Secondary market trading between DTC
Participants will be settled in same-day funds.
Trading between Cedel and/or Euroclear Participants. Secondary market
trading between Cedel Participants or Euroclear Participants will be settled
using the procedures applicable to conventional eurobonds in same-day funds.
A-1
<PAGE>
Trading between DTC seller and Cedel or Euroclear purchaser. When Global
Securities are to be transferred from the account of a DTC Participant to the
account of a Cedel Participant or a Euroclear Participant, the purchaser will
send instructions to Cedel or Euroclear through a Cedel Participant or
Euroclear Participant at least one business day prior to settlement. Cedel or
Euroclear will instruct the respective Depositary, as the case may be, to
receive the Global Securities against payment. Payment will include interest
accrued on the Global Securities from and including the last coupon payment
date to and excluding the settlement date. Payment will then be made by the
respective depositary to the DTC Participant's account against delivery of the
Global Securities. After settlement has been completed, the Global Securities
will be credited to the respective clearing system and by the clearing system
and by the clearing system, in accordance with its usual procedures, to the
Cedel Participant's or Euroclear Participant's account. The Global Securities
credit will appear the next day (European time) and the cash debit will be
back-valued to, and the interest on the Global Securities will accrue from,
the value date (which would be the preceding day when settlement occurred in
New York). If settlement is not completed on the intended value date (i.e.,
the trade fails), the Cedel or Euroclear cash debit will be valued instead as
of the actual settlement date.
Cedel Participants and Euroclear Participants will need to make available to
the respective clearing systems the funds necessary to process same-day funds
settlement. The most direct means of doing so is to pre-position funds for
settlement, either from cash on hand or existing lines of credit, as they
would for any settlement occurring within Cedel or Euroclear. Under this
approach, they may take on credit exposure to Cedel or Euroclear until the
Global Securities are credited to their accounts one day later.
As an alternative, if Cedel or Euroclear has extended a line of credit to
them, Cedel Participants or Euroclear Participants can elect not to pre-
position funds and allow that credit line to be drawn upon the finance
settlement. Under this procedure, Cedel Participants or Euroclear Participants
purchasing Global Securities would incur overdraft charges for one day,
assuming they cleared the overdraft when the Global Securities were credited
to their accounts. However, interest on the Global Securities would accrue
from the value date. Therefore, in many cases the investment income on the
Global Securities earned during that one-day period may substantially reduce
or offset the amount of such overdraft charges, although this result will
depend on each Cedel Participant's or Euroclear Participant's particular cost
of funds.
Since the settlement is taking place during New York business hours, DTC
Participants can employ their usual procedures for sending Global Securities
to the respective Depositary for the benefit of Cedel Participants or
Euroclear Participants. The sale proceeds will be available to the DTC seller
on the settlement date. Thus, to the DTC Participant a cross-market
transaction will settle no differently than a trade between two DTC
Participants.
Trading between Cedel or Euroclear seller and DTC purchaser. Due to time
zone differences in their favor, Cedel Participants and Euroclear Participants
may employ their customary procedures for transactions in which Global
Securities are to be transferred by the respective clearing system, through
the respective Depositary, to a DTC Participant. The seller will send
instructions to Cedel or Euroclear through a Cedel Participant or Euroclear
Participant at least one business day prior to settlement. In these cases,
Cedel or Euroclear will instruct the respective Depositary, as appropriate, to
deliver the bonds to the DTC Participant's account against payment. Payment
will include interest accrued on the Global Securities from and including the
last coupon payment date to and excluding the settlement date. The payment
will then be reflected in the account of the Cedel Participant or Euroclear
Participant the following day, and receipt of the cash proceeds in the Cedel
Participant's or Euroclear Participant's account would be back-valued to the
value date (which would be the preceding day, when settlement occurred in New
York). Should the Cedel Participant or Euroclear Participant have a line of
credit with its respective clearing system and elect to be in debit in
anticipation of receipt of the sale proceeds in its account, the back-
valuation will extinguish any overdraft charges incurred over that one-day
period. If settlement is not completed on the intended value date (i.e., the
trade fails), receipt of the cash proceeds in the Cedel Participant's or
Euroclear Participant's account would instead be valued as of the actual
settlement date. Finally, day traders that use Cedel or Euroclear and that
purchase Global Securities from DTC Participants for delivery to Cedel
Participants or Euroclear Participants should note that these trades would
automatically fail
A-2
<PAGE>
on the sale side unless affirmative action were taken. At least three
techniques should be readily available to eliminate this potential problem:
(1) 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 procedure;
(2) 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
(3) 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 document) on registered debt issued by
U.S. Persons, unless (i) each clearing system, bank or other financial
institution that holds customers' securities in the ordinary course of its
trade or business in the chain of intermediaries between such beneficial owner
and the U.S. entity required to withhold tax complies with applicable
certification requirements and (ii) such beneficial owner takes one of the
following steps to obtain an exemption or reduced tax rate:
Exemption for non-U.S. Persons (Form W-8). Beneficial owners of Certificates
that are non-U.S. Persons can obtain a complete exemption from the withholding
tax by filing a signed Form W-8 (Certificate of Foreign Status). If the
information shown on Form W-8 changes, a new Form W-8 must be filed within 30
days of such change.
Exemption for non-U.S. Persons with effectively connected income (Form
4224). A non-U.S. Person, including a non-U.S. corporation or bank with a U.S.
branch, for which the interest income is effectively connected with its
conduct of a trade or business in the United States, can obtain an exemption
from the withholding tax by filing Form 4224 (Exemption from Withholding of
Tax on Income Effectively Connected with the Conduct of a Trade or Business in
the United States).
Exemption or reduced rate for non-U.S. Persons resident in treaty countries
(Form 1001). Non-U.S. Persons that are Certificate Owners residing in a
country that has a tax treaty with the United States can obtain an exemption
or reduced tax rate (depending on the treaty terms) by filing Form 1001
(Ownership, Exemption or Reduced Rate Certificate). If the treaty provides
only for a reduced rate, withholding tax will be imposed at that rate unless
the filer alternatively files Form W-8. Form 1001 may be filed by the
Certificate Owner or his agent.
Exemption for U.S. Persons (Form W-9). U.S. Persons can obtain a complete
exemption from the withholding tax by filing Form W-9 (Payer's Request for
Taxpayer Identification Number and Certification).
U.S. Federal Income Tax Reporting Procedure. The Certificate Owner of a
Global Security or, in the case of a Form 1001 or a Form 4224 filer, his
agent, files by submitting the appropriate form to the person through whom it
holds (the clearing agency, in the case of persons holding directly on the
books of the clearing agency). Form W-8 and Form 1001 are effective for three
calendar years and Form 4224 is effective for one calendar year.
The term "U.S. Person" means (i) a citizen or resident of the United States,
(ii) a corporation or partnership created or organized in the United States or
under the laws of the United States or of any state, (iii) an estate the
income of which is subject to United States federal income taxation regardless
of its source or (iv) a trust the income of which is subject to United States
federal income taxation regardless of its source; provided, however, that for
tax years beginning after December 31, 1996 (and, if a trustee so elects, for
tax years ending after August 20, 1996), a "U.S. Person" shall include any
trust if a court within the United States is able to exercise primary
supervision over the administration of such trust and one or more United
States fiduciaries have the authority to control all substantial decisions of
such trust. This summary does not deal with all aspects of U.S. Federal income
tax withholding that may be relevant to foreign holders of the Global
Securities. Investors are advised to consult their own tax advisors for
specific tax advice concerning their holding and disposing of the Global
Securities.
A-3
<PAGE>
PART II
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following is an itemized list of the estimated expenses to be incurred
in connection with the offering of the securities being offered hereunder
other than underwriting discounts and commissions.
<TABLE>
<S> <C>
Registration Fee........................................... $1,818,181.82
Printing and Engraving..................................... 350,000.00
Trustee's Fees............................................. 20,000.00
Legal Fees and Expenses.................................... 250,000.00
Blue Sky Fees and Expenses................................. 20,000.00
Accountants' Fees and Expenses............................. 150,000.00
Rating Agency Fees......................................... 1,500,000.00
Miscellaneous Fees......................................... 30,000.00
-------------
Total.................................................... $4,138,181.82
=============
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Article IX of the By-Laws of Chase Manhattan Bank USA, National Association
(the "Bank") provide that any person who was or is made a party or is
threatened to be made a party to or is otherwise involved in any action, suit
or proceeding, whether civil, criminal, administrative or investigative (a
"proceeding"), by reason of the fact that he or she is or was a director or
officer of the Bank or is or was serving at the request of the Bank as a
director, officer, employee or agent of another corporation or of a
partnership, joint venture, trust or other enterprise, including service with
respect to an employee benefit plan (an "indemnitee"), whether the basis or
such proceeding is alleged action in an official capacity as a director,
officer, employee or agent or in any other capacity while serving as a
director, officer, employee or agent, shall be indemnified and held harmless
by the Bank to the fullest extent authorized by the Delaware General
Corporation Law, as the same exists or may hereafter be amended but, in the
case of any such amendment, only to the extent that such amendment permits the
Bank to provide broader indemnification rights than permitted prior thereto),
against all expense, liability and loss including attorneys' fees, judgments,
fines, ERISA excise taxes or penalties and amounts paid in settlement)
reasonably incurred or suffered by such indemnitee in connection therewith and
such indemnification shall continue as to an indemnitee who has ceased to be a
director, officer, employee or agent and shall inure to the benefit of the
indemnitee's heirs, executors and administrators; provided, however, that,
except as provided in the second following paragraph with respect to
proceedings to enforce rights to indemnification, the Bank shall indemnify any
such indemnitee in connection with a proceeding (or part thereof) initiated by
such indemnitee only if such proceeding (or part thereof) was authorized by
the board of directors of the Bank.
The right to indemnification described in the immediately preceding
paragraph shall include the right to be paid by the Bank the expenses incurred
in defending any proceeding for which such right to indemnification is
applicable in advance of its final disposition (hereafter an "advancement of
expenses"); provided, however, that, if the Delaware General Corporation Law
requires, an advancement of expenses incurred by an indemnitee in his or her
capacity as a director or officer (and not in any other capacity in which
service was or is rendered by such indemnitee, including, without limitation,
service to an employee benefit plan) shall be made only upon delivery to the
Bank of an undertaking (hereinafter an "undertaking"), by or on behalf of such
indemnitee, to repay all amounts so advanced if it shall ultimately be
determined by final judicial decision from which there is no further right to
appeal (hereinafter a "final adjudication") that such indemnitee is not
entitled to be indemnified for such expenses under such Article IX or
otherwise.
II-1
<PAGE>
The rights to indemnification and to the advancement of expenses described
in the two preceding paragraphs are contract rights. If a claim under either
of such paragraphs is not paid in full by the Bank within sixty days after a
written claim has been received by the Bank except in the case of a claim for
an advancement of expenses, in which case the applicable period shall be
twenty days, the indemnitee may at any time thereafter bring suit against the
Bank to recover the unpaid amount of the claim. If successful in whole or in
part in any such suit, or in a suit brought by the Bank to recover an
advancement of expenses pursuant to the terms of an undertaking, the
indemnitee shall be entitled to be paid also the expense of prosecuting or
defending such suit. In any suit brought by the indemnitee to enforce a right
to indemnification under such Article IX(but not in a suit brought by the
indemnitee to enforce a right to an advancement of expenses) it shall be a
defense that, and in any suit by the Bank to recover an advancement of
expenses pursuant to the terms of an undertaking, the Bank shall be entitled
to recover such expense upon a final adjudication that, the indemnitee has not
met any applicable standard for indemnification set forth in the Delaware
General Corporation Law. Neither the failure of the Bank (including its board
of directors, independent legal counsel, or its stockholders) to have made a
determination prior to the commencement of such suit that indemnification of
the indemnitee is proper in the circumstances because the indemnitee has met
the applicable standard of conduct set forth in the Delaware General
Corporation Law, nor an actual determination by the Bank (including its board
of directors, independent legal counsel, or its stockholders) that the
indemnitee has not met such applicable standard of conduct shall create a
presumption that the indemnitee has not met such applicable standard of
conduct or, in the case of such a suit brought by the indemnitee, be a defense
to such suit. In any suit brought by the indemnitee to enforce a right to
indemnification or to an advancement of expenses under such Article IX, or by
the Bank to recover an advancement of expenses pursuant to the terms of an
undertaking, the burden of proving that the indemnitee is not entitled to be
indemnified, or to such advancement of expenses, under such Article IX or
otherwise shall be on the Bank.
Article IX of the Bank's By-Laws also provides that the foregoing right of
indemnification or reimbursement shall not be exclusive of other rights to
which any person may be entitled under any statute, Articles of Association,
by-law, agreement, or vote of stockholders or disinterested stockholders or
otherwise. Section 145 of the Delaware General Corporation Law provides that a
Delaware corporation must indemnify a director or officer who has defended
successfully, on the merits or otherwise, any proceeding against him or any
claim, matter or issue therein, for reasonable expenses actually incurred in
such defense.
There are directors and officers liability insurance policies presently
outstanding which insure directors and officers of the Bank, the Bank's parent
and certain of its subsidiaries. The policies cover losses for which the Bank,
the Bank's parent or any of those subsidiaries shall be required or permitted
by law to indemnify directors and officers and which result from claims made
against such directors or officers based upon the commission of wrongful acts
in the performance of their duties. The policies also cover losses which the
directors or officers must pay as the result of claims brought against them
based upon the commission of wrongful acts in the performance of their duties
and for which they are not indemnified by the Bank, the Bank's parent or any
of those subsidiaries. The losses covered by the policies are subject to
certain exclusions and do not include fines or penalties imposed by law or
other matters deemed uninsurable under the law. The policies contain self-
insured retention provisions.
II-2
<PAGE>
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Exhibits
<TABLE>
<C> <S>
1.1 --Form of Underwriting Agreement (incorporated by reference to Exhibit
1.1 to the Registration Statement on Form S-3 of Chemical Bank (No. 33-
94190)).*
4.1 --Pooling and Servicing Agreement dated as of October 19, 1995 between
Chemical Bank, as Transferor and Servicer, and The Bank of New York, as
Trustee (incorporated by reference to Exhibit 4.1 to the Registration
Statement on Form S-3 of Chemical Bank (No. 33-94190)).*
4.2 --Amended and Restated Pooling and Servicing Agreement dated as of June
1, 1996 among the Registrant, Chemical Bank and The Bank of New York.
4.3 --Second Amended and Restated Pooling and Servicing Agreement dated as
of September 1, 1996 among the Registrant, The Chase Manhattan Bank and
The Bank of New York.
5.1 --Opinion of Simpson Thacher & Bartlett (a partnership which includes
professional corporations).
8.1 --Opinion of Simpson Thacher & Bartlett with respect to certain tax
matters (included in opinion filed as Exhibit 5.1).
23.1 --Consent of Simpson Thacher & Bartlett (included in opinion filed as
Exhibit 5.1).
24.1 --Powers of Attorney.
</TABLE>
- --------
* Previously filed.
(b) Financial Statements
All financial statements, schedules and historical financial information
have been omitted as they are not applicable.
ITEM 17. UNDERTAKINGS
The undersigned Registrant on behalf of the Chase Credit Card Master Trusts
(the "Trusts") hereby undertakes as follows:
(a) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement; (i) to include any
prospectus required by Section 10(a)(3) of the Securities Act of 1933; (ii)
to reflect in the prospectus any facts or events arising after the
effective date of the Registration Statement (or the most recent post-
effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
Registration Statement; (iii) to include any material information with
respect to the plan of distribution not previously disclose in the
Registration Statement or any material change to such information in the
Registration Statement; provided, however, that (a)(i) and (a)(ii) will not
apply if the information required to be included in a post-effective
amendment thereby is contained in periodic reports filed pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in this Registration Statement.
(b) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new Registration Statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering hereof.
(c) 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.
(d) That, for purposes of determining any liability under the Securities
Act of 1933, each filing of an annual report of the Trusts 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 herein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
II-3
<PAGE>
(e) That insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the provisions described
under Item 15 above, or otherwise, the Registrant has been advised that in
the opinion of the Securities and Exchange Commission such indemnification
is against public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in
the successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the
securities being registered, the Registrant will, unless in the opinion of
its counsel the matter has been settled by controlling precedent, submit to
a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of each issue.
(g) That, for purposes of determining any liability under the Securities
Act of 1933, the information omitted from the form of prospectus filed as
part of this Registration Statement in reliance upon Rule 430A and
contained in a form of prospectus filed by the Registrant pursuant to Rule
424(b)(1) or (4) under the Securities Act of 1933 shall be deemed to be
part of this Registrant Statement as of the time it was declared effective.
(h) That, for the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment that contains a form
of prospectus shall be deemed to be a new registration statement relating
to the securities offered herein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering thereof.
II-4
<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
AMENDMENT NO. 1 TO THE REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY
THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF WILMINGTON, STATE
OF DELAWARE, ON OCTOBER 31, 1996.
Chase Manhattan Bank USA, National
Association,
as originator of the Trust Registrant
/s/ Keith Schuck
By _______________________________________
KEITH SCHUCK
CONTROLLER
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, THIS
AMENDMENT NO. 1 TO THE REGISTRATION STATEMENT HAS BEEN SIGNED ON OCTOBER 31,
1996 BY THE FOLLOWING PERSONS IN THE CAPACITIES INDICATED.
SIGNATURE TITLE
* Chairman of the Board and
_____________________________________ Director
DONALD L. BOUDREAU
* President and Director
_____________________________________
MICHAEL BARRETT
* Director
_____________________________________
CHARLES R. WALSH
Director
_____________________________________
LUKE HAYDEN
Director
_____________________________________
WILLIAM HOEFLING
II-5
<PAGE>
SIGNATURE TITLE
Director
*
_____________________________________
KEVIN HURLEY
Director
*
_____________________________________
MICHAEL URKOWITZ
Director
_____________________________________
JOHN HEHIR
Director
_____________________________________
THOMAS JACOB
/s/ Keith Schuck
_____________________________________ Controller (Chief Financial
KEITH SCHUCK and Accounting Officer)
- --------
* The undersigned, by signing his name hereto, does hereby sign this Amendment
No. 1 to the Registration Statement on behalf of each of the above-indicated
directors and officers of the Registrant pursuant to powers of attorney
signed by such directors and officers.
/s/ Keith Schuck
-------------------------------------
KEITH SCHUCK
ATTORNEY-IN-FACT
II-6
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
<C> <S>
1.1 --Form of Underwriting Agreement (incorporated by reference to Exhibit
1.1 to the Registration Statement on Form S-3 of Chemical Bank (No.
33-94190)).*
4.1 --Pooling and Servicing Agreement dated as of October 19, 1995 between
Chemical Bank, as Transferor and Servicer, and The Bank of New York,
as Trustee (incorporated by reference to Exhibit 4.1 to the
Registration Statement on Form S-3 of Chemical Bank (No. 33-94190)).*
4.2 --Amended and Restated Pooling and Servicing Agreement dated as of
June 1, 1996 among the Registrant, Chemical Bank and The Bank of New
York.
4.3 --Second Amended and Restated Pooling and Servicing Agreement dated as
of September 1, 1996 among the Registrant, The Chase Manhattan Bank
and The Bank of New York.
5.1 --Opinion of Simpson Thacher & Bartlett (a partnership which includes
professional corporations).
8.1 --Opinion of Simpson Thacher & Bartlett with respect to certain tax
matters (included in opinion filed as Exhibit 5.1).
23.1 --Consent of Simpson Thacher & Bartlett (included in opinion filed as
Exhibit 5.1).
24.1 --Powers of Attorney.
</TABLE>
- --------
* Previously filed.
<PAGE>
EXHIBIT 4.2
================================================================================
THE CHASE MANHATTAN BANK (USA),
Transferor on and after June 1, 1996,
CHEMICAL BANK,
Transferor prior to June 1, 1996 and Servicer
and
THE BANK OF NEW YORK,
Trustee
on behalf of the Certificateholders
of Chemical Master Credit Card Trust I
_________________________________
AMENDED AND RESTATED
POOLING AND SERVICING AGREEMENT
Dated as of June 1, 1996
================================================================================
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I
<TABLE>
<CAPTION>
<S> <C> <C>
DEFINITIONS....................... 1
Section 1.1 Definitions................................................ 1
Section 1.2 Other Definitional Provisions.............................. 22
ARTICLE II
CONVEYANCE OF RECEIVABLES;
ISSUANCE OF CERTIFICATES.................. 23
Section 2.1 Conveyance of Receivables.................................. 23
Section 2.2 Acceptance by Trustee...................................... 24
Section 2.3 Representations and Warranties of
the Transferor............................................. 25
Section 2.4 Representations and Warranties of
the Transferor Relating to the
Agreement and the Receivables.............................. 27
Section 2.5 Covenants of the Transferor................................ 33
Section 2.6 Addition of Accounts....................................... 36
Section 2.7 Removal of Accounts........................................ 39
Section 2.8 Discount Option............................................ 40
</TABLE>
ARTICLE III
<TABLE>
<CAPTION>
<S> <C> <C>
ADMINISTRATION AND SERVICING
OF RECEIVABLES........................ 42
Section 3.1 Acceptance of Appointment and Other
Matters Relating to the Servicer.......................... 44
Section 3.2 Servicing Compensation.................................... 44
Section 3.3 Representations and Warranties
of the Servicer........................................... 45
Section 3.4 Reports and Records for the Trustee....................... 46
Section 3.5 Annual Servicer's Certificate............................. 47
Section 3.6 Annual Independent Accountants'
Servicing Report.......................................... 47
Section 3.7 Tax Treatment............................................. 48
Section 3.8 Notices to the Transferor................................. 49
ARTICLE IV
RIGHTS OF CERTIFICATEHOLDERS AND ALLOCATION
AND APPLICATION OF COLLECTIONS................ 50
</TABLE>
-i-
<PAGE>
<TABLE>
<S> <C> <C>
Section 4.1 Rights of Certificateholders............................... 50
Section 4.2 Establishment of Accounts.................................. 50
Section 4.3 Collections and Allocations................................ 53
Section 4.4 Allocations During Funding Period.......................... 55
</TABLE>
ARTICLE V
<TABLE>
<CAPTION>
<S> <C> <C>
[ARTICLE V IS RESERVED AND SHALL
BE SPECIFIED IN ANY SUPPLEMENT
WITH RESPECT TO ANY SERIES].................... 56
ARTICLE VI
THE CERTIFICATES..................... 57
Section 6.1 The Certificates........................................... 57
Section 6.2 Authentication of Certificates............................. 57
Section 6.3 Registration of Transfer and Exchange
of Certificates............................................ 58
Section 6.4 Mutilated, Destroyed, Lost or Stolen
Certificates .............................................. 61
Section 6.5 Persons Deemed Owners...................................... 61
Section 6.6 Appointment of Paying Agent................................ 62
Section 6.7 Access to List of Certificateholders'
Names and Addresses........................................ 63
Section 6.8 Authenticating Agent....................................... 64
Section 6.9 Tender of Transferor Certificate........................... 65
Section 6.10 Book-Entry Certificates.................................... 68
Section 6.11 Notices to Clearing Agency................................. 69
Section 6.12 Definitive Certificates.................................... 69
Section 6.13 Global Certificate......................................... 70
Section 6.14 Meetings of Certificateholders............................. 70
</TABLE>
ARTICLE VII
<TABLE>
<CAPTION>
<S> <C> <C>
OTHER MATTERS RELATING
TO THE TRANSFEROR..................... 71
Section 7.1 Liability of the Transferor................................ 71
Section 7.2 Merger or Consolidation of, or Assumption
of the Obligations of, the Transferor...................... 71
Section 7.3 Limitation of Liability.................................... 72
Section 7.4 Liabilities................................................ 72
ARTICLE VIII
OTHER MATTERS RELATING
TO THE SERVICER........................ 74
</TABLE>
-ii-
<PAGE>
<TABLE>
<S> <C> <C>
Section 8.1 Liability of the Servicer.................................. 74
Section 8.2 Merger or Consolidation of, or
Assumption of the Obligations of,
the Servicer............................................... 74
Section 8.3 Limitation of Liability of the Servicer
and Others................................................. 74
Section 8.4 Servicer Indemnification of the Trust
and the Trustee............................................ 75
Section 8.5 The Servicer Not to Resign................................. 76
Section 8.6 Access to Certain Documentation and
Information Regarding the Receivables...................... 76
Section 8.7 Delegation of Duties....................................... 77
Section 8.8 Examination of Records..................................... 77
</TABLE>
ARTICLE IX
<TABLE>
<CAPTION>
<S> <C> <C>
PAY OUT EVENTS........................ 78
Section 9.1 Pay Out Events............................................. 78
Section 9.2 Additional Rights Upon the Occurrence
of Certain Events.......................................... 79
</TABLE>
ARTICLE X
<TABLE>
<CAPTION>
<S> <C> <C>
SERVICER DEFAULTS..................... 81
Section 10.1 Servicer Defaults.......................................... 81
Section 10.2 Trustee to Act; Appointment of Successor................... 83
Section 10.3 Notification to Certificateholders......................... 85
Section 10.4 Waiver of Past Defaults.................................... 85
</TABLE>
ARTICLE XI
<TABLE>
<CAPTION>
<S> <C> <C>
THE TRUSTEE........................ 87
Section 11.1 Duties of Trustee.......................................... 87
Section 11.2 Certain Matters Affecting the Trustee...................... 89
Section 11.3 Trustee Not Liable for Recitals in
Certificates............................................... 90
Section 11.4 Trustee May Own Certificates............................... 90
Section 11.5 The Servicer to Pay Trustee's Fees
and Expenses............................................... 91
Section 11.6 Eligibility Requirements for Trustee....................... 91
Section 11.7 Resignation or Removal of Trustee.......................... 92
Section 11.8 Successor Trustee.......................................... 92
Section 11.9 Merger or Consolidation of Trustee......................... 93
Section 11.10 Appointment of Co-Trustee or Separate
Trustee.................................................... 93
Section 11.11 Tax Returns................................................ 94
</TABLE>
-iii-
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Section 11.12 Trustee may Enforce Claims Without
Possession of Certificates................................. 95
Section 11.13 Suits for Enforcement...................................... 95
Section 11.14 Rights of Certificateholders to
Direct Trustee............................................. 95
Section 11.15 Representations and Warranties of Trustee.................. 96
Section 11.16 Maintenance of Office or Agency............................ 96
</TABLE>
ARTICLE XII
<TABLE>
<CAPTION>
<S> <C> <C>
TERMINATION..................................... 97
Section 12.1 Termination of Trust...................................... 97
Section 12.2 Optional Purchase......................................... 98
Section 12.3 Final Payment with Respect to any Series 98
Section 12.4 Termination Rights of Holder of
Certificate............................................... 100
Section 12.5 Defeasance................................................ 100
</TABLE>
ARTICLE XIII
<TABLE>
<CAPTION>
<S> <C> <C>
MISCELLANEOUS PROVISIONS 102
Section 13.1 Amendment.................................................. 102
Section 13.2 Protection of Right, Title and
Interest to Trust.......................................... 103
Section 13.3 Limitation on Rights of Certificate........................ 104
Section 13.4 Governing Law.............................................. 105
Section 13.5 Notices.................................................... 106
Section 13.6 Severability of Provisions................................. 106
Section 13.7 Assignment................................................. 106
Section 13.8 Certificates Non-Assessable and Fully Paid................. 107
Section 13.9 Further Assurances......................................... 107
Section 13.10 No Waiver; Cumulative Remedies............................. 107
Section 13.11 Counterparts............................................... 107
Section 13.12 Third-Party Beneficiaries.................................. 107
Section 13.13 Actions by Certificateholders.............................. 107
Section 13.14 Rule 144A Information...................................... 108
Section 13.15 Merger and Integration..................................... 108
Section 13.16 Headings................................................... 108
</TABLE>
-iv-
<PAGE>
EXHIBITS
Exhibit A Form of Transferor Certificate
Exhibit B Form of Assignment of Receivables in Additional Accounts
Exhibit C Form of Monthly Servicer's Certificate
Exhibit D Form of Annual Servicer's Certificate
Exhibit E Form of Opinion of Counsel Regarding Additional Accounts
Exhibit F Form of Annual Opinion of Counsel
Exhibit G Form of Reassignment of Receivables
Exhibit H Form of Reconveyance of Receivables
SCHEDULES
Schedule 1 List of Accounts [Deemed Incorporated]
-v-
<PAGE>
AMENDED AND RESTATED POOLING AND SERVICING AGREEMENT, dated as of June
1, 1996 by and among THE CHASE MANHATTAN BANK (USA), a banking corporation
organized and existing under the laws of the State of Delaware, as Transferor on
and after June 1, 1996, CHEMICAL BANK, a banking corporation organized and
existing under the laws of the State of New York, as Transferor prior to June 1,
1996 and as Servicer, and THE BANK OF NEW YORK, a New York banking corporation,
as Trustee.
WHEREAS, Chemical Bank as Transferor and Servicer, and the Trustee are
parties to a Pooling and Servicing Agreement, dated as of October 19, 1995 (the
"Original Pooling and Servicing Agreement");
WHEREAS, Chemical Bank as Transferor and Servicer under the Original
Pooling and Servicing Agreement desires to amend and restate the Original
Pooling and Servicing Agreement to read in its entirety as set forth below and
to, among other things, provide for the assumption of the obligations of the
Transferor the date hereof by The Chase Manhattan Bank (USA) ("Chase USA")
concurrently with the transfer of the Transferor Certificate and the Accounts to
Chase USA; and
WHEREAS, Chase USA has entered into the Receivables Asset Purchase
Agreement, dated as of June 1, 1996, between Chemical Bank and Chase USA,
pursuant to which Chemical has transferred to Chase USA and Chase USA has
expressly assumed, among other things, the obligations and duties of Chemical as
Transferor;
NOW, THEREFORE, pursuant to Section 13.1(b) of the Original Pooling
and Servicing Agreement, the parties hereto hereby agree that effective on and
as of the date hereof, the Original Pooling and Servicing Agreement is hereby
amended to read in its entirety as follows:
In consideration of the mutual agreements herein contained, each party
agrees as follows for the benefit of the other parties and the
Certificateholders:
ARTICLE
DEFINITIONS
Section 1.1 Definitions. Whenever used in this Agreement, the
-----------
following words and phrases shall have the following meanings:
"Account Information" shall have the meaning specified in subsection
-------------------
2.2(b).
<PAGE>
"Account" shall mean each VISA(R) and MasterCard(R)* credit card account
-------
established pursuant to a Credit Card Agreement between the Transferor and any
Person identified by account number and by the Receivable balance as of the Cut-
Off Date and as of each Addition Date in each computer file or microfiche list
delivered to the Trustee by the Transferor pursuant to Section 2.1 or 2.6. The
definition of Account shall include each Transferred Account. The term
"Account" shall be deemed to refer to an Additional Account only from and after
the Addition Date with respect thereto, and the term "Account" shall be deemed
to refer to any Removed Account only prior to the Removal Date with respect
thereto.
"Accumulation Period" shall mean, with respect to any Series, or any Class
-------------------
within a Series, a period following the Revolving Period during which
Collections of Principal Receivables are accumulated in an account for the
benefit of the Investor Certificateholders of a Series, or a Class within such
Series, which shall be the controlled accumulation period, the rapid
accumulation period or other accumulation period, in each case as defined with
respect to such Series in the related Supplement.
"Addition Date" shall mean each date as of which Additional Accounts will
-------------
be included as Accounts pursuant to Section 2.6.
"Additional Accounts" shall have the meaning specified in subsection
-------------------
2.6(a).
"Affiliate" of any Person shall mean any other Person controlling,
---------
controlled by or under common control with such Person.
"Aggregate Investor Default Amount" shall have, with respect to any Series
---------------------------------
of Certificates, the meaning stated in the related Supplement.
"Aggregate Investor Interest" shall mean, as of any date of determination,
---------------------------
the sum of the Investor Interests of all Series of Certificates issued and
outstanding on such date of determination.
"Aggregate Investor Percentage" with respect to Principal Receivables,
-----------------------------
Finance Charge Receivables and Receivables in Defaulted Accounts, as the case
may be, shall mean, as of any date of determination, the sum of such Investor
Percentages of all Series of Certificates issued and outstanding on such date of
- -----------------------
* VISA (R) and MasterCard(R) are registered trademarks of VISA USA, Inc.
and of MasterCard International Incorporated, respectively.
2
<PAGE>
determination; provided, however, that the Aggregate Investor Percentage shall
-------- -------
not exceed 100%.
"Agreement" shall mean this Pooling and Servicing Agreement and all
---------
amendments hereof and supplements hereto, including any Supplement.
"Amortization Period" shall mean, with respect to any Series, or any Class
-------------------
within a Series, a period following the Revolving Period during which principal
is distributed to Investor Certificateholders, which shall be the controlled
amortization period, the principal amortization period, the rapid amortization
period, or other amortization period, in each case as defined with respect to
such Series in the related Supplement.
"Annual Membership Fee" shall have the meaning specified in the Credit Card
---------------------
Agreement applicable to each Account for annual membership fees or similar
terms.
"Applicants" shall have the meaning specified in Section 6.7.
----------
"Appointment Day" shall have the meaning specified in subsection 9.2(a).
---------------
"Assignment" shall have the meaning specified in subsection 2.6(c)(ii).
----------
"Authorized Newspaper" shall mean a newspaper of general circulation in the
--------------------
Borough of Manhattan, The City of New York printed in the English language and
customarily published on each Business Day, whether or not published on
Saturdays, Sundays and holidays.
"Average Principal Receivables" shall mean, for any period, an amount equal
-----------------------------
to (a) the sum of the aggregate amount of Principal Receivables at the end of
each day during such period divided by (b) the number of days in such period.
------- --
"Bank Portfolio" shall mean the MasterCard and VISA accounts owned by the
--------------
Transferor.
"Bankruptcy Code" shall mean the United States federal Bankruptcy Code,
---------------
Title 11 of the United States Code, as amended.
"Base Rate" shall have the meaning, with respect to any Series, specified
---------
in the related Supplement.
"Bearer Certificates" shall have the meaning specified in Section 6.1.
-------------------
3
<PAGE>
"Bearer Rules" shall mean the provisions of the Internal Revenue Code, in
------------
effect from time to time, governing the treatment of bearer obligations,
including sections 163(f), 871, 881, 1441, 1442 and 4701, and any regulations
thereunder including, to the extent applicable to any Series, Proposed or
Temporary Regulations.
"BIF" shall mean the Bank Insurance Fund administered by the FDIC.
---
"Book-Entry Certificates" shall mean certificates evidencing a beneficial
-----------------------
interest in the Investor Certificates, ownership and transfers of which shall be
made through book entries by a Clearing Agency as described in Section 6.10;
provided, however that after the occurrence of a condition whereupon book-entry
- -------- -------
registration and transfer are no longer authorized and Definitive Certificates
are to be issued to the Certificate Owners, such certificates shall no longer be
"Book-Entry Certificates."
"Business Day" shall mean any day other than a Saturday, a Sunday or a day
------------
on which banking institutions in New York, New York (or, with respect to any
Series, any additional city specified in the related Supplement) are authorized
or obligated by law or executive order to be closed.
"Cash Advance Fees" shall have the meaning specified in the Credit Card
-----------------
Agreement applicable to each Account for cash advance fees or similar terms.
"Cedel" shall mean Cedel Bank, societe anonyme.
-----
"Certificate" shall mean any one of the Investor Certificates of any Series
-----------
or the Transferor Certificate.
"Certificateholder" or "Holder" shall mean the Person in whose name a
----------------- ------
Certificate is registered in the Certificate Register and, if applicable, the
holder of any Bearer Certificate or Coupon, as the case may be.
"Certificate Interest" shall mean interest payable in respect of the
--------------------
Investor Certificates of any Series pursuant to Article IV of the Supplement for
such Series.
"Certificate Owner" shall mean, with respect to a Book-Entry Certificate,
-----------------
the Person who is the beneficial owner of such Book-Entry Certificate, as may be
reflected on the books of the Clearing Agency, or on the books of a Person
maintaining an account with such Clearing Agency (directly or as an indirect
participant, in accordance with the rules of such Clearing Agency).
4
<PAGE>
"Certificate Principal" shall mean principal payable in respect of the
---------------------
Investor Certificates of any Series pursuant to Article IV of this Agreement.
"Certificate Rate" shall mean, with respect to any Series of Certificates
----------------
(or, for any Series with more than one Class, for each Class of such Series),
the percentage (or formula on the basis of which such rate shall be determined)
stated in the related Supplement.
"Certificate Register" shall mean the register maintained pursuant to
--------------------
Section 6.3, providing for the registration of the Certificates and transfers
and exchanges thereof.
"Chase USA" shall mean The Chase Manhattan Bank (USA), a banking
---------
corporation organized and existing under the laws of the State of Delaware.
"Chemical Bank" shall mean Chemical Bank, a banking corporation organized
-------------
and existing under the laws of the State of New York.
"Chemical Corporate Trust Office" shall mean the principal office of
-------------------------------
Chemical Bank 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 270 Park Avenue, New York, New York 10017.
"Class" shall mean, with respect to any Series, any one of the classes of
-----
Certificates of that Series as specified in the related Supplement.
"Clearing Agency" shall mean an organization registered as a "clearing
---------------
agency" pursuant to Section 17A of the Securities Exchange Act of 1934, as
amended.
"Clearing Agency Participant" shall mean a broker, dealer, bank, other
---------------------------
financial institution or other Person for whom from time to time a Clearing
Agency or Foreign Clearing Agency effects book-entry transfers and pledges of
securities deposited with the Clearing Agency or Foreign Clearing Agency.
"Closing Date" shall mean, with respect to any Series, the date of issuance
------------
of such Series of Certificates, as specified in the related Supplement.
"Collateral Interest" shall have the meaning, with respect to any Series,
-------------------
specified in the related Supplement.
"Collection Account" shall have the meaning specified in subsection 4.2(a).
------------------
5
<PAGE>
"Collections" shall mean all payments (including Insurance Proceeds)
-----------
received by the Servicer in respect of the Receivables, in the form of cash,
checks, wire transfers, ATM transfers or other form of payment in accordance
with the Credit Card Agreement in effect from time to time. A Collection
processed on an Account in excess of the aggregate amount of Receivables in such
Account as of the Date of Processing of such Collection shall be deemed to be a
payment in respect of Principal Receivables to the extent of such excess.
Collections with respect to any Monthly Period shall include the amount of
Interchange (if any) and the amount of Recoveries (if any) allocable to the
Trust with respect to such Monthly Period, to be applied as if such amounts were
Collections of Finance Charge Receivables for all purposes. Collections with
respect to any Monthly Period shall also include the amount deposited by the
Transferor into the Finance Charge Account (or Series Account if provided in any
supplement) pursuant to Section 2.8.
"Companion Series" shall mean (i) each Series which has been paired with
----------------
another series (which Series may be prefunded in whole or in part), such that
the reduction of the Investor Interest of such Series results in the increase of
the Investor Interest of such other Series, as described in the related
Supplements, and (ii) such other Series, as described in the related
Supplements.
"Controlled Distribution Amount," with respect to any Series, shall have
------------------------------
the meaning specified in the related Supplement.
"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, 21 West, New York, New York 10286.
"Coupon" shall have the meaning specified in Section 6.1.
------
"Credit Adjustment" shall have the meaning specified in subsection 4.3(c).
-----------------
"Credit Card Agreement" shall mean the agreement and Federal Truth in
---------------------
Lending Statement for MasterCard and VISA credit card accounts between any
Obligor and the Transferor, as such agreement may be amended, modified or
otherwise changed from time to time.
"Credit Card Guidelines" shall mean the Transferor's policies and
----------------------
procedures relating to the operation of its credit card business, including,
without limitation, the policies and procedures for determining the
creditworthiness of credit card customers, the extension of credit to credit
card customers, and
6
<PAGE>
relating to the maintenance of credit card accounts and collection of credit
card receivables, as such policies and procedures may be amended from time to
time.
"Credit Enhancement" shall mean, with respect to any Series, the
------------------
subordination, the cash collateral guaranty or account, collateral interest,
letter of credit, surety bond, insurance policy, spread account, reserve
account, cross-support feature or any other contract or agreement for the
benefit of the Certificateholders of such Series (or Certificateholders of a
Class within such Series) as designated in the applicable Supplement.
"Credit Enhancement Provider" shall mean, with respect to any Series, the
---------------------------
Person, if any, designated as such in the related Supplement.
"Cut-Off Date" shall mean September 26, 1995.
------------
"Date of Processing" shall mean, with respect to any transaction, the date
------------------
on which such transaction is first recorded on the Servicer's computer master
file of VISA and MasterCard accounts (without regard to the effective date of
such recordation).
"Default Amount" shall mean, with respect to any Defaulted Account, the
--------------
amount of Principal Receivables (other than Ineligible Receivables) in such
Defaulted Account on the day such Account became a Defaulted Account.
"Defaulted Account" shall mean each Account with respect to which, in
-----------------
accordance with the Credit Card Guidelines or the Servicer's customary and usual
servicing procedures for servicing credit card receivables comparable to the
Receivables, the Servicer has charged off the Receivables in such Account as
uncollectible. An Account shall become a Defaulted Account on the day on which
such Receivables are recorded as charged off as uncollectible on the Servicer's
computer master file of VISA and MasterCard accounts. Notwithstanding any other
provision hereof, any Receivables in a Defaulted Account that are Ineligible
Receivables shall be treated as Ineligible Receivables rather than Receivables
in Defaulted Accounts.
"Definitive Certificate" shall have the meaning specified in Section 6.10.
----------------------
"Depository" shall have the meaning specified in Section 6.10.
----------
"Depository Agreement" shall mean, with respect to a Series having Book-
--------------------
Entry Certificates, the agreement among the Transferor, the Trustee and the
Clearing Agency, or as otherwise provided in the related Supplement.
7
<PAGE>
"Determination Date" shall mean, unless otherwise specified in the related
------------------
Series Supplement, the tenth calendar day of each month, or if such day is not a
Business Day, the next preceding Business Day.
"Discount Percentage" shall have the meaning specified in Section 2.8.
-------------------
"Discount Option Receivables" shall mean, on any date on and after the date
---------------------------
on which the Transferor's exercise of its discount option pursuant to Section
2.8 takes effect, the sum of (a) the aggregate Discount Option Receivables at
the end of the prior day (which amount, prior to the date on which the
Transferor's exercise of its discount option takes effect and with respect to
Receivables generated prior to such date, shall be zero) plus (b) any New
----
Discount Option Receivables created on such day minus (c) any Discount Option
-----
Receivables Collections received on such Date of Processing.
"Discount Option Receivables Collections" shall mean on any Date of
---------------------------------------
Processing on and after the date on which the Transferor's exercise of its
discount option pursuant to Section 2.8 takes effect, the product of (a) a
fraction the numerator of which is the amount of the Discount Option Receivables
and the denominator of which is the sum of the Principal Receivables plus the
amount of Discount Option Receivables in each case (for both numerator and
denominator) at the end of the prior Monthly Period and (b) Collections of
Principal Receivables, prior to any reduction for Finance Charge Receivables
which are Discount Option Receivables, received on such Date of Processing.
"Distribution Account" shall have the meaning specified in subsection
--------------------
4.2(c).
"Distribution Date" shall mean, with respect to each Series, the dates
-----------------
specified in the related Supplement.
"Dollars", "$" or "U.S. $" shall mean United States dollars.
------- - ------
"Eligible Account" shall mean, as of the Cut-Off Date (or, with respect to
----------------
Additional Accounts as of the relevant Addition Date), each Account owned by the
Transferor:
(a) which is in existence and maintained with the Transferor;
(b) which is payable in Dollars;
(c) the Obligor on which has provided, as its most recent billing
address, an address which is located in the United States or its
territories or possessions;
8
<PAGE>
(d) which the Transferor has not classified on its electronic records
as counterfeit, deleted, fraudulent, stolen or lost;
(e) which the Transferor has not charged off in its customary and
usual manner for charging off such Accounts as of the Cut-Off Date (or,
with respect to Additional Accounts, as of the relevant Addition Date); and
(f) the Obligor of which has not been identified by the Transferor on
its electronic records as being involved in a voluntary or involuntary
bankruptcy proceeding.
"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), 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.
"Eligible Institution" shall mean (a), the Servicer, (b) a depository
--------------------
institution (which may be the Trustee or an affiliate) organized under the laws
of the United States or any one of the states thereof which at all times (i) has
either (x) a long-term unsecured debt rating of "A2" or better by Moody's or (y)
a certificate of deposit rating of "P-1" by Moody's, (ii) has either (x) a long-
term unsecured debt rating of "AAA" by Standard & Poor's or (y) a certificate of
deposit rating of "A-l+" by Standard & Poor's and (iii) is a member of the FDIC
or (c) any other institution that is acceptable to the Rating Agencies.
"Eligible Receivable" shall mean each Receivable:
-------------------
(a) which has arisen under an Eligible Account (in the case of
Accounts conveyed to the Trust on the Initial Closing Date and in the case
of Additional Accounts conveyed to the Trust on the relevant Addition
Date);
(b) which was created in compliance, in all material respects, with
all Requirements of Law applicable to the Transferor and pursuant to a
Credit Card Agreement which complies, in all material respects, with all
Requirements of Law applicable to the Transferor;
(c) with respect to which all consents, licenses, approvals or
authorizations of, or registrations or declarations with, any Governmental
Authority required to be obtained, effected or given by the Transferor in
connection
9
<PAGE>
with the creation of such Receivable or the execution, delivery and
performance by the Transferor of the Credit Card Agreement pursuant to
which such Receivable was created, have been duly obtained, effected or
given and are in full force and effect as of such date of creation;
(d) as to which, as of the Closing Date, or in the case of Receivables
in Additional Accounts as of the relevant Addition Date, the Transferor or
the Trust had good title thereto, free and clear of all Liens arising under
or through the Transferor or any of its Affiliates (other than Liens
permitted pursuant to subsection 2.5(b));
(e) which is the legal, valid and binding payment obligation of the
Obligor thereon, enforceable against such Obligor in accordance with its
terms, except as affected by bankruptcy, insolvency, reorganization,
moratorium and other similar laws, now or hereafter in effect, relating to
or affecting creditors' rights generally, general equitable principles
(whether considered in a suit in equity or at law) and an implied covenant
of good faith and fair dealing; and
(f) which constitutes an "account" or "general intangible" under and
as defined in Article 9 of the UCC.
"Enhancement Invested Amount" shall have the meaning, with respect to any
---------------------------
Series, specified in the related Supplement.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
-----
amended from time to time.
"Euroclear Operator" shall mean Morgan Guaranty Trust Company of New York,
------------------
Brussels, Belgium office, as operator of the Euroclear System.
"Excess Funding Account" shall have the meaning specified in subsection
----------------------
4.2(d).
"Excess Funding Amount" shall mean, as of any date of determination, the
---------------------
principal amount on deposit in the Excess Funding Account.
"Exchange" shall mean either of the procedures described under Section 6.9.
--------
"Exchange Date" shall have the meaning, with respect to any Series issued
-------------
pursuant to an Exchange, specified in Section 6.9.
"Exchange Notice" shall have the meaning, with respect to any Series issued
---------------
pursuant to an Exchange, specified in Section 6.9.
10
<PAGE>
"Extended Trust Termination Date" shall have the meaning specified in
-------------------------------
subsection 12.1(a).
"FDIC" shall mean the Federal Deposit Insurance Corporation.
----
"FDR" shall have the meaning specified in Section 8.7.
---
"Finance Charge Account" shall have the meaning specified in subsection
----------------------
4.2(b).
"Finance Charge Receivables" shall mean Receivables created in respect of
--------------------------
the Periodic Finance Charges, Cash Advance Fees and Late Fees and similar fees
and charges, Annual Membership Fees and Special Fees to the extent such Special
Fees are categorized as Finance Charge Receivables. Finance Charge Receivables
with respect to any Monthly Period shall include the amount of Interchange (if
any), Recoveries (if any), Discount Option Receivables (if any), Insurance
Proceeds and investment earnings from any of the Trust Accounts, and other
amounts allocable to any Series of Certificates pursuant to any Supplement with
respect to such Monthly Period that are to be treated as Finance Charge
Receivables but shall exclude charges for credit insurance.
"Foreign Clearing Agency" shall mean Cedel and the Euroclear Operator.
-----------------------
"Funding Period" shall have the meaning specified in Section 4.4.
--------------
"Global Certificate" shall have the meaning specified in Section 6.13.
------------------
"Governmental Authority" shall mean the United States of America, any state
----------------------
or other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"Group" shall mean, with respect to any Series, the group of Series in
-----
which the related Supplement specifies that such Series shall be included.
"Ineligible Receivable" shall have the meaning specified in subsection
---------------------
2.4(d)(iii).
"Initial Closing Date" shall mean October 19, 1995.
--------------------
"Initial Investor Interest" shall mean, with respect to any Series of
-------------------------
Certificates, the amount stated in the related Supplement.
"Insolvency Event" shall have the meaning specified in subsection 9.2(a).
----------------
11
<PAGE>
"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.
"Interchange" shall mean, with respect to any Monthly Period, the product
-----------
of amounts recorded by the Transferor as interchange for such Monthly Period and
the Trust Percentage.
"Internal Revenue Code" shall mean the Internal Revenue Code of 1986, as
---------------------
amended from time to time.
"Investment Company Act" shall mean the Investment Company Act of 1940, as
----------------------
amended from time to time.
"Investor Account" shall mean each of the Finance Charge Account, the
----------------
Principal Account, the Excess Funding Account and the Distribution Account.
"Investor Certificate" shall mean any one of the certificates (including,
--------------------
without limitation, the Bearer Certificates, the Registered Certificates or the
Global Certificates) issued by the Trust, executed by the Transferor and
authenticated by the Trustee substantially in the form (or forms in the case of
a Series with multiple Classes) of the investor certificate attached to the
related Supplement.
"Investor Certificateholder" shall mean each holder of record of an
--------------------------
Investor Certificate.
"Investor Charge-Off" shall have, with respect to each Series, the meaning
-------------------
specified in the applicable Supplement.
"Investor Default Amount" shall have, with respect to any Series of
-----------------------
Certificates, the meaning stated in the related Supplement.
"Investor Exchange" shall have the meaning specified in subsection 6.9(b).
-----------------
"Investor Interest" shall have, with respect to any Series of Certificates,
-----------------
the meaning stated in the related Supplement.
"Investor Percentage" shall have, with respect to Principal Receivables,
-------------------
Finance Charge Receivables and Receivables in Defaulted Accounts, and any Series
of Certificates, the meaning stated in the related Supplement.
"Investor Servicing Fee" shall have, with respect to each Series, the
----------------------
meaning specified in Section 3.2.
12
<PAGE>
"Late Fees" shall have the meaning specified in the Credit Card Agreement
---------
applicable to each Account for late fees or similar terms.
"Lien" shall mean any mortgage, deed of trust, pledge, hypothecation,
----
assignment, deposit arrangement, encumbrance, lien (statutory or other),
preference, priority or other security agreement or preferential arrangement of
any kind or nature whatsoever, including, without limitation, any conditional
sale or other title retention agreement, any financing lease having
substantially the same economic effect as any of the foregoing or comparable law
of any jurisdiction to evidence any of the foregoing; provided, however, that
-------- -------
any assignment pursuant to Section 7.2 shall not be deemed to constitute a Lien.
"Minimum Aggregate Principal Receivables" shall mean, as of any date of
---------------------------------------
determination, the sum of the numerators used on such date to calculate the
Investor Percentage with respect to Principal Receivables for all Series
outstanding on such date, less the amount on deposit in the Excess Funding
Account as of such date of determination.
"Minimum Transferor Interest" shall mean, with respect to any Monthly
---------------------------
Period, an amount equal to the product of the Minimum Transferor Interest
Percentage and the sum of (i) the Average Principal Receivables for such Monthly
Period, (ii) the Excess Funding Amount and (iii) any amounts on deposit in any
Principal Funding Account and any other Series Account (if so specified in the
applicable Supplement).
"Minimum Transferor Interest Percentage" shall mean the highest percentage
--------------------------------------
specified as the "Minimum Transferor Interest Percentage" in any Supplement;
provided, however, that the Transferor may reduce the Minimum Transferor
- -------- -------
Interest Percentage upon (w) 30 days' prior notice to the Trustee, each Rating
Agency and any Credit Enhancement Provider entitled to receive such notice
pursuant to the relevant Supplement, (x) written confirmation from each Rating
Agency that such action will satisfy the Rating Agency Condition, (y) delivery
to the Trustee and each such Credit Enhancement Provider of an Officer's
Certificate stating that the Transferor reasonably believes that such reduction
will not, based on the facts known to such officer at the time of such
certification, then or thereafter cause a Pay Out Event to occur with respect to
any Series and (z) delivery to the Trustee of a Tax Opinion; provided further
-------- -------
that the Minimum Transferor Interest Percentage shall not at any time be less
than 2%.
"Monthly Period" shall mean, unless otherwise defined in any Supplement,
--------------
the period from and including the first day of a calendar month to and including
the last day of a calendar month.
"Moody's" shall mean Moody's Investors Service, Inc.
-------
13
<PAGE>
"New Discount Option Receivables" shall mean, as of any date of
-------------------------------
determination, the product of the Discount Percentage and the amount of
Principal Receivables (before subtracting out Finance Charge Receivables which
are Discount Option Receivables) arising on such date of determination.
"Notice Date" shall have the meaning specified in subsection 2.6(c)(i).
-----------
"Obligor" shall mean, with respect to any Account, the Person or Persons
-------
obligated to make payments with respect to such Account, including any guarantor
thereof.
"Officer's Certificate" shall mean a certificate signed by any Vice
---------------------
President or more senior officer of the Transferor or Servicer and delivered to
the Trustee.
"Opinion of Counsel" shall mean a written opinion of counsel, who may be
------------------
counsel for or an employee of the Person providing the opinion, and who shall be
reasonably acceptable to the Trustee.
"Participation" shall have the meaning specified in subsection 2.6(a)(ii).
-------------
"Paying Agent" shall mean any paying agent appointed pursuant to Section
------------
6.6 and shall initially be Chemical Bank.
"Pay Out Commencement Date" shall mean, (a) with respect to each Series,
-------------------------
the date on which a Trust Pay Out Event is deemed to occur pursuant to Section
9.1 or (b) with respect to any Series, a Series Pay Out Event is deemed to occur
pursuant to the Supplement for such Series.
"Pay Out Event" shall mean, with respect to each Series, a Trust Pay Out
-------------
Event or a Series Pay Out Event.
"Periodic Finance Charges" shall have the meaning specified in the Credit
------------------------
Card Agreement applicable to each Account for finance charges (due to periodic
rate) or any similar term.
"Permitted Investments" shall mean, unless otherwise provided in the
---------------------
Supplement with respect to any Series
(a) book-entry securities or negotiable instruments or securities
represented by instruments in bearer or registered form which evidence (i)
obligations of or fully guaranteed by the United States of America; (ii)
demand deposits, time deposits or certificates of deposit of any depositary
institution or trust company incorporated under the laws of the United
States of America or any state thereof (or domestic branches of foreign
banks) and subject to
14
<PAGE>
supervision and examination by federal or state banking or depositary
institution authorities; provided, however, that at the time of the Trust's
-------- -------
investment or contractual commitment to invest therein, the certificates of
deposit or short-term deposits of such depositary institution or trust
company shall have a credit rating from Moody's and Standard & Poor's of
"P-1" and "A-1+", respectively; (iii) commercial paper having, at the time
of the Trust's investment or contractual commitment to invest therein, a
rating from Moody's and Standard & Poor's of "P-1" and "A-l+", respectively
and (iv) bankers' acceptances issued by any depository institution or trust
company described in clause (a)(ii) above;
(b) demand deposits in the name of the Trust or the Trustee in any
depositary institution or trust company referred to in clause (a)(ii)
above;
(c) repurchase agreements transacted with either
(i) an entity subject to the United States federal bankruptcy
code, provided that (A) the repurchase agreement matures prior to the
next Distribution Date or is due on demand, (B) the Trustee or a third
party acting solely as agent for the Trustee has possession of the
collateral, (C) the Trustee on behalf of the Trust has a security
interest in the collateral, (D) the market value of the collateral is
maintained at the requisite collateral percentage of the obligation in
accordance with standards of the Rating Agencies, (E) the failure to
maintain the requisite collateral level will obligate the Trustee to
liquidate the collateral immediately, (F) the securities subject to
the repurchase agreement are either obligations of, or fully
guaranteed as to principal and interest by, the United States of
America or any instrumentality or agency thereof, certificates of
deposit or bankers acceptances and (G) the securities subject to the
repurchase agreement are free and clear of any third party lien or
claim; or
(ii) a financial institution insured by the FDIC, or any broker-
dealer with "retail customers" that is under the jurisdiction of the
Securities Investors Protection Corp. ("SIPC"), provided that (A) the
market value of the collateral is maintained at the requisite
collateral percentage of the obligation in accordance with the
standards of the Rating Agencies, (B) the Trustee or a third party
(with a short-term debt rating of P-1 or higher by Moody's) acting
solely as agent for the Trustee has possession of the collateral, (C)
the
15
<PAGE>
Trustee on behalf of the Trust has a security interest in the
collateral, (D) the collateral is free and clear of third party liens
and, in the case of an SIPC broker, was not acquired pursuant to a
repurchase or reverse repurchase agreement and (E) the failure to
maintain the requisite collateral percentage will obligate the Trustee
to liquidate the collateral; provided, however, that at the time of
-------- -------
the Trust's investment or contractual commitment to invest in any
repurchase agreement, the short-term deposits or commercial paper
rating of such entity or institution in subsections (i) and (ii) shall
have a credit rating of "P-1" from Moody's and "A-1+" from Standard &
Poor's; and
(d) any other investment that by its terms converts to cash within a
finite time period if the Rating Agency Condition is satisfied with respect
thereto.
"Person" shall mean any legal person, including any individual,
------
corporation, limited liability company, partnership, joint venture, association,
joint-stock company, trust, unincorporated organization, governmental entity or
other entity of similar nature.
"Pool Factor" shall mean, except with respect to any Series issued in more
-----------
than one Class, a number carried out to seven decimals representing the ratio of
the applicable Investor Interest as of such Record Date (determined after taking
into account any reduction in the Investor Interest which will occur on the
following Distribution Date) to the applicable Initial Investor Interest, and
with respect to a Series having more than one Class, as specified in the
Supplement relating to such Series.
"Portfolio Yield" shall have the meaning, with respect to any Series,
---------------
specified in the related Supplement.
"Pre-Funding Account" shall have the meaning specified in Section 4.4.
-------------------
"Principal Account" shall have the meaning specified in subsection 4.2(b).
-----------------
"Principal Receivable" shall mean each Receivable other than (i) Finance
--------------------
Charge Receivables, and (ii) Receivables in Defaulted Accounts. A Receivable
shall be deemed to have been created at the end of the day on the Date of
Processing of such Receivable. In calculating the aggregate amount of Principal
Receivables on any day, the amount of Principal Receivables shall be reduced by
the aggregate amount of credit balances in the Accounts on such day. Any
Receivables which the Transferor is unable to transfer
16
<PAGE>
as provided in subsection 2.5(e) shall not be included in calculating the
aggregate amount of Principal Receivables.
"Principal Sharing Series" shall mean a Series, that, pursuant to the
------------------------
related Supplement, is entitled to Shared Principal Collections.
"Principal Shortfalls" shall mean, with respect to a Transfer Date, the
--------------------
aggregate amount for all outstanding Series that the related Supplements specify
are "Principal Shortfalls" for such Transfer Date.
"Principal Terms" shall have the meaning, with respect to any Series issued
---------------
pursuant to an Exchange, specified in subsection 6.9(c).
"Rating Agency" shall mean, with respect to each Series, the rating agency
-------------
or agencies, if any, specified in the related Supplement.
"Rating Agency Condition" shall mean, at any time with respect to a Series,
-----------------------
the written confirmation of the Rating Agency that a specified event or
modification of the terms of such Series will not result in the withdrawal or
downgrade of the rating of the Certificates of any Series then in effect.
"Reassignment" shall have the meaning specified in subsection 2.7(b)(ii).
------------
"Reassignment Date" shall have the meaning specified in subsection 2.4(e).
-----------------
"Receivable" shall mean any amount owing by any Obligor including, without
----------
limitation, amounts owing for the payment of goods and services, cash advances,
access checks, Annual Membership Fees, Cash Advance Fees, Periodic Finance
Charges, Late Fees and Special Fees, if any but excluding credit insurance
premiums.
"Record Date" shall mean, with respect to any Distribution Date, the last
-----------
Business Day of the preceding Monthly Period.
"Recoveries" shall mean, with respect to any Monthly Period, the product of
----------
all amounts recorded as recoveries on the Bank Portfolio by the Servicer during
such Monthly Period and the Trust Percentage.
"Registered Certificates" shall have the meaning specified in Section 6.1.
-----------------------
"Removal Date" shall mean the date on which Receivables in certain
------------
designated Removed Accounts will be reassigned by the Trustee to the Transferor.
17
<PAGE>
"Removal Notice Date" shall mean the day no later than the fifth Business
-------------------
Day prior to a Removal Date.
"Removed Accounts" shall have the meaning specified in subsection 2.7(a).
----------------
"Requirements of Law" for any Person shall mean the certificate of
-------------------
incorporation or articles of association and by-laws or other organizational or
governing documents of such Person, and any law, treaty, rule or regulation, or
determination of an arbitrator or Governmental Authority, in each case
applicable to or binding upon such Person or to which such Person is subject,
whether federal, state or local (including, without limitation, usury laws, the
federal Truth in Lending Act and Regulation Z and Regulation B of the Board of
Governors of the Federal Reserve System).
"Responsible Officer" shall mean any officer within the Corporate Trust
-------------------
Office (or any successor group of the Trustee), including any Vice President,
any Assistant Secretary or any other officer of the Trustee customarily
performing functions similar to those performed by any person who at the time
shall be an above-designated officer and also, with any particular officer to
whom any corporate trust matter is referred because of such Officer's knowledge
of and familiarity with the particular subject.
"Revolving Period" shall have, with respect to each Series, the meaning
----------------
specified in the related Supplement.
"SAIF" shall mean the Savings Association Insurance Fund administered by
----
the FDIC.
"Securities Act" shall mean the Securities Act of 1933, as amended.
--------------
"Series" shall mean any Series of Investor Certificates, which may include
------
within any such Series a Class or Classes of Investor Certificates subordinate
to another such Class or Classes of Investor Certificates.
"Series Account" shall mean any account or accounts established pursuant to
--------------
a Supplement for the benefit of such Series.
"Series Pay Out Event" shall have, with respect to any Series, the meaning
--------------------
specified pursuant to the Supplement for the related Series.
"Series Servicing Fee Percentage" shall mean, with respect to any Series,
-------------------------------
the amount specified in the related Supplement.
18
<PAGE>
"Series Termination Date" shall mean, with respect to any Series of
-----------------------
Certificates, the date stated in the related Supplement.
"Servicer" shall mean initially Chemical Bank, and its permitted successors
--------
and assigns and thereafter any Person appointed as successor as herein provided
to service the Receivables.
"Servicer Default" shall have the meaning specified in Section 10.1.
----------------
"Servicing Fee" shall have the meaning specified in Section 3.2.
-------------
"Servicing Officer" shall mean any officer of the Servicer involved in, or
-----------------
responsible for, the administration and servicing of the Receivables whose name
appears on a list of servicing officers furnished to the Trustee by the
Servicer, as such list may from time to time be amended.
"Shared Excess Finance Charge Collections" shall mean, with respect to any
----------------------------------------
Transfer Date, the aggregate amount for all outstanding Series that the related
supplements specify are to be treated as "Shared Excess Finance Charge
Collections" for such Transfer Date.
"Shared Principal Collections" shall mean, with respect to any Transfer
----------------------------
Date, the aggregate amount for all outstanding Series that the related
Supplements specify are to be treated as "Shared Principal Collections" for such
Transfer Date.
"Special Fees" shall mean any fees which are not now but from time to time
------------
may be assessed on the Accounts. On or after the date on which any of such
Special Fees begin to be assessed on the Accounts, the Transferor may designate
in an Officer's Certificate whether such Special Fees shall be treated as
Principal Receivables or Finance Charge Receivables.
"Standard & Poor's" shall mean Standard & Poor's Ratings Services, a
-----------------
Division of The McGraw-Hill Companies, Inc.
"Successor Servicer" shall have the meaning specified in subsection
------------------
10.2(a).
"Supplement" or "Series Supplement" shall mean, with respect to any Series,
---------- -----------------
a supplement to this Agreement complying with the terms of Section 6.9 of this
Agreement, executed in conjunction with any issuance of any Series of
Certificates (or, in the case of the issuance of Certificates on the Initial
Closing Date, the supplement executed in connection with the issuance of such
Certificates).
19
<PAGE>
"Tax Opinion" shall mean with respect to any action, an Opinion of Counsel
-----------
delivered to the Trust and the Trustee to the effect that, for U.S. federal
income tax purposes, (a) such action will not adversely affect the tax
characterization as debt of Investor Certificates of any outstanding Series or
Class that were characterized as debt at the time of their issuance, (b)
following such action the Trust will not be deemed to be an association (or a
"publicly traded partnership" within the meaning of Section 7704(b) of the Code)
taxable as a corporation and (c) such action will not cause or constitute a
taxable event in which gain or loss would be recognized by any Investor
Certificateholder or the Trust.
"Termination Notice" shall have, with respect to any Series, the meaning
------------------
specified in subsection 10.1(d).
"Transfer Agent and Registrar" shall have the meaning specified in Section
----------------------------
6.3 and shall initially be the Chemical Corporate Trust Office.
"Transfer Date" shall mean, unless otherwise specified in the related
-------------
Supplement, with respect to any Series, the Business Day immediately prior to
each Distribution Date.
"Transferor" shall mean (i) with respect to the time period prior to June
----------
1, 1996, Chemical Bank and (ii) with respect to the time period beginning on
June 1, 1996, Chase USA and its successors in interest and permitted assigns.
"Transferor Certificate" shall mean the certificate executed by the
----------------------
Transferor and authenticated by the Trustee, substantially in the form of
Exhibit A and exchangeable as provided in Section 6.9; provided, however, that
-------- -------
at any time there shall be only one Transferor Certificate.
"Transferor Exchange" shall have the meaning specified in subsection
-------------------
6.9(b).
"Transferor Interest" shall mean, on any date of determination, the
-------------------
aggregate amount of Principal Receivables and the principal amounts on deposit
in the Excess Funding Account, any Principal Funding Account and any other
Series Account (if so provided in the applicable Supplement) at the end of the
day immediately prior to such date of determination, minus the Aggregate
-----
Investor Interest at the end of such day, minus the aggregate Enhancement
-----
Invested Amounts (if such amounts are not included in the Investor Interest in
the applicable Supplement), if any, for each Series outstanding at the end of
such day.
"Transferor Percentage" shall mean, on any date of determination, when used
---------------------
with respect to Principal Receivables, Finance Charge Receivables and
Receivables in Defaulted Accounts, a
20
<PAGE>
percentage equal to 100% minus the Aggregate Investor Percentage with respect to
-----
such categories of Receivables.
"Transferor Servicing Fee" shall have the meaning specified in Section 3.2.
------------------------
"Transferred Account" shall mean (a) an Account with respect to which a new
-------------------
credit account number has been issued by the Servicer or the Transferor under
circumstances resulting from a lost or stolen credit card or from the transfer
from one affinity group to another affinity group and not requiring standard
application and credit evaluation procedures under the Credit Card Guidelines or
(b) an Eligible Account resulting from the conversion of an Account that was a
standard account to a premium account or from a premium account to a standard
account, and which in either case can be traced or identified by reference to or
by way of the computer files or microfiche lists delivered to the Trustee
pursuant to Section 2.1 or 2.6 as an account into which an Account has been
transferred.
"Trust" shall mean the trust created by this Agreement, the corpus of which
-----
shall consist of the Receivables now existing or hereafter created and arising
in connection with the Accounts, all monies due or to become due with respect to
the Receivables, all proceeds (as defined in Section 9-306 of the UCC) of the
Receivables and Insurance Proceeds relating to the Receivables, the right to
receive certain amounts paid or payable as Interchange and Recoveries, such
funds as from time to time are deposited in the Collection Account, the Finance
Charge Account, the Principal Account, the Distribution Account, the Excess
Funding Account and any Series Account and the rights to any Credit Enhancement
with respect to any Series. The name of such Trust shall be "The Chemical
Master Credit Card Trust I" or any other name at the option of the Transferor;
provided, however, that at least 5 Business Days prior to any change in the name
- -------- -------
of Trust, the Transferor shall give written notice of such change to the
Servicer, the Trustee, each Rating Agency, any Credit Enhancement Provider and
all Certificateholders.
"Trust Accounts" shall mean the Collection Account, the Principal Account,
--------------
the Finance Charge Account, the Distribution Account and the Excess Funding
Account.
"Trust Extension" shall have the meaning specified in subsection 12.1(a).
---------------
"Trust Pay Out Event" shall have, with respect to each Series, the meaning
-------------------
specified in Section 9.1.
"Trust Percentage" shall mean, with respect to any Monthly Period, a
----------------
fraction expressed as a percentage, the numerator of which is the aggregate
principal amount of Principal Receivables
21
<PAGE>
(prior to giving effect to any reduction thereof for Finance Charge Receivables
which are Discount Option Receivables) as of the close of business on the last
day of the prior Monthly Period and the denominator of which is the aggregate
principal balance of the Bank Portfolio as of the close of business on the last
day of the prior Monthly Period.
"Trust Termination Date" shall mean (i) if a Trust Extension shall not have
----------------------
occurred, the earlier to occur of (a) the first Business Day after the
Distribution Date following the date on which funds shall have been deposited in
the Distribution Account or the applicable Series Account for the payment of
Investor Certificateholders of each Series then issued and outstanding
sufficient to pay in full such certificates, (b) the date specified in
subsection 9.2(b) and (c) August 31, 2016, and (ii) if a Trust Extension shall
have occurred, the Extended Trust Termination Date.
"Trustee" shall mean The Bank of New York, a New York banking corporation,
-------
and its successors and any corporation resulting from or surviving any
consolidation or merger to which it or its successors may be a party and any
successor trustee appointed as herein provided.
"UCC" shall mean the Uniform Commercial Code, as amended from time to time,
---
as in effect in either the State of New York or the State of Delaware, as
applicable.
"Undivided Interest" shall mean the undivided interest in the Trust
------------------
evidenced by an Investor Certificate.
Section 1.2 Other Definitional Provisions.
-----------------------------
(a) All terms defined in any Supplement or this Agreement shall have
the defined meanings when used in any certificate or other document made or
delivered pursuant hereto unless otherwise defined therein.
(b) As used herein and in any certificate or other document made or
delivered pursuant hereto or thereto, accounting terms not defined in Section
1.1, and accounting terms partially defined in Section 1.1 to the extent not
defined, shall have the respective meanings given to them under generally
accepted accounting principles or regulatory accounting procedures applicable to
the Transferor, as applicable. To the extent that the definitions of accounting
terms herein are inconsistent with the meanings of such terms under generally
accepted accounting principles or such regulatory accounting procedures, the
definitions contained herein shall control.
(c) The agreements, representations and warranties of Chemical Bank in
this Agreement and in any Supplement in each of
22
<PAGE>
its capacities as Transferor and Servicer shall be deemed to be the agreements,
representations and warranties of Chemical Bank solely in each such capacity for
the time periods during which Chemical Bank acts in the respective capacity
under this Agreement and the agreements, representations and warranties of Chase
USA in this Agreement and in any Supplement in its capacity as Transferor shall
be deemed to be the agreements, representations and warranties of Chase USA
solely in such capacity for the time periods and for so long as Chase USA acts
in such capacity under this Agreement.
(d) The words "hereof," "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to any Supplement or this
Agreement as a whole and not to any particular provision of this Agreement or
any Supplement; and Section, subsection, Schedule and Exhibit references
contained in this Agreement or any Supplement are references to Sections,
subsections, Schedules and Exhibits in or to this Agreement or any Supplement
unless otherwise specified. The Monthly Servicer Report, the form of which is
attached as Exhibit C, shall be in substantially the form of Exhibit C, with
such changes as the Servicer may determine to be necessary or desirable;
provided, however, that no such change shall serve to exclude information
- -------- -------
required by the Agreement or any Supplement. The Servicer shall, upon making
such determination, deliver to the Trustee and each Rating Agency an Officer's
Certificate to which shall be annexed the form of the related Exhibit, as so
changed. Upon the delivery of such Officer's Certificate to the Trustee, the
related Exhibit, as so changed, shall for all purposes of this Agreement
constitute such Exhibit. The Trustee may conclusively rely upon such Officer's
Certificate in determining whether the related Exhibit, as changed, conforms to
the requirements of this Agreement.
[End of Article I]
23
<PAGE>
ARTICLE II
CONVEYANCE OF RECEIVABLES;
ISSUANCE OF CERTIFICATES
Section 2.1 Conveyance of Receivables. Each of Chemical Bank and
-------------------------
Chase USA does hereby transfer, assign, set over, and otherwise convey to the
Trust for the benefit of the Certificateholders, without recourse, all of its
right, title and interest in and to (i) the Receivables existing as of the Cut-
Off Date and thereafter created and arising in connection with the Accounts
(other than Additional Accounts), (ii) all monies due or to become due with
respect to such Receivables, (iii) all proceeds of such Receivables, (iv)
Insurance Proceeds relating to such Receivables, (v) Recoveries and (vi)
Interchange.
In connection with such transfer, assignment, set-over and conveyance,
each of Chemical Bank and Chase USA agrees to file, at its own expense, a
financing statement (including any continuation statements with respect to such
financing statement when applicable) with respect to the Receivables now
existing and hereafter created for the perfection of a security interest (as
defined in the UCC) in accounts and general intangibles (as defined in Section
9-106 of the UCC) meeting the requirements of applicable state law in such
manner and in such jurisdictions as are necessary to perfect such security
interest in favor of the Trust, and to deliver a file-stamped copy of such
financing statement or continuation statement or other evidence at such filing
(which may, for purposes of this Section 2.1, consist of telephone confirmation
of such filing) to the Trustee on or prior to the date of issuance of the
Certificates, and in the case of any continuation statements filed pursuant to
this Section 2.1, as soon as practicable after receipt thereof by the
Transferor. It is understood and agreed that the description of collateral set
forth in such financing statements will include all credit card accounts of the
Transferor. Upon receipt of written request from the Transferor to release the
receivables in such credit card accounts as are specified in such request, the
Trustee is hereby authorized and hereby agrees to execute promptly, UCC-3
amendments or releases, releasing such credit card accounts; provided, however,
-------- -------
that except as permitted pursuant to Section 2.7, no such release shall apply to
the Accounts, including any Additional Accounts. In addition, the Trustee is
hereby authorized to execute such intercreditor or other agreements as may be
requested in writing by the Transferor in connection with the foregoing;
provided, however, that except as permitted pursuant to Section 2.7, no such
- -------- -------
intercreditor agreements shall apply to the Accounts, including any Additional
Accounts, or any Receivables in such Accounts or Additional Accounts. The
foregoing transfer, assignment, set-over and conveyance to the Trust shall be
made to the Trustee, on behalf of the Trust, and each refer-
24
<PAGE>
ence in this Agreement to such transfer, assignment, set-over and conveyance
shall be construed accordingly.
In connection with such transfer, the Transferor agrees, at its own
expense, on or prior to the Initial Closing Date (i) to indicate in its computer
files that Receivables created in connection with the Accounts have been
transferred to the Trust pursuant to this Agreement for the benefit of the
Certificateholders and (ii) to deliver to the Trustee a computer file or
microfiche list containing a true and complete list of all such Accounts,
identified by account number and setting forth the Receivable balance as of the
Cut-Off Date. Such file or list shall be marked as Schedule 1 to this
Agreement, delivered to the Trustee as confidential and proprietary, and is
hereby incorporated into and made a part of this Agreement. The Transferor
further agrees not to remove such indication in the file 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 a Defaulted
Account.
The Transferor hereby grants to the Trustee a security interest in all
of the Transferor's right, title and interest in, to and under the Receivables
existing as of the Cut-Off Date and thereafter created and arising in connection
with the Accounts (other than Additional Accounts), all moneys due or to become
due with respect to such Receivables, all proceeds of such Receivables and all
Insurance Proceeds relating to such Receivables, all Recoveries and Interchange
and all proceeds thereof to secure a loan in an amount equal to the unpaid
principal amount of the Investor Certificates issued hereunder or to be issued
pursuant to this Agreement and the interest accrued at the related Certificate
Rate, and this Agreement shall constitute a security agreement under applicable
law.
Pursuant to the request of the Transferor, the Trustee shall cause
Certificates in authorized denominations evidencing the entire interest in the
Trust to be duly authenticated and delivered to or upon the order of the
Transferor pursuant to Section 6.2.
Notwithstanding anything else in this Agreement to the contrary, it is
understood and agreed that the ownership interest or lien conveyed or granted by
Chemical Bank, as Transferor, to the Trustee in Receivables and other property
under the Original Pooling and Servicing Agreement shall remain in full force
and effect and shall in no way be affected by the amendment and restatement of
such Original Pooling and Servicing Agreement by this Amended and Restated
Pooling and Servicing Agreement.
25
<PAGE>
Section 2.2 Acceptance by Trustee.
---------------------
(a) The Trustee hereby acknowledges its acceptance, on behalf of the
Trust, of all right, title and interest previously held by the Transferor in and
to the Receivables existing as of the Cut-Off Date and thereafter created and
arising in connection with the Accounts, all monies due or to become due with
respect thereto (including all Finance Charge Receivables), all proceeds of such
Receivables, Insurance Proceeds relating to such Receivables, all Recoveries and
Interchange and the proceeds thereof, 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 described in the
third paragraph of Section 2.1.
(b) The Trustee hereby agrees not to disclose to any Person any of the
account numbers or other information contained in the computer files or
microfiche lists delivered to the Trustee by the Transferor pursuant to Sections
2.1, 2.6 and 2.7 ("Account Information") except as required in connection with
the performance of its duties hereunder or in enforcing the rights of the
Certificateholders or to a Successor Servicer appointed pursuant to Section
10.2, or as mandated pursuant to any Requirement of Law applicable to the
Trustee or as requested by any Person in connection with financing statements
filed with the Trust. 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, shall allow
the Transferor to inspect the Trustee's security and confidentiality
arrangements from time to time during normal business hours. In the event that
the Trustee is required by law to disclose any Account Information, the Trustee
shall provide the Transferor with prompt written notice, unless such notice is
prohibited by law, of any such request or requirement so that the Transferor may
request a protective order or other appropriate remedy. The Trustee shall use
its best efforts to provide the Transferor with written notice no later than
five Business Days prior to any disclosure pursuant to this subsection 2.2(b).
(c) The Trustee shall have no power to create, assume or incur
indebtedness or other liabilities in the name of the Trust other than as
contemplated in this Agreement.
Section 2.3 Representations and Warranties of the Transferor. The
------------------------------------------------
Transferor hereby represents and warrants to the Trust as of the Initial Closing
Date:
26
<PAGE>
(a) Organization and Good Standing. The Transferor is a banking
------------------------------
corporation duly organized and validly existing in good standing under the
laws of the state of its organization and has full corporate power,
authority and legal right to execute, deliver and perform its obligations
under this Agreement and to execute and deliver to the Trustee the
Certificates pursuant hereto, and, in all material respects, to own its
properties and conduct its business as such properties are presently owned
and such business is presently conducted.
(b) Due Qualification. The Transferor is duly qualified to do
-----------------
business and is in good standing (or is exempt from such requirement) and
has obtained all necessary licenses and approvals with respect to the
Transferor in each jurisdiction in which failure to so qualify or to obtain
such licenses and approvals would render any Credit Card Agreement relating
to an Account or any Receivable unenforceable by the Transferor or the
Trust or would have a material adverse effect on the Certificateholders;
provided, however, that no representation or warranty is made with respect
-------- -------
to any qualifications, licenses or approvals which the Trustee would have
to obtain to do business in any state in which the Trustee seeks to enforce
any Account or Receivable.
(c) Due Authorization. The execution and delivery of this Agreement
-----------------
and the execution and delivery to the Trustee of the Certificates by the
Transferor and the consummation of the transactions provided for in this
Agreement have been duly authorized by the Transferor by all necessary
corporate action on its part and this Agreement will remain, from the time
of its execution, an official record of the Transferor.
(d) No Conflict. The execution and delivery of this Agreement and the
-----------
Certificates, the performance of the transactions contemplated by this
Agreement and the fulfillment of the terms hereof 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, except to the extent that the same could
not reasonably be expected to have a material adverse effect on the
Certificateholders.
(e) No Violation. The execution and delivery of this Agreement, any
------------
Supplement and the Certificates, the performance of the transactions
contemplated by this Agreement and the fulfillment of the terms hereof will
not conflict with or violate any Requirements of Law applicable to the
Trans-
27
<PAGE>
feror, except to the extent that the same could not reasonably be expected
to have a material adverse effect on the Certificateholders.
(f) No Proceedings. There are no proceedings or investigations
--------------
pending or, to the best knowledge of the Transferor, threatened against the
Transferor before any court, regulatory body, administrative agency, or
other tribunal or governmental instrumentality (i) asserting the invalidity
of this Agreement or the Certificates, (ii) seeking to prevent the issuance
of the Certificates or the consummation of any of the transactions
contemplated by this Agreement or the Certificates, (iii) seeking any
determination or ruling that, in the reasonable judgment of the Transferor,
would materially and adversely affect the performance by the Transferor of
its obligations under this Agreement, (iv) seeking any determination or
ruling that would materially and adversely affect the validity or
enforceability of this Agreement or the Certificates or (v) seeking to
affect adversely the income tax attributes of the Trust.
(g) Eligibility of Accounts. As of the Cut-Off Date, each Account was
-----------------------
an Eligible Account and no selection procedures adverse to the Investor
Certificateholders have been employed by the Transferor in selecting the
Accounts from among the Eligible Accounts in the Bank Portfolio.
(h) All Consents Required. All approvals, authorizations, consents,
---------------------
orders or other actions of any Person or of any governmental body or
official required in connection with the execution and delivery of this
Agreement and the Certificates, the performance of the transactions
contemplated by this Agreement and the fulfillment of the terms hereof,
have been obtained, except where the failure to obtain such approvals,
authorizations, consents, orders or other actions could not reasonably be
expected to have a material adverse effect on the Certificateholders.
For the purposes of the representations and warranties contained in
this Section 2.3 and made by the Transferor on the Initial Closing Date,
"Certificates" shall mean the Certificates issued on the Initial Closing Date.
The representations and warranties set forth in this Section 2.3 shall survive
the transfer and assignment of the respective Receivables to the Trust, and
termination of the rights and obligations of the Servicer pursuant to Section
10.1. The Transferor hereby represents and warrants to the Trust, with respect
to any Series of Certificates, as of its Closing Date, unless otherwise stated
in such Supplement, that the representations and warranties of the Transferor
set forth in Section 2.3 are true and correct as of such date (for the purposes
of such representations and warran-
28
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ties, "Certificates" shall mean the Certificates issued on the related Closing
Date). Upon discovery by the Transferor, the Servicer or the Trustee of a
breach of any of the foregoing representations and warranties, the party
discovering such breach shall give prompt written notice to the others.
Section 2.4 Representations and Warranties of the Transferor Relating
---------------------------------------------------------
to the Agreement and the Receivables.
- ------------------------------------
(a) Binding Obligation; Valid Transfer and Assignment. The Transferor
-------------------------------------------------
hereby represents and warrants to the Trust that, as of the Initial Closing
Date:
(i) This Agreement constitutes a valid and legally binding
obligation of the Transferor, enforceable against the Transferor in
accordance with its terms, except (A) as may be limited by applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium
or other similar laws now or hereafter in effect relating to or affecting
creditors' rights generally and the rights of creditors of banking
corporations organized under the laws of the state of its organization, and
(B) as may be limited by general equitable principles (whether considered
in a proceeding in equity or at law) and an implied covenant of good faith
and fair dealing.
(ii) This Agreement constitutes either (A) a valid transfer,
assignment, set-over and conveyance to the Trust of all right, title and
interest of the Transferor in and to the Receivables now existing and
hereafter created and arising in connection with the Accounts (other than
Receivables in Additional Accounts), all proceeds of such Receivables and
Insurance Proceeds relating thereto, and such Receivables and all proceeds
thereof and Insurance Proceeds relating thereto will be held by the Trust
free and clear of any Lien of any Person claiming through or under the
Transferor or any of its Affiliates except for (x) Liens permitted under
subsection 2.5(b), (y) the interest of the Transferor as Holder of the
Transferor Certificate and (z) the Transferor's right, if any, to interest
accruing on, and investment earnings, if any, in respect of the Finance
Charge Account, the Principal Account or any Series Account, as provided in
this Agreement or the related Supplement, or (B) a grant of a security
interest (as defined in the UCC) in such property to the Trust, which is
enforceable with respect to the existing Receivables, the proceeds thereof
and Insurance Proceeds relating thereto upon execution and delivery of this
Agreement, and which will be enforceable with respect to such Receivables
hereafter created, the proceeds thereof and Insurance Proceeds relating
thereto, upon such creation. If this Agreement constitutes the grant of a
security interest to the Trust in such property, upon
29
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the filing of the financing statement described in Section 2.1 and in the
case of the Receivables hereafter created and proceeds thereof and
Insurance Proceeds relating thereto, upon such creation, the Trust shall
have a first priority perfected security interest in the Transferor's
rights in such property (subject to Section 9-306 of the UCC), except for
Liens permitted under subsection 2.5(b). Neither the Transferor nor any
Person claiming through or under the Transferor shall have any claim to or
interest in the Principal Account, the Finance Charge Account, the
Distribution Account or any Series Account, except for the Transferor's
rights to receive interest accruing on, and investment earnings in respect
of, the Finance Charge Account and Principal Account as provided in this
Agreement (or, if applicable, any Series Account as provided in any
Supplement) and, if this Agreement constitutes the grant of a security
interest in such property, except for the interest of the Transferor in
such property as a debtor for purposes of the UCC.
(b) Eligibility of Receivables. The Transferor hereby represents and
--------------------------
warrants to the Trust as of the Initial Closing Date and as of each Addition
Date, as the case may be, that:
(i) Each Receivable is an Eligible Receivable as of the Cut-Off
Date or the Addition Date, as applicable.
(ii) Each Receivable then existing has been transferred to the
Trust free and clear of any Lien of any Person claiming through or under
the Transferor or any of its Affiliates (other than Liens permitted under
subsection 2.5(b)) and in compliance, in all material respects, with all
Requirements of Law applicable to the Transferor.
(iii) With respect to each Receivable then existing, all
consents, licenses, approvals or authorizations of or registrations or
declarations with any Governmental Authority required to be obtained,
effected or given by the Transferor in connection with the conveyance of
such Receivable to the Trust have been duly obtained, effected or given and
are in full force and effect.
(iv) On each day on which any new Receivable is created, the
Transferor shall be deemed to represent and warrant to the Trust that (A)
each Receivable created on such day is an Eligible Receivable, (B) each
Receivable created on such day has been conveyed to the Trust in
compliance, in all material respects, with all Requirements of Law
applicable to the Transferor, (C) with respect to each such Receivable, all
consents, licenses, approvals or authorizations of or registrations or
declarations with, any Governmental Authority required to be obtained,
effected or
30
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given by the Transferor in connection with the conveyance of such
Receivable to the Trust have been duly obtained, effected or given and are
in full force and effect and (D) the representations and warranties set
forth in subsection 2.4(a) are true and correct with respect to each
Receivable created on such day as if made on such day.
(v) As of the Initial Closing Date, Schedule 1 to this Agreement,
and as of the applicable Addition Date with respect to Additional Accounts
designated pursuant to Sections 2.6(a) and (b), the related computer file
or microfiche list referred to in Section 2.6, is an accurate and complete
listing in all material respects of all the Accounts as of the Cut-Off
Date, or with respect to Additional Accounts, as of the applicable Addition
Date and the information contained therein with respect to the identity of
such Accounts and the Receivables existing thereunder is true and correct
in all material respects as of the Cut-Off Date or such applicable Addition
Date. As of September 28, 1995, the aggregate amount of Receivables in all
the Accounts was $5,118,124,136.02 of which $5,016,343,299.38 were
Principal Receivables.
(c) Notice of Breach. The representations and warranties set forth in
----------------
this Section 2.4 shall survive the transfer and assignment of the respective
Receivables to the Trust. Upon discovery by the Transferor, the Servicer or the
Trustee of a breach of any of the representations and warranties set forth in
this Section 2.4, the party discovering such breach shall give prompt written
notice to the other parties mentioned above. The Transferor agrees to cooperate
with the Servicer and the Trustee in attempting to cure any such breach.
(d) Transfer of Ineligible Receivables.
----------------------------------
(i) Automatic Removal. In the event of a breach with respect to
-----------------
a Receivable of any representations and warranties set forth in subsection
2.4(b)(ii), or in the event that a Receivable is not an Eligible Receivable
as a result of the failure to satisfy the conditions set forth in clause
(d) of the definition of Eligible Receivable, and any of the following
three conditions is met: (A) as a result of such breach or event such
Receivable is charged off as uncollectible or the Trust's rights in, to or
under such Receivable or its proceeds are impaired or the proceeds of such
Receivable are not available for any reason to the Trust free and clear of
any Lien; (B) the Lien upon the subject Receivable (1) arises in favor of
the United States of America or any State or any agency or instrumentality
thereof and involves taxes or liens arising under Title IV of ERISA or (2)
has been consented to by the Transferor; or (C) the unsecured short-term
debt rating of the Transferor
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is not at least "P-1" by Moody's and "A-1" by Standard & Poor's and the
Lien upon the subject Receivable ranks prior to the Lien created pursuant
to this Agreement; then, upon the earlier to occur of the discovery of such
breach or event by the Transferor or the Servicer or receipt by the
Transferor of written notice of such breach or event given by the Trustee,
each such Receivable shall be automatically removed from the Trust on the
terms and conditions set forth in subsection 2.4(d)(iii).
(ii) Removal After Cure Period. In the event of a breach of any
-------------------------
of the representations and warranties set forth in subsection 2.4(b) other
than a breach or event as set forth in clause (d)(i) above, and as a result
of such breach the related Account becomes a Defaulted Account or the
Trust's rights in, to or under the Receivable or its proceeds are impaired
or the proceeds of such Receivable are not available for any reason to the
Trust free and clear of any Lien, then, upon the expiration of 60 days (or
such longer period as may be agreed to by the Trustee in its sole
discretion, but in no event later than 120 days) from the earlier to occur
of the discovery of any such event by either the Transferor or the
Servicer, or receipt by the Transferor of written notice of any such event
given by the Trustee, each such Receivable shall be removed from the Trust
on the terms and conditions set forth in subsection 2.4(d)(iii); provided,
--------
however, that no such removal shall be required to be made if, on any day
-------
within such applicable period, such representations and warranties with
respect to such Receivable shall then be true and correct in all material
respects as if such Receivable had been created on such day.
(iii) Procedures for Removal. When the provisions of subsection
----------------------
2.4(d)(i) or (ii) above require removal of a Receivable, the Transferor
shall accept reassignment of such Receivable (an "Ineligible Receivable")
by directing the Servicer to deduct the principal balance of each such
Ineligible Receivable from the Principal Receivables in the Trust and to
decrease the Transferor Interest by such amount. On and after the date of
such removal, each Ineligible Receivable shall be deducted from the
aggregate amount of Principal Receivables used in the calculation of any
Investor Percentage, the Transferor Percentage or the Transferor Interest.
In the event that the exclusion of an Ineligible Receivable from the
calculation of the Transferor Interest would cause the Transferor Interest
to be reduced below the Minimum Transferor Interest, the Transferor shall
immediately, but in no event later than 10 Business Days after such event,
make a deposit in the Excess Funding Account in immediately available funds
in an amount equal to the amount by which the Transferor Interest would be
reduced
32
<PAGE>
below the Minimum Transferor Interest. The portion of such deposit
allocated to the Investor Certificates of each Series shall be distributed
to the Investor Certificateholders of each Series in the manner specified
in Article IV, if applicable, on the Distribution Date relating to the
Monthly Period in which such deposit is made. Upon the reassignment to the
Transferor of an Ineligible Receivable, the Trust shall automatically and
without further action be deemed to transfer, assign, set-over and
otherwise convey to the Transferor, without recourse, representation or
warranty, all the right, title and interest of the Trust in and to such
Ineligible Receivable, all monies due or to become due with respect to such
Ineligible Receivable and all proceeds of such Ineligible Receivable and
Insurance Proceeds relating to such Ineligible Receivable allocated to such
Ineligible Receivable pursuant to any Supplement. Such reassigned
Ineligible Receivable shall be treated by the Trust as collected in full as
of the date on which it was transferred. The Trustee shall execute such
documents and instruments of transfer or assignment and take other actions
as shall reasonably be requested by the Transferor to evidence the
conveyance of such Ineligible Receivable pursuant to this subsection
2.4(d)(iii). The obligation of the Transferor set forth in this subsection
2.4(d)(iii), or the automatic removal of such Receivable from the Trust, as
the case may be, shall constitute the sole remedy respecting any breach of
the representations and warranties set forth in the above-referenced
subsections with respect to such Receivable available to Certificateholders
or the Trustee on behalf of Certificateholders.
(iv) Proceeds Held by Servicer. For the purposes of subsections
-------------------------
2.4(d)(i) and (ii) above, proceeds of a Receivable shall not be deemed to
be impaired hereunder solely because such proceeds are held by the Servicer
(if the Servicer is the Transferor) for more than the applicable period
under Section 9-306(3) of the UCC.
(e) Reassignment of Trust Portfolio. In the event of a breach of any
-------------------------------
of the representations and warranties set forth in subsection 2.4(a), either the
Trustee or the Holders of Investor Certificates evidencing Undivided Interests
aggregating more than 50% of the Aggregate Investor Interest, by notice then
given in writing to the Transferor (and to the Trustee and the Servicer, if
given by the Investor Certificateholders), may direct the Transferor to accept
reassignment of an amount of Principal Receivables (as specified below) within
60 days of such notice (or within such longer period as may be specified in such
notice), and the Transferor shall be obligated to accept reassignment of such
Principal Receivables on a Distribution Date specified by the Transferor (such
Distribution Date, the "Reassignment Date") occurring within such applicable
period on the
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terms and conditions set forth below; provided, however, that no such
-------- -------
reassignment shall be required to be made if, at any time during such applicable
period, the representations and warranties contained in subsection 2.4(a) shall
then be true and correct in all material respects. The Transferor shall deposit
on the Transfer Date (in New York Clearing House, next day funds) preceding the
Reassignment Date an amount equal to the reassignment deposit amount for such
Receivables in the Distribution Account or Series Account, as provided in the
related Supplement, for distribution to the Investor Certificateholders pursuant
to Article XII. The reassignment deposit amount with respect to each Series for
such reassignment, unless otherwise stated in the related Supplement, shall be
equal to (i) the Investor Interest of such Series at the end of the day on the
last day of the Monthly Period preceding the Reassignment Date, less the amount,
if any, previously allocated for payment of principal to such Certificateholders
on the related Distribution Date in the Monthly Period in which the Reassignment
Date occurs, plus (ii) an amount equal to all interest accrued but unpaid on the
Investor Certificates of such Series at the applicable Certificate Rate through
the Reassignment Date, less the amount, if any, previously allocated for payment
of interest to the Certificateholders of such Series on the related Distribution
Date in the Monthly Period in which the Reassignment Date occurs. Payment of
the reassignment deposit amount with respect to each Series, and all other
amounts in the Distribution Account or the applicable Series Account in respect
of the preceding Monthly Period, shall be considered a prepayment in full of the
Receivables represented by the Investor Certificates on the Distribution Date
following the Transfer Date on which such amount has been deposited in full into
the Distribution Account or the applicable Series Account, the Receivables and
all monies due or to become due with respect to such Receivables and all
proceeds of the Receivables and Insurance Proceeds relating to such Receivables
and Interchange (if any) and Recoveries (if any) allocable to the Series shall
be released to the Transferor after payment of all amounts otherwise due
hereunder on or prior to such dates and the Trustee shall execute and deliver
such instruments of transfer or assignment, in each case without recourse,
representation or warranty, as shall be prepared by and as are reasonably
requested by the Transferor to vest in the Transferor, or its designee or
assignee, all right, title and interest of the Trust in and to the Receivables,
all monies due or to become due with respect to such Receivables and all
proceeds of the Receivables and Insurance Proceeds relating to such Receivables
and Interchange (if any) and Recoveries (if any) allocable to the Series. If
the Trustee or the Investor Certificateholders give notice directing the
Transferor to accept reassignment as provided above, the obligation of the
Transferor to accept reassignment of the Receivables and pay the reassignment
deposit amount pursuant to this subsection 2.4(e) shall constitute the sole
remedy respecting a breach of the representations and warranties contained in
subsection
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2.4(a) available to the Investor Certificateholders or the Trustee on behalf of
the Investor Certificateholders.
Section 2.5 Covenants of the Transferor. The Transferor hereby
---------------------------
covenants that:
(a) Receivables to be Accounts or General Intangibles. Except in
-------------------------------------------------
connection with the enforcement thereof, the Transferor will take no action to
cause any Receivable to be evidenced by any instrument (as defined in the UCC).
Each Receivable shall be payable pursuant to a contract which does not create a
Lien on any goods purchased thereunder. The Transferor will take no action to
cause any Receivable to be anything other than an "account" or "general
intangible" (as defined in the UCC).
(b) Security Interests. Except for the conveyances hereunder, the
------------------
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,
whether now existing or hereafter created, or any interest therein; the
Transferor will immediately notify the Trustee of the existence of any Lien on
any Receivable, and the Transferor shall defend the right, title and interest of
the Trust in, to and under the Receivables, whether now existing or hereafter
created, against all claims of third parties claiming through or under the
Transferor; provided, however, that nothing in this subsection 2.5(b) shall
-------- -------
prevent or be deemed to prohibit the Transferor from suffering to exist upon any
of the Receivables any Liens for municipal or other local taxes if such taxes
shall not at the time be due and payable or if the 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) Finance Charges and Other Fees. The Transferor, except as
------------------------------
otherwise required by any Requirement of Law, or as is deemed by the Transferor
to be necessary in order for the Transferor to maintain its credit card
business, based upon a good faith assessment by the Transferor, in its sole
discretion, of the nature of the competition in the credit card business, shall
not at any time reduce the Periodic Finance Charges assessed on any Receivable
or other fees on any Account if, as a result of such reduction, the Transferor's
reasonable expectation of the Portfolio Yield as of such date (after giving
effect to any concurrent exercise of a discount option) would be less than the
Base Rate.
(d) Credit Card Agreements and Account Guidelines. The Transferor
---------------------------------------------
shall comply with and perform its obligations under the Credit Card Agreements
relating to the Accounts and the Credit Card Guidelines and all applicable rules
and regulations of VISA U.S.A., Inc. and MasterCard International Inc., except
insofar as any failure to comply or perform would not materially
35
<PAGE>
and adversely affect the rights of the Trust or the Certificateholders hereunder
or under the Certificates. The Transferor may change the terms and provisions
of the Credit Card Agreements or the Credit Card Guidelines in any respect
(including, without limitation, the reduction of the required minimum monthly
payment, the calculation of the amount, or the timing, of charge offs and the
Periodic Finance Charges and other fees to be assessed thereon) only if such
change (i) would not, in the reasonable belief of the Transferor, cause a Pay
Out Event to occur, and (ii) is made applicable to the comparable segment of the
revolving credit card accounts owned and serviced by the Transferor which have
characteristics the same as, or substantially similar to, the Accounts that are
the subject of such change, except as otherwise restricted by an endorsement,
sponsorship, or other agreement between the Transferor and an unrelated third
party or by the terms of the Credit Card Agreements.
(e) Account Allocations.
-------------------
(i) in the event that the Transferor is unable for any reason to
transfer Receivables to the Trust in accordance with the provisions of this
Agreement (including, without limitation, by reason of the application of
the provisions of Section 9.2 or an order by any federal governmental
agency having regulatory authority over the Transferor or any court of
competent jurisdiction that the Transferor not transfer any additional
Principal Receivables to the Trust) then, in any such event, (A) the
Transferor agrees to allocate and pay to the Trust, after the date of such
inability, all Collections with respect to Principal Receivables, and all
amounts which would have constituted Collections with respect to Principal
Receivables but for the Transferor's inability to transfer such Receivables
(up to an aggregate amount equal to the amount of Principal Receivables in
the Trust on such date); (B) the Transferor agrees to have such amounts
applied as Collections in accordance with Article IV; and (C) for only so
long as all Collections and all amounts which would have constituted
Collections are allocated and applied in accordance with clauses (A) and
(B) above, Principal Receivables (and all amounts which would have
constituted Principal Receivables but for the Transferor's inability to
transfer Receivables to the Trust) that are written off as uncollectible in
accordance with this Agreement shall continue to be allocated in accordance
with Article IV, and all amounts that would have constituted Principal
Receivables but for the Transferor's inability to transfer Receivables to
the Trust shall be deemed to be Principal Receivables for the purpose of
calculating (i) the applicable Investor Percentage with respect to any
Series and (ii) the Aggregate Investor Percentage thereunder. If the
Transferor is unable pursuant to any Requirement of Law to allocate
Collections as described above, the Transferor
36
<PAGE>
agrees that it shall in any such event allocate, after the occurrence of
such event, payments on each Account with respect to the principal balance
of such Account first to the oldest principal balance of such Account and
to have such payments applied as Collections in accordance with Article IV.
The parties hereto agree that Finance Charge Receivables, whenever created,
accrued in respect of Principal Receivables that have been conveyed to the
Trust, or that would have been conveyed to the Trust but for the above
described inability to transfer such Receivables, shall continue to be a
part of the Trust notwithstanding any cessation of the transfer of
additional Principal Receivables to the Trust and that Collections with
respect thereto shall continue to be allocated and paid in accordance with
Article IV.
(ii) In the event that, pursuant to subsection 2.4(d), the
Transferor accepts reassignment of an Ineligible Receivable as a result of
a breach of the representations and warranties in subsection 2.4(b)
relating to such Receivable, then, in any such event, the Transferor agrees
to account for payments received with respect to such Ineligible Receivable
separately from its accounting for Collections on Principal Receivables
retained by the Trust. If payments received from or on behalf of an
Obligor are not specifically applicable either to an Ineligible Receivable
of such Obligor reassigned to the Transferor or to the Receivables of such
Obligor retained in the Trust, then the Transferor agrees to allocate
payments proportionately based on the total amount of Principal Receivables
of such Obligor retained in the Trust and the total amount owing by such
Obligor on any Ineligible Receivables reassigned to the Transferor, and the
portion allocable to any Principal Receivables retained in the Trust shall
be treated as Collections and deposited in accordance with the provisions
of Article IV.
(f) Conveyance of Accounts. The Transferor may transfer Accounts (i)
----------------------
directly to any Affiliate that executes an agreement assuming with respect to
such Accounts the obligations and duties of the Transferor or indirectly to any
Affiliate in one or more substantially simultaneous transactions among the
Transferor, such Affiliate and any other Affiliates of the Transferor or (ii) to
any other Person, provided that such other Person executes such an agreement and
the Rating Agency Condition is satisfied; provided, however, that the Transferor
-------- -------
shall not be prohibited hereby from conveying, assigning, exchanging or
otherwise transferring the Accounts in connection with a transaction complying
with the provisions of Section 7.2.
37
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Section 2.6 Addition of Accounts.
--------------------
(a) (i) If, (A) as of the end of any Monthly Period, the Transferor
Interest is less than the Minimum Transferor Interest for that period the
Transferor shall designate additional eligible MasterCard or VISA accounts
from the Bank Portfolio ("Additional Accounts") to be included as Accounts
in a sufficient amount such that the Transferor Interest after giving
effect to such addition will be at least equal to the Minimum Transferor
Interest, or (B) as of the end of any Monthly Period, the sum of the
aggregate amount of Principal Receivables is less than the Minimum
Aggregate Principal Receivables (as adjusted for any Series having a
Companion Series as described in the Supplement for such Series), the
Transferor shall designate Additional Accounts to be included as Accounts
in a sufficient amount such that the aggregate amount of Principal
Receivables will be equal to or greater than the Minimum Aggregate
Principal Receivables. Receivables from such Additional Accounts shall be
transferred to the Trust on or before the tenth Business Day following the
end of such Monthly Period.
(ii) 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 representing undivided interests in a pool of assets
primarily consisting of receivables arising under revolving credit card
accounts or other revolving credit accounts owned by the Transferor or any
Affiliate of any Transferor and collections thereon ("Participations").
--------------
The addition of Participations in the Trust pursuant to this paragraph (a)
or paragraph (b) below shall be effected by an amendment hereto, dated the
applicable Addition Date, pursuant to Section 13.1(a).
(b) In addition to its obligation under subsection 2.6(a), the
Transferor may, but shall not be obligated to, designate from time to time
Additional Accounts of the Transferor to be included as Accounts or
Participations to be included as Trust Assets, in either case as of the
applicable Addition Date.
(c) The Transferor agrees that any such transfer of Receivables from
Additional Accounts, under subsection 2.6(a) or (b) shall satisfy the following
conditions (to the extent provided below):
(i) On or before the fifth Business Day prior to the Addition
Date with respect to additions pursuant to subsection 2.6(a) and on or
before the tenth Business Day prior to the Addition Date with respect to
additions pursuant to subsection 2.6(b) (the "Notice Date"), the Transferor
-----------
shall give the Trustee, each Rating Agency and the Servicer
38
<PAGE>
written notice that such Additional Accounts or Participations will be
included, which notice shall specify the approximate aggregate amount of
the Receivables to be transferred.
(ii) On or before the Addition Date, the Transferor shall have
delivered to the Trustee a written assignment (including an acceptance by
the Trustee on behalf of the Trust for the benefit of the Investor
Certificateholders) in substantially the form of Exhibit B (the
"Assignment") and the Transferor shall have indicated in its computer files
----------
that the Receivables created in connection with the Additional Accounts
have been transferred to the Trust and, within five Business Days
thereafter, or as otherwise agreed upon between the Transferor and the
Trustee, the Transferor shall have delivered to the Trustee a computer file
or microfiche list containing a true and complete list of all Additional
Accounts, adequately identified by billing cycle and/or account number and
the aggregate amount of the Receivables in such Additional Accounts, as of
the Addition Date, which computer file or microfiche list shall be as of
the date of such Assignment incorporated into and made a part of such
Assignment and this Agreement.
(iii) The Transferor shall represent and warrant that (x) each
Additional Account is, as of the Addition Date, an Eligible Account, and
each Receivable in such Additional Account is, as of the Addition Date, an
Eligible Receivable, (y) no selection procedures believed by the Transferor
to be materially adverse to the interests of the Investor
Certificateholders were utilized in selecting the Additional Accounts from
the available Eligible Accounts from the Bank Portfolio, and (z) as of the
Addition Date, the Transferor is not insolvent.
(iv) The Transferor shall represent and warrant that, as of the
Addition Date, the Assignment constitutes either (x) a valid transfer and
assignment to the Trust of all right, title and interest of the Transferor
in and to the Receivables then existing and thereafter created in the
Additional Accounts, and all proceeds (as defined in the UCC) of such
Receivables and Insurance Proceeds relating thereto and such Receivables
and all proceeds thereof and Insurance Proceeds relating thereto will be
held by the Trust free and clear of any Lien of any Person claiming through
or under the Transferor or any of its Affiliates, except for (i) Liens
permitted under subsection 2.5(b), (ii) the interest of the Transferor as
Holder of the Transferor Certificate and (iii) the Transferor's right to
receive interest accruing on, and investment earnings in respect of, the
Finance Charge Account and the Principal Account, or any Series Account as
provided in this Agreement and any related
39
<PAGE>
Supplement or (y) a grant of a security interest (as defined in the UCC),
in such property to the Trust, which is enforceable with respect to then
existing Receivables of the Additional Accounts, the proceeds (as defined
in the UCC), thereof and Insurance Proceeds relating thereto upon the
conveyance of such Receivables to the Trust, and which will be enforceable
with respect to the Receivables thereafter created in respect of Additional
Accounts conveyed on such Addition Date, the proceeds (as defined in the
UCC), thereof and Insurance Proceeds relating thereto upon such creation;
and (z) if the Assignment constitutes the grant of a security interest to
the Trust in such property, upon the filing of a financing statement as
described in Section 2.1 with respect to such Additional Accounts and in
the case of the Receivables thereafter created in such Additional Accounts
and the proceeds (as defined in the UCC), thereof, and Insurance Proceeds
relating thereto, upon such creation, the Trust shall have a first priority
perfected security interest in such property (subject to Section 9-306 of
the UCC), except for Liens permitted under subsection 2.5(b).
(v) The Transferor shall deliver an Officer's Certificate
substantially in the form of Schedule 2 to Exhibit B to the Trustee
confirming the items set forth in paragraph (iii) above.
(vi) The Transferor shall deliver an Opinion of Counsel with
respect to the Receivables in the Additional Accounts to the Trustee
substantially in the form of Exhibit E.
(vii) the Rating Agency Condition shall have been satisfied with
respect to the inclusion of such accounts as Additional Accounts pursuant
to subsection 2.6(b).
(viii) With respect to a Participation included as Trust Assets
pursuant to subsection 2.6(b), the Transferor shall deliver a Tax Opinion.
Section 2.7 Removal of Accounts.
-------------------
(a) Subject to the conditions set forth below, the Transferor may, but
shall not be obligated to, designate Receivables from Accounts for deletion and
removal ("Removed Accounts") from the Trust; provided, however, that the
---------------- -------- -------
Transferor shall not make more than one such designation in any Monthly Period.
On or before the fifth Business Day (the "Removal Notice Date") prior to the
-------------------
date on which the designated Removed Accounts will be reassigned by the Trustee
to the Transferor (the "Removal Date"), the Transferor shall give the Trustee
------------
and the Servicer written notice that the Receivables from such Removed Accounts
are to be reassigned to the Transferor.
40
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(b) The Transferor shall be permitted to designate and require
reassignment to it of the Receivables from Removed Accounts only upon
satisfaction of the following conditions:
(i) The removal of any Receivables of any Removed Accounts on any
Removal Date shall not, in the reasonable belief of the Transferor, (a)
cause a Pay Out Event to occur; provided, however, that for the purposes of
-------- -------
this subsection 2.7(b)(i), the Receivables of each Removed Account shall be
considered to have been removed as of the Removal Date, (b) cause the
Transferor Interest to be less than the Minimum Transferor Interest on such
Removal Date, (c) cause the sum of the aggregate amount of Principal
Receivables and the Excess Funding Amount to be less than the Minimum
Aggregate Principal Receivables, or (d) result in the failure to make any
payment specified in the related Supplement with respect to any Series.
(ii) On or prior to the Removal Date, the Transferor shall have
delivered to the Trustee for execution a written assignment in
substantially the form of Exhibit G (the "Reassignment") and, within five
------------
Business Days thereafter, or as otherwise agreed upon between the
Transferor and the Trustee, the Transferor shall have delivered to the
Trustee a computer file or microfiche list containing a true and complete
list of all Removed Accounts identified by account number and the aggregate
amount of the Receivables in such Removed Accounts as of the Removal Date,
which computer file or microfiche list shall as of the Removal Date modify
and amend and be made a part of this Agreement.
(iii) The Transferor shall represent and warrant that no
selection procedures believed by the Transferor to be materially adverse to
the interests of the Certificateholders were utilized in selecting the
Removed Accounts to be removed from the Trust.
(iv) As of the Removal Notice Date, either (a) the Receivables
are not more than 15% delinquent by estimated principal amount and the
weighted averaged delinquency of such Receivables is not more than 60 days,
or (b) the Receivables are not more than 7% delinquent by estimated
principal amount and the weighted average delinquency of such Receivables
does not exceed 90 days.
(v) On or before the tenth Business Day prior to the Removal
Date, each Rating Agency shall have received notice of such proposed
removal of the Receivables of such Accounts and the Transferor shall have
received written confirmation from each Rating Agency that such removal
will satisfy the Rating Agency Condition; and
41
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(vi) The Transferor shall have delivered to the Trustee an
Officer's Certificate confirming the items set forth in clauses (i) through
(v) above. The Trustee may conclusively rely on such Officer's
Certificate, shall have no duty to make inquiries with regard to the
matters set forth therein and shall incur no liability in so relying.
Upon satisfaction of the above conditions, the Trustee shall execute
and deliver the Reassignment to the Transferor, and the Receivables from the
Removed Accounts shall no longer constitute a part of the Trust.
Section 2.8 Discount Option. The Transferor shall have the option
---------------
to designate at any time a fixed or floating percentage (the "Discount
Percentage"), of the amount of Receivables arising in the Accounts on or after
the date such designation becomes effective that would otherwise constitute
Principal Receivables (prior to subtracting from Principal Receivables, Finance
Charge Receivables that are Discount Option Receivables) to be treated as
Finance Charge Receivables. The Transferor may from time to time increase
(subject to the limitations described below), reduce or eliminate the Discount
Percentage for Discount Option Receivables arising in the Accounts on and after
the date of such change. The Transferor must provide 30 days' prior written
notice to the Servicer, the Trustee, each Credit Enhancement Provider and each
Rating Agency of any such exercise of the discount option or increase, reduction
or elimination of the Discount Percentage, and such exercise of the discount
option or increase, reduction or elimination of the Discount Percentage shall
become effective on the date specified therein only if (i) the Transferor has
delivered to the Trustee an Officer's Certificate to the effect that, based on
the facts known to such officer at the time, the Transferor reasonably believes
that such increase, reduction or elimination shall not at the time of its
occurrence cause a Pay Out Event, or an event which with notice or the lapse of
time would constitute a Pay Out Event, to occur with respect to any Series and
(ii) the Transferor, the Servicer and the Trustee shall have received written
confirmation from each Rating Agency that the Rating Agency Condition is
satisfied.
(a) On each Date of Processing after the date on which the
Transferor's exercise of its discount option takes effect, the Transferor shall
treat Discount Option Receivables Collections as Collections of Finance Charge
Receivables.
[End of Article II]
42
<PAGE>
ARTICLE III
ADMINISTRATION AND SERVICING
OF RECEIVABLES
Section 3.1 Acceptance of Appointment and Other Matters Relating to
-------------------------------------------------------
the Servicer.
- ------------
(a) Chemical Bank agrees to act as the Servicer under this Agreement.
The Investor Certificateholders of each Series by their acceptance of the
related Certificates consent to Chemical Bank acting as Servicer.
(b) The Servicer shall service and administer the Receivables and
shall collect payments due under the Receivables in accordance with its
customary and usual servicing procedures for servicing credit card receivables
comparable to the Receivables and in accordance with the Credit Card Guidelines
and shall have full power and authority, acting alone or through any party
properly designated by it hereunder, to do any and all things in connection with
such servicing and administration which it may deem necessary or desirable.
Without limiting the generality of the foregoing and subject to Section 10.1,
the Servicer is hereby authorized and empowered (i) to make withdrawals from the
Collection Account as set forth in this Agreement, (ii) unless such power and
authority is revoked by the Trustee on account of the occurrence of a Servicer
Default pursuant to Section 10.1, to instruct the Trustee to make withdrawals
and payments, from the Finance Charge Account, the Principal Account, the Excess
Funding Account and any Series Account, in accordance with such instructions as
set forth in this Agreement, (iii) unless such power and authority is revoked by
the Trustee on account of the occurrence of a Servicer Default pursuant to
Section 10.1, to instruct the Trustee in writing, as set forth in this
Agreement, (iv) to execute and deliver, on behalf of the Trust for the benefit
of the Certificateholders, any and all instruments of satisfaction or
cancellation, or of partial or full release or discharge, and all other
comparable instruments, with respect to the Receivables and, after the
delinquency of any Receivable and to the extent permitted under and in
compliance with applicable law and regulations, to commence enforcement
proceedings with respect to such Receivables and (v) to make any filings,
reports, notices, applications, registrations with, and to seek any consents or
authorizations from the Securities and Exchange Commission and any state
securities authority on behalf of the Trust as may be necessary or advisable to
comply with any federal or state securities or reporting requirements. The
Trustee agrees that it shall promptly follow the instructions of the Servicer to
withdraw funds from the Principal Account, the Finance Charge Account, the
Excess Funding Account, or any Series Account and to take any action required
under any Credit Enhancement at such time as required under this Agreement. The
Trustee shall execute
43
<PAGE>
at the Servicer's written request such documents prepared by the Transferor and
acceptable to the Trustee as may be necessary or appropriate to enable the
Servicer to carry out its servicing and administrative duties hereunder.
(c) In the event that the Transferor is unable for any reason to
transfer Receivables to the Trust in accordance with the provisions of this
Agreement (including, without limitation, by reason of the application of the
provisions of Section 9.2 or the order of any federal governmental agency having
regulatory authority over the Transferor or any court of competent jurisdiction
that the Transferor not transfer any additional Principal Receivables to the
Trust) then, in any such event, (A) the Servicer agrees to allocate, after such
date, all collections with respect to Principal Receivables, and all amounts
which would have constituted Collections with respect to Principal Receivables
but for the Transferor's inability to transfer such Receivables (up to an
aggregate amount equal to the aggregate amount of Principal Receivables in the
Trust as of such date) in accordance with subsection 2.5(e); (B) the Servicer
agrees to apply such amounts as Collections in accordance with Article IV, and
(C) for only so long as all Collections and all amounts which would have
constituted Collections are allocated and applied in accordance with clauses (A)
and (B) above, Principal Receivables and all amounts which would have
constituted Principal Receivables but for the Transferor's inability to transfer
Receivables to the Trust that are written off as uncollectible in accordance
with this Agreement shall continue to be allocated in accordance with Article IV
and all amounts which would have constituted Principal Receivables but for the
Transferor's inability to transfer Receivables to the Trust shall be deemed to
be Principal Receivables for the purpose of calculating the applicable Investor
Percentage thereunder. If the Servicer is unable pursuant to any Requirement of
Law to allocate payments on the Accounts as described above, the Servicer agrees
that it shall in any such event allocate, after the occurrence of such event,
payments on each Account with respect to the principal balance of such Account
first to the oldest principal balance of such Account and to have such payments
applied as Collections in accordance with Article IV. The parties hereto agree
that Finance Charge Receivables, whenever created, accrued in respect of
Principal Receivables which have been conveyed to the Trust, or which would have
been conveyed to the Trust but for the above described inability to transfer
such Receivables, shall continue to be a part of the Trust notwithstanding any
cessation of the transfer of additional Principal Receivables to the Trust and
that Collections with respect thereto shall continue to be allocated and paid in
accordance with Article IV.
(d) In the event that pursuant to subsection 2.4(d), the Transferor
accepts reassignment of an Ineligible Receivable as a result of a breach of the
representations and warranties in
44
<PAGE>
subsection 2.4(b) relating to such Receivable, then, in any such event, the
Servicer agrees to account for payments received with respect to such Ineligible
Receivable separately from its accounting for Collections on Principal
Receivables retained by the Trust. If payments received from or on behalf of an
Obligor are not specifically applicable either to an Ineligible Receivable of
such Obligor reassigned to the Transferor or to Receivables of such Obligor
retained in the Trust, then the Servicer agrees to allocate payments
proportionately based on the total amount of Principal Receivables of such
Obligor retained in the Trust and the total amount owing by such Obligor on any
Ineligible Receivables purchased by the Transferor, and the portion allocable to
any Principal Receivables retained in the Trust shall be treated as Collections
and deposited in accordance with the provisions of Article IV.
(e) The Servicer shall not be obligated to use separate servicing
procedures, offices, employees or accounts for servicing the Receivables from
the procedures, offices, employees and accounts used by the Servicer in
connection with servicing other credit card receivables.
(f) The Servicer shall maintain fidelity bond coverage insuring
against losses through wrongdoing of its officers and employees who are involved
in the servicing of credit card receivables covering such actions and in such
amounts as the Servicer believes to be reasonable from time to time.
Section 3.2 Servicing Compensation. As compensation for its
----------------------
servicing activities hereunder and reimbursement for its expenses as set forth
in the immediately following paragraph, the Servicer shall be entitled to
receive a servicing fee prior to the termination of the Trust pursuant to
Section 12.1. The Servicing Fee shall be payable, with respect to each Series,
at the times and in the amounts set forth in the related Supplement. The
Servicing Fee shall be allocated between the Investor Certificates (the
"Investor Servicing Fee") and the Holder of the Transferor Certificate (the
- -----------------------
"Transferor Servicing Fee").
- -------------------------
The Servicer's expenses include the amounts due to the Trustee
pursuant to Section 11.5 and the reasonable fees and disbursements of
independent public accountants and all other expenses incurred by the Servicer
in connection with its activities hereunder; provided, however that the Servicer
-------- -------
shall not be liable for any liabilities, costs or expenses of the Trust, the
Investor Certificateholders or the Certificate Owners arising under any tax law,
including without limitation any federal, state or local income or franchise
taxes or any other tax imposed on or measured by income (or any interest or
penalties with respect thereto or arising from a failure to comply therewith).
The Servicer shall be required to pay such expenses for its own
45
<PAGE>
account and shall not be entitled to any payment therefor other than the
servicing fee specified herein.
Section 3.3 Representations and Warranties of the Servicer. Chemical
----------------------------------------------
Bank, as initial Servicer, hereby makes, and any successor Servicer by its
appointment hereunder shall make the following representations and warranties on
which the Trustee has relied in accepting the Receivables in Trust and in
authenticating the Certificates issued on the Initial Closing Date:
(a) Organization and Good Standing. The Servicer is a banking
------------------------------
corporation duly organized, validly existing and in good standing under the
laws of the state of its organization and has full corporate power,
authority and legal right to own its properties and conduct its credit card
business as such properties are presently owned and as such business is
presently conducted, and to execute, deliver and perform its obligations
under this Agreement.
(b) Due Qualification. The Servicer is duly qualified to do business
-----------------
and is in good standing (or is exempt from such requirement) and has
obtained all necessary licenses and approvals, except to the extent that
the failure so to qualify or register would not have a material adverse
effect on the Servicer's ability to perform its obligations hereunder.
(c) Due Authorization. The execution, delivery, and performance of
-----------------
this Agreement have been duly authorized by the Servicer by all necessary
corporate action on the part of the Servicer.
(d) Binding Obligation. This Agreement constitutes a legal, valid and
------------------
binding obligation of the Servicer, enforceable in accordance with its
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or
hereinafter in effect, affecting the enforcement of creditors' rights in
general or the rights of creditors of banking corporations organized under
the laws of the State of New York.
(e) No Violation. The execution and delivery of this Agreement by the
------------
Servicer, and the performance of the transactions contemplated by this
Agreement and the fulfillment of the terms hereof applicable to the
Servicer, will not conflict with, violate, result in any breach of any of
the material terms and provisions of, or constitute (with or without notice
or lapse of time or both) a default under, any Requirement of Law
applicable to the Servicer or any indenture, contract, agreement, mortgage,
deed of trust or other instrument to which the Servicer is a party or by
46
<PAGE>
which it is bound except to the extent that the same could not reasonably
be expected to have a material adverse effect on the Certificateholders or
any Credit Enhancement Provider.
(f) No Proceedings. There are no proceedings or investigations
--------------
pending or, to the best knowledge of the Servicer, threatened against the
Servicer before any court, regulatory body, administrative agency or other
tribunal or governmental instrumentality seeking to prevent the issuance of
the Certificates or the consummation of any of the transactions
contemplated by this Agreement, seeking any determination or ruling that,
in the reasonable judgment of the Servicer, would materially and adversely
affect the performance by the Servicer of its obligations under this
Agreement, or seeking any determination or ruling that would materially and
adversely affect the validity or enforceability of this Agreement.
(g) Compliance with Requirements of Law. The Servicer shall duly
-----------------------------------
satisfy all obligations on its part to be fulfilled under or in connection
with each Receivable and the related Account, will maintain in effect all
qualifications required under Requirements of Law in order to service
properly each Receivable and the related Account and will comply in all
material respects with all other Requirements of Law in connection with
servicing each Receivable and the related Account the failure to comply
with which would have a material adverse effect on the Certificateholders
or any Credit Enhancement Provider.
Section 3.4 Reports and Records for the Trustee.
-----------------------------------
(a) Daily Reports. On each Business Day during any period during
-------------
which the Servicer is required to make daily deposits to the Collection Account
pursuant to Section 4.3(a), the Servicer shall prepare and make available at the
office of the Servicer for inspection by the Trustee a record setting forth (i)
the aggregate amount of Collections processed by the Servicer on the preceding
Business Day and (ii) the aggregate amount of Receivables as of the close of
business on the preceding Business Day.
(b) Monthly Servicer's Certificate. Unless otherwise stated in the
------------------------------
related Supplement with respect to any Series, on each Determination Date the
Servicer shall forward, as provided in Section 13.5, to the Trustee, the Paying
Agent, any Credit Enhancement Provider and each Rating Agency, a certificate of
a Servicing Officer in the form of Exhibit C (which includes the Schedule
thereto specified as such in each Supplement) setting forth (i) the aggregate
amount of Collections processed during the preceding Monthly Period, (ii) the
aggregate amount of the
47
<PAGE>
applicable Investor Percentage of Collections of Principal Receivables processed
by the Servicer pursuant to Article IV during the preceding Monthly Period with
respect to each Series then outstanding, (iii) the aggregate amount of the
applicable Investor Percentage of Collections of Finance Charge Receivables
processed by the Servicer pursuant to Article IV during the preceding Monthly
Period with respect to each Series then outstanding, (iv) the aggregate amount
of Receivables processed as of the end of the last day of the preceding Monthly
Period, (v) the balance on deposit in the Finance Charge Account, the Principal
Account or any Series Account applicable to any Series then outstanding on such
Determination Date with respect to Collections processed by the Servicer during
the preceding Monthly Period, (vi) the aggregate amount, if any, of withdrawals,
drawings or payments under any Credit Enhancement, if any, for each Series then
outstanding required to be made with respect to the previous Monthly Period in
the manner provided in the related Supplement, (vii) the sum of all amounts
payable to the Investor Certificateholders of each Series (or for a Series of
more than one Class, each such Class) on the succeeding Distribution Date in
respect of Certificate Principal and Certificate Interest with respect to such
preceding monthly Period and (viii) such other matters as are set forth in
Exhibit C.
Section 3.5 Annual Servicer's Certificate. On or before March 31 of
-----------------------------
each calendar year, beginning with March 31, 1997, the Servicer will deliver, as
provided in Section 13.5, to the Trustee, any Credit Enhancement Provider and
the Rating Agency, an Officer's Certificate substantially in the form of Exhibit
D stating that (a) a review of the activities of the Servicer during the twelve-
month period ending on December 31 of the preceding calendar year, or for the
initial period, from the Closing Date until December 31, 1996, and of its
performance under this Agreement was made under the supervision of the officer
signing such certificate and (b) to the best of such Officer's knowledge, based
on such review, the Servicer has fully performed all its obligations under this
Agreement throughout such period, or, if there has been a default in the
performance of any such obligation, specifying each such default known to such
officer and the nature and status thereof. A copy of such certificate may be
obtained by any Investor Certificateholder by a request in writing to the
Trustee addressed to the Corporate Trust office.
Section 3.6 Annual Independent Accountants' Servicing Report.
------------------------------------------------
(a) On or before March 31 of each calendar year, beginning with March
31, 1997, the Servicer shall cause a firm of nationally recognized independent
certified public accountants (who may also render other services to the Servicer
or the Transferor) to furnish, as provided in Section 13.5, a report
48
<PAGE>
addressed to the Trustee, any Credit Enhancement Provider and the Transferor, to
the effect that such firm has examined management's assertion that, as of the
date of such report, the system of internal control over servicing of
securitized credit card receivables met the criteria for effective internal
control described in the report entitled "Internal Control - Integrated
Framework" issued by the Committee of Sponsoring Organizations of the Treadway
Commission ("COSO") and that in their opinion, management's assertion is fairly
stated, in all material respects. A copy of such report shall be distributed by
the Trustee to the Rating Agency and will be available for distribution to
Certificateholders upon written request therefor addressed to the Trustee at the
Corporate Trust Office.
(b) On or before March 31 of each calendar year, beginning with March
31, 1997, the Servicer shall cause a firm of nationally recognized independent
certified public accountants (who may also render other services to the Servicer
or the Transferor) to furnish, as provided in Section 13.5, a report, prepared
using generally accepted attestation standards, addressed to the Trustee, any
Credit Enhancement Provider and the Transferor, to the effect that they have
compared the amounts set forth in the monthly certificates forwarded by the
Servicer pursuant to subsection 3.4(c) during the period covered by such report
(which shall be the twelve-month period ending on December 31 of the preceding
calendar year, or for the initial period, from the Closing Date until December
31, 1996) with the Servicer's computer reports which were the source of such
amounts and found them to be in agreement or shall disclose any exceptions
noted. Additionally, such firm shall recalculate the mathematical accuracy of
amounts derived in the monthly certificates. A copy of such report shall be
distributed by the Trustee to the Rating Agency and will be available for
distribution to Certificateholders upon written request therefor addressed to
the Trustee at the Corporate Trust Office.
Section 3.7 Tax Treatment. The Transferor has structured this
-------------
Agreement and the Investor Certificates with the intention that the Investor
Certificates will qualify under applicable federal, state, local and foreign tax
law as indebtedness. The Transferor, the Servicer, the Holder of the Transferor
Certificate, each Investor Certificateholder, and each Certificate Owner, agree
to treat and to take no action inconsistent with the treatment of the Investor
Certificates (or beneficial interest therein) as indebtedness for purposes of
federal, state, local and foreign income or franchise taxes and any other tax
imposed on or measured by income. Each Investor Certificateholder and the
Holder of the Transferor Certificate, by acceptance of its Certificate and each
Certificate Owner, by acquisition of a beneficial interest in a Certificate,
agree to be bound by the provisions of this section 3.7. Each Certificateholder
agrees that it will cause any Certificate Owner acquiring an interest in
49
<PAGE>
a Certificate through it to comply with this Agreement as to treatment as
indebtedness under applicable tax law, as described in this Section 3.7.
Section 3.8 Notices to the Transferor. In the event that the
-------------------------
Transferor is no longer acting as Servicer, any Successor Servicer appointed
pursuant to Section 10.2 shall deliver or make available to the Transferor each
certificate and report required to be prepared, forwarded or delivered
thereafter pursuant to Sections 3.4, 3.5 and 3.6.
[End of Article III]
50
<PAGE>
ARTICLE IV
RIGHTS OF CERTIFICATEHOLDERS AND ALLOCATION
AND APPLICATION OF COLLECTIONS
Section 4.1 Rights of Certificateholders. Each Series of Investor
----------------------------
Certificates shall represent Undivided Interests in the Trust, including the
benefits of any Credit Enhancement issued with respect to such Series and the
right to receive the Collections and other amounts at the times and in the
amounts specified in this Article IV to be deposited in the Investor Accounts
and any other Series Account (if so specified in the related Supplement) or to
be paid to the Investor Certificateholders of such Series; provided, however,
-------- -------
that the aggregate interest represented by such Certificates at any time in the
Principal Receivables shall not exceed an amount equal to the Investor Interest
at such time. The Transferor Certificate shall represent the remaining
undivided interest in the Trust, including the right to receive the Collections
and other amounts at the times and in the amounts specified in this Article IV
to be paid to the Holder of the Transferor Certificate; provided, however, that
-------- -------
the aggregate interest represented by such Transferor Certificate at any time in
the Principal Receivables shall not exceed the Transferor Interest at such time
and such Certificate shall not represent any interest in the Investor Accounts,
except as provided in this Agreement, or the benefits of any Credit Enhancement
issued with respect to any Series.
Section 4.2 Establishment of Accounts.
-------------------------
(a) The Collection Account. The Servicer, for the benefit of the
----------------------
Certificateholders, shall establish and maintain in the name of the Trustee, on
behalf of the Trust, an Eligible Deposit Account bearing a designation clearly
indicating that the funds deposited therein are held in trust for the benefit of
the Certificateholders (the "Collection Account"). Pursuant to authority
------------------
granted to it pursuant to subsection 3.1(b), the Servicer shall have the
revocable power to withdraw funds from the Collection Account for the purposes
of carrying out its duties hereunder.
(b) The Finance Charge and Principal Accounts. The Trustee, for the
-----------------------------------------
benefit of the Investor Certificateholders, shall establish and maintain in the
State of New York with the Paying Agent in the name of the Trust two Eligible
Deposit Accounts (the "Finance Charge Account" and the "Principal Account",
---------------------- -----------------
respectively), bearing a designation clearly indicating that the funds therein
are held for the benefit of the Investor Certificateholders; provided, however,
-------- -------
that each of such accounts may be established as sub-accounts of the Collection
Account. The Trustee shall possess all right, title and interest in all funds
on deposit from time to time in the Finance Charge Account and
51
<PAGE>
the Principal Account and in all proceeds thereof. The Finance Charge Account
and the Principal Account shall be under the sole dominion and control of the
Trustee for the benefit of the Investor Certificateholders. Pursuant to
authority granted to it hereunder, the Servicer shall have the revocable power
to instruct the Trustee to withdraw funds from the Finance Charge Account and
Principal Account for the purpose of carrying out the Servicer's duties
hereunder. The Trustee at all times shall maintain accurate records reflecting
each transaction in the Principal Account and the Finance Charge Account and
that funds held therein shall at all times be held in trust for the benefit of
the Investor Certificateholders.
(c) The Distribution Account. The Trustee, for the benefit of the
------------------------
Investor Certificateholders, shall cause to be established and maintained in the
name of the Trust, an Eligible Deposit Account bearing a designation clearly
indicating that the funds deposited therein are held in trust for the benefit of
the Investor Certificateholders (the "Distribution Account"). The Trustee shall
--------------------
possess all right, title and interest in all funds on deposit from time to time
in the Distribution Account and in all proceeds thereof. The Distribution
Account shall be under the sole dominion and control of the Trustee for the
benefit of the Investor Certificateholders.
(d) The Excess Funding Account. The Trustee, for the benefit of the
--------------------------
Investor Certificateholders, shall establish and maintain an Eligible Deposit
Account bearing a designation clearly indicating that the funds therein are held
for the benefit of the Investor 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 Investor Certificateholders. If,
at any time, the Excess Funding Account ceases to be an Eligible Deposit
Account, the Trustee shall notify the Rating Agency and within 10 Business Days
establish a new Eligible Deposit Account which shall be designated as the new
Excess Funding Account and shall transfer any cash or any investments to such
new Excess Funding Account. From the date such new Excess Funding Account is
established, it shall be the "Excess Funding Account." Pursuant to authority
granted to it hereunder, the Servicer shall have the revocable power to instruct
the Trustee to withdraw funds from the Excess Funding Account for the purpose of
carrying out the Servicer's duties hereunder. The Trustee at all times shall
maintain accurate records reflecting each transaction in the Excess Funding
Account and that funds held therein shall at all times be held in trust for the
benefit of the Investor Certificateholders.
52
<PAGE>
(e) Series Accounts. If so provided in the related Supplement, the
---------------
Trustee, for the benefit of the Investor Certificateholders, shall cause to be
established and maintained in the name of the Trust, one or more Series
Accounts. Each such Series Account shall bear a designation clearly indicating
that the funds deposited therein are held for the benefit of the Investor
Certificateholders of such Series. Each such Series Account will be an Eligible
Deposit Account, if so provided in the related Supplement and will have the
other features and be applied as set forth in the related Supplement.
(f) Administration of the Finance Charge, Principal Accounts and
------------------------------------------------------------
Excess Funding Account. Funds on deposit in the Principal Account, the Finance
- ----------------------
Charge Account and the Excess Funding Account shall at all times be invested in
Permitted Investments. Any such investment shall mature and such funds shall be
available for withdrawal on or prior to the Transfer Date related to the Monthly
Period in which such funds were processed for collection, or if so specified in
the related Supplement, immediately preceding a Distribution Date. The Trustee
shall maintain for the benefit of the Investor Certificateholders possession of
the negotiable instruments or securities evidencing the Permitted Investments
described in clause (a) of the definition thereof from the time of purchase
thereof until the time of sale or maturity; provided, however that no such
-------- -------
investment shall be disposed of prior to its maturity date. At the end of each
month, all interest and earnings (net of losses and investment expenses) on
funds on deposit in the Principal Account and the Finance Charge Account shall
be deposited by the Trustee in an Eligible Deposit Account in the name of the
Transferor, or a Person designated in writing by the Servicer, which shall not
constitute a part of the Trust, or shall otherwise be turned over by the Trustee
to the Transferor not less frequently than monthly, and all interest and
earnings (net of losses and investment expenses) on funds on deposit in the
Excess Funding Account shall be deposited by the Trustee in the Finance Charge
Account for application as Collections of Finance Charge Receivables. Subject
to the restrictions set forth above, the Servicer, or a Person designated in
writing by the Servicer, of which the Trustee shall have received written
notification thereof, shall instruct the Trustee with respect to the investment
of funds on deposit in the Principal Account and the Finance Charge Account.
For purposes of determining the availability of funds or the balances in the
Finance Charge Account, the Principal Account and, except as provided in the
second preceding sentence, the Excess Funding Account, for any reason under this
Agreement, all investment earnings on such funds shall be deemed not to be
available or on deposit.
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<PAGE>
Section 4.3 Collections and Allocations.
---------------------------
(a) Collections. Except as provided below, the Servicer shall deposit
-----------
all Collections in the Collection Account as promptly as possible after the Date
of Processing of such Collections, but in no event later than the second
Business Day following such Date of Processing. In the event of the insolvency
of the Servicer, then, immediately upon the occurrence of such event and
thereafter, the Servicer shall deposit all Collections into the Collection
Account, and in no such event shall the Servicer deposit any Collections
thereafter into any account established, held or maintained with the Servicer.
The Servicer shall allocate such amounts to each Series of Investor
Certificates and to the Holder of the Transferor Certificate in accordance with
this Article IV and shall withdraw the required amounts from the Collection
Account or pay such amounts to the Holder of the Transferor Certificate in
accordance with this Article IV, in both cases as modified by any Supplement.
The Servicer shall make such deposits or payments on the date indicated therein
in immediately available funds or as otherwise provided in the Supplement for
any Series of Certificates with respect to such Series.
Notwithstanding anything in this Agreement to the contrary, for so
long as, and only so long as, the Transferor shall remain the Servicer
hereunder, and (a)(i) the Servicer provides to the Trustee a letter of credit
covering risk collection of the Servicer, and (ii) the Transferor shall not have
received a notice from any Rating Agency that such a letter of credit would
result in the lowering of such Rating Agency's then-existing rating of the
Investor Certificates, or (b) the Servicer shall have and maintain a certificate
of deposit or short-term deposit rating of "P-1" by Moody's and of "A-1" by
Standard & Poor's, the Servicer need not deposit Collections into the Collection
Account, the Principal Account, the Finance Charge Account, the Excess Funding
Account or any Series Account, as provided in any Supplement, or make payments
to the Holder of the Transferor Certificate as provided in Article IV, but may
make such deposits, payments and withdrawals on each Transfer Date in an amount
equal to the net amount of such deposits, payments and withdrawals which would
have been made but for the provisions of this paragraph.
Notwithstanding anything else in this Agreement to the contrary, with
respect to any Monthly Period, whether the Servicer is required to make monthly
or daily deposits from the Collection Account into the Finance Charge Account,
the Principal Account, the Excess Funding Account or any Series Account, as
provided in any Supplement, (i) the Servicer will only be required to deposit
Collections from the Collection Account into the Finance Charge Account, the
Principal Account, the Excess
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Funding Account or any Series Account in an amount equal to the lesser of (x)
the amount required to be deposited into any such deposit account pursuant to
the terms of this Agreement or any Supplement and (y) the amount required to be
distributed on or prior to the related Distribution Date to Investor
Certificateholders or to any Credit Enhancement Provider pursuant to the terms
of any Supplement or agreement relating to such Credit Enhancement and (ii) if
at any time prior to such Distribution Date the amount of Collections deposited
in the Collection Account exceeds the amount required to be deposited pursuant
to clause (i) above, the Servicer will be permitted to withdraw the excess from
the Collection Account.
(b) Allocations for the Transferor Certificate. Throughout the
------------------------------------------
existence of the Trust, unless otherwise stated in any Supplement, the Servicer
shall allocate to the Holder of the Transferor Certificate an amount equal to
the product of (A) the Transferor Percentage and (B) the aggregate amount of
such Collections allocated to Principal Receivables and Finance Charge
Receivables, respectively, in respect of each Monthly Period. Notwithstanding
anything in this Agreement to the contrary, unless otherwise stated in any
Supplement, the Servicer need not deposit this amount or any other amounts so
allocated to the Transferor Certificate pursuant to any Supplement into the
Collection Account and shall pay, or be deemed to pay, such amounts as collected
to the Holder of the Transferor Certificate.
(c) Adjustments for Miscellaneous Credits and Fraudulent Charges. The
------------------------------------------------------------
Servicer shall be obligated to reduce on a net basis in each Monthly Period the
aggregate amount of Principal Receivables used to calculate the Transferor
Interest as provided in this subsection 4.3(c) (a "Credit Adjustment") with
-----------------
respect to any Principal Receivable (i) which was created in respect of
merchandise refused or returned by the Obligor thereunder or as to which the
Obligor thereunder has asserted a counterclaim or defense, (ii) which is reduced
by the Servicer by any rebate, refund, charge-back or adjustment (including
Servicer errors) or (iii) which was created as a result of a fraudulent or
counterfeit charge.
In the event that the inclusion of the amount of a Credit Adjustment
in the calculation of the Transferor Interest would cause the Transferor
Interest to be an amount less than the Minimum Transferor Interest, the
Transferor shall make a deposit, no later than the Business Day following the
Date of Processing of such Credit Adjustment, in the Excess Funding Account in
immediately available funds in an amount equal to the amount by which such
Credit Adjustment would cause the Transferor Interest to be less than the
Minimum Transferor Interest on such Date of Processing.
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(d) Transfer of Defaulted Accounts. Unless otherwise provided in any
------------------------------
Supplement, on the date on which an Account becomes a Defaulted Account, the
Trust shall automatically and without further action or consideration be deemed
to transfer, set over, and otherwise convey to the Transferor, without recourse,
representation or warranty, all the right, title and interest of the Trust in
and to Receivables in such Defaulted Account, all monies due or to become due
with respect to such Receivables, all proceeds of such Receivables and Insurance
Proceeds relating to such Receivables allocable to the Trust with respect to
such Receivables. Notwithstanding any such transfer of accounts, amounts
recovered with respect to such defaulted accounts may still be allocated to the
Trust to the extent provided for in the definition of Recoveries.
(e) Operation of Excess Funding Account. On each Determination Date
-----------------------------------
on which one or more Series is in its Amortization Period or Accumulation
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, and the Servicer shall instruct the Trustee to withdraw such amount (up
to the Excess Funding Amount) from the Excess Funding Account on the next
succeeding Transfer Date and deposit such amount in the Distribution Account for
allocation among each such Series as Shared Principal Collections as specified
in each related Supplement. On any Business Day on which the Transferor
Interest exceeds the Minimum Transferor Interest, the Servicer shall instruct
the Trustee to withdraw the amount of such excess (up to the Excess Funding
Amount) from the Excess Funding Account on such day and pay such amount to the
Holder of the Transferor Certificate.
Section 4.4 Allocations During Funding Period. To the extent that
---------------------------------
the Servicer establishes an Eligible Deposit Account as a pre-funding account
(the "Pre-Funding Account") with respect to any Series, bearing a designation
indicating that the funds deposited therein are for the benefit of such Series,
during the period (the "Funding Period"), as set forth in the related
Supplement, that the Pre-Funding Account maintains a balance, the date upon
which an increase in the Invested Amount of such Series in accordance with the
terms of such related Supplement occurs shall be treated as an Addition Date
solely for the purpose of calculating the applicable Investor Percentages. Such
Addition Date shall be deemed to occur on the date of each such increase and the
applicable Investor Percentages shall be calculated accordingly.
[THE REMAINDER OF ARTICLE IV IS RESERVED AND SHALL BE SPECIFIED IN ANY
SUPPLEMENT WITH RESPECT TO ANY SERIES]
[End of Article IV]
56
<PAGE>
ARTICLE V
[ARTICLE V IS RESERVED AND SHALL
BE SPECIFIED IN ANY SUPPLEMENT
WITH RESPECT TO ANY SERIES]
[End of Article V]
57
<PAGE>
ARTICLE VI
THE CERTIFICATES
Section 6.1 The Certificates. Subject to Sections 6.10 and 6.13, the
----------------
Investor Certificates of each Series and any Class thereof may be issued in
bearer form (the "Bearer Certificates") with attached interest coupons and a
-------------------
special coupon (collectively, the "Coupons") or in fully registered form (the
-------
"Registered Certificates"), and shall be substantially in the form of the
- ------------------------
exhibits with respect thereto attached to the related Supplement. The
Transferor Certificate shall be substantially in the form of Exhibit A. The
Investor Certificates and the Transferor Certificate shall, upon issue pursuant
hereto or to Section 6.9 or Section 6.10, be executed and delivered by the
Transferor to the Trustee for authentication and redelivery as provided in
Sections 2.1 and 6.2. Any Investor Certificate shall be issuable in a minimum
denomination of $1,000 Undivided Interest and integral multiples thereof, unless
otherwise specified in any Supplement. The Transferor Certificate shall be
issued as a single certificate. Each Certificate shall be executed by manual or
facsimile signature on behalf of the Transferor by its President or any Vice
President. Certificates bearing the manual or facsimile signature of the
individual who was, at the time when such signature was affixed, authorized to
sign on behalf of the Transferor or the Trustee shall not be rendered invalid,
notwithstanding that such individual has ceased to be so authorized prior to the
authentication and delivery of such Certificates or does not hold such office at
the date of such Certificates. No Certificate shall be entitled to any benefit
under this Agreement, or be valid for any purpose, unless there appears on such
Certificate a certificate of authentication substantially in the form provided
for herein, executed by or on behalf of the Trustee by the manual signature of a
duly authorized signatory, and such certificate upon any Certificate shall be
conclusive evidence, and the only evidence, that such Certificate has been duly
authenticated and delivered hereunder. All Certificates shall be dated the date
of their authentication except Bearer Certificates which shall be dated the
applicable Issuance Date as provided in the related Supplement.
Section 6.2 Authentication of Certificates. Contemporaneously with
------------------------------
the initial assignment and transfer of the Receivables, whether now existing or
hereafter created (other than Receivables in Additional Accounts) and the other
components to the Trust, the Trustee shall authenticate and deliver the initial
Series of Investor Certificates, upon the written order of the Transferor, to
the underwriters for the sale of the Book-Entry Certificates evidenced by such
Investor Certificates, and against payment to the Transferor of the Initial
Investor Interest (net of any purchase or underwriting discount). Upon the
receipt of such payment and the issuance of the Investor Certificates, such
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Investor Certificates shall be fully paid and non-assessable. The Trustee shall
authenticate and deliver the Transferor Certificate to the Transferor
simultaneously with its delivery to the Transferor of the initial Series of
Investor Certificates. Upon an Exchange as provided in Section 6.9 and the
satisfaction of certain other conditions specified therein, the Trustee shall
authenticate and deliver the Investor Certificates of additional Series (with
the designation provided in the related Supplement), upon the order of the
Transferor, to the Persons designated in such Supplement. Upon the order of the
Transferor, the Certificates of any Series shall be duly authenticated by or on
behalf of the Trustee, in authorized denominations. If specified in the related
Supplement for any Series, the Trustee shall authenticate and deliver outside
the United States the Global Certificate that is issued upon original issuance
thereof, upon the written order of the Transferor, to the Depository against
payment of the purchase price therefor. If specified in the related Supplement
for any Series, the Trustee shall authenticate Book-Entry Certificates that are
issued upon original issuance thereof, upon the written order of the Transferor,
to a Clearing Agency or is nominee as provided in Section 6.10 against payment
of the purchase price thereof.
Section 6.3 Registration of Transfer and Exchange of Certificates.
-----------------------------------------------------
(a) The Trustee shall cause to be kept at the office or agency to be
maintained by a transfer agent and registrar (the "Transfer Agent and
------------------
Registrar"), in accordance with the provisions of Section 11.16, a register (the
"Certificate Register") in which, subject to such reasonable regulations as it
--------------------
may prescribe, the Transfer Agent and Registrar shall provide for the
registration of the Investor Certificates of each Series (unless otherwise
provided in the related Supplement) and of transfers and exchanges of the
Investor Certificates as herein provided. Chemical Bank is hereby initially
appointed Transfer Agent and Registrar for the purposes of registering the
Investor Certificates and transfers and exchanges of the Investor Certificates
as herein provided. If any form of Investor Certificate is issued as a Global
Certificate, the Trustee may, or if and so long as any Series of Investor
Certificates are listed an the Luxembourg Stock Exchange and such exchange shall
so require, the Trustee shall appoint a co-transfer agent and co-registrar in
Luxembourg or another European city. Any reference in this Agreement to the
Transfer Agent and Registrar shall include any co-transfer agent and co-
registrar unless the context otherwise requires. Chemical Bank shall be
permitted to resign as Transfer Agent and Registrar upon 30 days' written notice
to the Servicer. In the event that Chemical Bank shall no longer be the
Transfer Agent and Registrar, the Trustee shall appoint a successor Transfer
Agent and Registrar.
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Upon surrender for registration of transfer of any Certificate at any
office or agency of the Transfer Agent and Registrar, the Transferor shall
execute, subject to the provisions of subsection 6.3(c), and the Trustee shall
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Certificates in authorized denominations of like
aggregate Undivided Interests; provided, however that the provisions of this
-------- -------
paragraph shall not apply to Bearer Certificates.
At the option of an Investor Certificateholder, Investor Certificates
may be exchanged for other Investor Certificates of the same Series in
authorized denominations of like aggregate Undivided Interests, upon surrender
of the Investor Certificates to be exchanged at any such office or agency. At
the option of any Holder of Registered Certificates, Registered Certificates may
be exchanged for other Registered Certificates of the same Series in authorized
denominations of like aggregate Undivided Interests in the Trust, upon surrender
of the Registered Certificates to be exchanged at any office or agency of the
Transfer Agent and Registrar maintained for such purpose. At the option of a
Bearer Certificateholder, subject to applicable laws and regulations (including
without limitation, the Bearer Rules), Bearer Certificates may be exchanged for
other Bearer Certificates or Registered Certificates of the same Series in
authorized denominations of like aggregate Undivided Interests in the Trust, in
the manner specified in the Supplement for such Series, upon surrender of the
Bearer Certificates to be exchanged at an office or agency of the Transfer Agent
and Registrar located outside the United States. Each Bearer Certificate
surrendered pursuant to this Section 6.3 shall have attached thereto (or be
accompanied by) all unmatured Coupons, provided that any Bearer Certificate so
surrendered after the close of business on the Record Date preceding the
relevant Distribution Date after the related Series Termination Date need not
have attached the coupons relating to such Distribution Date.
Whenever any Investor Certificates of any Series are so surrendered
for exchange, the Transferor shall execute, and the Trustee shall authenticate
and (unless the Transfer Agent and Registrar is different than the Trustee, in
which case the Transfer Agent and Registrar shall) deliver, the Investor
Certificates of such Series which the Certificateholder making the exchange is
entitled to receive. Every Investor Certificate presented or surrendered for
registration of transfer or exchange shall be accompanied by a written
instrument of transfer in a form satisfactory to the Trustee and the Transfer
Agent and Registrar duly executed by the Certificate holder thereof or his
attorney-in-fact duly authorized in writing.
The preceding provisions of this Section 6.3 notwithstanding, the
Trustee or the Transfer Agent and Registrar, as the
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<PAGE>
case may be, shall not be required to register the transfer of or exchange any
Investor Certificate of any Series for a period of 15 days preceding the due
date for any payment with respect to the Investor Certificates of such Series.
Unless otherwise provided in the related Supplement, no service charge
shall be made for any registration of transfer or exchange of Certificates, but
the Transfer Agent and Registrar may require payment of a sum sufficient to
cover any tax or governmental charge that may be imposed in connection with any
transfer or exchange of Certificates.
All Investor Certificates (together with any Coupons attached to
Bearer Certificates) surrendered for registration of transfer and exchange shall
be canceled by the Transfer Agent and Registrar and disposed of in a manner
satisfactory to the Trustee. The Trustee shall cancel and destroy any Global
Certificates upon its exchange in full for Definitive Certificates and shall
deliver a certificate of destruction to the Transferor. Such certificate shall
also state that a certificate or certificates of each Foreign Clearing Agency to
the effect referred to in Section 6.13 was received with respect to each portion
of such Global Certificate exchanged for Definitive Certificates.
The Transferor shall execute and deliver to the Trustee or the
Transfer Agent and Registrar, as applicable, Bearer Certificates and Registered
Certificates in such amounts and at such times as are necessary to enable the
Trustee to fulfill its responsibilities under this Agreement and the
Certificates.
(b) Except as provided in Section 6.9 or 7.2 or in any Supplement, in
no event shall the Transferor Certificate or any interest therein be transferred
hereunder, in whole or in part, unless the Trustee shall have consented in
writing to such transfer; provided, however, that the Trustee may not withhold
-------- -------
such consent if it shall have received (1) written confirmation from each Rating
Agency that such transfer will satisfy the Rating Agency Condition and (2) a Tax
Opinion with respect to such transfer.
(c) Unless otherwise provided in the related Supplement, registration
of transfer of Registered Certificates containing a legend relating to the
restrictions on transfer of such Registered Certificates (which legend shall be
set forth in the Supplement relating to such Investor Certificates) shall be
effected only if the conditions set forth in such related Supplement are
satisfied.
Whenever a Registered Certificate containing the legend sat forth in
the related Supplement is presented to the Transfer Agent and Registrar for
registration of transfer, the Transfer Agent and Registrar shall promptly seek
instructions from the
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<PAGE>
Servicer regarding such transfer. The Transfer Agent and Registrar and the
Trustee shall be entitled to receive written instructions signed by a Servicing
Officer prior to registering any such transfer or authenticating new Registered
Certificates, as the case may be. The Servicer hereby agrees to indemnify the
Transfer Agent and Registrar and the Trustee and to hold each of them harmless
against any loss, liability or expense incurred without negligence or bad faith
on their part arising out of or in connection with actions taken or omitted by
them in reliance on any such written instructions furnished pursuant to this
subsection 6.3(c).
(d) The Transfer Agent and Registrar will maintain at its expense in
the Borough of Manhattan, the City of New York (and subject to this Section 6.3,
if specified in the related Supplement for any Series, any other city designated
in such Supplement) an office or offices or an agency or agencies where Investor
Certificates of such Series may be surrendered for registration of transfer or
exchange.
Section 6.4 Mutilated, Destroyed, Lost or Stolen Certificates. If
-------------------------------------------------
(a) any mutilated Certificate (together, in the case of Bearer Certificates,
with all unmatured Coupons, if any, appertaining thereto) is surrendered to the
Transfer Agent and Registrar, or the Transfer Agent and Registrar receives
evidence to its satisfaction of the destruction, loss or theft of any
Certificate and (b) there is delivered to the Transfer Agent and Registrar and
the Trustee such security or indemnity as may be reasonably 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 and the Trustee shall authenticate and (unless the Transfer Agent
and Registrar is different from the Trustee, in which case the Transfer Agent
and Registrar shall) deliver (in compliance with applicable law), in exchange
for or in lieu of any such mutilated, destroyed, lost or stolen Certificate, a
new Certificate of like tenor and aggregate Undivided Interest. In connection
with the issuance of any new Certificate under this Section 6.4, the Trustee or
the Transfer Agent and Registrar may require the payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in relation
thereto and any other expenses (including the fees and expenses of the Trustee
and the Transfer Agent and Registrar) connected therewith. Any duplicate
Certificate issued pursuant to this Section 6.4 shall constitute complete and
indefeasible evidence of ownership in the Trust, as if originally issued,
whether or not the lost, stolen or destroyed certificate shall be found at any
time.
Section 6.5 Persons Deemed Owners. Prior to due presentation of a
---------------------
Certificate for registration of transfer, the Trustee, the Paying Agent, the
Transfer Agent and Registrar and
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any agent of any of them may treat the Person in whose name any Certificate is
registered as the owner of such Certificate for the purpose of receiving
distributions pursuant to Article V (as described in any Supplement) and for all
other purposes whatsoever, and neither the Trustee, the Paying Agent, the
Transfer Agent and Registrar nor any agent of any of them shall be affected by
any notice to the contrary; provided, however, that in determining whether the
-------- -------
holders of Investor Certificates evidencing the requisite Undivided Interests
have given any request, demand, authorization, direction, notice, consent or
waiver hereunder, unless otherwise expressly specified herein or in the related
Supplement, Investor Certificates owned by the Transferor, the Servicer or any
Affiliate thereof shall be disregarded and deemed not to be outstanding, except
that, in determining whether the Trustee shall be protected in relying upon any
such request, demand, authorization, direction, notice, consent or waiver, only
Investor Certificates which a Responsible Officer in the Corporate Trust Office
of the Trustee knows to be so owned shall be so disregarded. Investor
Certificates so owned that have been pledged in good faith shall not be
disregarded as outstanding, if the pledgee establishes to the satisfaction of
the Trustee the pledgee's right so to act with respect to such Investor
Certificates and that the pledgee is not the Transferor, the Servicer or an
Affiliate thereof.
In the case of a Bearer Certificate, the Trustee, the Paying Agent,
the Transfer Agent and Registrar and any agent of any of them may treat the
holder of a Bearer Certificate or Coupon as the owner of such Bearer Certificate
or Coupon for the purpose of receiving distributions pursuant to Article IV and
Article XII and for all other purposes whatsoever, and neither the Trustee, the
Paying Agent, the Transfer Agent and Registrar nor any agent of any of them
shall be affected by any notice to the contrary. Certificates so owned which
have been pledged in good faith shall not be disregarded and may be regarded as
outstanding, if the pledgee establishes to the satisfaction of the Trustee the
pledgee's right so to act with respect to such Investor Certificates and that
the pledgee is not the Transferor, the Servicer or an Affiliate thereof.
Section 6.6 Appointment of Paying Agent.
---------------------------
(a) The Paying Agent shall make distributions to Investor
Certificateholders from the appropriate account or accounts maintained for the
benefit of Certificateholders as specified in this Agreement or the related
Supplement for any Series pursuant to Articles IV and V hereof. Any Paying
Agent shall have the revocable power to withdraw funds from such appropriate
account or accounts for the purpose of making distributions referred to above.
The Trustee (or the Servicer if the Trustee is the Paying Agent) may revoke such
power and remove the Paying Agent, if the Trustee (or the Servicer if the
Trustee is
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the Paying Agent) determines in its sole discretion that the Paying Agent shall
have failed to perform its obligations under this Agreement in any material
respect or for other good cause. The Trustee (or the Servicer if the Trustee is
the Paying Agent) shall notify the Rating Agency of the removal of any Paying
Agent. The Paying Agent, unless the Supplement with respect to any Series
states otherwise, shall initially be Chemical Bank. If any form of Investor
Certificate is issued as a Global Certificate, or if and so long as any Series
of Investor Certificates are listed on the Luxembourg Stock Exchange and such
exchange shall so require, the Trustee shall appoint a co-paying agent in
Luxembourg or another European city. The Paying Agent shall be permitted to
resign as Paying Agent upon 30 days' written notice to the Servicer. In the
event that any Paying Agent shall no longer be the Paying Agent, the Trustee
shall appoint a successor to act as Paying Agent (which shall be a bank or trust
company). The provisions of Sections 11.1, 11.2 and 11.3 shall apply to the
Trustee also in the capacity of Paying Agent, for so long as the Trustee shall
act as Paying Agent. Any reference in this Agreement to the Paying Agent shall
include any co-paying agent unless the context requires otherwise.
If specified in the related Supplement for any Series, so long as the
Investor Certificates of such Series are outstanding, the Transferor shall
maintain a co-paying agent in New York City (for Registered Certificates only)
or any other city designated in such Supplement which, if and so long as any
Series of Investor Certificates is listed on the Luxembourg Stock Exchange or
other stock exchange and such exchange so requires, shall be in Luxembourg or
the location required by such other stock exchange.
(b) The Trustee shall cause the Paying Agent (other than itself) to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee that such Paying Agent will hold all sums, if any,
held by it for payment to the Certificateholders in trust for the benefit of the
Certificateholders entitled thereto until such sums shall be paid to such
Certificateholders and shall agree, and if the Trustee is the Paying Agent it
hereby agrees, that it shall comply with all requirements of the Internal
Revenue Code regarding the withholding by the Trustee of payments in respect of
federal income taxes due from Certificate Owners.
Section 6.7 Access to List of Certificateholders' Names and
-----------------------------------------------
Addresses. The Trustee will furnish or cause to be furnished by the Transfer
Agent and Registrar to the Servicer or the Paying Agent, within five Business
Days after receipt by the Trustee of a request therefor from the Servicer or the
Paying Agent, respectively, in writing, a list in such form as the Servicer or
the Paying Agent may reasonably require, of the names and addresses of the
Investor Certificateholders as of the most
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recent Record Date for payment of distributions to Investor Certificateholders.
Unless otherwise provided in the related Supplement, holders of Investor
Certificates evidencing Undivided Interests aggregating not less than 10% of the
Investor Interest of the Investor Certificates of any Series (the "Applicants")
----------
may apply in writing to the Trustee, and if such application states that the
Applicants desire to communicate with other Investor Certificateholders of any
Series with respect to their rights under this Agreement or under the Investor
Certificates and is accompanied by a copy of the communication which such
Applicants propose to transmit, then the Trustee, after having been adequately
indemnified by such Applicants for its costs and expenses, shall afford or shall
cause the Transfer Agent and Registrar to afford such Applicants access during
normal business hours to the most recent list of Certificateholders held by the
Trustee and shall give the Servicer notice that such request has been made,
within five Business Days after the receipt of such application. Such list
shall be as of a date no more than 45 days prior to the date of receipt of such
Applicants' request. Every Certificateholder, by receiving and holding a
Certificate, agrees with the Trustee that neither the Trustee, the Transfer
Agent and Registrar, nor any of their respective agents shall be held
accountable by reason of the disclosure of any such information as to the names
and addresses of the Certificateholders hereunder, regardless of the source from
which such information was obtained.
Section 6.8 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 a certificate of authentication executed on behalf
of the Trustee by an authenticating agent. Each authenticating agent must be
acceptable to the Transferor.
(b) Any institution succeeding to the corporate agency business of an
authenticating agent shall continue to be an authenticating agent without the
execution or filing of any paper or any further act on the part of the Trustee
or such authenticating agent.
(c) An authenticating agent may at any time resign by giving written
notice of resignation to the Trustee and to the Transferor. The Trustee may at
any time terminate the agency of an authenticating agent by giving notice of
termination to such
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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 affect as if originally named as an authenticating agent. No successor
authenticating agent shall be appointed unless acceptable to the Trustee and the
Transferor.
(d) The Trustee agrees to pay each authenticating agent from time to
time reasonable compensation for its services under this Section 6.8, and the
Trustee shall be entitled to be reimbursed and the Servicer shall reimburse the
Trustee for such reasonable payments actually made, subject to the provisions of
Section 11.5.
(e) The provisions of Sections 11.1, 11.2 and 11.3 shall be applicable
to any authenticating agent.
(f) Pursuant to an appointment made under this Section 6.8, the
Certificates may have endorsed thereon, in lieu of 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 signatory
Section 6.9 Tender of Transferor Certificate.
--------------------------------
(a) Upon any Exchange, the Trustee shall issue to the Holder of the
Transferor Certificate under Section 6.1, for execution and redelivery to the
Trustee for authentication under Section 6.2, one or more new Series of Investor
Certificates. Any such Series of Investor Certificates shall be substantially
in the form specified in the related Supplement and shall bear, upon its face,
the designation for such Series to which it belongs, as selected by the
Transferor. Except as specified in any Supplement for a related Series, all
Investor Certificates of any Series shall rank pari passu and be equally and
---- -----
ratably entitled as provided herein to the benefits hereof (except that the
Credit Enhancement provided for any Series shall not be available for any other
Series) without preference, priority or
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distinction on account of the actual time or times of authentication and
delivery, all in accordance with the terms and provisions of this Agreement and
the related Supplement.
(b) The Holder of the Transferor Certificate may tender the Transferor
Certificate to the Trustee in exchange for (i) one or more newly issued Series
of Investor Certificates or in connection with a Companion Series, interests in
such Series and (ii) a reissued Transferor Certificate (any such tender, a
"Transferor Exchange"). In addition, to the extent permitted for any Series of
- --------------------
Investor Certificates as specified in the related Supplement, the Investor
Certificateholders of such Series may tender their Investor Certificates and the
Holder of the Transferor Certificate may tender the Transferor Certificate to
the Trustee pursuant to the terms and conditions set forth in such Supplement in
exchange for (i) one or more newly issued Series of Investor Certificates and
(ii) a reissued Transferor Certificate (an "Investor Exchange"). The Transferor
-----------------
Exchange and Investor Exchange are referred to collectively herein as an
"Exchange." The Holder of the Transferor Certificate may perform an Exchange by
- ---------
notifying the Trustee, in writing at least three days in advance (an "Exchange
--------
Notice") of the date upon which the Exchange is to occur (an "Exchange Date").
- ------
Any Exchange Notice shall state the designation of any Series (and Class
thereof, if applicable) to be issued on the Exchange Date and, with respect to
each such Series: (a) its Initial Investor Interest (or the method for
calculating such Initial Investor Interest) (b) its Certificate Rate (or the
method for allocating interest payments or other cash flows to such Series), if
any, and (c) the Credit Enhancement Provider, if any, with respect to such
Series. On the Exchange Date, the Trustee shall authenticate and deliver any
such Series of Investor Certificates only upon delivery to it of the following:
(a) a Supplement satisfying the criteria set forth in subsection 6.9(c) executed
by the Transferor and specifying the Principal Terms of such Series, (b) the
applicable Credit Enhancement, if any, (c) the agreement, if any, pursuant to
which the Credit Enhancement Provider agrees to provide the Credit Enhancement,
if any, (d) an Opinion of Counsel to the effect that, unless otherwise stated in
the related Supplement, the newly issued Series or Class of Investor
Certificates will be treated as debt secured by the Receivables for United
States federal income and Delaware and New York state income and corporate
franchise tax purposes, (e) a Tax Opinion, (f) written confirmation from each
Rating Agency that the Exchange will satisfy the Rating Agency Condition, (g) an
Officer's Certificate signed by a Vice President (or any more senior officer) of
the Transferor, that on the Exchange Date (i) the Transferor, after giving
effect to the Exchange, would not be required to add Additional Accounts
pursuant to subsection 2.6(a), and (ii) after giving effect to such Exchange,
the Transferor Interest would be at least equal to the Minimum Transferor
Interest and (h) the existing Transferor Certificate or applicable Investor
Certifi-
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cates, as the case may be. Upon satisfaction of such conditions, the Trustee
shall cancel the existing Transferor Certificate or applicable Investor
Certificates, as the case may be, and issue, as provided above, such Series of
Investor Certificates and a new Transferor Certificate, dated the Exchange Date.
There is no limit to the number of Exchanges that may be performed under the
Agreement.
(c) In conjunction with an Exchange, the parties hereto shall execute
a Supplement, which shall specify the relevant terms with respect to any newly
issued Series of Investor Certificates, which may include without limitation:
(i) its name or designation, (ii) an Initial Investor Interest or the method of
calculating the Initial Investor Interest, (iii) the method of determining any
adjusted Investor Interest, if applicable, (iv) the Certificate Rate (or formula
for the determination thereof), (v) the Closing Date, (vi) each Rating Agency
rating such Series, (vi) the name of the Clearing Agency, if any, (vii) the
rights of the Holder of the Transferor Certificate that have been transferred to
the Holders of such Series pursuant to such Exchange (including any rights to
allocations of Collections of Finance Charge Receivables and Principal
Receivables), (ix) the interest payment date or dates and the date or dates from
which interest shall accrue, (x) the periods during which or dates on which
principal will be paid or accrued, (xi) the method of allocating Collections
with respect to Principal Receivables for such Series and, if applicable, with
respect to other Series and the method by which the principal amount of Investor
Certificates of such Series shall amortize or accrete and the method for
allocating Collections with respect to Finance Charge Receivables and
Receivables in Defaulted Accounts, (xii) any other Collections with respect to
Receivables or other amounts available to be paid with respect to such Series,
(xii) the names of any accounts to be used by such Series and the terms
governing the operation of any such accounts and use of moneys therein, (xiv)
the Series Servicing Fee and the Series Servicing Fee Percentage, (xv) the
Minimum Transferor Interest and the Series Termination Date, (xvi) the terms of
any Credit Enhancement with respect to such Series, and the Credit Enhancement
Provider, if applicable, (xvii) the base rate applicable to such Series, (xviii)
the terms on which the Certificates of such Series may be repurchased or
remarketed to other investors, (xix) any deposit into any account provided for
such Series, (xx) the number of Classes of such Series, and if more than one
Class, the rights and priorities of each such Class, (xxi) whether Interchange
or other fees will be included in the funds available to be paid for such
Series, (xxii) the priority of any Series with respect to any other Series,
(xxiii) the rights, if any, of the holders of the Transferor Certificate that
have been transferred to the holders of such Series, (xxiv) the Pool Factor,
(xxv) the Minimum Aggregate Principal Receivables, (xxvi) whether such Series
will be part of a Group, (xxvii) whether such Series will or may be a Companion
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<PAGE>
Series and the Series with which it will be paired, if applicable and (xxviii)
any other relevant terms of such Series (including whether or not such Series
will be pledged as collateral for an issuance of any other securities, including
commercial paper) (all such terms, the "Principal Terms" of such Series). The
---------------
terms of such Supplement may modify or amend the terms of this Agreement solely
as applied to such new Series. If on the date of the issuance of such Series
there is issued and outstanding one or more Series of Investor Certificates and
no Series of Investor Certificates is currently rated by a Rating Agency, then
as a condition to such Exchange a nationally recognized investment banking firm
or commercial bank shall also deliver to the Trustee an Officer's certificate
stating, in substance, that the Exchange will not have an adverse effect on the
timing or distribution of payments to such other Series of Investor Certificates
then issued and outstanding.
Section 6.10 Book-Entry Certificates. Unless otherwise provided in
-----------------------
any related Supplement, the Investor Certificates, upon original issuance, shall
be issued in the form of typewritten Certificates representing the Book-Entry
Certificates, to be delivered to the depository specified in such Supplement
(the "Depository") which shall be the Clearing Agency or Foreign Clearing
----------
Agency, by or on behalf of such Series. The Investor Certificates of each
Series shall, unless otherwise provided in the related Supplement, initially be
registered on the Certificate Register in the name of the nominee of the
Clearing Agency or Foreign Clearing Agency. No Certificate Owner will receive a
definitive certificate representing such Certificate Owner's interest in the
related Series of Investor Certificates, except as provided in Section 6.12.
Unless and until definitive, fully registered Investor Certificates of any
Series ("Definitive Certificates") have been issued to Certificate Owners
-----------------------
pursuant to Section 6.12;
(i) the provisions of this Section 6.10 shall be in full force
and effect with respect to each such Series;
(ii) the Transferor, the Servicer, the Paying Agent, the Transfer
Agent and Registrar and the Trustee may deal with the Clearing Agency and
the Clearing Agency Participants for all purposes (including the making of
distributions on the Investor Certificates of each such Series) as the
authorized representatives of the Certificate Owners;
(iii) to the extent that the provisions of this Section 6.10
conflict with any other provisions of this Agreement, the provisions of
this Section 6.10 shall control with respect to each such Series; and
69
<PAGE>
(iv) the rights of Certificate Owners of each such Series shall
be exercised only through the Clearing Agency or Foreign Clearing Agency
and the applicable Clearing Agency Participants and shall be limited to
those established by law and agreements between such Certificate Owners and
the Clearing Agency or Foreign Clearing Agency and/or the Clearing Agency
Participants. Pursuant to the Depository Agreement applicable to a Series,
unless and until Definitive Certificates of such Series are issued pursuant
to Section 6.12, the initial Clearing Agency will make book-entry transfers
among the Clearing Agency Participants and receive and transmit
distributions of principal and interest on the Investor Certificates to
such Clearing Agency Participants.
Section 6.11 Notices to Clearing Agency. Whenever notice or other
--------------------------
communication to the Certificateholders is required under this Agreement, unless
and until Definitive Certificates shall have been issued to Certificate Owners
pursuant to Section 6.12, the Trustee shall give all such notices and
communications specified herein to be given to Holders of the Investor
Certificates to the Clearing Agency or Foreign Clearing Agency for distribution
to Holders of Investor Certificates.
Section 6.12 Definitive Certificates. If (i) (A) the Transferor
-----------------------
advises the Trustee in writing that the Clearing Agency or Foreign Clearing
Agency is no longer willing or able to discharge properly its responsibilities
under the applicable Depository Agreement, and (B) the Trustee or the Transferor
is unable to locate a qualified successor, (ii) the Transferor, at its option,
advises the Trustee in writing that it elects to terminate the book-entry system
through the Clearing Agency or Foreign Clearing Agency with respect to any
Series of Certificates or (iii) after the occurrence of a Servicer Default,
Certificate Owners of a Series representing beneficial interests aggregating not
less than 50% of the Investor Interest of such Series advise the Trustee and the
applicable Clearing Agency or Foreign Clearing Agency through the applicable
Clearing Agency Participants in writing that the continuation of a book-entry
system through the applicable Clearing Agency or Foreign Clearing Agency is no
longer in the best interests of the Certificate Owners, the Trustee shall notify
all Certificate Owners of such Series, through the applicable Clearing Agency
Participants, of the occurrence of any such event and of the availability of
Definitive Certificates to Certificate Owners of such Series requesting the
same. Upon surrender to the Trustee of the Investor Certificates of such Series
by the applicable Clearing Agency or Foreign Clearing Agency, accompanied by
registration instructions from the applicable Clearing Agency or Foreign
Clearing Agency for registration, the Trustee shall issue the Definitive
Certificates of such Series. Neither the Transferor nor the Trustee shall be
liable for any delay in delivery of such
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<PAGE>
instructions and may conclusively rely on, and shall be protected in relying on,
such instructions. Upon the issuance of Definitive Certificates of such Series
all references herein to obligations imposed upon or to be performed by the
applicable Clearing Agency or Foreign Clearing Agency shall be deemed to be
imposed upon and performed by the Trustee, to the extent applicable with respect
to such Definitive Certificates, and the Trustee shall recognize the Holders of
the Definitive Certificates of such Series as Certificateholders of such Series
hereunder.
Section 6.13 Global Certificate. If specified in the related
------------------
Supplement for any Series, the Investor Certificates may be initially issued in
the form of a single temporary Global Certificate (the "Global Certificate") in
------------------
bearer form, without interest coupons, in the denomination of the Initial
Investor Interest and substantially in the form attached to the related
Supplement. Unless otherwise specified in the related Supplement, the
provisions of this Section 6.13 shall apply to such Global Certificate. The
Global Certificate will be authenticated by the Trustee upon the same
conditions, in substantially the same manner and with the same effect as the
Definitive Certificates. The Global Certificate may be exchanged in the manner
described in the related Supplement for Registered or Bearer Certificates in
definitive form.
Section 6.14 Meetings of Certificateholders. To the extent provided
------------------------------
by the Supplement for any Series issued in whole or in part in Bearer
Certificates, the Servicer or the Trustee may at any time call a meeting of the
Certificateholders of such Series, to be held at such time and at such place as
the Servicer or the Trustee, as the case may be, shall determine, for the
purpose of approving a modification of or amendment to, or obtaining a waiver
of, any covenant or condition set forth in this Agreement with respect to such
Series or in the Certificates of such Series, subject to Section 13.1 of the
Agreement.
[End of Article VI]
71
<PAGE>
ARTICLE VII
OTHER MATTERS RELATING
TO THE TRANSFEROR
Section 7.1 Liability of the Transferor. The Transferor shall be
---------------------------
liable in accordance herewith to the extent of the obligations specifically
undertaken by the Transferor.
Section 7.2 Merger or Consolidation of, or Assumption of the
------------------------------------------------
Obligations of, the Transferor.
- ------------------------------
(a) The Transferor 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:
(i) (A) the Transferor is the surviving entity or (B) if the
Transferor is not the surviving entity, the corporation formed by such
consolidation or into which the Transferor is merged or the Person which
acquires by conveyance or transfer the properties and assets of the
Transferor substantially as an entirety shall be organized and existing
under the laws of the United States of America or any State or the District
of Columbia, and shall be a national banking association, state banking
corporation or other entity which is not subject to the bankruptcy laws of
the United States of America and shall expressly assume, by an agreement
supplemental hereto, executed and delivered to the Trustee, in form
satisfactory to the Trustee, the performance of every covenant and
obligation of the Transferor, as applicable hereunder and shall benefit
from all the rights granted to the Transferor, as applicable hereunder. To
the extent that any right, covenant or obligation of the Transferor, as
applicable hereunder, is inapplicable to the successor entity, such
successor entity shall be subject to such covenant or obligation, or
benefit from such right, as would apply, to the extent practicable, to such
successor entity. In furtherance hereof, in applying this Section 7.2 to a
successor entity, Section 9.2 hereof shall be applied by reference to
events of involuntary liquidation, receivership or conservatorship
applicable to such successor entity as shall be set forth in the Officer's
Certificate described in subsection 7.2(a)(ii);
(ii) the Transferor shall have delivered to the Trustee an
Officer's Certificate signed by a Vice President (or any more senior
officer) of the Transferor stating that such consolidation, merger,
conveyance or transfer and such supplemental agreement comply with this
Section 7.2 and that all conditions precedent herein provided for relating
to such transaction have been complied with and an Opinion of
72
<PAGE>
Counsel that such supplemental agreement is legal, valid and binding; and
(iii) the Transferor shall have delivered notice to the Rating
Agency of such consolidation, merger, conveyance or transfer.
(b) The obligations of the Transferor hereunder shall not be
assignable nor shall any Person succeed to the obligations of the Transferor
hereunder (i) except for mergers, consolidations, assumptions or transfers in
accordance with the provisions of the foregoing paragraph or (ii) unless the
assignee with respect to such obligations shall be organized and existing under
the laws of the United States of America or any State or the District of
Columbia, and shall be a national banking association, state banking corporation
or other entity which is not subject to the bankruptcy laws of the United States
of America and shall expressly assume, by an agreement supplemental hereto,
executed and delivered to the Trustee, in form satisfactory to the Trustee, the
performance of every covenant and obligation of the Transferor, as applicable
hereunder and shall benefit from all the rights granted to the Transferor, as
applicable hereunder. To the extent that any right, covenant or obligation of
the Transferor, as applicable hereunder, is inapplicable to the assignee, such
assignee shall be subject to such covenant or obligation, or benefit from such
right, as would apply, to the extent practicable, to such assignee.
Section 7.3 Limitation of Liability. The directors, officers,
-----------------------
employees or agents of the Transferor shall not be under any liability to the
Trust, the Trustee, the Certificateholders, any Credit Enhancement Provider or
any other Person hereunder or pursuant to any document delivered hereunder, it
being expressly understood that all such liability is expressly waived and
released as a condition of, and as consideration for, the execution of this
Agreement and any Supplement and the issuance of the Certificates; provided,
--------
however, that this provision shall not protect the officers, directors,
- -------
employees, or agents of the Transferor against any liability which would
otherwise be imposed by reason of willful misfeasance or gross negligence in the
performance of duties or by reason of reckless disregard of obligations and
duties hereunder. Except as provided in Section 7.4, the Transferor shall not
be under any liability to the Trust, the Trustee, the Certificateholders, any
Credit Enhancement Provider or any other Person for any action taken or for
refraining from the taking of any action in its capacity as Transferor pursuant
to this Agreement or any Supplement whether arising from express or implied
duties under this Agreement or any Supplement; provided, however, that this
-------- -------
provision shall not protect the Transferor against any liability which would
otherwise be imposed by reason of willful misfeasance or gross negligence in the
performance of duties or by reason of reckless
73
<PAGE>
disregard of obligations and duties hereunder. The Transferor and any director,
officer, employee or agent may rely in good faith on any document of any kind
prima facie properly executed and submitted by any Person respecting any matters
- ----- -----
arising hereunder.
Section 7.4 Liabilities. Notwithstanding Section 7.3 (and
-----------
notwithstanding Sections 3.2, 8.3, 8.4 and 11.11), or any other provision
herein, the Transferor by entering into this Agreement, and any holder of an
interest in the Transferor Certificate by its acceptance thereof, agree to be
liable, directly to any creditor or claimant for the entire amount of any
liabilities, including without limitation, any taxes imposed on the Trust,
losses, claims or damages (other than those that would be incurred by an
Investor Certificateholder or a Credit Enhancement Provider, if any, if the
Investor Certificates or Collateral Interest, as the case may be, were notes
secured by the Receivables, for example, as a result of the performance of the
Receivables, market fluctuations, a shortfall or failure to make payment under
any Credit Enhancement or other similar market or investment risks associated
with ownership of the Investor Certificates) arising out of or based on the
arrangement created by this Agreement (to the extent that, if the Trust assets
at the time the claim is made were used to pay in full all outstanding
Certificates of all Series, the Trust assets that would remain after the
Investor Certificateholders and Credit Enhancement Providers, if any, were paid
in full would be insufficient to pay any such losses, claims, damages or
liabilities) as though this Agreement created a partnership under the New York
Revised Limited Partnership Act in which the Transferor and such holder of an
interest in the Transferor Certificate were the general partners of such
partnership. The rights created by this Section 7.4 shall run directly to and
be enforceable by the injured party subject to the limitations hereof. To the
extent provided in Section 8.4, the Servicer will (from its own assets and not
from the assets of the Trust) indemnify and hold harmless the Transferor and
each holder of an interest in the Transferor Certificate against and from
certain losses, claims, damages and liabilities of the Transferor as described
in this Section arising from the actions or omissions of the Servicer.
[End Of Article VII]
74
<PAGE>
ARTICLE VIII
OTHER MATTERS RELATING
TO THE SERVICER
Section 8.1 Liability of the Servicer. The Servicer shall be liable
-------------------------
in accordance herewith only to the extent of the obligations specifically
undertaken by the Servicer in such capacity herein.
Section 8.2 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:
(i) (A) the Servicer is the surviving entity or (B) if the
Servicer is not the surviving entity, 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 a corporation organized and
existing under the laws of the United States of America or any State or the
District of Columbia, and shall be a state or national banking association
or other entity which is not subject to the bankruptcy laws of the United
States of America and shall expressly assume, by an agreement supplemental
hereto, executed and delivered to the Trustee in form satisfactory to the
Trustee, the performance of every covenant and obligation of the Servicer
hereunder (to the extent that any right, covenant or obligation of the
Servicer, as applicable hereunder, is inapplicable to the successor entity,
such successor entity shall be subject to such covenant or obligation, or
benefit from such right, as would apply, to the extent practicable, to such
successor entity);
(ii) the Servicer shall have delivered to the Trustee an
Officer's Certificate that such consolidation, merger, conveyance or
transfer and such supplemental agreement comply with this Section 8.2 and
that all conditions precedent herein provided for relating to such
transaction have been complied with and an Opinion of Counsel that such
supplemental agreement is legal, valid and binding with respect to the
Servicer; and
(iii) the Servicer shall have delivered notice to the Rating
Agency of such consolidation, merger, conveyance or transfer.
Section 8.3 Limitation of Liability of the Servicer and Others. The
--------------------------------------------------
directors, officers, employees or agents of the
75
<PAGE>
Servicer shall not be under any liability to the Trust, the Trustee, the
Certificateholders, any Credit Enhancement Provider or any other Person
hereunder or pursuant to any document delivered hereunder, it being expressly
understood that all such liability is expressly waived and released as a
condition of, and as consideration for, the execution of this Agreement and any
Supplement and the issuance of the Certificates; provided, however, that this
-------- -------
provision shall not protect the directors, officers, employees and agents of the
Servicer against any liability which would otherwise be imposed by reason of
willful misfeasance or gross negligence in the performance of duties or by
reason of reckless disregard of obligations and duties hereunder. Except as
provided in Section 8.4 with respect to the Trust and the Trustee, its officers,
directors, employees and agents, the Servicer shall not be under any liability
to the Trust, the Trustee, its officers, directors, employees and agents, the
Certificateholders or any other Person for any action taken or for refraining
from the taking of any action in its capacity as Servicer pursuant to this
Agreement or any Supplement; provided, however, that this provision shall not
-------- -------
protect the Servicer against any liability which would otherwise be imposed by
reason of willful misfeasance or gross negligence in the performance of duties
or by reason of its reckless disregard of its obligations and duties hereunder
or under any Supplement. The Servicer may rely in good faith on any document of
any kind prima facie properly executed and submitted by any Person respecting
----- -----
any matters arising hereunder. The Servicer shall not be under any obligation
to appear in, prosecute or defend any legal action which is not incidental to
its duties to service the Receivables in accordance with this Agreement which in
its reasonable opinion may cause it to incur any expense or liability.
Section 8.4 Servicer Indemnification of the Trust and the Trustee.
-----------------------------------------------------
The Servicer shall indemnify and hold harmless the Trust and the Trustee, its
officers, directors, employees and agents, from and against any reasonable loss,
liability, expense, damage or injury suffered or sustained by reason of any acts
or omissions or alleged acts or omissions of the Servicer with respect to
activities of the Trust or the Trustee pursuant to this Agreement or any
Supplement, including, but not limited to any judgment, award, settlement,
reasonable attorneys' fees and other costs or expenses incurred in connection
with the defense of any actual or threatened action, proceeding or claim;
provided, however, that the Servicer shall not indemnify the Trustee if such
- -------- -------
acts, omissions or alleged acts or omissions constitute or are caused by fraud,
negligence, bad faith 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
76
<PAGE>
Certificateholders or the Certificate owners as to any losses, claims or damages
incurred by any of them in their capacities as investors, including without
limitation losses incurred as a result of Defaulted Accounts or Receivables
which are written off as uncollectible; and provided, further, that the Servicer
-------- -------
shall not indemnify the Trust, the Investor Certificateholders or the
Certificate Owners for any liabilities, costs or expenses of the Trust, the
Investor Certificateholders or the Certificate Owners arising under any tax law,
including without limitation, any federal, state, local or foreign income or
franchise taxes or any other tax imposed on or measured by income (or any
interest or penalties with respect thereto or arising from a failure to comply
therewith) required to be paid by the Trust, the Investor Certificateholders or
the Certificate Owners in connection herewith to any taxing authority. Any such
indemnification shall not be payable from the assets of the Trust. The
provisions of this indemnity shall run directly to and be enforceable by an
injured party subject to the limitations hereof. The provisions of this Section
8.4 shall survive termination of this Agreement and the resignation or removal
of the Trustee.
Section 8.5 The Servicer Not to Resign. The Servicer shall not
--------------------------
resign from the obligations and duties hereby imposed on it except upon
determination that (i) the performance of its duties hereunder is no longer
permissible under applicable law and (ii) there is no reasonable action which
the Servicer could take to make the performance of its duties hereunder
permissible under applicable law. Any such determination permitting the
resignation of the Servicer shall be evidenced as to clause (i) above by an
Opinion of Counsel to such effect delivered to the Trustee. No such resignation
shall become effective until the Trustee or a Successor Servicer shall have
assumed the responsibilities and obligations of the Servicer in accordance with
Section 10.2 hereof. If the Trustee is unable within 120 days of the date of
such determination to appoint a Successor Servicer, the Trustee shall serve as
Successor Servicer hereunder.
Section 8.6 Access to Certain Documentation and Information Regarding
---------------------------------------------------------
the Receivables. The Servicer shall provide to the Trustee access to the
- ---------------
documentation regarding the Accounts and the Receivables in such cases where the
Trustee is required in connection with the enforcement of the rights of the
Investor Certificateholders, or by applicable statutes or regulations to review
such documentation, such access being afforded without charge but only (i) upon
reasonable request, (ii) during normal business hours, (iii) subject to the
Servicer's normal security and confidentiality procedures and (iv) at offices
designated by the Servicer. Nothing in this Section 8.6 shall derogate from the
obligation of the Transferor, the Trustee or the Servicer to observe any
applicable law prohibiting disclosure of information regarding the Obligors and
the failure of the Servicer to provide access as provided in this Section 8.6 as
a
77
<PAGE>
result of such obligations shall not constitute a breach of this Section 8.6.
Section 8.7 Delegation of Duties. It is understood and agreed by the
--------------------
parties hereto that the Servicer may delegate certain of its duties hereunder to
First Data Resources, Inc. ("FDR"), a credit card processor located in Omaha,
---
Nebraska. In the ordinary course of business, the Servicer may at any time
delegate any duties hereunder to any Person who agrees to conduct such duties in
accordance with the Credit Card Guidelines. Any such delegations shall not
relieve the Servicer of its liability and responsibility with respect to such
duties, and shall not constitute a resignation within the meaning of Section 8.5
hereof. If any such delegation is to a party other than FDR notification
thereof shall be given to each Rating Agency.
Section 8.8 Examination of Records. The Servicer shall clearly and
----------------------
unambiguously identify each Account (including any Additional Account designated
pursuant to Section 2.6) in its computer or other records to reflect that the
Receivables arising in such Account have been conveyed to the Trust pursuant to
this Agreement. 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]
78
<PAGE>
ARTICLE IX
PAY OUT EVENTS
Section 9.1 Pay Out Events. If any one of the following events
--------------
(each, a "Trust Pay Out Event") shall occur:
-------------------
(a) (i) a court having jurisdiction in the premises shall enter a
decree or order for relief in respect of the Transferor in an involuntary
case under the Bankruptcy Code or any applicable bankruptcy, insolvency or
other similar law now or hereafter in effect, which decree or order is not
stayed, or any other similar relief shall be granted under any applicable
federal or state law, (ii) an involuntary case is commenced against the
Transferor under any applicable bankruptcy, insolvency or other similar law
now or hereafter in effect which remains undismissed, undischarged or
unbonded for a period of 60 days or (iii) the Transferor shall have a
decree or an order for relief entered with respect to it or commence a
voluntary case under the Bankruptcy Code or any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect;
(b) the Transferor 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 all or substantially all of its property, or a decree or order of a
court or agency or supervisory authority having jurisdiction in the
premises for the appointment of a conservator or receiver or liquidator in
any insolvency, readjustment of debt, marshalling of assets and liabilities
or similar proceedings, or for the winding-up or liquidation of its
affairs, shall have been entered against the Transferor; or the Transferor
shall admit in writing its inability to pay its debts generally as they
become due, file a petition to take advantage of any applicable insolvency
or reorganization statute, make an assignment for the benefit of its
creditors or voluntarily suspend payment of its obligations; or the
Transferor shall become unable for any reason to transfer Receivables to
the Trust in accordance with the provisions of this Agreement; or
(c) the Trust shall become subject to regulation by the Securities and
Exchange Commission as an "investment company" within the meaning of the
Investment Company Act;
then a Pay Out Event with respect to all Series of Certificates shall occur
without any notice or other action on the part of the Trustee or the Investor
Certificateholders immediately upon the occurrence of such event.
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Section 9.2 Additional Rights Upon the Occurrence of Certain Events.
-------------------------------------------------------
(a) If any event set forth in Section 9.1(a) or (b) shall occur (any
such event, an "Insolvency Event"), the Transferor shall on the day of such
----------------
Insolvency Event (the "Appointment Day") immediately cease to transfer Principal
---------------
Receivables to the Trust and shall promptly give notice to the Trustee of such
Insolvency Event and the arrangement among the parties created hereby shall be
deemed to have been dissolved, subject to the liquidation and winding up
procedures described below. Notwithstanding any cessation of the transfer to
the Trust of additional Principal Receivables, Finance Charge Receivables,
whenever created, accrued in respect of Principal Receivables which have been
transferred to the Trust shall continue to be a part of the Trust, and
Collections with respect thereto shall continue to be allocated and paid in
accordance with Article IV. Within 15 days of the Appointment Day, the Trustee
shall (i) publish a notice in an Authorized Newspaper that an Insolvency Event
has occurred and that the Trustee intends to sell, dispose of or otherwise
liquidate the Receivables in a commercially reasonable manner and (ii) send
written notice to the Investor Certificateholders describing the provisions of
this Section 9.2 and requesting instructions from such Holders. Unless within
75 days from the day notice pursuant to clause (i) above is first published, the
Trustee shall have received written instructions of Holders of Investor
Certificates evidencing more than 50% of the Investor Interest of each Series
issued and outstanding (or, if any such Series has two or more Classes, each
Class) to the effect that such Certificateholders disapprove of the liquidation
of the Receivables. If such vote disapproving of liquidation of the Receivables
has not been obtained, the Trustee shall use its best efforts to sell, dispose
of or otherwise liquidate the Receivables in a commercially reasonable manner
and on commercially reasonable terms, which shall include the solicitation of
competitive bids. The Trustee may obtain a prior determination from any such
conservator, receiver or liquidator that the terms and manner of any proposed
sale, disposition or liquidation are commercially reasonable. The provisions of
Sections 9.1 and 9.2 shall not be deemed to be mutually exclusive.
(b) The proceeds from the sale, disposition or liquidation of the
Receivables pursuant to subsection (a) above shall be treated as Collections on
the Receivables and shall be allocated and deposited in accordance with the
provisions of Article IV; provided, that the Trustee shall determine
--------
conclusively in its sole discretion the amount of such proceeds which are
allocable to Finance Charge Receivables and the amount of such proceeds which
are allocable to Principal Receivables. On the day following the last
Distribution Date in the Monthly Period during which such proceeds are
distributed to the Investor Certificateholders of each Series, the Trust shall
terminate.
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(c) The Trustee may appoint an agent or agents to assist with its
responsibilities pursuant to this Article IX with respect to competitive bids.
[End of Article IX]
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ARTICLE X
SERVICER DEFAULTS
Section 10.1 Servicer Defaults. If any one of the following events
-----------------
(a "Servicer Default") shall occur and be continuing:
----------------
(a) any failure by the Servicer to make any payment, transfer or
deposit or to give instructions or notice to the Trustee pursuant to
Article IV or to instruct the Trustee to make any required drawing,
withdrawal, or payment under any Credit Enhancement on or before the date
occurring ten Business Days after the date such payment, transfer, deposit
withdrawal or drawing or such instruction or notice is required to be made
or given, as the case may be, under the terms of this Agreement;
(b) failure on the part of the Servicer duly to observe or perform in
any respect any other covenants or agreements of the Servicer set forth in
this Agreement, which has a material adverse effect on the Investor
Certificateholders of any Series and which continues unremedied for a
period of 60 days after the date on which written notice of such failure,
requiring the same to be remedied, shall have been given to the Servicer by
the Trustee, or to the Servicer and the Trustee by the Holders of Investor
Certificates evidencing Undivided Interests aggregating not less than 50%
of the Investor Interest of any Series adversely affected thereby and
continues to materially adversely affect such Investor Certificateholders
for such period; or the Servicer shall delegate its duties under this
Agreement, except as permitted by Section 8.7;
(c) any representation, warranty or certification made by the Servicer
in this Agreement or in any certificate delivered pursuant to this
Agreement shall prove to have been incorrect when made, which has a
material adverse effect an the Investor Certificateholders of any Series
and which continues to be incorrect in any material respect for a period of
60 days after the date on which written notice of such failure, requiring
the same to be remedied, shall have been given to the Servicer by the
Trustee, or to the Servicer and the Trustee by the Holders of Investor
Certificates evidencing Undivided Interests aggregating not less than 50%
of the Investor Interest of any Series adversely affected thereby and
continues to materially adversely affect such Investor Certificateholders
for such period; or
(d) the Servicer shall consent to the appointment of a conservator or
receiver or liquidator in any insolvency, readjustment of debt, marshalling
of assets and liabilities
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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 entered against the Servicer, and such decree or order
shall have remained in force undischarged or unstayed for a period of 60
days; or the Servicer shall admit in writing its inability to pay its debts
generally as they become due, file a petition to take advantage of any
applicable insolvency or reorganization statute, make any assignment for
the benefit of its creditors or voluntarily suspend payment of its
obligations; then, so long as such Servicer Default shall not have been
remedied, either the Trustee, or the Holders of Investor Certificates
evidencing Undivided Interests aggregating more than 50% of the Aggregate
Investor Interest, by notice then given in writing to the Servicer (and to
the Trustee if given by the Investor Certificateholders) (a "Termination
-----------
Notice"), may terminate all of the rights and obligations of the Servicer
------
as Servicer under this Agreement. After receipt by the Servicer of such
Termination Notice, and on the date that a Successor Servicer shall have
been appointed by the Trustee pursuant to Section 10.2, all authority and
power of the Servicer under this Agreement shall pass to and be vested in a
Successor Servicer; and, without limitation, the Trustee is hereby
authorized and empowered (upon the failure of the Servicer to cooperate) to
execute and deliver, on behalf of the Servicer, as attorney-in-fact or
otherwise, all documents and other instruments upon the failure of the
Servicer to execute or deliver such documents or instruments, and to do and
accomplish all other acts or things necessary or appropriate to effect the
purposes of such transfer of servicing rights and obligations. The
Servicer agrees to cooperate with the Trustee and such Successor Servicer
in effecting the termination of the responsibilities and rights of the
Servicer to conduct servicing hereunder including, without limitation, the
transfer to such Successor Servicer of all authority of the Servicer to
service the Receivables provided for under this Agreement, including,
without limitation, all authority over all Collections which shall on the
date of transfer be held by the Servicer for deposit, or which have been
deposited by the Servicer, in the Collection Account, the Finance Charge
Account, the Principal Account, the Excess Funding Account and any Series
Account, or which shall thereafter be received with respect to the
Receivables, and in assisting the Successor Servicer and in enforcing all
rights to Insurance Proceeds and Interchange (if any) applicable to the
Trust. The Servicer shall promptly transfer its electronic records
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or electronic copies thereof relating to the Receivables to the Successor
Servicer in such electronic form as the Successor Servicer may reasonably
request and shall promptly transfer to the Successor Servicer all other
records, correspondence and documents necessary for the continued servicing
of the Receivables in the manner and at such times as the Successor
Servicer shall reasonably request. To the extent that compliance with this
Section 10.1 shall require 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 each
customary licensing and confidentiality agreements as the Servicer shall
deem necessary to protect its interests. The Servicer shall, on the date
of any servicing transfer, transfer all of its rights and obligations under
the Credit Enhancement with respect to any Series to the Successor
Servicer.
Notwithstanding the foregoing, a delay in or failure of performance
referred to in subsection 10.1(a) for a period of 10 Business Days or in
subsection 10.1(b) or (c) for a period of 60 Business Days, shall not constitute
a Servicer Default if such delay or failure could not be prevented by the
exercise of reasonable diligence by the Servicer and such delay or failure was
caused by an act of God or the public enemy, acts of declared or undeclared war,
public disorder, rebellion, riot or sabotage, epidemics, landslides, lightning,
fire, hurricanes, tornadoes, earthquakes, nuclear disasters or meltdowns,
floods, power outages or similar causes. The preceding sentence shall not
relieve the Servicer from using its best efforts to perform its obligations in a
timely manner in accordance with the terms of this Agreement and the Servicer
shall provide the Trustee, any Credit Enhancement Provider, the Transferor and
the Holders of Investor Certificates with an Officer's Certificate giving prompt
notice of such failure or delay by it, together with a description of the cause
of such failure or delay and its efforts so to perform its obligations.
Section 10.2 Trustee to Act; Appointment of Successor.
----------------------------------------
(a) On and after the receipt by the Servicer of a Termination Notice
pursuant to Section 10.1, the Servicer shall continue to perform all servicing
functions under this Agreement until the date specified in the Termination
Notice or otherwise specified by the Trustee in writing or, if no such date is
specified in such Termination Notice, or otherwise specified by the Trustee,
until a date mutually agreed upon by the Servicer and Trustee. The Trustee
shall notify each Rating Agency of such removal of the Servicer. The Trustee
shall, as promptly as possible after the giving of a Termination Notice appoint
a successor Servicer (the "Successor Servicer"), and such Successor Servicer
------------------
shall accept its appointment by a written assumption in
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a form acceptable to the Trustee. The Trustee may obtain bids from any
potential successor Servicer. If the Trustee is unable to obtain any bids from
any potential successor Servicer and the Servicer delivers an Officer's
Certificate to the effect that the Servicer cannot in good faith cure the
Servicer Default which gave rise to a transfer of servicing, and if the Trustee
is legally unable to act as Successor Servicer, then the Trustee shall notify
each Credit Enhancement Provider of the proposed sale of the Receivables and
shall provide each such Credit Enhancement Provider an opportunity to bid on the
Receivables and shall offer the Transferor the right of first refusal to
purchase the Receivables on terms equivalent to the best purchase offer as
determined by the Trustee, but in no event less than an amount equal to the
Aggregate Investor Interest on the date of such purchase plus all interest
----
accrued but unpaid on all of the outstanding Investor Certificates at the
applicable Certificate Rate through the date of such purchase. The proceeds of
such sale shall be deposited in the Distribution Account or any Series Account,
as provided in the related Supplement, for distribution to the Investor
Certificateholders of each outstanding Series pursuant to Section 12.3 of the
Agreement. In the event that a Successor Servicer has not been appointed and
has not accepted its appointment at the time when the Servicer ceases to act as
Servicer, the Trustee without further action shall automatically be appointed
the Successor Servicer. Notwithstanding the above, the Trustee shall, if it is
legally unable so to act, petition a court of competent jurisdiction to appoint
any established financial institution having, in the case of an entity that is
subject to risk-based capital adequacy requirements, risk-based capital of at
least $50,000,000 or, in the case of an entity that is not subject to risk-based
capital requirements, having a net worth of not less than $50,000,000 and whose
regular business includes the servicing of VISA or MasterCard credit card
receivables as the Successor Servicer hereunder.
(b) Upon its appointment, the Successor Servicer shall be the
successor in all respects to the Servicer with respect to servicing functions
under this Agreement and shall be subject to all the responsibilities, duties
and liabilities relating thereto placed on the Servicer by the terms and
provisions hereof, and all references in this Agreement to the Servicer shall be
deemed to refer to the Successor Servicer. Any Successor Servicer, by its
acceptance of its appointment, will automatically agree to be bound by the terms
and provisions of each Credit Enhancement.
(c) In connection with such appointment and assumption, the Trustee
shall be entitled to such compensation, or may make such arrangements for the
compensation of the Successor Servicer out of Collections, as it and such
Successor Servicer shall agree; provided, however, that no such compensation
-------- -------
shall be in excess of the Servicing Fee permitted to be paid to the Servicer
pursuant to Section 3.2. The Transferor agrees that if
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the Servicer is terminated hereunder, it will agree to deposit a portion of the
Collections in respect of Finance Charge Receivables that it is entitled to
receive pursuant to Article IV to pay its share of the compensation of the
Successor Servicer.
(d) All authority and power granted to the Successor Servicer under
this Agreement shall automatically cease and terminate upon termination of the
Trust pursuant to Section 12.1 and shall pass to and be vested in 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 10.2
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 10.3 Notification to Certificateholders. Within two Business
----------------------------------
Days after the Servicer becomes aware of any Servicer Default, the Servicer
shall give written notice thereof to the Trustee and any Credit Enhancement
Provider and the Trustee shall give notice to the Investor Certificateholders at
their respective addresses appearing in the Certificate Register. Upon any
termination or appointment of a Successor Servicer pursuant to this Article X,
the Trustee shall give prompt written notice thereof to Investor
Certificateholders at their respective addresses appearing in the Certificate
Register.
Section 10.4 Waiver of Past Defaults. The Holders of Investor
-----------------------
Certificates evidencing Undivided Interests aggregating not less than 66-2/3% of
the Investor Interest of each Series adversely affected by any default by the
Services or Transferor may, on behalf of all Certificateholders of such Series,
waive any default by the Servicer or Transferor in the performance of its
obligations hereunder and its consequences, except a default in the failure to
make any required deposits or payments of interest or principal relating to such
Series pursuant to Article IV which default does not result from the failure of
the Paying Agent to perform its obligations to make any required deposits or
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payments of interest and principal in accordance with Article IV. Upon any such
waiver of a past default, such default shall cease to exist, and any default
arising therefrom shall be deemed to have been remedied for every purpose of
this Agreement. No such waiver shall extend to any subsequent or other default
or impair any right consequent thereon except to the extent expressly so waived.
[End of Article X]
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ARTICLE XI
THE TRUSTEE
Section 11.1 Duties of Trustee.
-----------------
(a) The Trustee, prior to the occurrence of any Servicer Default and
after the curing of all Servicer Defaults which may have occurred, undertakes to
perform such duties and only such duties as are specifically set forth in this
Agreement. If a Responsible Officer has received written notice that a Servicer
Default has occurred (which has not been cured or waived), the Trustee shall
exercise such of the rights and powers vested in it by this Agreement, and use
the same degree of care and skill in its exercise, as a prudent person would
exercise or use under the circumstances in the conduct of such person's own
affairs.
(b) The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments furnished
to the Trustee which are specifically required to be furnished pursuant to any
provision of this Agreement, shall examine them to determine whether they
substantially conform to the requirements of this Agreement.
(c) Subject to subsection 11.1(a), no provision of this Agreement
shall be construed to relieve the Trustee from liability for its own negligent
action, its own negligent failure to act or its own misconduct; provided,
--------
however, that:
- -------
(i) the Trustee shall not be personally liable for an error of
judgment made in good faith by a Responsible Officer or Responsible
Officers of the Trustee, unless it shall be proved that the Trustee was
negligent in ascertaining the pertinent facts;
(ii) the Trustee shall not be personally liable with respect to
any action taken, suffered or omitted to be taken by it in good faith in
accordance with the direction of the Holders of Investor Certificates
evidencing Undivided Interests aggregating more than 50% of the Investor
Interest of any Series relating to the time, method and place of conducting
any proceeding for any remedy available to the Trustee, or exercising any
trust or power conferred upon the Trustee in relation to such Series, under
this Agreement; and
(iii) the Trustee shall not be charged with knowledge of any
failure by the Servicer referred to in clauses (a) and (b) of Section 10.1
unless a Responsible Officer of the Trustee obtains actual knowledge of
such failure or the Trustee receives written notice of such
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failure from the Servicer or any Holders of Investor Certificates
evidencing Undivided Interests aggregating not less than 10% of the
Investor Interest of any Series adversely affected thereby.
(d) The Trustee shall not be required to expend or risk its own funds
or otherwise incur financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, if there is
reasonable ground for believing that the repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it, and
none of the provisions contained in this Agreement shall in any event require
the Trustee to perform, or be responsible for the manner of performance of, any
of the obligations of the Servicer under this Agreement except during such time,
if any, as the Trustee shall be the successor to, and be vested with the rights,
duties, powers and privileges of, the Servicer in accordance with the terms of
this Agreement.
(e) Except for actions expressly authorized by this Agreement, the
Trustee shall take no action reasonably likely to impair the interests of the
Trust in any Receivable now existing or hereafter created or to impair the value
of any Receivable now existing or hereafter created.
(f) Except as provided in this subsection 11.1(f), the Trustee shall
have no power to vary the corpus of the Trust including, without limitation, the
power to (i) accept any substitute obligation for a Receivable initially
assigned to the Trust under Section 2.1 or 2.6 hereof, (ii) add any other
investment, obligation or security to the Trust, except for an addition
permitted under Section 2.6 or (iii) withdraw from the Trust any Receivables,
except for a withdrawal permitted under Sections 2.7, 9.2, 10.2, 12.1 or 12.2 or
subsections 2.4(d), 2.4(e) or Article IV.
(g) 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 promptly to perform such obligation, duty or agreement in the manner
so required.
(h) If the Transferor has agreed to transfer any of its 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 identify separately the rights, if any, of the Trust and such other
Person in the Transferor's credit card receivables; provided, however that the
-------- -------
Trustee shall not be required to enter into
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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 11.2 Certain Matters Affecting the Trustee. Except as
-------------------------------------
otherwise provided in Section 11.1:
(a) the Trustee may rely on and shall be protected in acting on, or in
refraining from acting in accord with, any assignment of Receivables in
Additional Accounts, the initial report, the monthly Servicer's
certificate, the annual Servicer's certificate, the monthly payment
instructions and notification to the Trustee, the monthly
Certificateholder's statement, any resolution, Officer's Certificate,
certificate of auditors or any other certificate, statement, instrument,
opinion, report, notice, request, consent, order, appraisal, bond or other
paper or document reasonably 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 of its selection, and any
Opinion of Counsel shall be full and complete authorization and protection
in respect of any action taken or suffered or omitted by it hereunder in
good faith and in accordance with such Opinion of Counsel;
(c) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Agreement or any Credit Enhancement,
or to institute, conduct or defend any litigation hereunder or in relation
hereto, at the request, order or direction of any of the Certificateholders
or any Credit Enhancement Provider, pursuant to the provisions of this
Agreement, unless such Certificateholders or Credit Enhancement Provider
shall have offered to the Trustee reasonable security or indemnity against
the costs, expenses and liabilities which may be incurred therein or
thereby; nothing contained herein shall, however, relieve the Trustee of
the obligations, upon the occurrence of any Servicer Default (which has not
been cured), to exercise such of the rights and powers vested in it by this
Agreement and any Credit Enhancement, and to use the same degree of care
and skill in its exercise as a prudent person would exercise or use under
the circumstances in the conduct of his own affairs;
(d) the Trustee shall not be personally liable for any action taken,
suffered or omitted by it in good faith and believed by it to be authorized
or within the discretion or
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rights or powers conferred upon it by this Agreement except to the extent
of the Trustee's negligence;
(e) the Trustee shall not be bound to make any investigation into the
facts of matters stated in any assignment of Receivables in Additional
Accounts, the initial report, the monthly Servicer's certificate, the
annual Servicer's certificate, the monthly payment instructions and
notification to the Trustee, the monthly Certificateholder's statement, any
resolution, certificate, statement, instrument, opinion, report, notice,
request, consent, order, approval, bond or other paper or document, unless
requested in writing so to do by Holders of Investor Certificates
evidencing Undivided Interests aggregating more than 50% of the Investor
Interest of any Series which could be adversely affected if 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 by or through agents or
attorneys or a custodian appointed with due care by it hereunder; and
(g) except as may be required by subsection 11.1(a), or otherwise
expressly required herein or in any Supplement 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 11.3 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 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 in respect of the Receivables or deposited in or
withdrawn from the Collection Account, the Principal Account or the Finance
Charge Account, or any Series Account by the Servicer.
Section 11.4 Trustee May Own Certificates. The Trustee in its
----------------------------
individual or any other capacity may become the owner or pledgee of Investor
Certificates with the same rights as it would have if it were not the Trustee.
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Section 11.5 The Servicer to Pay Trustee's Fees and Expenses. The
-----------------------------------------------
Servicer covenants and agrees to pay to the Trustee from time to time, and the
Trustee shall be entitled to receive such reasonable compensation as shall be
agreed upon from time to time between the Servicer and the Trustee (which shall
not be limited by any provision of law in regard to the compensation of a
trustee of an express trust) for all services rendered by it in the execution of
the Trust hereby created and in the exercise and performance of any of the
powers and duties hereunder of the Trustee, and, subject to Section 8.4, the
Servicer will pay or reimburse the Trustee (without reimbursement from any
Investor Account, any Series Account or otherwise) upon its request for all
reasonable expenses, disbursements and advances incurred or made by the Trustee
in accordance with any of the provisions of this Agreement except any such
expense, disbursement or advance as may arise from its own negligence, bad faith
or wilful misfeasance and except as provided in the following sentence. If the
Trustee is appointed Successor Servicer pursuant to section 10.2, the provisions
of this Section 11.5 shall not apply to expenses, disbursements and advances
made or incurred by the Trustee in its capacity as Successor Servicer.
The obligations of the Servicer under this Section 11.5 shall survive
the termination of the Trust and the resignation or removal of the Trustee.
Section 11.6 Eligibility Requirements for Trustee. The Trustee
------------------------------------
hereunder shall at all times be a corporation organized and doing business under
the laws of the United States of America or any state thereof authorized under
such laws to exercise corporate trust powers, having a long-term unsecured debt
rating of at least "Baa3" by Moody's and "BBB-" by Standard & Poor's having, in
the case of an entity that is subject to risk-based capital adequacy
requirements, risk-based capital of at least $50,000,000 or, in the case of an
entity that is not subject to risk-based capital adequacy requirements, having a
combined capital and surplus of at least $50,000,000 and subject to supervision
or examination by federal or state authority. If such corporation publishes
reports of condition at least annually, pursuant to law or to the requirements
of the aforesaid supervising or examining authority, then for the purpose of
this Section 11.6, the combined capital and surplus of such corporation shall be
deemed to be its combined capital and surplus as set forth in the 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 11.6, the
Trustee shall resign immediately in the manner and with the effect specified in
Section 11.7.
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Section 11.7 Resignation or Removal of Trustee.
---------------------------------
(a) The Trustee may at any time resign and be discharged from the
Trust hereby created by giving written notice thereof to the Servicer. Upon
receiving such notice of resignation, the Servicer shall promptly appoint a
successor trustee by written instrument, in duplicate, one copy of which
instrument shall be delivered to the resigning Trustee and one copy to the
successor trustee. If no successor trustee shall have been so appointed and
have accepted within 30 days after the giving of such notice of resignation, the
resigning Trustee may petition any court of competent jurisdiction for the
appointment of a successor trustee.
(b) If at any time the Trustee shall cease to be eligible in
accordance with the provisions of Section 11.6 hereof and shall fail to resign
after written request therefor by 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
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 11.7 shall
not become effective until acceptance of appointment by the successor trustee as
provided in Section 11.8 hereof and any liability of the Trustee arising
hereunder shall survive such appointment of a successor trustee.
Section 11.8 Successor Trustee.
-----------------
(a) Any successor trustee appointed as provided in Section 11.7 hereof
shall execute, acknowledge and deliver to the Transferor and to its predecessor
Trustee an instrument accepting such appointment hereunder, and thereupon the
resignation or removal of the predecessor Trustee shall become effective and
such successor trustee, without any further act, deed or conveyance, shall
become fully vested with all the rights, powers, duties and obligations of its
predecessor hereunder, with the like effect as if originally named as Trustee
herein. The predecessor Trustee shall deliver to the successor trustee all
documents and statements held by it hereunder, and 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
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successor trustee all such rights, powers, duties and obligations.
(b) No successor trustee shall accept appointment as provided in this
Section 11.8 unless at the time of such acceptance such successor trustee shall
be eligible under the provisions of Section 11.6 hereof.
(c) Upon acceptance of appointment by a successor trustee as provided
in this Section 11.8, such successor trustee shall mail notice of such
succession hereunder to all Certificateholders at their addresses as shown in
the Certificate Register.
Section 11.9 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 11.6 hereof, without the execution or filing of any paper
or any further act on the part of any of the parties hereto, anything herein to
the contrary notwithstanding.
Section 11.10 Appointment of Co-Trustee or Separate Trustee.
---------------------------------------------
(a) Notwithstanding any other provisions of this Agreement, at any
time, for the purpose of meeting any legal requirements of any jurisdiction in
which any part of the Trust may at the time be located, the Trustee shall have
the power and may execute and deliver all instruments to appoint one or more
Persons to act as a co-trustee or co-trustees, or separate trustee or separate
trustees, of all or any part of the Trust, and to vest in such Person or
Persons, in such capacity and for the benefit of the Certificateholders, such
title to the trust, or any part thereof, and, subject to the other provisions of
this Section 11.10, such powers, duties, obligations, rights and trusts as the
Trustee may consider necessary or desirable. No co-trustee or separate trustee
hereunder shall be required to meet the terms of eligibility as a successor
trustee under Section 11.6 and no notice to Certificateholders of the
appointment of any co-trustee or separate trustee shall be required under
Section 11.8 hereof.
(b) Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) all rights, powers, duties and obligations conferred or
imposed upon the Trustee shall be conferred or
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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.
(d) Any separate trustee or co-trustee may at any time constitute the
Trustee as its agent or attorney-in-fact with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect to this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee.
Section 11.11 Tax Returns. In the event the Trust shall be required
-----------
to file tax returns, the Trustee, as soon as practicable after it is made aware
of such requirement, shall prepare or cause to be prepared any tax returns
required to be filed by the Trust and, to the extent possible, shall file such
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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, in the
event that the Trustee is determined to be the person required by law to sign
such return. 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, in the event that the Trustee is determined to be the person required
by law to sign such return, 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 the Holders any Series of Certificates, as their interests
may appear, in respect of which such judgment has been obtained.
Section 11.13 Suits for Enforcement. If a Servicer Default shall
---------------------
occur and be continuing, the Trustee, in its discretion may, subject to the
provisions of Section 10.1, proceed to protect and enforce its rights and the
rights of the Holders 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 the Holders of any Series of Certificates.
Section 11.14 Rights of Certificateholders to Direct Trustee.
----------------------------------------------
Holders of Investor Certificates evidencing Undivided Interests aggregating more
than 50% of the Aggregate Investor Interest (or, with respect to any remedy,
trust or power that
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does not relate to all Series, 50% of the Aggregate Investor Interest of the
Investor Certificates of all Series to which such remedy, trust or power
relates) shall have the right to direct the time, method, and place of
conducting any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred on the Trustee; provided, however, that, subject to
-------- -------
Section 11.1, 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 subject it to personal liability or
be unduly prejudicial to the rights of Certificateholders not parties to such
direction; and provided further that nothing in this Agreement shall impair the
-------- -------
right of the Trustee to take any action deemed proper by the Trustee and which
is not inconsistent with such direction of such Holders of Investor
Certificates.
Section 11.15 Representations and Warranties of Trustee. The Trustee
-----------------------------------------
represents and warrants that:
(i) the Trustee is a banking corporation organized, existing and
authorized to engage in the business of banking under the laws of the State
of New York;
(ii) the Trustee has full power, authority and right to execute,
deliver and perform this Agreement, and has taken all necessary action to
authorize the execution, delivery and performance by it of this Agreement;
and
(iii) this Agreement has been duly executed and delivered by the
Trustee.
Section 11.16 Maintenance of Office or Agency. The Trustee will
-------------------------------
maintain at its expense in the Borough of Manhattan, the City of New York an
office or offices, or agency or agencies, where notices and demands to or upon
the Trustee in respect of the Certificates and this Agreement may be served.
The Trustee initially designates its Corporate Trust Office as its office for
such purposes in New York. The Trustee will give prompt written notice to the
Servicer and to Certificateholders (or in the case of Holders of Bearer
Certificates, in the manner provided for in the related Supplement) of any
change in the location of the Certificate Register or any such office or agency.
[End of Article XI]
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ARTICLE XII
TERMINATION
Section 12.1 Termination of Trust.
--------------------
(a) 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 Certificateholders as hereinafter set forth) shall
terminate, except with respect to the duties described in Sections 8.4 and 11.5
and subsections 2.4(c) and 12.3(b), on the Trust Termination Date; provided,
--------
however, that the Trust shall not terminate on the date specified in clause (i)
- -------
of the definition of "Trust Termination Date" if each of the Servicer and the
Holder of the Transferor Certificate notify the Trustee in writing, not later
than five Business Days preceding such date, that they desire that the Trust not
terminate on such date, which notice (such notice, a "Trust Extension") shall
---------------
specify the date on which the Trust shall terminate (such date, the "Extended
--------
Trust Termination Date"); provided, however, that the Extended Trust Termination
- ---------------------- -------- -------
Date shall be not later than the day prior to the expiration of 21 years after
the death of the last survivor of the descendants living on the date of this
Agreement of Joseph P. Kennedy, the late ambassador of the United States of
America to the Court of St. James's. The Servicer and the Holder of the
Transferor Certificate may, on any date following the Trust Extension, so long
as no Series of Certificates is outstanding, deliver a notice in writing to the
Trustee changing the Extended Trust Termination Date.
(b) All principal or interest with respect to any Series of Investor
Certificates shall be due and payable no later than the Series Termination Date
with respect to such Series. Unless otherwise provided in a Supplement, in the
event that the Investor Interest of any Series of Certificates is greater than
zero on its Series Termination Date (after giving effect to all transfers,
withdrawals, deposits and drawings to occur on such date and the payment of
principal to be made on such Series on such date), the Trustee will sell or
cause to be sold, and pay the proceeds first, to all Certificateholders of such
-----
Series pro rata in final payment of all principal of and accrued interest on
such Series of Certificates, and second, as provided in the related Supplement,
------
an amount of Principal Receivables and the related Finance Charge Receivables
(or interests therein) up to 110% of the sum of the Investor Interest of such
Series plus the Enhancement Invested Amount or the Collateral Interest (if not
included in the Investor Interest) of such Series, if any, at the close of
business on such date (but not more than an amount of Principal Receivables and
the related Finance Charge Receivables equal to the sum of (1) the product of
(A) the Transferor Percentage, (B) the aggregate amount of Principal Receivables
in the
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Trust and (C) a fraction the numerator of which is the applicable Investor
Percentage with respect to Finance Charge Receivables and the denominator of
which is the sum of all Investor Percentages with respect to Finance Charge
Receivables of all Series and (2) the Investor Interest of such Series plus the
Enhancement Invested Amount or the Collateral Interest (if not included in the
Investor Interest) of such Series). The Trustee shall notify each Credit
Enhancement Provider of the proposed sale of such Receivables and shall provide
each Credit Enhancement Provider an opportunity to bid on such Receivables. The
Transferor shall be permitted to purchase such Receivables in such case and
shall have a right of first refusal with respect thereto. Any proceeds of such
sale in excess of such principal and interest paid shall be paid to the Holder
of the Transferor Certificate. Upon such Series Termination Date with respect
to the applicable Series of Certificates, final payment of all amounts allocable
to any Investor Certificates of such Series shall be made in the manner provided
in Section 12.3.
Section 12.2 Optional Purchase. (a) If so provided in any
-----------------
Supplement, the Transferor may, but shall not be obligated to, cause a final
distribution to be made in respect of the related Series of Certificates on a
Distribution Date specified in such Supplement by depositing into the
Distribution Account or the applicable Series Account, not later than the
Transfer Date preceding such Distribution Date, for application in accordance
with Section 12.3, the amount specified in such Supplement.
(b) The amount deposited pursuant to subsection 12.2(a) shall be paid
to the Investor Certificateholders of the related Series pursuant to Section
12.3 on the related Distribution Date following the date of such deposit. All
Certificates of a Series which are purchased by the Transferor pursuant to
subsection 12.2(a) shall be delivered by the Transferor upon such purchase to,
and be canceled by, the Transfer Agent and Registrar and be disposed of in a
manner satisfactory to the Trustee and the Transferor. The Investor Interest of
each Series which is purchased by the Transferor pursuant to subsection 12.2(a)
shall, for the purposes of the definition of "Transferor Interest," be deemed to
be equal to zero on the Distribution Date following the making of the deposit,
and the Transferor Interest shall thereupon be deemed to have been increased by
the Investor Interest of such Series.
Section 12.3 Final Payment with Respect to any Series.
----------------------------------------
(a) Written notice of any termination, specifying the Distribution
Date upon which the Investor Certificateholders of any Series may surrender
their Certificates for payment of the final distribution with respect to such
Series and cancellation, shall be given by the Trustee to Investor
Certificateholders of such Series mailed not later than the fifth day of the
month of
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such final distribution (subject to at least two Business Days' prior notice
from the Servicer to the Trustee) (or in the manner provided by the Supplement
relating to such Series) specifying (i) the Distribution Date (which shall be
the Distribution Date in the month (x) in which the deposit is made pursuant to
subsection 2.4(e), 9.2(a), 10.2(a) or 12.2(a) of the Agreement or such other
section as may be specified in the related Supplement, or (y) in which the
related Series Termination Date occurs) upon which final payment of such
Investor Certificates will be made upon presentation and surrender of such
Investor Certificates at the office or offices therein designated (which, in the
case of Bearer Certificates, shall be outside the United States), (ii) the
amount of any such final payment and (iii) that the Record Date otherwise
applicable to such Distribution Date is not applicable, payments being made only
upon presentation and surrender of the Investor Certificates at the office or
offices therein specified. The Servicer's notice to the Trustee in accordance
with the preceding sentence shall be accompanied by an Officers' Certificate
setting forth the information specified in Article V of this Agreement covering
the period during the then current calendar year through the date of such notice
and setting forth the date of such final distribution. The Trustee shall give
such notice to the Transfer Agent and Registrar and the Paying Agent at the time
such notice is given to such Investor Certificateholders.
(b) Notwithstanding the termination of the Trust pursuant to
subsection 12.1(a) or the occurrence of the Series Termination Date with respect
to any Series, all funds then on deposit in the Finance Charge Account, the
Principal Account, the Excess Funding Account, the Distribution Account or any
Series Account applicable to the related Series shall continue to be held in
trust for the benefit of the Certificateholders of the related Series and the
Paying Agent or the Trustee shall pay such funds to the Certificateholders of
the related Series upon surrender of their Certificates (which surrenders and
payments, in the case of Bearer Certificates, shall be made only outside the
United States). In the event that all of the Investor Certificateholders of any
Series shall not surrender their Certificates for cancellation within six months
after the date specified in the above-mentioned written notice, the Trustee
shall give a second written notice (or, in the case of Bearer Certificates,
publication notice) to the remaining Investor Certificateholders of such Series
upon receipt of the appropriate records from the Transfer Agent and Registrar to
surrender their Certificates for cancellation and receive the final distribution
with respect thereto. If within one and one-half years after the second notice
with respect to a Series, all the Investor Certificates of such Series shall not
have been surrendered for cancellation, the Trustee may take appropriate steps
or may appoint an agent to take appropriate steps, to contact the remaining
Investor Certificateholders of such Series concerning surrender of
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their Certificates, and the cost thereof shall be paid out of the funds in the
Distribution Account or any Series Account held for the benefit of such Investor
Certificateholders. The Trustee and the Paying Agent shall pay to the
Transferor upon request any monies held by them for the payment of principal or
interest which 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) All Certificates surrendered for payment of the final distribution
with respect to such Certificates and cancellation shall be canceled by the
Transfer Agent and Registrar and be disposed of in a manner satisfactory to the
Trustee and the Transferor.
Section 12.4 Termination Rights of Holder of Transferor Certificate.
------------------------------------------------------
Upon the termination of the Trust pursuant to Section 12.1, and after payment of
all amounts due hereunder on or prior to such termination and the surrender of
the Transferor Certificate, the Trustee shall execute a written reconveyance
substantially in the form of Exhibit H pursuant to which it shall reconvey to
the Holder of the Transferor Certificate, without recourse, representation or
warranty, all right, title and interest of the Trust in the Receivables, whether
then existing or thereafter created, all moneys due or to become due with
respect to such Receivables (including all accrued interest theretofore posted
as Finance Charge Receivables) and all proceeds of such Receivables and
Insurance Proceeds relating to such Receivables and Interchange (if any)
allocable to the Trust, except for amounts held by the Trustee pursuant to
subsection 12.3(b). The Trustee shall execute and deliver such instruments of
transfer and assignment, in each case without recourse, as shall be reasonably
requested by the Holder of the Transferor Certificate to vest in such Holder all
right, title and interest which the Trust had in the Receivables.
Section 12.5 Defeasance. Notwithstanding anything to the contrary in
----------
this Agreement or any Supplement:
(a) The Transferor may at its option be discharged from its
obligations with respect to all of the Investor Certificates issued by the
Trust or any specified Series thereof on the date the applicable conditions
set forth in Section 12.5(c) are satisfied ("Defeasance"); provided
---------- --------
however, that the following rights, obligations, powers, duties and
-------
immunities shall survive until otherwise terminated or discharged
hereunder: (A) the rights of Holders of Investor Certificates of the Trust
or any specified Series thereof to receive, solely from the trust fund
provided for in Section 12.5(c), payments in respect of principal of and
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interest on such Investor Certificates when such payments are due; (B) the
Transferor's obligations with respect to such Series of Certificates under
Sections 6.3, 6.4 and 12.3; (C) the rights, powers, trusts, duties and
immunities of the Trustee, the Paying Agent and the Transfer Agent and
Registrar hereunder; and (D) this Section 12.5.
(b) Subject to Section 12.5(c), the Transferor at its option may use
Collections to purchase Permitted Investments rather than additional
Receivables for transfer to the Trust until such time as no Receivables
remain in the Trust.
(c) The following shall be the conditions to Defeasance under Section
12.5(a): (1) the Transferor irrevocably shall have deposited or caused to
be deposited with the Trustee, under the terms of an irrevocable trust
agreement in form and substance satisfactory to the Trustee, as trust funds
in trust for making the payments described below: (A) Dollars in an
amount, or (B) Permitted Investments which through the scheduled payment of
principal and interest in respect thereof will provide, not later than the
due date of payment thereon, money in an amount, or (C) a combination
thereof, in each case sufficient to pay and discharge, and, which shall be
applied by the Trustee to pay and discharge, all remaining scheduled
interest and principal payments on all outstanding Investor Certificates of
the Trust or any specified Series thereof on the dates scheduled for such
payments in this Agreement and the applicable Supplements and all amounts
owed to the Credit Enhancement Provider for any Series if so provided in
the related Supplements or agreements with such Credit Enhancement
Provider; (2) prior to each exercise of its right to substitute money or
Permitted Investments for Receivables, the Transferor shall deliver to the
Trustee a Tax Opinion with respect to such substitution and an Opinion of
Counsel to the effect that the Trust will not be required to register as an
"investment company" within the meaning of the Investment Company Act of
1940, as amended; and (3) such deposit and termination of obligations will
not result in a Pay Out Event for any Series.
[End of Article XII]
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ARTICLE XIII
MISCELLANEOUS PROVISIONS
Section 13.1 Amendment.
---------
(a) This Agreement (including any Supplement) may be amended from time
to time by the Bank, the Servicer and the Trustee, without the consent of any of
the Certificateholders, (i) to cure any ambiguity, to revise any exhibits or
schedules (other than Schedule 1), to correct or supplement any provisions
herein or thereon or (ii) to add any other provisions with respect to matters or
questions raised under this Agreement which shall not be inconsistent with the
provisions of this Agreement; provided, however, that such action shall not, as
evidenced by an Opinion of Counsel, adversely affect in any material respect the
interests of any of the Certificateholders unless such Certificateholders have
consented thereto.
(b) This Agreement (including any Supplement) and any schedule or
exhibit thereto may also be amended from time to time by the Transferor, the
Servicer and the Trustee, without the consent of any of the Certificateholders,
for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Agreement, or of modifying in any
manner the rights of the Holders of Certificates; provided, however, that (i)
-------- -------
the Servicer shall have provided an Officer's Certificate to the Trustee to the
effect that such amendment will not materially and adversely affect the
interests of any Certificateholder, (ii) the Servicer shall have provided a Tax
Opinion with respect to such amendment and (iii) the Servicer shall have
provided at least ten Business Days' prior written notice to each Rating Agency
of such amendment and shall have received written confirmation from each Rating
Agency that such action will satisfy the Rating Agency Condition; provided,
--------
further, that such amendment shall not, without the consent of each
- -------
Certificateholder of each Series affected thereby, (i) reduce in any manner the
amount of, or delay the timing of, distributions which are required to be made
on any Certificate of such Series, (ii) alter the requirements for changing the
Minimum Transferor Interest Percentage for such Series, (iii) change the
definition of or the manner of calculating the interest of any Certificateholder
of such Series, (iv) change the manner in which the Transferor Interest is
determined or (v) reduce the percentage pursuant to Subsection 13.1(c) required
to consent to any such amendment.
(c) This Agreement and any Supplement may also be amended from time to
time by the Transferor, the Servicer and the Trustee with the consent of
Certificateholders evidencing undivided interests aggregating more than 50% of
the Investor Interest of each and every Series adversely affected, for the
purpose of adding any provisions to or changing in any manner or elimi-
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nating any of the provisions of this Agreement or of modifying in any manner the
rights of the Certificateholders of any Series then issued and outstanding;
provided, however, that no such amendment under this subsection shall (i) reduce
- -------- -------
in any manner the amount of, or delay the timing of, distributions which are
required to be made on any Certificate of such Series without the consent of all
of the related Certificateholders; (ii) change the definition of or the manner
of calculating the Investor Interest, the Investor Percentage or the Investor
Default Amount of such Series without the consent of the related
Certificateholders or (iii) reduce the aforesaid percentage required to consent
to any such amendment, in each case without the consent of each
Certificateholder of all Series affected.
(d) It shall not be necessary to obtain the consent of
Certificateholders under this Section 13.1 to approve the particular form of any
proposed amendment, but it shall be sufficient if such consent shall approve the
substance thereof. The manner of obtaining such consents and of evidencing the
authorization of the execution thereof by Certificateholders shall be subject to
such reasonable requirements as the Trustee may prescribe.
(e) Promptly after the execution of any amendment pursuant to
subsections 13.1(a) or 13.1(c) above, the Trustee shall furnish notification of
the substance of such amendment to each Rating Agency providing a rating for any
Series.
(f) Any Supplement executed and delivered pursuant to Section 6.9 and
any amendments regarding the addition to or removal of Receivables from the
Trust as provided in Sections 2.6 or 2.7, executed in accordance with the
provisions hereof, shall not be considered amendments to this Agreement for the
purpose of Section 13.1.
(g) In connection with any amendment, the Trustee may request, in
addition to the Opinion of Counsel required by subsection 13.2(d), an Opinion of
Counsel from the Transferor or the Servicer to the effect that the amendment
complies with all requirements of this Agreement. The Trustee may, but shall
not be obligated to, enter into any amendment which affects the Trustee's
rights, duties or immunities under this Agreement or otherwise.
Section 13.2 Protection of Right, Title and Interest to Trust.
------------------------------------------------
(a) The Servicer shall cause this Agreement, all amendments hereto
and/or all financing statements and continuation statements and any other
necessary documents covering the Certificateholders and the Trustee's right,
title and interest to the Trust to be promptly recorded, registered and filed,
and at all times to be kept recorded, registered and filed, all in such
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manner and in such places as may be required by law fully to preserve and
protect the right, title and interest of the Certificateholders or the Trustee,
as the case may be, hereunder to all property comprising the Trust. The
Servicer shall deliver to the Trustee file-stamped copies of, or filing receipts
for, any document recorded, registered or filed as provided above, promptly
after the same become available following such recording, registration of
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 subsection 13.2(a).
(b) Within 30 days after the Transferor makes any change in its name,
identity or corporate structure which would make any financing statement or
continuation statement filed in accordance with paragraph (a) above seriously
misleading within the meaning of Section 9-402(7) of the UCC, the 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 of the Transferor and the Servicer will give the Trustee
prompt written notice of any relocation of any office from which it services
Receivables or keeps records concerning the Receivables or of its principal
executive office and whether, as a result of such relocation, the applicable
provisions of the UCC would require the filing of any amendment of any
previously filed financing or continuation statement or of any new financing
statement and shall file such financing statements or amendments as may be
necessary to continue the perfection of the Trust's security interest in the
Receivables and the proceeds thereof. Each of the Transferor and the Servicer
will at all times maintain each office from which it services Receivables and
its principal executive office within the United States of America.
(d) The Servicer will deliver to the Trustee: (i) upon each date that
any Additional Accounts are to be included in the Accounts pursuant to Section
2.6(a) or (b), an Opinion of Counsel substantially in the form of Exhibit E; and
(ii) on or before March 31 of each year, beginning with March 31, 1996, an
Opinion of Counsel, substantially in the form of Exhibit F.
Section 13.3 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 Certificateholder's legal representatives or heirs to claim an
accounting or to take any action or commence any proceeding in any court for a
parti-
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tion or winding up of the Trust, nor otherwise affect the rights, obligations
and liabilities of the parties hereto or any of them.
(b) No Certificateholder shall have any right to vote (except with
respect to the Investor Certificateholders as provided in Section 13.1 hereof)
or in any manner otherwise control the operation and management of the Trust, or
the obligations of the parties hereto, nor shall anything herein set forth, or
contained in the terms of the Certificates, be construed so as to constitute the
Certificateholders from time to time as partners or members of an association;
nor shall any Certificateholder be under any liability to any third person by
reason of any action taken by the parties to this Agreement pursuant to any
provision hereof.
(c) No Certificateholder shall have any right by virtue of any
provisions of this Agreement to institute any suit, action or proceeding in
equity or at law upon or under or with respect to this Agreement, unless such
Certificateholder previously shall have given written notice to the Trustee, and
unless the Holders of Certificates evidencing Undivided Interests aggregating
more than 50% of the Investor Interest of any Series which may be adversely
affected but for the institution of such suit, action or proceeding, shall have
made written request upon the Trustee to institute such action, suit or
proceeding in its own name as Trustee hereunder and shall have offered to the
Trustee such reasonable indemnity as it may require against the costs, expenses
and liabilities to be incurred therein or thereby, and the Trustee, for 60 days
after its receipt of such notice, request and offer of indemnity, shall have
neglected or refused to institute any such action, suit or proceeding; it being
understood and intended, and being expressly covenanted by each
Certificateholder with every other Certificateholder and the Trustee, that no
one or more Certificateholders shall have the right in any manner whatever by
virtue or by availing itself or themselves of any provisions of this Agreement
to affect, disturb or prejudice the rights of the Certificateholders of any
other of the Certificates, or to obtain or seek to obtain priority over or
preference to any other such Certificateholder, or to enforce any right under
this Agreement, except in the manner herein provided and for the equal, ratable
and common benefit of all Certificateholders. For the protection and
enforcement of the provisions of this Section 13.3, each and every
Certificateholder and the Trustee shall be entitled to such relief as can be
given either at law or in equity.
SECTION 13.4 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, AND WITHOUT,
LIMITING THE GENERALITY OF THE FOREGOING, THE IMMUNITY AND STANDARD OF
106
<PAGE>
CARE OF THE TRUSTEE IN THE ADMINISTRATION OF THE TRUST HEREUNDER SHALL BE
GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
Section 13.5 Notices. All demands, notices and communications
-------
hereunder shall be in writing and shall be deemed to have been duly given (i)
when personally delivered at, sent by facsimile to, (ii) two Business Days after
being sent by courier at or (iii) five Business Days after being mailed by
registered mail, return receipt requested, to (a) in the case of the Transferor,
to Chase USA, 802 Delaware Avenue, Wilmington, Delaware 19801, Attention:
Corporate Secretary, (b) in the case of the Servicer, to Chemical Bank, 270 Park
Avenue, New York, New York 10017, Attention: Chief Corporate Finance officer,
(c) in the case of the Trustee, to the Corporate Trust Office, (d) in the case
of the Credit Enhancement Provider for a particular Series, the address, if any,
specified in the Supplement relating to such Series and (e) in the case of the
Rating Agency for a particular Series, the address, if any, specified in the
Supplement relating to such Series; or, as to each party, at such other address
as shall be designated by such party in a written notice to each other party.
Unless otherwise provided with respect to any Series in the related Supplement
any notice required or permitted to be mailed to a Certificateholder shall be
given by first class mail, postage prepaid, at the address of such
Certificateholder as shown in the Certificate Register, or with respect to any
notice required or permitted to be made to the Holders of Bearer Certificates,
by publication in the manner provided in the related Supplement. If and so long
as any Series or Class is listed on the Luxembourg Stock Exchange and such
Exchange shall so require, any Notice to Investor Certificateholders shall be
published in an authorized newspaper of general circulation in Luxembourg within
the time period prescribed in this Agreement. Any notice so mailed within the
time prescribed in this Agreement shall be conclusively presumed to have been
duly given, whether or not the Certificateholder receives such notice.
Section 13.6 Severability of Provisions. If any one or more of the
--------------------------
covenants, agreements, provisions or terms of this Agreement shall for any
reason whatsoever be held invalid, then such covenants, agreements, provisions
or terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity of
enforceability of the other provisions of this Agreement or of the Certificates
or rights of the Certificateholders thereof.
Section 13.7 Assignment. Notwithstanding anything to the contrary
----------
contained herein, except as provided in Section 8.2, this Agreement may not be
assigned by the Servicer without the prior consent of Holders of Investor
Certificates evidencing Undivided Interests aggregating not less than 66 2/3% of
the Investor Interest of each Series on a Series by Series basis.
107
<PAGE>
Section 13.8 Certificates Non-Assessable and Fully Paid. It is the
------------------------------------------
intention of the parties to this Agreement that the Certificateholders shall not
be personally liable for obligations of the Trust, that the Undivided Interests
represented by the Certificates shall be non-assessable for any losses or
expenses of the Trust or for any reason whatsoever, and that Certificates upon
authentication thereof by the Trustee pursuant to Sections 2.1 and 6.2 are and
shall be deemed fully paid.
Section 13.9 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, without limitation,
the execution of any financing statements or continuation statements relating to
the Receivables for filing under the provisions of the Uniform Commercial Code
of any applicable jurisdiction.
Section 13.10 No Waiver; Cumulative Remedies. No failure to exercise
------------------------------
and no delay in exercising, on the part of the Trustee, any Credit Enhancement
Provider or the Investor Certificateholders, any right, remedy, power or
privilege hereunder, shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, remedy, power or privilege hereunder preclude any
other or further exercise thereof or the exercise of any other right, remedy,
power or privilege. The rights, remedies, powers and privileges herein provided
are cumulative and not exhaustive of any rights, remedies, powers and privileges
provided by law.
Section 13.11 Counterparts. This Agreement may be executed in two or
------------
more counterparts (and by different parties on separate counterparts), each of
which shall be an original, but all of which together shall constitute one and
the same instrument.
Section 13.12 Third-Party Beneficiaries. This Agreement will inure
-------------------------
to the benefit of and be binding upon the parties hereto, the Certificateholders
and, to the extent provided in the related Supplement, to the Credit Enhancement
Provider named therein, and their respective successors and permitted assigns.
Except as otherwise provided in this Article XIII, no other Person will have any
right or obligation hereunder.
Section 13.13 Actions by Certificateholders.
-----------------------------
(a) Wherever in this Agreement a provision is made that an action may
be taken or a notice, demand or instruction given by Investor
Certificateholders, such action, notice or instruction may be taken or given by
any Investor Certificateholder, unless such provision requires a specific
percentage of Investor Certificateholders.
108
<PAGE>
(b) Any request, demand, authorization, direction, notice, consent,
waiver or other act by a Certificateholder shall bind such Certificateholder and
every subsequent holder of such Certificate issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done or omitted to be done by the Trustee or the Servicer in reliance
thereon, whether or not notation of such action is made upon such Certificate.
Section 13.14 Rule 144A Information. For so long as any of the
---------------------
Investor Certificates of any Series or any Class are "restricted securities"
within the meaning of Rule 144(a)(3) under the Securities Act, each of the
Transferor, the Servicer, the Trustee and the Enhancement Provider for such
Series agree to cooperate with each other to provide to any Investor
Certificateholders of such Series or Class and to any prospective purchaser of
Certificates designated by such an Investor Certificateholder upon the request
of such Investor Certificateholder or prospective purchaser, any information
required to be provided to such holder or prospective purchaser to satisfy the
condition set forth in Rule 144A(d)(4) under the Securities Act.
Section 13.15 Merger and Integration. Except as specifically stated
----------------------
otherwise herein, this Agreement sets forth the entire understanding of the
parties relating to the subject matter hereof, and all prior understandings,
written or oral, are superseded by this Agreement. This Agreement may not be
modified, amended, waived or supplemented except as provided herein.
Section 13.16 Headings. The headings herein are for purposes of
--------
reference only and shall not otherwise affect the meaning or interpretation of
any provision hereof.
[End of Article XIII]
109
<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.
THE CHASE MANHATTAN BANK (USA),
Transferor on and after
June 1, 1996
By: /s/ Keith Schuck
-------------------------------------
Name: Keith Schuck
Title: VP
CHEMICAL BANK,
Transferor prior to
June 1, 1996 and Servicer
By: /s/ Richard L. Craig
------------------------------------
Name: Richard L. Craig
Title: Managing Director
THE BANK OF NEW YORK,
Trustee
By: /s/ Joseph G. Ernst
------------------------------------
Name: Joseph G. Ernst
Title: Assistant Vice President
<PAGE>
EXHIBIT A
---------
TRANSFEROR CERTIFICATE
----------------------
No. 1 One Unit
CHEMICAL MASTER CREDIT CARD TRUST I
ASSET BACKED CERTIFICATE
THIS CERTIFICATE WAS ISSUED PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE ACT), AND MAY BE SOLD ONLY PURSUANT
TO A REGISTRATION STATEMENT EFFECTIVE UNDER THE ACT OR AN EXEMPTION FROM THE
PROVISIONS OF SECTION 5 OF THE ACT. IN ADDITION, THE TRANSFER OF THIS
CERTIFICATE IS SUBJECT TO RESTRICTIONS SET FORTH IN THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN. A COPY OF THE POOLING AND SERVICING AGREEMENT
WILL BE FURNISHED TO THE HOLDER OF THIS CERTIFICATE BY THE TRUSTEE UPON WRITTEN
REQUEST.
This Certificate represents an
------------------------------
Undivided Interest in the
-------------------------
Chemical Master Credit Card Trust I
-----------------------------------
Evidencing an Undivided Interest in a trust, the corpus of which consists of a
portfolio of MasterCard and VISA* credit card receivables generated or
acquired by The Chase Manhattan Bank (USA) and other assets and interests
constituting the Trust under the Pooling and Servicing Agreement described
below.
(Not an interest in or an obligation of Chemical Bank or The Chase Manhattan
Bank (USA) or any Affiliate thereof.)
This certifies that The Chase Manhattan Bank (USA) (the "Holder") is
the registered owner of an undivided interest in a trust (the "Trust"), the
corpus of which consists of a portfolio of receivables (the "Receivables") now
existing or hereafter created under selected MasterCard and VISA credit card
accounts (the
- --------------
* MasterCard and VISA are registered trademarks of MasterCard International
Inc. and of VISA U.S.A., Inc., respectively.
<PAGE>
"Accounts") of The Chase Manhattan Bank (USA) (the "Transferor"), a banking
corporation organized and existing under the laws of the State of Delaware, all
monies due or to become due in payment of the Receivables (including all Finance
Charge Receivables), all proceeds of such Receivables and Insurance Proceeds
relating to the Receivables, the other assets and interests constituting the
Trust and the proceeds thereof pursuant to an Amended and Restated Pooling and
Servicing Agreement dated as of June 1, 1996, as supplemented by any Supplement
relating to a Series of Investor Certificates (the "Pooling and Servicing
Agreement"), by and between Chemical Bank, as Transferor prior to June 1, 1996
and Servicer, The Chase Manhattan Bank (USA), as Transferor on and after June 1,
1996, and The Bank of New York, as Trustee (the "Trustee"), a summary of certain
of the pertinent provisions of which is set forth herein.
To the extent not defined herein, the capitalized terms used herein
have the meanings assigned to them in the Pooling and Servicing Agreement. This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Pooling and Servicing Agreement, to which Pooling and
Servicing Agreement, as amended from time to time, the Holder by virtue of the
acceptance hereof assents and by which the Holder is bound.
This Certificate has not been registered or qualified under the
Securities Act of 1933, as amended, or any state securities law. No sale,
transfer or other disposition of this Certificate shall be permitted other than
in accordance with the provisions of Section 6.3, 6.9 or 7.2 of the Pooling and
Servicing Agreement.
The Receivables consist of Principal Receivables which arise generally
from the purchase of goods and services and of amounts advanced to cardholders
as cash advances, and of Finance Charge Receivables which arise generally from
Periodic Finance Charges and other fees and charges, as more fully specified in
the Pooling and Servicing Agreement.
This Certificate is the Transferor Certificate (the "Certificate"),
which represents an Undivided Interest in the Trust, including the right to
receive the Collections and other amounts at the times and in the amounts
specified in the Pooling and Servicing Agreement
A-2
<PAGE>
to be paid to the Holder of the Transferor Certificate. The aggregate interest
represented by this Certificate in the Principal Receivables in the Trust shall
not at any time exceed the Transferor Interest at such time. In addition to
this Certificate, Series of Investor Certificates will be issued to investors
pursuant to the Pooling and Servicing Agreement, each of which will represent an
Undivided Interest in the Trust. This Certificate shall not represent any
interest in the Investor Accounts, any Series Accounts or any Credit
Enhancement, except to the extent provided in the Pooling and Servicing
Agreement. The Transferor Interest on any date of determination will be an
amount equal to the aggregate amount of Principal Receivables and the principal
amounts on deposit in the Excess Funding Account, any Principal Funding Account
and any other Series Account (if so provided in the applicable Supplement) at
the end of the day immediately prior to such date of determination minus the
-----
Aggregate Investor Interest at the end of such day, minus the aggregate
-----
Enhancement Invested Amounts (if such amounts are not included in the Investor
Interest in the applicable Supplement), if any, for each Series outstanding at
the end of such day.
The Servicer shall deposit all Collections in the Collection Account
as promptly as possible after the Date of Processing of such Collections, but in
no event later than the second Business Day following such Date of Processing
(except as provided below and except as provided in any Supplement to the
Pooling and Servicing Agreement). Unless otherwise stated in any Supplement,
throughout the existence of the Trust, the Servicer shall allocate to the Holder
of the Certificate an amount equal to the product of (A) the Transferor
Percentage and (B) the aggregate amount of such Collections allocated to
Principal Receivables and Finance Charge Receivables, respectively, in respect
of each Monthly Period. Notwithstanding the first sentence of this paragraph,
the Servicer need not deposit this amount or any other amounts so allocated to
the Certificate pursuant to the Pooling and Servicing Agreement into the
Collection Account and shall pay, or be deemed to pay, such amounts as collected
to the Holder of the Certificate.
Chemical Bank, as Servicer, is entitled to receive as servicing
compensation a monthly servicing fee. The portion of the servicing fee which
will be
A-3
<PAGE>
allocable to the Holder of the Certificate pursuant to the Pooling and Servicing
Agreement will be payable by the Holder of the Certificate and neither the Trust
nor the Trustee or the Investor Certificateholders will have any obligations to
pay such portion of the servicing fee.
This Certificate does not represent an obligation of, or any interest
in, the Transferor or the Servicer, and neither the Certificates nor the
Accounts or Receivables are insured or guaranteed by the Federal Deposit
Insurance Corporation or any other governmental agency. This Certificate is
limited in right of payment to certain Collections respecting the Receivables,
all as more specifically set forth hereinabove and in the Pooling and Servicing
Agreement.
Upon the termination of the Trust pursuant to Section 12.1 of the
Pooling and Servicing Agreement, the Trustee shall assign and convey to the
Holder of the Certificate (without recourse, representation or warranty) all
right, title and interest of the Trust in the Receivables, whether then existing
or thereafter created, all monies due or to become due with respect thereto
(including all accrued interest theretofore posted as Finance Charge
Receivables) and all proceeds thereof and Insurance Proceeds relating thereto
and Interchange allocable to the Trust pursuant to any Supplement, except for
amounts held by the Trustee pursuant to Section 12.3(b) of the Pooling and
Servicing Agreement. The Trustee shall execute and deliver such instruments of
transfer and assignment, in each case without recourse, as shall be reasonably
requested by the Holder of the Certificate to vest in such Holder all right,
title and interest which the Trustee had in the Receivables.
Unless the certificate of authentication hereon has been executed by
or on behalf of the Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Pooling and Servicing Agreement, or be valid
for any purpose.
A-4
<PAGE>
IN WITNESS WHEREOF, The Chase Manhattan Bank(USA) has caused this
Certificate to be duly executed under its official seal.
THE CHASE MANHATTAN BANK (USA)
By:_______________________
Authorized Officer
Date:
A-5
<PAGE>
Trustee's Certificate of Authentication
---------------------------------------
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is the Transferor Certificate referred to in
the within-mentioned Pooling and Servicing Agreement.
THE BANK OF NEW YORK,
as Trustee
By:______________________
Authorized Officer
A-6
<PAGE>
EXHIBIT B
---------
FORM OF ASSIGNMENT OF RECEIVABLES IN ADDITIONAL ACCOUNTS
- --------------------------------------------------------
ASSIGNMENT No. _____ OF RECEIVABLES IN ADDITIONAL ACCOUNTS, dated as
___________ __, by and between The Chase Manhattan Bank (USA), a banking
corporation organized and existing under the laws of the State of Delaware
("Chase USA"), to The Bank of New York, a banking corporation organized and
existing under the laws of the State of New York (the "Trustee") pursuant to the
Pooling and Servicing Agreement referred to below.
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Chase USA, Chemical Bank and the Trustee are parties to the
Amended and Restated Pooling and Servicing Agreement, dated as of June 1, 1996
(hereinafter as such agreement may have been, or may from time to time be,
amended, supplemented or otherwise modified, the "Pooling and Servicing
Agreement");
WHEREAS, pursuant to the Pooling and Servicing Agreement, Chase USA
wishes to designate Additional Accounts of Chase USA to be included as Accounts
and to convey the Receivables of such Additional Accounts, whether now existing
or hereafter created, to the Trust as part of the corpus of the Trust (as each
such term is defined in the Pooling and Servicing Agreement); and
WHEREAS, the Trustee is willing to accept such designation and
conveyance subject to the terms and conditions hereof;
NOW, THEREFORE, Chase USA and the Trustee hereby agree as follows:
1. Defined Terms. All terms defined in the Pooling and
-------------
Servicing Agreement and used herein shall have such defined meanings when
used herein, unless otherwise defined herein.
"Addition Date" shall mean, with respect to the Additional
-------------
Accounts designated hereby, ___________, ____.
B-1
<PAGE>
"Notice Date" shall mean, with respect to the Additional Accounts
-----------
designated hereby, __________, ____ (which shall be a date on or prior to
the fifth Business Day prior to the Addition Date with respect to additions
pursuant to subsection 2.6(a) of the Pooling and Servicing Agreement and
the tenth Business Day prior to the Addition Date with respect to additions
pursuant to subsection 2.6(b) of the Pooling and Servicing Agreement).
2. Designation of Additional Accounts. Chase USA shall deliver
----------------------------------
to the Trustee not later than five Business Days after the Addition Date, a
computer file or microfiche list containing a true and complete list of
each MasterCard and VISA account which as of the Addition Date shall be
deemed to be an Additional Account, such accounts being identified by
account number and by the amount of Receivables in such accounts as of the
close of business on the Addition Date. Such list shall be delivered five
Business Days after the date of this Agreement and shall be marked as
Schedule 1 to this Assignment and, as of the Addition Date, shall be
incorporated into and made a part of this Assignment.
3. Conveyance of Receivables.
-------------------------
(a) Chase USA does hereby transfer, assign, set-over and
otherwise convey to the Trust for the benefit of the Certificateholders,
without recourse on and after the Addition Date, all right, title and
interest of Chase USA in and to the Receivables now existing and hereafter
created in the Additional Accounts designated hereby, all monies due or to
become due with respect thereto (including all Finance Charge Receivables)
and all proceeds of such Receivables, Insurance Proceeds relating to such
Receivables and the proceeds thereof.
(b) In connection with such transfer, Chase USA agrees to record
and file, at its own expense, a financing statement with respect to the
Receivables now existing and hereafter created in the Additional Accounts
designated hereby (which may be a single financing statement with respect
to all such Receivables) for the transfer of accounts as defined in Section
9-106 of the UCC as in effect in the State of New York meeting
B-2
<PAGE>
the requirements of applicable state law in such manner and such
jurisdictions as are necessary to perfect the assignment of such
Receivables to the Trust, and to deliver a file-stamped copy of such
financing statement or other evidence of such filing (which may, for
purposes of this Section 3, consist of telephone confirmation of such
filing) to the Trustee on or prior to the date of this Agreement.
(c) In connection with such transfer, Chase USA further agrees,
at its own expense, on or prior to the date of this Assignment to indicate
in its computer files that Receivables created in connection with the
Additional Accounts designated hereby have been transferred to the Trust
pursuant to this Assignment for the benefit of the Certificateholders.
4. Acceptance by Trustee. The Trustee hereby acknowledges its
---------------------
acceptance on behalf of the Trust for the benefit of the Certificateholders
of all right, title and interest previously held by Chase USA in and to the
Receivables now existing and hereafter created, and declares that it shall
maintain such right, title and interest, upon the Trust herein set forth,
for the benefit of all Certificateholders.
5. Representations and Warranties of Chase USA. Chase USA
-------------------------------------------
hereby represents and warrants to the Trust as of the Addition Date:
(a) Legal, Valid and Binding Obligation. This Assignment
-----------------------------------
constitutes a legal, valid and binding obligation of Chase USA
enforceable against Chase USA in accordance with its terms, except as
such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect affecting the enforcement of creditors' rights in
general and the rights of creditors of [banking associations] and
except as such enforceability may be limited by general principles of
equity (whether considered in a suit at law or in equity).
B-3
<PAGE>
(b) Eligibility of Accounts and Receivables. Each Additional
---------------------------------------
Account designated hereby is an Eligible Account and each Receivable
in such Additional Account is an Eligible Receivable.
(c) Selection Procedures. No selection procedures believed by
--------------------
Chase USA to be materially adverse to the interests of the Investor
Certificateholders were utilized in selecting the Additional Accounts
designated hereby from the available Eligible Accounts in the Bank
Portfolio.
(d) Insolvency. Chase USA is not insolvent and, after giving
----------
effect to the conveyance set forth in Section 3 of this Assignment,
will not be insolvent.
(e) Security Interest. This Assignment constitutes either: (i)
-----------------
a valid transfer and assignment to the Trust of all right, title and
interest of Chase USA in and to Receivables now existing and hereafter
created in the Additional Accounts designated hereby, and all proceeds
(as defined in the UCC as in effect in the State of New York) of such
Receivables and Insurance Proceeds relating thereto, and such
Receivables and any proceeds thereof and Insurance Proceeds relating
thereto will be held by the Trust free and clear of any Lien of any
Person claiming through or under Chase USA or any of its Affiliates
except for (x) Liens permitted under subsection 2.5(b) of the Pooling
and Servicing Agreement, (y) the interest of the holder of the
Transferor Certificate and (z) Chase USA's right to receive interest
accruing on, and investment earnings in respect of, the Finance Charge
Account and the Principal Account as provided in the Pooling and
Servicing Agreement; or (ii) a grant of a security interest (as
defined in the UCC as in effect in the State of New York) in such
property to the Trust, which is enforceable with respect to existing
Receivables of the Additional Accounts, the proceeds (as defined in
the UCC as in effect in the State of New York) thereof and Insurance
Proceeds relating thereto, upon the conveyance of such Receivables to
the Trust, and which will be enforceable with respect to the
Receivables thereafter created in respect of Addi-
B-4
<PAGE>
tional Accounts designated hereby, the proceeds (as defined in the UCC
as in effect in the State of New York) thereof and Insurance Proceeds
relating thereto, upon such creation; and (iii) if this Assignment
constitutes the grant of a security interest to the Trust in such
property, upon the filing of a financing statement described in
Section 3 of this Assignment with respect to the Additional Accounts
designated hereby and in the case of the Receivables of such
Additional Accounts thereafter created and the proceeds (as defined in
the UCC as in effect in the State of New York) thereof, and Insurance
Proceeds relating to such Receivables, upon such creation, the Trust
shall have a first priority perfected security interest in such
property (subject to Section 9-306 of the UCC as in effect in the
State of New York), except for Liens permitted under subsection 2.5(b)
of the Pooling and Servicing Agreement.
6. Conditions Precedent. The acceptance by the Trustee set
--------------------
forth in Section 4 and the amendment of the Pooling and Servicing Agreement
set forth in Section 7 are subject to the satisfaction, on or prior to the
Addition Date, of the following conditions precedent:
(a) Officer's Certificate. Chase USA shall have delivered
---------------------
to the Trustee a certificate of a Vice President or more senior
officer substantially in the form of Schedule 2 hereto, certifying
that (i) all requirements set forth in Section 2.6 of the Pooling and
Servicing Agreement for designating Additional Accounts and conveying
the Principal Receivables of such Account, whether now existing or
hereafter created, have been satisfied and (ii) each of the
representations and warranties made by Chase USA in Section 5 is true
and correct as of the Addition Date. The Trustee may conclusively
rely on such Officer's Certificate, shall have no duty to make
inquiries with regard to the matters set forth therein, and shall
incur no liability in so relying.
(b) Opinion of Counsel. Chase USA shall have delivered to
------------------
the Trustee an Opinion of Counsel with respect to the Additional
Accounts
B-5
<PAGE>
designated hereby substantially in the form of Exhibit E to the
Pooling and Servicing Agreement.
(c) Additional Information. Chase USA shall have delivered
----------------------
to the Trustee such information as was reasonably requested by the
Trustee to satisfy itself as to the accuracy of the representation and
warranty set forth in subsection 5(d) to this Agreement.
7. Amendment of the Pooling and Servicing Agreement. The
------------------------------------------------
Pooling and Servicing Agreement is hereby amended to provide that all
references therein to the "Pooling and Servicing Agreement," to "this
Agreement" and "herein" shall be deemed from and after the Addition Date to
be a dual reference to the Pooling and Servicing Agreement as supplemented
by this Assignment. Except as expressly amended hereby, all of the
representations, warranties, terms, covenants and conditions to the Pooling
and Servicing Agreement shall remain unamended and shall continue to be,
and shall remain, in full force and effect in accordance with its terms and
except as expressly provided herein shall not constitute or be deemed to
constitute a waiver of compliance with or a consent to noncompliance with
any term or provisions of the Pooling and Servicing Agreement.
8. Counterparts. This Assignment may be executed in two or more
------------
counterparts (and by different parties on separate counterparts), each of
which shall be an original, but all of which together shall constitute one
and the same instrument.
9. GOVERNING LAW. THIS AGREEMENT SHALL BE 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, AND
WITHOUT, LIMITING THE GENERALITY OF THE FOREGOING, THE IMMUNITY AND
STANDARD OF CARE OF THE TRUSTEE IN THE ADMINISTRATION OF THE TRUST
HEREUNDER SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
B-6
<PAGE>
IN WITNESS WHEREOF, the undersigned have caused this Assignment of
Receivables in Additional Accounts to be duly executed and delivered by their
respective duly authorized officers on the day and year first above written.
THE CHASE MANHATTAN BANK (USA)
By:________________________
Name:
Title:
THE BANK OF NEW YORK,
as Trustee
By:________________________
Name:
Title:
B-7
<PAGE>
Schedule 1
to Assignment of
Receivables in
Additional Accounts
-------------------
ADDITIONAL ACCOUNTS
-------------------
B-8
<PAGE>
Schedule 2
to Assignment of
Receivables in
Additional Accounts
-------------------
The Chase Manhattan Bank (USA)
Chemical Master Credit Card Trust I
Officer's Certificate
__________________________, a duly authorized officer of The Chase
Manhattan Bank (USA), a banking corporation organized and existing under the
laws of the State of Delaware, ("Chase USA"), hereby certifies and acknowledges
on behalf of Chase USA that to the best of his knowledge the following
statements are true on ____________, ____, (the "Addition Date"), and
acknowledges on behalf of Chase USA that this Officer's Certificate will be
relied upon by The Bank of New York, as Trustee (the "Trustee") of the Chemical
Master Credit Card Trust I in connection with the Trustee entering into
Assignment No. ______ of Receivables in Additional Accounts, dated as of the
Addition Date (the "Assignment"), by and between Chase USA and the Trustee, in
connection with the Amended and Restated Pooling and Servicing Agreement, dated
as of June 1, 1996, as heretofore supplemented and amended (the "Pooling and
Servicing Agreement") pursuant to which Chemical, as Transferor prior to June 1,
1996 and Servicer, Chase USA as Transferor on and after June 1, 1996 and the
Trustee are parties. The undersigned hereby certifies and acknowledges on
behalf of Chase USA that:
(a) on or prior to the Addition Date, Chase USA has delivered to the
Trustee the Assignment (including an acceptance by the Trustee on behalf of the
Trust for the benefit of the Investor Certificateholders) and Chase USA has
indicated in its computer files that the Receivables created in connection with
the Additional Accounts have been transferred to the Trust and within five
Business Days after the Addition Date Chase USA shall deliver to the Trustee a
computer file or microfiche list containing a true and complete list of all
Additional Accounts identified by account number and the aggregate amount of the
Receivables in such Additional Accounts as of the Addition Date, which computer
file or microfiche list shall be as of the date of such Assignment, incorporated
into and made a part of such Assignment and the Pooling and Servicing Agreement.
B-9
<PAGE>
(b) Legal, Valid and Binding Obligation. The Assignment constitutes
-----------------------------------
a legal, valid and binding obligation of Chase USA, enforceable against Chase
USA in accordance with its terms, except as such enforceability may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect affecting the enforcement of creditors'
rights in general and the rights of creditors of (banking associations) and
except as such enforceability may be limited by general principles of equity
(whether considered in a suit at law or in equity).
(c) Eligibility Of Accounts. Each Additional Account designated
-----------------------
pursuant to the Assignment is an Eligible Account and each Receivable in such
Additional Account is an Eligible Receivable.
(d) Selection Procedures. No selection procedures believed by Chase
--------------------
USA to be materially adverse to the interests of the Investor Certificateholders
were utilized in selecting the Additional Accounts designated hereby from the
available Eligible Accounts in the Bank Portfolio.
(e) Insolvency. Chase USA is not insolvent and, after giving effect
----------
to the conveyance set forth in Section 3 of the Assignment, will not be
insolvent.
(f) Security Interest. The Assignment constitutes either: (i) a
-----------------
valid transfer and assignment to the Trust of all right, title and interest of
Chase USA in and to Receivables now existing and hereafter created in the
Additional Accounts designated pursuant to the Assignment, and all proceeds (as
defined in the UCC as in effect in the State of New York) of such Receivables
and Insurance Proceeds relating thereto, and such Receivables and any proceeds
thereof and Insurance Proceeds relating thereto will be held by the Trust free
and clear of any Lien of any Person claiming through or under the Transferor or
any of its Affiliates except for (x) Liens permitted under subsection 2.5(b) of
the Pooling and Servicing Agreement, (y) the interest of Chase USA as holder of
the Transferor Certificate and (z) Chase USA's right to receive interest
accruing on, and investment earnings in respect of, the Finance Charge Account
and the Principal Account as provided in the Pooling and Servicing Agreement and
any Supplement; or (ii) a grant of a security interest (as defined in the UCC as
in effect in the State of New York) in such property to the
B-10
<PAGE>
Trust, which is enforceable with respect to the existing Receivables of the
Additional Accounts designated pursuant to the Assignment, the proceeds (as
defined in the UCC as in effect in the State of New York) thereof and Insurance
Proceeds relating thereto upon the conveyance of such Receivables to the Trust,
and which will be enforceable with respect to the Receivables thereafter created
in respect of Additional Accounts designated pursuant to the Assignment, the
proceeds (as defined in the UCC as in effect in the State of New York) thereof
and Insurance Proceeds relating thereto, upon such creation; and (iii) if the
Assignment constitutes the grant of a security interest to the Trust in such
property, upon the filing of a financing statement described in Section 3 of the
Assignment with respect to the Additional Accounts designated pursuant to the
Assignment and in the case of the Receivables of such Additional Accounts
thereafter created and the proceeds (as defined in the UCC as in effect in the
State of New York) thereof, and Insurance Proceeds relating to such Receivables,
upon such creation, the Trust shall have a first priority perfected security
interest in such property (subject to Section 9-306 of the UCC as in effect in
the State of New York), except for Liens permitted under subsection 2.5(b) of
the Pooling and Servicing Agreement.
(g) Requirements of Pooling and Servicing Agreement. All
-----------------------------------------------
requirements set forth in Section 2.6 of the Pooling and Servicing Agreement for
designating Additional Accounts and conveying the Principal Receivables of such
Accounts, whether now existing or hereafter created, have been satisfied.
B-11
<PAGE>
Initially capitalized terms used herein and not otherwise defined are
used as defined in the Pooling and Servicing Agreement.
IN WITNESS WHEREOF, I have hereunto set my hand this _____ day
of___________, ____.
THE CHASE MANHATTAN BANK
(USA)
By:________________________
Name:
Title:
B-12
<PAGE>
EXHIBIT C
---------
FORM OF MONTHLY SERVICER'S CERTIFICATE
--------------------------------------
Chemical Bank
________________________________________
CHEMICAL MASTER CREDIT CARD TRUST I
________________________________________
1. Capitalized terms used in this Certificate have their respective
meanings set forth in the Pooling and Servicing Agreement; provided, that the
--------
"preceding Monthly Period" shall mean the Monthly Period immediately preceding
the calendar month in which this Certificate is delivered. This Certificate is
delivered pursuant to subsection 3.4(b) of the Pooling and Servicing Agreement.
References herein to certain sections and subsections are references to the
respective sections and subsections of the Pooling and Servicing Agreement.
2. Chemical is Servicer under the Pooling and Servicing Agreement.
3. The undersigned is a Servicing Officer.
4. The date of this Certificate is a Determination Date under the
Pooling and Servicing.
5. The aggregate amount of
Collections processed
during the preceding
Monthly Period was equal
to (excluding Annual $_________
Membership Fees and
Interchange)...............
6. The Aggregate Investor
Percentage of Receivables
processed by the Servicer
during the preceding
Monthly Period was equal to $_________
<PAGE>
7. The Aggregate Investor
Percentage of Collections
of Finance Charge
Receivables processed by
the Servicer during the
preceding Monthly Period
was equal to (excluding
Annual Membership Fees and
Interchange)............... $_________
8. The aggregate amount of
Receivables processed by
the Servicer as of the end
of the last day of the
preceding Monthly Period... $_________
9. Of the balance on deposit in
the Finance Charge Account, the
amount attributable to the
Aggregate Investor Percentage of
Collections processed by the
Servicer during the preceding
Monthly Period...............$_________
10. Of the balance on deposit in
the Principal Account, the amount
attributable to the Aggregate
Investor Percentage of
Collections processed by the
Servicer during the preceding
Monthly Period.............. $_________
11. The aggregate amount, if any,
of withdrawals, drawings or
payments under any Credit
Enhancement, if any, required to
be made with respect to any
Series outstanding for the
preceding Monthly Period..... $_________
12. The Aggregate Investor
Percentage of Collections
of Principal Receivables
processed by the Servicer
during the current month
is equal to................ $_________
C-2
<PAGE>
13. The amount equal to the
Aggregate Investor Percentage of
Annual Membership Fees deposited
to the Finance Charge Account or
any Series Account on or before
the Transfer Date during the
current month is equal to..... $_________
14. The aggregate amount
of Interchange to be
deposited in the Finance
Charge Account on the
Transfer Date of the
current month is equal to.. $_________
15. The aggregate amount
of all sums payable to the
Investor Certificateholder
of each Series on the
succeeding Distribution
Date with respect to
Certificate Principal...... $_________
16. The aggregate amount
of all sums payable to the
Investor Certificateholder
of each Series on the
succeeding Distribution
Date with respect to
Certificate Interest....... $_________
17. To the knowledge of the undersigned, there are no Liens on any
Receivables in the Trust except as described below:
[If applicable, insert "None."]
C-3
<PAGE>
IN WITNESS WHEREOF, the undersigned has duly executed and delivered
this certificate this ____ day of __________, ____.
CHEMICAL BANK,
Servicer
By:________________________
Name:
Title:
C-4
<PAGE>
Schedule to Monthly
Servicer's Certificate*
----------------------
Chemical Bank
________________________________________
CHEMICAL MASTER CREDIT CARD TRUST I
________________________________________
* A separate schedule is to be attached for each Series, with appropriate
changes and additions to reflect the specifics of the related Series
Supplement.
C-5
<PAGE>
EXHIBIT D
---------
FORM OF ANNUAL SERVICER'S CERTIFICATE
-------------------------------------
Chemical Bank
-------------------------------------
CHEMICAL MASTER CREDIT CARD TRUST I
-------------------------------------
The undersigned, a duly authorized representative of CHEMICAL BANK, a
banking corporation organized and existing under the laws of the State of New
York ("Chemical"), as Servicer pursuant to the Amended and Restated Pooling and
Servicing Agreement dated as of June 1, 1996 (the "Pooling and Servicing
Agreement") by and among Chemical, The Chase Manhattan Bank (USA) and The Bank
of New York, as trustee (the "Trustee") does hereby certify that:
1. Chemical is Servicer under the Pooling and Servicing
Agreement.
2. The undersigned is duly authorized pursuant to the Pooling
and Servicing Agreement to execute and deliver this Certificate to the
Trustee.
3. This Certificate is delivered pursuant to Section 3.5 of the
Pooling and Servicing Agreement.
4. A review of the activities of the Servicer during [the period
from the Closing date until December 31, 1996] or [the twelve-month period
ended December 31, ___] was conducted under the supervision of the
undersigned.
5. Based on such review, the Servicer has, to the best of the
knowledge of the undersigned, fully performed all its obligations under the
Pooling and Servicing Agreement throughout such period and no default in
the performance of such obligations has occurred or is continuing except as
set forth in paragraph 6 below.
6. The following is a description of each default in the
performance of the Servicer's obliga-
<PAGE>
tions under the provisions of the Pooling and Servicing Agreement,
including any Supplement, known to the undersigned to have been made during
such period which sets forth in detail (i) the nature of each such default,
(ii) the action taken by the Servicer, if any, to remedy each such default
and (iii) the current status of each such default:
[If applicable, insert "None."]
IN WITNESS WHEREOF, the undersigned has duly executed this certificate
this ____ day of ____________, ____.
By: ____________________________
Name:
Title: Vice President
D-2
<PAGE>
EXHIBIT E
---------
FORM OF OPINION OF COUNSEL REGARDING ADDITIONAL ACCOUNTS
--------------------------------------------------------
PROVISIONS TO BE INCLUDED IN OPINION OF COUNSEL
TO BE DELIVERED PURSUANT TO SECTION 2.6(c)(vi)
OF THE POOLING AND SERVICING AGREEMENT
--------------------------------------
The opinions set forth below may be subject to certain qualifications,
assumptions, limitations and exceptions taken or made in the opinion of
Transferor's counsel with respect to similar matters delivered on the Closing
Date.
The Assignment has been duly authorized, executed and delivered by the
Transferor and constitutes the legal, valid and binding agreement of the
Transferor, enforceable against the Transferor in accordance with its terms
subject to the effects of bankruptcy, insolvency, liquidation, receivership,
conservatorship, fraudulent conveyance, reorganization, moratorium and other
similar laws relating to or affecting creditors' rights generally, general
equitable principles (whether considered in a proceeding in equity or at law)
and an implied covenant of good faith and fair dealing.
If the transfer of the Receivables in the Additional Accounts
designated in the Assignment to the Trust pursuant to the Pooling and Servicing
Agreement constitutes a true sale of such Receivables to the Trust:
With respect to such Receivables in existence on the date
hereof, such sale transfers all of the right, title and interest of
the Transferor in and to such Receivables and the proceeds thereof to
the Trust, free and clear of any liens now existing (other than
existing liens as to which a filing under the Code is not required to
perfect such liens) or hereafter created but subject to the rights of
the Transferor as holder of the Transferor Certificate.
With respect to such Receivables which come into existence
after the date hereof, upon the creation of such Receivables, such
sale will
<PAGE>
transfer all of the right, title and interest of the Transferor in and
to such Receivables and the proceeds thereof to the Trust free and
clear of any liens other than liens which are in existence on the date
of such transfer ("Intervening Liens") but subject to the rights of
the Transferor as holder of the Transferor Certificate. Any such
Intervening Liens would be subject to the prior perfected security
interest in favor of the Trustee as set forth in paragraph 3 below.
In either case, no further action will thereafter be required under New
York or federal law to protect the Trust's ownership interest in such
Receivables against creditors of, or subsequent purchasers from, the
Transferor. We note, however, that unless the obligor in respect of a
Receivable has received notice of such assignment, bona fide payments made
by such obligor to a second assignee of such Receivable will discharge such
obligor's obligations to the extent of such payment, and such payment will
be recoverable only from such second assignee.
If the transfer of the Receivables to the Trust pursuant to the
Pooling and Servicing Agreement as supplemented by the Assignment does not
constitute a true sale of such Receivables to the Trust, then the Pooling and
Servicing Agreement creates a valid security interest in favor of the Trustee,
for the benefit of the Investor Certificateholders in the Transferor's right,
title and interest in and to such Receivables and the proceeds thereof. If the
transfer of such Receivables to the Trust constitutes a true sale of such
Receivables to the Trust but such sale is not effective as of such date to
convey Receivables not existing on such date, the Pooling and Servicing
Agreement as supplemented by the Assignment creates a valid security interest in
favor of the Trustee, for the benefit of the Investor Certificateholders, in the
Transferor's interest in such Receivables and the proceeds thereof to the extent
such interest is not so conveyed to the Trust. In either event, such security
interest constitutes a perfected security interest in such Receivables subject
to no prior or equal liens, enforceable as such against creditors of, and
purchasers from, the Transferor and the FDIC as conservator or receiver for the
Transferor, except:
(i) as enforceability may be subject to (A) the
E-2
<PAGE>
right of the FDIC, as receiver for the Transferor, to enforce the
Pooling and Servicing Agreement, notwithstanding any provision thereof
providing for termination, default, acceleration, or exercise of
rights upon, or solely by reason of, insolvency or the appointment of
a conservator or receiver, (B) the FDIC's authority, as receiver for
the Transferor, to transfer any asset or liability of the Transferor
to another depository institution, (C) the statutory prohibition on
any attachment or execution being issued by any court upon assets in
the possession of the FDIC as receiver for the Transferor, (D) the
right of the FDIC to obtain a stay, for a period not to exceed 90
days, in any judicial action or proceeding to which the Transferor is
a party and (E) the right of the FDIC, as receiver for the Transferor,
to require a secured party to establish its right to payments by
submitting to and completing the claims procedure established by the
Financial Institutions Reform, Recovery and Enforcement Act of 1989;
(ii) as perfection may be limited (A) with respect to any such
Receivables which are evidenced by instruments (as defined in Section
9-105(l)(i) of the Code) which are not in the possession of the
Trustee; and (B) in the case of proceeds, by Section 9-306 of the
Code; and
(iii) as priority may be subject to (A) any liens, claims or other
interests that arise by operation of law and do not require any filing
or similar action in order to take priority over a perfected security
interest; (B) any claim or lien in favor of the United States, any
state or any agency or instrumentality thereof (including, without
limitation, liens arising under the federal, state or local tax laws
or under the Employee Retirement Income Security Act of 1974, as
amended); (C) the security interest of any Person claiming any portion
of the collateral as proceeds (other than Receivables in which the
Trustee has a prior lien) of such Person's security interest or (D)
the security interest of any Person previously perfected without
filing or the taking of possession pursuant to Section 9-304(4) of the
UCC; (E) liens
E-3
<PAGE>
under Section 4-208 of the Code (relating to the security interest of
a collecting bank); (F) with respect to any Receivables represented by
chattel paper (and proceeds thereof), the interest of a purchaser of
such chattel paper under Section 9-308 of the Code; and (G) a claim by
the FDIC or any other receiver or conservator of the Transferor for
administrative expenses. Such perfection and priority of the security
interest of the Trustee for the benefit of the Investor
Certificateholders would not be affected by an increase or a decrease
in the relative interests in the Receivables of the Transferor as
holder of the Transferor Certificate and the Investor
Certificateholders.
In addition, in connection with the opinions set forth in paragraph 2
and this paragraph 3, no opinion is expressed herein with respect to Receivables
or the proceeds thereof other than the Receivables in the Additional Accounts
designated by the Assignment and the proceeds thereof. No opinion is expressed
herein with respect to the perfection, priority or enforceability of the Trust's
interest in proceeds of the Receivables except to the extent such proceeds
consist of either (1) identifiable cash proceeds held in the Collection Account
maintained by a Eligible Institution in the name of the Trust in accordance with
the terms of the Pooling and Servicing Agreement and the Supplements or (2)
Permitted Investments held by or on behalf of the Trustee in accordance with the
terms of the Pooling and Servicing Agreement and the Supplements. We do not
express any opinion herein: (i) as to the creation, validity or enforceability
of any interest of the Transferor in the Receivables or the proceeds thereof,
(ii) as to the Transferor's title to any of the Receivables or the proceeds
thereof, (iii) as to whether the transfer of the Receivables constitutes a true
sale or a grant of a security interest, (iv) as to whether the purported sale of
all Receivables now existing and hereafter created is effective to convey as a
true sale to the Trust, as of the purported date of sale, Receivables which do
not exist as of such date of sale, or as to whether Receivables hereafter
created in an Account are deemed to exist as of the date hereof or (v) as to
whether a court may temporarily restrain the exercise of the Trust's rights to
the Receivables and the proceeds thereof. Further, we point out that delays in
the exercise of the rights and interests of the Trust may occur with respect to
E-4
<PAGE>
the Receivables and their proceeds in the possession of a receiver or
conservator, regardless of whether the transaction constitutes a true sale or a
secured transaction, by actions unilaterally taken by such receiver or
conservator.
With respect to the opinions expressed in paragraphs 2 and 3, we note
that pursuant to Section 2.1 of the Pooling and Servicing Agreement, the
Transferor has filed the Financing Statements with the Office of the Secretary
of State of the State of New York and the City Register in the County of New
York. In expressing the opinions set forth herein, we have assumed that in the
event that a change in the Transferor's name, identity or corporate structure
makes the Financing Statements seriously misleading within the meaning of
Section 9-402(7) of the New York Uniform Commercial Code (the "Code"), or the
Transferor moves the location of its executive office outside the State of New
York, the Transferor will file such financing statements or amendments as may be
necessary to continue the perfection of the Trust's interest in the Receivables
and the proceeds thereof as required by Section 13.2 of the Pooling and
Servicing Agreement within the time specified in Section 9-402(7) of the Code or
Section 9-103(3)(e) of the Code, as the case may be.
In expressing the opinions set forth herein, we have relied, without
independent investigation, upon reports received from the Office of the
Secretary of State of the State of New York and the City Register in the County
of New York with respect to financing statements and related filings and with
respect to certain notices of federal government liens, New York State
government tax liens, certain attachment liens and judgment liens with respect
to the Transferor on file with such offices. The effective dates of the latest
of such reports are set forth in Schedule A attached hereto (the "UCC Report
Schedule"). [In addition, with respect to the items identified on Schedule B
attached hereto, we have relied without independent investigation, on a
certificate of an officer of the Transferor attached hereto to the effect that
such items do not represent a lien or security interest on the Receivables.]
[We have assumed that no such filings or notices were made with respect to the
Transferor between the effective time of such reports and the time of the filing
of the Financing Statements. We note that the Transferor has delivered to us a
certificate to the effect of the preceding sentence.] In the Pooling and
Servicing Agreement, the Transferor represents and
E-5
<PAGE>
warrants that it has good and marketable title to the Receivables free and clear
of all Liens, and we note that the Transferor has delivered to us a certificate
to such effect.
In addition, we call to your attention the fact that if the FDIC were
appointed receiver for the Transferor, the FDIC could repudiate any contract it
determined to be burdensome and the repudiation of which it determined would
promote the orderly administration of the Transferor's affairs. 12 U.S.C. (S)
1821(e)(1), (2). However, Section 1821 provides that the FDIC's power as
receiver to repudiate contracts is not to be construed to permit the avoidance
of a properly perfected security interest except where such an interest is taken
in contemplation of insolvency or with the intent to hinder, delay, or defraud
the institution or the creditors of the institution. 12 U.S.C. (S) 1821(e)(11).
We have relied, without independent verification, upon on a certificate of an
officer of the Transferor (attached hereto as Annex I), to the effect that (i)
the Transferor was not as of the date of transfer of the Receivables, insolvent
or on the verge of insolvency and was not rendered insolvent or on the verge of
insolvency by reason thereof, (ii) the transfer was not made in contemplation of
insolvency and (iii) the transfer was made in good faith and without the intent
to hinder, delay or defraud any of the Transferor's creditors. In reliance upon
the certificate of the Transferor referred to above, we are of the opinion that
the transfer of, or the grant of a security interest in, the Receivables to the
Trust would not be subject to repudiation by the FDIC.
E-6
<PAGE>
EXHIBIT F
---------
FORM OF ANNUAL OPINION OF COUNSEL
---------------------------------
The opinions set forth below, which are to be delivered pursuant to
subsection 13.2(d)(ii) of the Pooling and Servicing Agreement, may be subject to
certain qualifications, assumptions, limitations and exceptions taken or made in
the opinion of counsel to the Transferor with respect to similar matters
delivered on the Closing Date.
1. If the transfer of the Receivables to the Trust pursuant to the
Pooling and Servicing Agreement constitutes a true sale of such Receivables to
the Trust:
a. With respect to such Receivables in existence on the date
hereof, such sale transfers all of the right, title and interest of
the Transferor in and to such Receivables and the proceeds thereof to
the Trust, free and clear of any liens now existing (other than
existing liens as to which a filing under the Code is not required to
perfect such liens) or hereafter created but subject to the rights of
the Transferor as holder of the Transferor Certificate.
b. With respect to such Receivables which come into existence
after the date hereof, upon the creation of such Receivables, such
sale will transfer all of the right, title and interest of the
Transferor in and to such Receivables and the proceeds thereof to the
Trust free and clear of any liens other than liens which are in
existence on the date of such transfer ("Intervening Liens") but
subject to the rights of the Transferor as holder of the Transferor
Certificate. Any such Intervening Liens would be subject to the prior
perfected security interest in favor of the Trustee as set forth in
paragraph 3 below.
In either case, no further action will thereafter be required under New
York or federal law to protect the Trust's ownership interest in such
Receivables against creditors of, or subsequent purchasers from, the
Transferor. We note, however, that unless the obligor in
<PAGE>
respect of a Receivable has received notice of such assignment, bona fide
payments made by such obligor to a second assignee of such Receivable will
discharge such obligor's obligations to the extent of such payment, and
such payment will be recoverable only from such second assignee.
2. If the transfer of the Receivables to the Trust pursuant to the
Pooling and Servicing Agreement does not constitute a true sale of such
Receivables to the Trust, then the Pooling and Servicing Agreement creates a
valid security interest in favor of the Trustee, for the benefit of the Investor
Certificateholders in the Transferor's right, title and interest in and to such
Receivables and the proceeds thereof. If the transfer of such Receivables to
the Trust constitutes a true sale of such Receivables to the Trust but such sale
is not effective as of such date to convey Receivables not existing on such
date, the Pooling and Servicing Agreement creates a valid security interest in
favor of the Trustee, for the benefit of the Investor Certificateholders, in the
Transferor's interest in such Receivables and the proceeds thereof to the extent
such interest is not so conveyed to the Trust. In either event, such security
interest constitutes a perfected security interest in such Receivables subject
to no prior or equal liens, enforceable as such against creditors of, and
purchasers from, the Transferor and the FDIC as conservator or receiver for the
Transferor, except:
(i) as enforceability may be subject to (A) the right of the FDIC, as
receiver for the Transferor, to enforce the Pooling and Servicing
Agreement, notwithstanding any provision thereof providing for
termination, default, acceleration, or exercise of rights upon, or
solely by reason of, insolvency or the appointment of a conservator or
receiver, (B) the FDIC's authority, as receiver for the Transferor, to
transfer any asset or liability of the Transferor to another
depository institution, (C) the statutory prohibition on any
attachment or execution being issued by any court upon assets in the
possession of the FDIC as receiver for the Transferor, (D) the right
of the FDIC to obtain a stay, for a period not to exceed 90 days, in
any judicial action or proceeding to which the Transferor is a party
and (E) the right of the FDIC, as receiver for the Transferor, to
F-2
<PAGE>
require a secured party to establish its right to payments by
submitting to and completing the claims procedure established by the
Financial Institutions Reform, Recovery and Enforcement Act of 1989;
(ii) as perfection may be limited (A) with respect to any such
Receivables which are evidenced by instruments (as defined in Section
9-105(l)(i) of the Code) which are not in the possession of the
Trustee; and (B) in the case of proceeds, by Section 9-306 of the
Code; and
(iii) as priority may be subject to (A) any liens, claims or other
interests that arise by operation of law and do not require any filing
or similar action in order to take priority over a perfected security
interest; (B) any claim or lien in favor of the United States, any
state or any agency or instrumentality thereof (including, without
limitation, liens arising under the federal, state or local tax laws
or under the Employee Retirement Income Security Act of 1974, as
amended); (C) the security interest of any Person claiming any portion
of the collateral as proceeds (other than Receivables in which the
Trustee has a prior lien) of such Person's security interest or (D)
the security interest of any Person previously perfected without
filing or the taking of possession pursuant to Section 9-304(4) of the
UCC; (E) liens under Section 4-208 of the Code (relating to the
security interest of a collecting bank); (F) with respect to any
Receivables represented by chattel paper (and proceeds thereof), the
interest of a purchaser of such chattel paper under Section 9-308 of
the Code; and (G) a claim by the FDIC or any other receiver or
conservator of the Transferor for administrative expenses. Such
perfection and priority of the security interest of the Trustee for
the benefit of the Investor Certificateholders would not be affected
by an increase or a decrease in the relative interests in the
Receivables of the Transferor as holder of the Transferor Certificate
and the Investor Certificateholders.
In addition, in connection with the opinions set
F-3
<PAGE>
forth in paragraph 1 and this paragraph 2, no opinion is expressed herein with
respect to Receivables or the proceeds thereof other than the Receivables in the
Additional Accounts designated by the Assignment and the proceeds thereof. No
opinion is expressed herein with respect to the perfection, priority or
enforceability of the Trust's interest in proceeds of the Receivables except to
the extent such proceeds consist of either (1) identifiable cash proceeds held
in the Collection Account maintained by a Eligible Institution in the name of
the Trust in accordance with the terms of the Pooling and Servicing Agreement
and the Supplements or (2) Permitted Investments held by or on behalf of the
Trustee in accordance with the terms of the Pooling and Servicing Agreement and
the Supplements. We do not express any opinion herein: (i) as to the creation,
validity or enforceability of any interest of the Transferor in the Receivables
or the proceeds thereof, (ii) as to the Transferor's title to any of the
Receivables or the proceeds thereof, (iii) as to whether the transfer of the
Receivables constitutes a true sale or a grant of a security interest, (iv) as
to whether the purported sale of all Receivables now existing and hereafter
created is effective to convey as a true sale to the Trust, as of the purported
date of sale, Receivables which do not exist as of such date of sale, or as to
whether Receivables hereafter created in an Account are deemed to exist as of
the date hereof or (v) as to whether a court may temporarily restrain the
exercise of the Trust's rights to the Receivables and the proceeds thereof.
Further, we point out that delays in the exercise of the rights and interests of
the Trust may occur with respect to the Receivables and their proceeds in the
possession of a receiver or conservator, regardless of whether the transaction
constitutes a true sale or a secured transaction, by actions unilaterally taken
by such receiver or conservator.
With respect to the opinions expressed in paragraphs 1 and 2, we note
that pursuant to Section 2.1 of the Pooling and Servicing Agreement, the
Transferor has filed the Financing Statements with the Office of the Secretary
of State of the State of New York and the City Register in the County of New
York. In expressing the opinions set forth herein, we have assumed that in the
event that a change in the Transferor's name, identity or corporate structure
makes the Financing Statements seriously misleading within the meaning of
Section 9-402(7) of the New York Uniform Commercial Code (the "Code"), or the
Transferor moves the location of its executive office outside the State of New
York, the
F-4
<PAGE>
Transferor will file such financing statements or amendments as may be necessary
to continue the perfection of the Trust's interest in the Receivables and the
proceeds thereof as required by Section 13.2 of the Pooling and Servicing
Agreement within the time specified in Section 9-402(7) of the Code or Section
9-103(3)(e) of the Code, as the case may be.
In expressing the opinions set forth herein, we have relied, without
independent investigation, upon reports received from the Office of the
Secretary of State of the State of New York and the City Register in the County
of New York with respect to financing statements and related filings and with
respect to certain notices of federal government liens, New York State
government tax liens, certain attachment liens and judgment liens with respect
to the Transferor on file with such offices. The effective dates of the latest
of such reports are set forth in Schedule A attached hereto (the "UCC Report
Schedule"). [In addition, with respect to the items identified on Schedule B
attached hereto, we have relied without independent investigation, on a
certificate of an officer of the Transferor attached hereto to the effect that
such items do not represent a lien or security interest on the Receivables.]
[We have assumed that no such filings or notices were made with respect to the
Transferor between the effective time of such reports and the time of the filing
of the Financing Statements. We note that the Transferor has delivered to us a
certificate to the effect of the preceding sentence.] In the Pooling and
Servicing Agreement, the Transferor represents and warrants that it has good and
marketable title to the Receivables free and clear of all Liens, and we note
that the Transferor has delivered to us a certificate to such effect.
In addition, we call to your attention the fact that if the FDIC were
appointed receiver for the Transferor, the FDIC could repudiate any contract it
determined to be burdensome and the repudiation of which it determined would
promote the orderly administration of the Transferor's affairs. 12 U.S.C. (S)
1821(e)(1), (2). However, Section 1821 provides that the FDIC's power as
receiver to repudiate contracts is not to be construed to permit the avoidance
of a properly perfected security interest except where such an interest is taken
in contemplation of insolvency or with the intent to hinder, delay, or defraud
the institution or the creditors of the institution. 12 U.S.C. (S) 1821(e)(11).
We have relied, without independent verification, upon on a
F-5
<PAGE>
certificate of an officer of the Transferor (attached hereto as Annex I), to the
effect that (i) the Transferor was not as of the date of transfer of the
Receivables, insolvent or on the verge of insolvency and was not rendered
insolvent or on the verge of insolvency by reason thereof, (ii) the transfer was
not made in contemplation of insolvency and (iii) the transfer was made in good
faith and without the intent to hinder, delay or defraud any of the Transferor's
creditors. In reliance upon the certificate of the Transferor referred to
above, we are of the opinion that the transfer of, or the grant of a security
interest in, the Receivables to the Trust would not be subject to repudiation by
the FDIC.
F-6
<PAGE>
EXHIBIT G
---------
FORM OF REASSIGNMENT OF RECEIVABLES
-----------------------------------
REASSIGNMENT NO. ____ OF RECEIVABLES, dated as of __________ ___,
____, by and between The Chase Manhattan Bank (USA), a banking corporation
organized and existing under the laws of the State of Delaware (the "Bank"), and
The Bank of New York, a banking corporation organized under the laws of the
State of New York (the "Trustee") pursuant to the Pooling and Servicing
Agreement referred to below.
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Bank, Chemcial Bank and the Trustee are parties to the
Amended and Restated Pooling and Servicing Agreement, dated as of June 1, 1996
(hereinafter as such agreement may have been, or may from time to time be,
amended, supplemented or otherwise modified, the "Pooling and Servicing
Agreement");
WHEREAS, pursuant to the Pooling and Servicing Agreement, the Bank
wishes to remove all Receivables from certain designated Accounts of the Bank
(the "Removed Accounts") and to cause the Trustee to reconvey the Receivables of
such Removed Accounts, whether now existing or hereafter created, from the Trust
to the Bank (as each such term is defined in the Pooling and Servicing
Agreement); and
WHEREAS, the Trustee is willing to accept such designation and to
reconvey the Receivables in the Removed Accounts subject to the terms and
conditions hereof;
NOW, THEREFORE, the Bank and the Trustee hereby agree as follows:
1. Defined Terms. All terms defined in the Pooling and
-------------
Servicing Agreement and used herein shall have such defined meanings when
used herein, unless otherwise defined herein.
<PAGE>
"Removal Date" shall mean, with respect to the Removed Accounts
------------
designated hereby, ___________, _____.
"Removal Notice Date" shall mean, with respect to the Removed
-------------------
Accounts designated hereby, ___________, _____ (which shall be a date on
or prior to the fifth Business Day prior to the Removal Date).
2. Designation of Removed Accounts. The Bank shall deliver to
-------------------------------
the Trustee, not later than five Business Days after the Removal Date, a
computer file or microfiche list containing a true and complete list of
each MasterCard and VISA account which as of the Removal Date shall be
deemed to be a Removed Account, such accounts being identified by account
number and by the aggregate amount of Receivables in such accounts as of
the close of business on the Removal Date. Such list shall be marked as
Schedule 1 to this Reassignment and shall be incorporated into and made a
part of this Reassignment as of the Removal Date.
3. Conveyance of Receivables.
-------------------------
(a) The Bank does hereby reconvey to the Bank, without recourse
on and after the Removal Date, all right, title and interest of the Trust
in and to the Receivables now existing and hereafter created in the Removed
Accounts designated hereby, all monies due or to become due with respect
thereto (including all Finance Charge Receivables), all proceeds (as
defined in Section 9-306 of the UCC as in effect in the State of New York)
of such Receivables, Insurance Proceeds relating to such Receivables and
the proceeds thereof.
(b) In connection with such transfer, the Trustee agrees to
execute and deliver to the Bank on or prior to the date of this
Reassignment, a termination statement with respect to the Receivables now
existing and hereafter created in the Removed Accounts designated hereby
(which may be a single termination statement with respect to all such
Receivables) evidencing the release by the Trust of its Lien on the
Receivables in the Removed Accounts, and meeting the requirements of
applicable state law, in such manner and such jurisdictions as are
necessary to remove such Lien.
G-2
<PAGE>
4. Representations and Warranties of the Bank. The Bank hereby
------------------------------------------
represents and warrants to the Trust as of the Removal Date:
(a) Legal Valid and Binding Obligation. This Reassignment
----------------------------------
constitutes a legal, valid and binding obligation of the Bank
enforceable against the Bank in accordance with its terms, except as
such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect affecting the enforcement of creditors' rights in
general and the rights of creditors of banking associations and except
as such enforceability may be limited by general principles of equity
(whether considered in a suit at law or in equity).
(b) Selection Procedures. No selection procedures believed
--------------------
by the Bank to be materially adverse to the interests of the Investor
Certificateholders were utilized in selecting the Removed Accounts
designated hereby.
5. Conditions Precedent. The amendment of the Pooling and
--------------------
Servicing Agreement set forth in Section 6 hereof is subject to the
satisfaction, on or prior to the Removal Date, of the following condition
precedent:
The Bank shall have delivered to the Trustee an Officer's
Certificate certifying that (i) as of the Removal Date, all
requirements set forth in Section 2.7 of the Pooling and Servicing
Agreement for designating Removed Accounts and reconveying the
Receivables of such Removed Accounts, whether now existing or
hereafter created, have been satisfied, and (ii) each of the
representations and warranties made by the Bank in Section 4 hereof is
true and correct as of the Removal Date. The Trustee may conclusively
rely on such Officer's Certificate, shall have no duty to make
inquiries with regard to the matters set forth therein, and shall
incur no liability in so relying.
6. Amendment of the Pooling and Servicing
--------------------------------------
G-3
<PAGE>
Agreement. The Pooling and Servicing Agreement is hereby amended to
---------
provide that all references therein to the "Pooling and Servicing
Agreement," to "this Agreement" and "herein" shall be deemed from and after
the Removal Date to be a dual reference to the Pooling and Servicing
Agreement as supplemented by this Reassignment. Except as expressly
amended hereby, all of the representations, warranties, terms, covenants
and conditions to the Pooling and Servicing Agreement shall remain
unamended and shall continue to be, and shall remain, in full force and
effect in accordance with its terms and except as expressly provided herein
shall not constitute or be deemed to constitute a waiver of compliance with
or a consent to non-compliance with any term or provision of the Pooling
and Servicing Agreement.
7. Counterparts. This Reassignment may be executed in two or
------------
more counterparts (and by different parties on separate counterparts), each
of which shall be an original, but all of which together shall constitute
one and the same instrument.
8. GOVERNING LAW. THIS REASSIGNMENT SHALL BE CONSTRUED IN
-------------
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS, AND
WITHOUT, LIMITING THE GENERALITY OF THE FOREGOING, THE IMMUNITY AND
STANDARD OF CARE OF THE TRUSTEE IN THE ADMINISTRATION OF THE TRUST
HEREUNDER SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
G-4
<PAGE>
IN WITNESS WHEREOF, the undersigned have caused this Reassignment of
Receivables to be duly executed and delivered by their respective duly
authorized officers on the day and year first above written.
THE CHASE MANHATTAN BANK (USA)
By: ____________________________
Name:
Title:
THE BANK OF NEW YORK,
as Trustee
By: ____________________________
Name:
Title:
G-5
<PAGE>
Schedule I
to Reassignment
of Receivables
--------------
REMOVED ACCOUNTS
----------------
G-6
<PAGE>
EXHIBIT H
---------
FORM OF RECONVEYANCE OF RECEIVABLES
-----------------------------------
RECONVEYANCE OF RECEIVABLES, dated as of ____________ ___, ____, by
and between The Chase Manhattan Bank (USA), a banking corporation organized and
existing under the laws of the State of Delaware (the "Transferor"), and The
Bank of New York, a banking corporation organized and existing under the laws of
New York (the "Trustee") pursuant to the Pooling and Servicing Agreement
referred to below.
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Transferor, Chemical Bank and the Trustee are parties to
the Amended and Restated Pooling and Servicing Agreement dated as of June 1,
1996 (hereinafter as such agreement may have been, or may from time to time be,
amended, supplemented or otherwise modified, the "Pooling and Servicing
Agreement");
WHEREAS, pursuant to the Pooling and Servicing Agreement, the
Transferor wishes to cause the Trustee to reconvey all of the Receivables and
proceeds thereof, whether now existing or hereafter created, from the Trust to
the Transferor pursuant to the terms of Section 12.4 of the Pooling and
Servicing Agreement upon termination of the Trust pursuant to subsection 12.1(a)
of the Pooling and Servicing Agreement (as each such term is defined in the
Pooling and Servicing Agreement);
WHEREAS, the Trustee is willing to reconvey Receivables subject to the
terms and conditions hereof;
NOW, THEREFORE, the Transferor and the Trustee hereby agree as
follows:
1. Defined Terms. All terms defined in the Pooling and Servicing
-------------
Agreement and used herein shall have such defined meanings when used herein,
unless otherwise defined herein.
"Reconveyance Date" shall mean ______________, ____.
-----------------
<PAGE>
2. Return of Lists of Accounts. The Trustee shall deliver to the
---------------------------
Transferor, not later than three Business Days after the Reconveyance Date, each
and every computer file or microfiche list of Accounts delivered to the Trustee
pursuant to the terms of the Pooling and Servicing Agreement.
3. Conveyance of Receivables. (a) The Trustee does hereby reconvey
-------------------------
to the Transferor, without recourse, on and after the Reconveyance Date, all
right, title and interest of the Trust in and to each and every Receivable now
existing and hereafter created in the Accounts, all monies due or to become due
with respect thereto (including all Finance Charge Receivables), all proceeds
(as defined in Section 9-306 of the UCC as in effect in the State of New York)
of such Receivables and Insurance Proceeds relating to such Receivables and any
Interchange, except for amounts, if any, held by the Trustee pursuant to
subsection 12.3(b) of the Pooling and Servicing Agreement.
(b) In connection with such transfer, the Trustee agrees to execute
and deliver to the Transferor on or prior to the date of this Reconveyance, such
UCC termination statements as the Transferor may reasonably request, evidencing
the release by the Trust of its lien on the Receivables.
4. Counterparts. This Reconveyance may be executed in two or more
------------
counterparts (and by different parties on separate counterparts), each of which
shall be an original, but all of which together shall constitute one and the
same instrument.
5. GOVERNING LAW. THIS RECONVEYANCE SHALL BE CONSTRUED IN
-------------
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS, AND WITHOUT,
LIMITING THE GENERALITY OF THE FOREGOING, THE IMMUNITY AND STANDARD OF CARE OF
THE TRUSTEE IN THE ADMINISTRATION OF THE TRUST HEREUNDER SHALL BE GOVERNED BY
THE LAWS OF THE STATE OF NEW YORK.
H-2
<PAGE>
IN WITNESS WHEREOF, the undersigned have caused this Reconveyance of
Receivables to be duly executed and delivered by their respective duly
authorized officers on the day and year first above written.
THE CHASE MANHATTAN BANK (USA)
By: ____________________________
Name:
Title:
THE BANK OF NEW YORK,
as Trustee
By: ____________________________
Name:
Title:
H-3
<PAGE>
SCHEDULE I
----------
LIST OF ACCOUNTS
----------------
Delivered to Trustee only
[Deemed Incorporated]
<PAGE>
EXHIBIT 4.3
================================================================================
CHASE MANHATTAN BANK USA, NATIONAL ASSOCIATION,
Transferor on and after June 1, 1996,
THE CHASE MANHATTAN BANK,
Transferor prior to June 1, 1996 and Servicer
and
THE BANK OF NEW YORK,
Trustee
on behalf of the Certificateholders
of Chemical Master Credit Card Trust I
_________________________________
SECOND AMENDED AND RESTATED
POOLING AND SERVICING AGREEMENT
Dated as of September 1, 1996
================================================================================
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINITIONS....................... 1
Section 1.1 Definitions.................................... 1
Section 1.2 Other Definitional Provisions.................. 23
ARTICLE II
CONVEYANCE OF RECEIVABLES;
ISSUANCE OF CERTIFICATES................. 25
Section 2.1 Conveyance of Receivables...................... 25
Section 2.2 Acceptance by Trustee.......................... 27
Section 2.3 Representations and Warranties of
the Transferor................................. 27
Section 2.4 Representations and Warranties of
the Transferor Relating to the
Agreement and the Receivables.................. 30
Section 2.5 Covenants of the Transferor.................... 36
Section 2.6 Addition of Accounts........................... 39
Section 2.7 Removal of Accounts............................ 41
Section 2.8 Discount Option................................ 43
ARTICLE III
ADMINISTRATION AND SERVICING
OF RECEIVABLES...................... 44
Section 3.1 Acceptance of Appointment and Other
Matters Relating to the Servicer............... 44
Section 3.2 Servicing Compensation......................... 46
Section 3.3 Representations and Warranties
of the Servicer................................ 47
Section 3.4 Reports and Records for the Trustee............ 48
Section 3.5 Annual Servicer's Certificate.................. 49
Section 3.6 Annual Independent Accountants'
Servicing Report............................... 49
Section 3.7 Tax Treatment.................................. 50
Section 3.8 Notices to the Transferor...................... 51
ARTICLE IV
RIGHTS OF CERTIFICATEHOLDERS AND ALLOCATION
AND APPLICATION OF COLLECTIONS.............. 52
Section 4.1 Rights of Certificateholders................... 52
-i-
<PAGE>
Page
----
Section 4.2 Establishment of Accounts...................... 52
Section 4.3 Collections and Allocations.................... 55
Section 4.4 Allocations During Funding Period.............. 57
Section 4.5 Certain Fees................................... 57
ARTICLE V
[ARTICLE V IS RESERVED AND SHALL
BE SPECIFIED IN ANY SUPPLEMENT
WITH RESPECT TO ANY SERIES]............... 59
ARTICLE VI
THE CERTIFICATES..................... 60
Section 6.1 The Certificates............................... 60
Section 6.2 Authentication of Certificates................. 60
Section 6.3 Registration of Transfer and Exchange of Cer-
tificates...................................... 61
Section 6.4 Mutilated, Destroyed, Lost or Stolen
Certificates................................... 64
Section 6.5 Persons Deemed Owners.......................... 64
Section 6.6 Appointment of Paying Agent.................... 65
Section 6.7 Access to List of Certificateholders'
Names and Addresses............................ 66
Section 6.8 Authenticating Agent........................... 67
Section 6.9 Tender of Transferor Certificate............... 68
Section 6.10 Book-Entry Certificates........................ 71
Section 6.11 Notices to Clearing Agency..................... 72
Section 6.12 Definitive Certificates........................ 72
Section 6.13 Global Certificate............................. 73
Section 6.14 Meetings of Certificateholders................. 73
ARTICLE VII
OTHER MATTERS RELATING
TO THE TRANSFEROR.................... 74
Section 7.1 Liability of the Transferor.................... 74
Section 7.2 Merger or Consolidation of, or Assumption
of the Obligations of, the Transferor.......... 74
Section 7.3 Limitation of Liability........................ 75
Section 7.4 Liabilities.................................... 76
-ii-
<PAGE>
Page
----
ARTICLE VIII
OTHER MATTERS RELATING
TO THE SERVICER..................... 77
Section 8.1 Liability of the Servicer...................... 77
Section 8.2 Merger or Consolidation of, or
Assumption of the Obligations of,
the Servicer................................... 77
Section 8.3 Limitation of Liability of the Servicer and
Others......................................... 77
Section 8.4 Servicer Indemnification of the Trust
and the Trustee................................ 78
Section 8.5 The Servicer Not to Resign..................... 79
Section 8.6 Access to Certain Documentation and
Information Regarding the Receivables.......... 79
Section 8.7 Delegation of Duties........................... 80
Section 8.8 Examination of Records......................... 80
ARTICLE IX
PAY OUT EVENTS...................... 81
Section 9.1 Pay Out Events................................. 81
Section 9.2 Additional Rights Upon the Occurrence
of Certain Events.............................. 82
ARTICLE X
SERVICER DEFAULTS.................... 84
Section 10.1 Servicer Defaults.............................. 84
Section 10.2 Trustee to Act; Appointment of Successor....... 86
Section 10.3 Notification to Certificateholders............. 88
Section 10.4 Waiver of Past Defaults........................ 88
ARTICLE XI
THE TRUSTEE....................... 90
Section 11.1 Duties of Trustee.............................. 90
Section 11.2 Certain Matters Affecting the Trustee.......... 92
Section 11.3 Trustee Not Liable for Recitals in
Certificates................................... 93
Section 11.4 Trustee May Own Certificates................... 93
Section 11.5 The Servicer to Pay Trustee's Fees
and Expenses................................... 94
Section 11.6 Eligibility Requirements for Trustee........... 94
-iii-
<PAGE>
Page
----
Section 11.7 Resignation or Removal of Trustee.............. 95
Section 11.8 Successor Trustee.............................. 95
Section 11.9 Merger or Consolidation of Trustee............. 96
Section 11.10 Appointment of Co-Trustee or Separate Trust-
ee............................................. 96
Section 11.11 Tax Returns.................................... 97
Section 11.12 Trustee may Enforce Claims Without
Possession of Certificates..................... 98
Section 11.13 Suits for Enforcement.......................... 98
Section 11.14 Rights of Certificateholders to
Direct Trustee................................. 98
Section 11.15 Representations and Warranties of Trustee...... 99
Section 11.16 Maintenance of Office or Agency................ 99
ARTICLE XII
TERMINATION...................... 100
Section 12.1 Termination of Trust.......................... 100
Section 12.2 Optional Purchase..............................101
Section 12.3 Final Payment with Respect to any Series.......101
Section 12.4 Termination Rights of Holder of
Transferor Certificate.........................103
Section 12.5 Defeasance.....................................103
ARTICLE XIII
MISCELLANEOUS PROVISIONS.................105
Section 13.1 Amendment......................................105
Section 13.2 Protection of Right, Title and
Interest to Trust..............................106
Section 13.3 Limitation on Rights of Certificateholders.....107
Section 13.4 Governing Law..................................108
Section 13.5 Notices........................................109
Section 13.6 Severability of Provisions.....................109
Section 13.7 Assignment.....................................109
Section 13.8 Certificates Non-Assessable and Fully Paid.....110
Section 13.9 Further Assurances.............................110
Section 13.10 No Waiver; Cumulative Remedies.................110
Section 13.11 Counterparts...................................110
Section 13.12 Third-Party Beneficiaries......................110
Section 13.13 Actions by Certificateholders..................110
Section 13.14 Rule 144A Information..........................111
Section 13.15 Merger and Integration.........................111
Section 13.16 Headings.......................................111
-iv-
<PAGE>
EXHIBITS
Exhibit A Form of Transferor Certificate
Exhibit B Form of Assignment of Receivables in Additional
Accounts
Exhibit C Form of Monthly Servicer's Certificate
Exhibit D Form of Annual Servicer's Certificate
Exhibit E Form of Opinion of Counsel Regarding Additional
Accounts
Exhibit F Form of Annual Opinion of Counsel
Exhibit G Form of Reassignment of Receivables
Exhibit H Form of Reconveyance of Receivables
SCHEDULES
Schedule 1 List of Accounts [Deemed Incorporated]
-v-
<PAGE>
SECOND AMENDED AND RESTATED POOLING AND SERVICING AGREEMENT, dated as
of September 1, 1996, by and among CHASE MANHATTAN BANK USA, NATIONAL
ASSOCIATION, a banking corporation organized and existing under the laws of the
United States (formerly known as The Chase Manhattan Bank (USA)), as Transferor
on and after June 1, 1996, THE CHASE MANHATTAN BANK, a banking corporation
organized and existing under the laws of the State of New York (formerly known
as Chemical Bank), as Transferor prior to June 1, 1996 and as Servicer, and THE
BANK OF NEW YORK, a New York banking corporation, as Trustee.
WHEREAS, The Chase Manhattan Bank, as Transferor and Servicer, and the
Trustee are parties to a Pooling and Servicing Agreement, dated as of October
19, 1995 (the "Original Pooling and Servicing Agreement");
WHEREAS, all of the parties hereto are parties to an Amended and
Restated Pooling and Servicing Agreement, dated as of June 1, 1996 (the "Amended
Pooling and Servicing Agreement"), which amended and restated the Original
Pooling and Servicing Agreement in its entirety); and
WHEREAS, the parties desire to amend and restate the Amended Pooling
and Servicing Agreement to read in its entirety as set forth below;
NOW, THEREFORE, pursuant to Section 13.1(b) of the Amended Pooling and
Servicing Agreement, the parties hereto hereby agree that effective on and as of
the date hereof, the Amended Pooling and Servicing Agreement is hereby amended
to read in its entirety as follows:
In consideration of the mutual agreements herein contained, each party
agrees as follows for the benefit of the other parties and the
Certificateholders:
ARTICLE I
DEFINITIONS
Section 1.1 Definitions. Whenever used in this Agreement, the
-----------
following words and phrases shall have the following meanings:
"Account Information" shall have the meaning specified in subsection
-------------------
2.2(b).
<PAGE>
"Account" shall mean each VISA(R) and MasterCard(R)/*/ credit card account
-------
established pursuant to a Credit Card Agreement between the Transferor and any
Person identified by account number and by the Receivable balance as of the Cut-
Off Date and as of each Addition Date in each computer file or microfiche list
delivered to the Trustee by the Transferor pursuant to Section 2.1 or 2.6. The
definition of Account shall include each Transferred Account. The term
"Account" shall be deemed to refer to an Additional Account only from and after
the Addition Date with respect thereto, and the term "Account" shall be deemed
to refer to any Removed Account only prior to the Removal Date with respect
thereto.
"Accumulation Period" shall mean, with respect to any Series, or any Class
-------------------
within a Series, a period following the Revolving Period during which
Collections of Principal Receivables are accumulated in an account for the
benefit of the Investor Certificateholders of a Series, or a Class within such
Series, which shall be the controlled accumulation period, the rapid
accumulation period or other accumulation period, in each case as defined with
respect to such Series in the related Supplement.
"Addition Date" shall mean each date as of which Additional Accounts will
-------------
be included as Accounts pursuant to Section 2.6.
"Additional Accounts" shall have the meaning specified in subsection
-------------------
2.6(a).
"Affiliate" of any Person shall mean any other Person controlling,
---------
controlled by or under common control with such Person.
"Aggregate Investor Default Amount" shall have, with respect to any Series
---------------------------------
of Certificates, the meaning stated in the related Supplement.
"Aggregate Investor Interest" shall mean, as of any date of determination,
---------------------------
the sum of the Investor Interests of all Series of Certificates issued and
outstanding on such date of determination.
"Aggregate Investor Percentage" with respect to Principal Receivables,
-----------------------------
Finance Charge Receivables and Receivables in Defaulted Accounts, as the case
may be, shall mean, as of any date of determination, the sum of such Investor
Percentages of all Series of Certificates issued and outstanding on such date of
- ------------------------
/*/ VISA(R) and MasterCard(R) are registered trademarks of VISA USA, Inc. and
of MasterCard International Incorporated, respectively.
2
<PAGE>
determination; provided, however, that the Aggregate Investor Percentage shall
-------- -------
not exceed 100%.
"Agreement" shall mean this Pooling and Servicing Agreement and all
---------
amendments hereof and supplements hereto, including any Supplement.
"Amortization Period" shall mean, with respect to any Series, or any Class
-------------------
within a Series, a period following the Revolving Period during which principal
is distributed to Investor Certificateholders, which shall be the controlled
amortization period, the principal amortization period, the rapid amortization
period, or other amortization period, in each case as defined with respect to
such Series in the related Supplement.
"Annual Membership Fee" shall have the meaning specified in the Credit Card
---------------------
Agreement applicable to each Account for annual membership fees or similar
terms.
"Applicants" shall have the meaning specified in Section 6.7.
----------
"Appointment Day" shall have the meaning specified in subsection 9.2(a).
---------------
"Assignment" shall have the meaning specified in subsection 2.6(c)(ii).
----------
"Authorized Newspaper" shall mean a newspaper of general circulation in the
--------------------
Borough of Manhattan, The City of New York printed in the English language and
customarily published on each Business Day, whether or not published on
Saturdays, Sundays and holidays.
"Average Principal Receivables" shall mean, for any period, an amount equal
-----------------------------
to (a) the sum of the aggregate amount of Principal Receivables at the end of
each day during such period divided by (b) the number of days in such period.
------- --
"Bank Portfolio" shall mean the MasterCard and VISA accounts owned by the
--------------
Transferor.
"Bankruptcy Code" shall mean the United States federal Bankruptcy Code,
---------------
Title 11 of the United States Code, as amended.
"Base Rate" shall have the meaning, with respect to any Series, specified
---------
in the related Supplement.
"Bearer Certificates" shall have the meaning specified in Section 6.1.
-------------------
3
<PAGE>
"Bearer Rules" shall mean the provisions of the Internal Revenue Code, in
------------
effect from time to time, governing the treatment of bearer obligations,
including sections 163(f), 871, 881, 1441, 1442 and 4701, and any regulations
thereunder including, to the extent applicable to any Series, Proposed or
Temporary Regulations.
"BIF" shall mean the Bank Insurance Fund administered by the FDIC.
---
"Book-Entry Certificates" shall mean certificates evidencing a beneficial
-----------------------
interest in the Investor Certificates, ownership and transfers of which shall be
made through book entries by a Clearing Agency as described in Section 6.10;
provided, however that after the occurrence of a condition whereupon book-entry
- -------- -------
registration and transfer are no longer authorized and Definitive Certificates
are to be issued to the Certificate Owners, such certificates shall no longer be
"Book-Entry Certificates."
"Business Day" shall mean any day other than a Saturday, a Sunday or a day
------------
on which banking institutions in New York, New York (or, with respect to any
Series, any additional city specified in the related Supplement) are authorized
or obligated by law or executive order to be closed.
"Cash Advance Fees" shall have the meaning specified in the Credit Card
-----------------
Agreement applicable to each Account for cash advance fees or similar terms.
"Cedel" shall mean Cedel Bank, societe anonyme.
-----
"Certificate" shall mean any one of the Investor Certificates of any Series
-----------
or the Transferor Certificate.
"Certificateholder" or "Holder" shall mean the Person in whose name a
----------------- ------
Certificate is registered in the Certificate Register and, if applicable, the
holder of any Bearer Certificate or Coupon, as the case may be.
"Certificate Interest" shall mean interest payable in respect of the
--------------------
Investor Certificates of any Series pursuant to Article IV of the Supplement for
such Series.
"Certificate Owner" shall mean, with respect to a Book-Entry Certificate,
-----------------
the Person who is the beneficial owner of such Book-Entry Certificate, as may be
reflected on the books of the Clearing Agency, or on the books of a Person
maintaining an account with such Clearing Agency (directly or as an indirect
participant, in accordance with the rules of such Clearing Agency).
4
<PAGE>
"Certificate Principal" shall mean principal payable in respect of the
---------------------
Investor Certificates of any Series pursuant to Article IV of this Agreement.
"Certificate Rate" shall mean, with respect to any Series of Certificates
----------------
(or, for any Series with more than one Class, for each Class of such Series),
the percentage (or formula on the basis of which such rate shall be determined)
stated in the related Supplement.
"Certificate Register" shall mean the register maintained pursuant to
--------------------
Section 6.3, providing for the registration of the Certificates and transfers
and exchanges thereof.
"Chase Account" shall mean any Account included in the Trust Portfolio
-------------
pursuant to that certain Assignment No. 2 of Receivables in Additional Accounts,
dated as of September 1, 1996, among Chase Bank, Chase USA and the Trustee, and
any other Accounts originated by Chase USA and assigned to the Trust Portfolio.
"Chase Bank" shall mean The Chase Manhattan Bank, a banking corporation
----------
organized and existing under the laws of the State of New York.
"Chase Corporate Trust Office" shall mean the principal office of Chase
----------------------------
Bank 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 270 Park Avenue, New York, New York 10017.
"Chase Portfolio Account" shall mean a MasterCard or VISA account owned by
-----------------------
Chase USA which is not processed by FDR.
"Chase USA" shall mean Chase Manhattan Bank USA, National Association, a
---------
banking corporation organized and existing under the laws of the United States
and having its headquarters in the City of Wilmington, State of Delaware.
"Chemical Account" shall mean any Account other than a Chase Account.
----------------
"Chemical Portfolio Account" shall mean any Mastercard or VISA account
--------------------------
owned by the Transferor other than a Chase Portfolio Account.
"Class" shall mean, with respect to any Series, any one of the classes of
-----
Certificates of that Series as specified in the related Supplement.
5
<PAGE>
"Clearing Agency" shall mean an organization registered as a "clearing
---------------
agency" pursuant to Section 17A of the Securities Exchange Act of 1934, as
amended.
"Clearing Agency Participant" shall mean a broker, dealer, bank, other
---------------------------
financial institution or other Person for whom from time to time a Clearing
Agency or Foreign Clearing Agency effects book-entry transfers and pledges of
securities deposited with the Clearing Agency or Foreign Clearing Agency.
"Closing Date" shall mean, with respect to any Series, the date of issuance
------------
of such Series of Certificates, as specified in the related Supplement.
"Collateral Interest" shall have the meaning, with respect to any Series,
-------------------
specified in the related Supplement.
"Collection Account" shall have the meaning specified in subsection 4.2(a).
------------------
"Collections" shall mean all payments (including Insurance Proceeds)
-----------
received by the Servicer in respect of the Receivables, in the form of cash,
checks, wire transfers, ATM transfers or other form of payment in accordance
with the Credit Card Agreement in effect from time to time. A Collection
processed on an Account in excess of the aggregate amount of Receivables in such
Account as of the Date of Processing of such Collection shall be deemed to be a
payment in respect of Principal Receivables to the extent of such excess.
Collections with respect to any Monthly Period shall include the amount of
Interchange (if any) and the amount of Recoveries (if any) allocable to the
Trust with respect to such Monthly Period, to be applied as if such amounts were
Collections of Finance Charge Receivables for all purposes. Collections with
respect to any Monthly Period shall also include the amount deposited by the
Transferor into the Finance Charge Account (or Series Account if provided in any
supplement) pursuant to Section 2.8.
"Companion Series" shall mean (i) each Series which has been paired with
----------------
another series (which Series may be prefunded in whole or in part), such that
the reduction of the Investor Interest of such Series results in the increase of
the Investor Interest of such other Series, as described in the related
Supplements, and (ii) such other Series, as described in the related
Supplements.
"Controlled Distribution Amount," with respect to any Series, shall have
------------------------------
the meaning specified in the related Supplement.
"Corporate Trust Office" shall mean the principal office of the Trustee at
----------------------
which at any particular time its corporate trust
6
<PAGE>
business shall be administered, which office at the date of the execution of
this Agreement is located at 101 Barclay Street, 21 West, New York, New York
10286.
"Coupon" shall have the meaning specified in Section 6.1.
------
"Credit Adjustment" shall have the meaning specified in subsection 4.3(c).
-----------------
"Credit Card Agreement" shall mean the agreement and Federal Truth in
---------------------
Lending Statement for MasterCard and VISA credit card accounts between any
Obligor and the Transferor, as such agreement may be amended, modified or
otherwise changed from time to time.
"Credit Card Guidelines" shall mean the Transferor's policies and
----------------------
procedures relating to the operation of its credit card business, including,
without limitation, the policies and procedures for determining the
creditworthiness of credit card customers, the extension of credit to credit
card customers, and relating to the maintenance of credit card accounts and
collection of credit card receivables, as such policies and procedures may be
amended from time to time.
"Credit Enhancement" shall mean, with respect to any Series, the
------------------
subordination, the cash collateral guaranty or account, collateral interest,
letter of credit, surety bond, insurance policy, spread account, reserve
account, cross-support feature or any other contract or agreement for the
benefit of the Certificateholders of such Series (or Certificateholders of a
Class within such Series) as designated in the applicable Supplement.
"Credit Enhancement Provider" shall mean, with respect to any Series, the
---------------------------
Person, if any, designated as such in the related Supplement.
"Cut-Off Date" shall mean September 26, 1995.
------------
"Date of Processing" shall mean, with respect to any transaction, the date
------------------
on which such transaction is first recorded on the Servicer's computer master
file of VISA and MasterCard accounts (without regard to the effective date of
such recordation).
"Default Amount" shall mean, with respect to any Defaulted Account, the
--------------
amount of Principal Receivables (other than Ineligible Receivables) in such
Defaulted Account on the day such Account became a Defaulted Account.
"Defaulted Account" shall mean each Account with respect to which, in
-----------------
accordance with the Credit Card Guidelines or the Servicer's customary and usual
servicing procedures for servicing
7
<PAGE>
credit card receivables comparable to the Receivables, the Servicer has charged
off the Receivables in such Account as uncollectible. An Account shall become a
Defaulted Account on the day on which such Receivables are recorded as charged
off as uncollectible on the Servicer's computer master file of VISA and
MasterCard accounts. Notwithstanding any other provision hereof, any
Receivables in a Defaulted Account that are Ineligible Receivables shall be
treated as Ineligible Receivables rather than Receivables in Defaulted Accounts.
"Definitive Certificate" shall have the meaning specified in Section 6.10.
----------------------
"Depository" shall have the meaning specified in Section 6.10.
----------
"Depository Agreement" shall mean, with respect to a Series having Book-
--------------------
Entry Certificates, the agreement among the Transferor, the Trustee and the
Clearing Agency, or as otherwise provided in the related Supplement.
"Determination Date" shall mean, unless otherwise specified in the related
------------------
Series Supplement, the tenth calendar day of each month, or if such day is not a
Business Day, the next preceding Business Day.
"Discount Percentage" shall have the meaning specified in Section 2.8.
-------------------
"Discount Option Receivables" shall mean, on any date on and after the date
---------------------------
on which the Transferor's exercise of its discount option pursuant to Section
2.8 takes effect, the sum of (a) the aggregate Discount Option Receivables at
the end of the prior day (which amount, prior to the date on which the
Transferor's exercise of its discount option takes effect and with respect to
Receivables generated prior to such date, shall be zero) plus (b) any New
----
Discount Option Receivables created on such day minus (c) any Discount Option
-----
Receivables Collections received on such Date of Processing.
"Discount Option Receivables Collections" shall mean on any Date of
---------------------------------------
Processing on and after the date on which the Transferor's exercise of its
discount option pursuant to Section 2.8 takes effect, the product of (a) a
fraction the numerator of which is the amount of the Discount Option Receivables
and the denominator of which is the sum of the Principal Receivables plus the
amount of Discount Option Receivables in each case (for both numerator and
denominator) at the end of the prior Monthly Period and (b) Collections of
Principal Receivables, prior to any reduction for Finance Charge Receivables
which are Discount Option Receivables, received on such Date of Processing.
8
<PAGE>
"Distribution Account" shall have the meaning specified in subsection
--------------------
4.2(c).
"Distribution Date" shall mean, with respect to each Series, the dates
-----------------
specified in the related Supplement.
"Dollars", "$" or "U.S. $" shall mean United States dollars.
------- - ------
"Eligible Account" shall mean, as of the Cut-Off Date (or, with respect to
----------------
Additional Accounts as of the relevant Addition Date), each Account owned by the
Transferor:
(a) which is in existence and maintained with the Transferor;
(b) which is payable in Dollars;
(c) the Obligor on which has provided, as its most recent billing
address, an address which is located in the United States or its
territories or possessions;
(d) which the Transferor has not classified on its electronic records
as counterfeit, deleted, fraudulent, stolen or lost;
(e) which the Transferor has not charged off in its customary and
usual manner for charging off such Accounts as of the Cut-Off Date (or,
with respect to Additional Accounts, as of the relevant Addition Date); and
(f) the Obligor of which has not been identified by the Transferor on
its electronic records as being involved in a voluntary or involuntary
bankruptcy proceeding.
"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), 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.
"Eligible Institution" shall mean (a), the Servicer, (b) a depository
--------------------
institution (which may be the Trustee or an affiliate) organized under the laws
of the United States or any one of the states thereof which at all times (i) has
either (x) a long-term unsecured debt rating of "A2" or better by Moody's or (y)
a certificate of deposit rating of "P-1" by Moody's, (ii) has either (x) a long-
term unsecured debt rating of "AAA" by Standard
9
<PAGE>
& Poor's or (y) a certificate of deposit rating of "A-l+" by Standard & Poor's
and (iii) is a member of the FDIC or (c) any other institution that is
acceptable to the Rating Agencies.
"Eligible Receivable" shall mean each Receivable:
-------------------
(a) which has arisen under an Eligible Account (in the case of
Accounts conveyed to the Trust on the Initial Closing Date and in the case
of Additional Accounts conveyed to the Trust on the relevant Addition
Date);
(b) which was created in compliance, in all material respects, with
all Requirements of Law applicable to the Transferor and pursuant to a
Credit Card Agreement which complies, in all material respects, with all
Requirements of Law applicable to the Transferor;
(c) with respect to which all consents, licenses, approvals or
authorizations of, or registrations or declarations with, any Governmental
Authority required to be obtained, effected or given by the Transferor in
connection with the creation of such Receivable or the execution, delivery
and performance by the Transferor of the Credit Card Agreement pursuant to
which such Receivable was created, have been duly obtained, effected or
given and are in full force and effect as of such date of creation;
(d) as to which, as of the Closing Date, or in the case of Receivables
in Additional Accounts as of the relevant Addition Date, the Transferor or
the Trust had good title thereto, free and clear of all Liens arising under
or through the Transferor or any of its Affiliates (other than Liens
permitted pursuant to subsection 2.5(b));
(e) which is the legal, valid and binding payment obligation of the
Obligor thereon, enforceable against such Obligor in accordance with its
terms, except as affected by bankruptcy, insolvency, reorganization,
moratorium and other similar laws, now or hereafter in effect, relating to
or affecting creditors' rights generally, general equitable principles
(whether considered in a suit in equity or at law) and an implied covenant
of good faith and fair dealing; and
(f) which constitutes an "account" or "general intangible" under and
as defined in Article 9 of the UCC.
"Enhancement Invested Amount" shall have the meaning, with respect to any
---------------------------
Series, specified in the related Supplement.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
-----
amended from time to time.
10
<PAGE>
"Euroclear Operator" shall mean Morgan Guaranty Trust Company of New York,
------------------
Brussels, Belgium office, as operator of the Euroclear System.
"Excess Funding Account" shall have the meaning specified in subsection
----------------------
4.2(d).
"Excess Funding Amount" shall mean, as of any date of determination, the
---------------------
principal amount on deposit in the Excess Funding Account.
"Exchange" shall mean either of the procedures described under Section 6.9.
--------
"Exchange Date" shall have the meaning, with respect to any Series issued
-------------
pursuant to an Exchange, specified in Section 6.9.
"Exchange Notice" shall have the meaning, with respect to any Series issued
---------------
pursuant to an Exchange, specified in Section 6.9.
"Extended Trust Termination Date" shall have the meaning specified in
-------------------------------
subsection 12.1(a).
"FDIC" shall mean the Federal Deposit Insurance Corporation.
----
"FDR" shall have the meaning specified in Section 8.7.
---
"Fee Determination Date" shall have the meaning specified in Section
----------------------
4.5(a).
"Finance Charge Account" shall have the meaning specified in subsection
----------------------
4.2(b).
"Finance Charge Receivables" shall mean Receivables created in respect of
--------------------------
the Periodic Finance Charges, Cash Advance Fees and Late Fees and similar fees
and charges, Annual Membership Fees and Special Fees to the extent such Special
Fees are categorized as Finance Charge Receivables. Finance Charge Receivables
with respect to any Monthly Period shall include the amount of Interchange (if
any), Recoveries (if any), Discount Option Receivables (if any), Insurance
Proceeds and investment earnings from any of the Trust Accounts, and other
amounts allocable to any Series of Certificates pursuant to any Supplement with
respect to such Monthly Period that are to be treated as Finance Charge
Receivables but shall exclude charges for credit insurance. For purposes of
this Agreement, the amounts of Late Fees, similar fees and charges, Special Fees
and Interchange to be included in Finance Charge Collections shall be determined
in accordance with Sections 4.5 and 4.6 hereof.
11
<PAGE>
"Foreign Clearing Agency" shall mean Cedel and the Euroclear Operator.
-----------------------
"Funding Period" shall have the meaning specified in Section 4.4.
--------------
"Global Certificate" shall have the meaning specified in Section 6.13.
------------------
"Governmental Authority" shall mean the United States of America, any state
----------------------
or other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"Group" shall mean, with respect to any Series, the group of Series in
-----
which the related Supplement specifies that such Series shall be included.
"Ineligible Receivable" shall have the meaning specified in subsection
---------------------
2.4(d)(iii).
"Initial Closing Date" shall mean October 19, 1995.
--------------------
"Initial Investor Interest" shall mean, with respect to any Series of
-------------------------
Certificates, the amount stated in the related Supplement.
"Insolvency Event" shall have the meaning specified in subsection 9.2(a).
----------------
"Insurance Proceeds" shall mean any amounts recovered by the Servicer
------------------
pursuant to any credit insurance policies covering any Obligor with respect to
Receivables under such Obligor's Account.
"Interchange" shall mean, (1) with respect to any Monthly Period prior to
-----------
the September 1996 Monthly Period, the product of (x) the amounts recorded by
the Transferor as interchange with respect to the Bank Portfolio for such
Monthly Period and (y) the Trust Percentage; and (2) with respect to each
Monthly Period commencing with the September 1996 Monthly Period, the product of
(x) the amounts recorded by the Transferor as interchange with respect to the
Bank Portfolio for such Monthly Period and (y) a fraction, the numerator of
which is the total amount of purchases of merchandise and services relating to
the Accounts made during such Monthly Period and the denominator of which is the
total amount of purchases of merchandise and services relating to the Bank
Portfolio with respect to such Monthly Period.
"Internal Revenue Code" shall mean the Internal Revenue Code of 1986, as
---------------------
amended from time to time.
12
<PAGE>
"Investment Company Act" shall mean the Investment Company Act of 1940, as
----------------------
amended from time to time.
"Investor Account" shall mean each of the Finance Charge Account, the
----------------
Principal Account, the Excess Funding Account and the Distribution Account.
"Investor Certificate" shall mean any one of the certificates (including,
--------------------
without limitation, the Bearer Certificates, the Registered Certificates or the
Global Certificates) issued by the Trust, executed by the Transferor and
authenticated by the Trustee substantially in the form (or forms in the case of
a Series with multiple Classes) of the investor certificate attached to the
related Supplement.
"Investor Certificateholder" shall mean each holder of record of an
--------------------------
Investor Certificate.
"Investor Charge-Off" shall have, with respect to each Series, the meaning
-------------------
specified in the applicable Supplement.
"Investor Default Amount" shall have, with respect to any Series of
-----------------------
Certificates, the meaning stated in the related Supplement.
"Investor Exchange" shall have the meaning specified in subsection 6.9(b).
-----------------
"Investor Interest" shall have, with respect to any Series of Certificates,
-----------------
the meaning stated in the related Supplement.
"Investor Percentage" shall have, with respect to Principal Receivables,
-------------------
Finance Charge Receivables and Receivables in Defaulted Accounts, and any Series
of Certificates, the meaning stated in the related Supplement.
"Investor Servicing Fee" shall have, with respect to each Series, the
----------------------
meaning specified in Section 3.2.
"Late Fees" shall have the meaning specified in the Credit Card Agreement
---------
applicable to each Account for late fees or similar terms.
"Lien" shall mean any mortgage, deed of trust, pledge, hypothecation,
----
assignment, deposit arrangement, encumbrance, lien (statutory or other),
preference, priority or other security agreement or preferential arrangement of
any kind or nature whatsoever, including, without limitation, any conditional
sale or other title retention agreement, any financing lease having
substantially the same economic effect as any of the foregoing or comparable law
of any jurisdiction to evidence any of the forego-
13
<PAGE>
ing; provided, however, that any assignment pursuant to Section 7.2 shall not be
-------- -------
deemed to constitute a Lien.
"Minimum Aggregate Principal Receivables" shall mean, as of any date of
---------------------------------------
determination, the sum of the numerators used on such date to calculate the
Investor Percentage with respect to Principal Receivables for all Series
outstanding on such date, less the amount on deposit in the Excess Funding
Account as of such date of determination.
"Minimum Transferor Interest" shall mean, with respect to any Monthly
---------------------------
Period, an amount equal to the product of the Minimum Transferor Interest
Percentage and the sum of (i) the Average Principal Receivables for such Monthly
Period, (ii) the Excess Funding Amount and (iii) any amounts on deposit in any
Principal Funding Account and any other Series Account (if so specified in the
applicable Supplement).
"Minimum Transferor Interest Percentage" shall mean the highest percentage
--------------------------------------
specified as the "Minimum Transferor Interest Percentage" in any Supplement;
provided, however, that the Transferor may reduce the Minimum Transferor
- -------- -------
Interest Percentage upon (w) 30 days' prior notice to the Trustee, each Rating
Agency and any Credit Enhancement Provider entitled to receive such notice
pursuant to the relevant Supplement, (x) written confirmation from each Rating
Agency that such action will satisfy the Rating Agency Condition, (y) delivery
to the Trustee and each such Credit Enhancement Provider of an Officer's
Certificate stating that the Transferor reasonably believes that such reduction
will not, based on the facts known to such officer at the time of such
certification, then or thereafter cause a Pay Out Event to occur with respect to
any Series and (z) delivery to the Trustee of a Tax Opinion; provided further
-------- -------
that the Minimum Transferor Interest Percentage shall not at any time be less
than 2%.
"Monthly Period" shall mean, unless otherwise defined in any Supplement,
--------------
the period from and including the first day of a calendar month to and including
the last day of a calendar month.
"Moody's" shall mean Moody's Investors Service, Inc.
-------
"New Discount Option Receivables" shall mean, as of any date of
-------------------------------
determination, the product of the Discount Percentage and the amount of
Principal Receivables (before subtracting out Finance Charge Receivables which
are Discount Option Receivables) arising on such date of determination.
"Notice Date" shall have the meaning specified in subsection 2.6(c)(i).
-----------
14
<PAGE>
"Obligor" shall mean, with respect to any Account, the Person or Persons
-------
obligated to make payments with respect to such Account, including any guarantor
thereof.
"Officer's Certificate" shall mean a certificate signed by any Vice
---------------------
President or more senior officer of the Transferor or Servicer and delivered to
the Trustee.
"Opinion of Counsel" shall mean a written opinion of counsel, who may be
------------------
counsel for or an employee of the Person providing the opinion, and who shall be
reasonably acceptable to the Trustee.
"Participation" shall have the meaning specified in subsection 2.6(a)(ii).
-------------
"Paying Agent" shall mean any paying agent appointed pursuant to Section
------------
6.6 and shall initially be Chase Bank.
"Pay Out Commencement Date" shall mean, (a) with respect to each Series,
-------------------------
the date on which a Trust Pay Out Event is deemed to occur pursuant to Section
9.1 or (b) with respect to any Series, a Series Pay Out Event is deemed to occur
pursuant to the Supplement for such Series.
"Pay Out Event" shall mean, with respect to each Series, a Trust Pay Out
-------------
Event or a Series Pay Out Event.
"Periodic Finance Charges" shall have the meaning specified in the Credit
------------------------
Card Agreement applicable to each Account for finance charges (due to periodic
rate) or any similar term.
"Permitted Investments" shall mean, unless otherwise provided in the
---------------------
Supplement with respect to any Series
(a) book-entry securities or negotiable instruments or securities
represented by instruments in bearer or registered form which evidence (i)
obligations of or fully guaranteed by the United States of America; (ii)
demand deposits, time deposits or certificates of deposit of any depositary
institution or trust company incorporated under the laws of the United
States of America or any state thereof (or domestic branches of foreign
banks) and subject to supervision and examination by federal or state
banking or depositary institution authorities; provided, however, that at
-------- -------
the time of the Trust's investment or contractual commitment to invest
therein, the certificates of deposit or short-term deposits of such
depositary institution or trust company shall have a credit rating from
Moody's and Standard & Poor's of "P-1" and "A-1+", respectively; (iii)
commercial paper having, at the time of the Trust's investment or
contractual commitment to invest therein, a rating from
15
<PAGE>
Moody's and Standard & Poor's of "P-1" and "A-l+", respectively and (iv)
bankers' acceptances issued by any depository institution or trust company
described in clause (a)(ii) above;
(b) demand deposits in the name of the Trust or the Trustee in any
depositary institution or trust company referred to in clause (a)(ii)
above;
(c) repurchase agreements transacted with either
(i) an entity subject to the United States federal bankruptcy
code, provided that (A) the repurchase agreement matures prior to the
next Distribution Date or is due on demand, (B) the Trustee or a third
party acting solely as agent for the Trustee has possession of the
collateral, (C) the Trustee on behalf of the Trust has a security
interest in the collateral, (D) the market value of the collateral is
maintained at the requisite collateral percentage of the obligation in
accordance with standards of the Rating Agencies, (E) the failure to
maintain the requisite collateral level will obligate the Trustee to
liquidate the collateral immediately, (F) the securities subject to
the repurchase agreement are either obligations of, or fully
guaranteed as to principal and interest by, the United States of
America or any instrumentality or agency thereof, certificates of
deposit or bankers acceptances and (G) the securities subject to the
repurchase agreement are free and clear of any third party lien or
claim; or
(ii) a financial institution insured by the FDIC, or any broker-
dealer with "retail customers" that is under the jurisdiction of the
Securities Investors Protection Corp. ("SIPC"), provided that (A) the
market value of the collateral is maintained at the requisite
collateral percentage of the obligation in accordance with the
standards of the Rating Agencies, (B) the Trustee or a third party
(with a short-term debt rating of P-1 or higher by Moody's) acting
solely as agent for the Trustee has possession of the collateral, (C)
the Trustee on behalf of the Trust has a security interest in the
collateral, (D) the collateral is free and clear of third party liens
and, in the case of an SIPC broker, was not acquired pursuant to a
repurchase or reverse repurchase agreement and (E) the failure to
maintain the requisite collateral percentage will obligate the Trustee
to liquidate the collateral; provided, however, that at the time of
-------- -------
the Trust's investment or contractual commitment to invest in any
repurchase agreement, the short-term deposits or commercial paper
16
<PAGE>
rating of such entity or institution in subsections (i) and (ii) shall
have a credit rating of "P-1" from Moody's and "A-1+" from Standard &
Poor's; and
(d) any other investment that by its terms converts to cash within a
finite time period if the Rating Agency Condition is satisfied with respect
thereto.
"Person" shall mean any legal person, including any individual,
------
corporation, limited liability company, partnership, joint venture, association,
joint-stock company, trust, unincorporated organization, governmental entity or
other entity of similar nature.
"Pool Factor" shall mean, except with respect to any Series issued in more
-----------
than one Class, a number carried out to seven decimals representing the ratio of
the applicable Investor Interest as of such Record Date (determined after taking
into account any reduction in the Investor Interest which will occur on the
following Distribution Date) to the applicable Initial Investor Interest, and
with respect to a Series having more than one Class, as specified in the
Supplement relating to such Series.
"Portfolio Yield" shall have the meaning, with respect to any Series,
---------------
specified in the related Supplement.
"Pre-Funding Account" shall have the meaning specified in Section 4.4.
-------------------
"Principal Account" shall have the meaning specified in subsection 4.2(b).
-----------------
"Principal Receivable" shall mean each Receivable other than (i) Finance
--------------------
Charge Receivables, and (ii) Receivables in Defaulted Accounts. A Receivable
shall be deemed to have been created at the end of the day on the Date of
Processing of such Receivable. In calculating the aggregate amount of Principal
Receivables on any day, the amount of Principal Receivables shall be reduced by
the aggregate amount of credit balances in the Accounts on such day. Any
Receivables which the Transferor is unable to transfer as provided in subsection
2.5(e) shall not be included in calculating the aggregate amount of Principal
Receivables.
"Principal Sharing Series" shall mean a Series, that, pursuant to the
------------------------
related Supplement, is entitled to Shared Principal Collections.
"Principal Shortfalls" shall mean, with respect to a Transfer Date, the
--------------------
aggregate amount for all outstanding Series that the related Supplements specify
are "Principal Shortfalls" for such Transfer Date.
17
<PAGE>
"Principal Terms" shall have the meaning, with respect to any Series issued
---------------
pursuant to an Exchange, specified in subsection 6.9(c).
"Rating Agency" shall mean, with respect to each Series, the rating agency
-------------
or agencies, if any, specified in the related Supplement.
"Rating Agency Condition" shall mean, at any time with respect to a Series,
-----------------------
the written confirmation of the Rating Agency that a specified event or
modification of the terms of such Series will not result in the withdrawal or
downgrade of the rating of the Certificates of any Series then in effect.
"Reassignment" shall have the meaning specified in subsection 2.7(b)(ii).
------------
"Reassignment Date" shall have the meaning specified in subsection 2.4(e).
-----------------
"Receivable" shall mean any amount owing by any Obligor including, without
----------
limitation, amounts owing for the payment of goods and services, cash advances,
access checks, Annual Membership Fees, Cash Advance Fees, Periodic Finance
Charges, Late Fees and Special Fees, if any but excluding credit insurance
premiums.
"Record Date" shall mean, with respect to any Distribution Date, the last
-----------
Business Day of the preceding Monthly Period.
"Recoveries" shall mean, (i) with respect to any Monthly Period or any
----------
shorter period commencing on or after the Recovery Determination Date, the
product of (a) all amounts recorded as recoveries on the Bank Portfolio by the
Servicer during such Monthly Period or such shorter period, as the case may be,
and (b) the Trust Percentage; and (ii) with respect to any Monthly Period or any
shorter period ending prior to the Recovery Determination Date, Recoveries shall
include, (a) with respect to the Chase Accounts, all amounts recorded as
recoveries with respect to the Chase Accounts by the Servicer during such period
and (b) with respect to the Chemical Accounts, the product of (1) all amounts
recorded as recoveries on the Bank Portfolio (excluding the amounts recorded as
recoveries on the Chase Portfolio Accounts) by the Servicer during such Monthly
Period or such shorter period, as the case may be, and (2) a fraction, the
numerator of which shall be the aggregate principal amount of Principal
Receivables arising from the Chemical Accounts (prior to giving effect to any
reduction thereof for Finance Charge Receivables arising from the Chemical
Accounts which are Discount Option Receivables) as of the close of business on
the last day of the prior Monthly Period and the denominator of which is the
aggregate principal balance of the Chemical Portfolio Accounts as of the close
of business on the last day of the prior Monthly Period.
18
<PAGE>
"Recovery Determination Date" shall mean the date specified by the Servicer
---------------------------
in an Officer's Certificate delivered to the Trustee as the date upon which the
Servicer will begin to calculate Recoveries in accordance with clause (1) of the
definition of the term "Recoveries."
"Registered Certificates" shall have the meaning specified in Section 6.1.
-----------------------
"Removal Date" shall mean the date on which Receivables in certain
------------
designated Removed Accounts will be reassigned by the Trustee to the Transferor.
"Removal Notice Date" shall mean the day no later than the fifth Business
-------------------
Day prior to a Removal Date.
"Removed Accounts" shall have the meaning specified in subsection 2.7(a).
----------------
"Requirements of Law" for any Person shall mean the certificate of
-------------------
incorporation or articles of association and by-laws or other organizational or
governing documents of such Person, and any law, treaty, rule or regulation, or
determination of an arbitrator or Governmental Authority, in each case
applicable to or binding upon such Person or to which such Person is subject,
whether federal, state or local (including, without limitation, usury laws, the
federal Truth in Lending Act and Regulation Z and Regulation B of the Board of
Governors of the Federal Reserve System).
"Responsible Officer" shall mean any officer within the Corporate Trust
-------------------
Office (or any successor group of the Trustee), including any Vice President,
any Assistant Secretary or any other officer of the Trustee customarily
performing functions similar to those performed by any person who at the time
shall be an above-designated officer and also, with any particular officer to
whom any corporate trust matter is referred because of such Officer's knowledge
of and familiarity with the particular subject.
"Revolving Period" shall have, with respect to each Series, the meaning
----------------
specified in the related Supplement.
"SAIF" shall mean the Savings Association Insurance Fund administered by
----
the FDIC.
"Securities Act" shall mean the Securities Act of 1933, as amended.
--------------
"Series" shall mean any Series of Investor Certificates, which may include
------
within any such Series a Class or Classes of
19
<PAGE>
Investor Certificates subordinate to another such Class or Classes of Investor
Certificates.
"Series Account" shall mean any account or accounts established pursuant to
--------------
a Supplement for the benefit of such Series.
"Series Pay Out Event" shall have, with respect to any Series, the meaning
--------------------
specified pursuant to the Supplement for the related Series.
"Series Servicing Fee Percentage" shall mean, with respect to any Series,
-------------------------------
the amount specified in the related Supplement.
"Series Termination Date" shall mean, with respect to any Series of
-----------------------
Certificates, the date stated in the related Supplement.
"Servicer" shall mean initially Chase Bank, and its permitted successors
--------
and assigns and thereafter any Person appointed as successor as herein provided
to service the Receivables.
"Servicer Default" shall have the meaning specified in Section 10.1.
----------------
"Servicing Fee" shall have the meaning specified in Section 3.2.
-------------
"Servicing Officer" shall mean any officer of the Servicer involved in, or
-----------------
responsible for, the administration and servicing of the Receivables whose name
appears on a list of servicing officers furnished to the Trustee by the
Servicer, as such list may from time to time be amended.
"Shared Excess Finance Charge Collections" shall mean, with respect to any
----------------------------------------
Transfer Date, the aggregate amount for all outstanding Series that the related
supplements specify are to be treated as "Shared Excess Finance Charge
Collections" for such Transfer Date.
"Shared Principal Collections" shall mean, with respect to any Transfer
----------------------------
Date, the aggregate amount for all outstanding Series that the related
Supplements specify are to be treated as "Shared Principal Collections" for such
Transfer Date.
"Special Fees" shall mean any fees which are not now but from time to time
------------
may be assessed on the Accounts. On or after the date on which any of such
Special Fees begin to be assessed on the Accounts, the Transferor may designate
in an Officer's Certificate whether such Special Fees shall be treated as
Principal Receivables or Finance Charge Receivables.
20
<PAGE>
"Standard & Poor's" shall mean Standard & Poor's Ratings Services, a
-----------------
Division of The McGraw-Hill Companies, Inc.
"Successor Servicer" shall have the meaning specified in subsection
------------------
10.2(a).
"Supplement" or "Series Supplement" shall mean, with respect to any Series,
---------- -----------------
a supplement to this Agreement complying with the terms of Section 6.9 of this
Agreement, executed in conjunction with any issuance of any Series of
Certificates (or, in the case of the issuance of Certificates on the Initial
Closing Date, the supplement executed in connection with the issuance of such
Certificates).
"Tax Opinion" shall mean with respect to any action, an Opinion of Counsel
-----------
delivered to the Trust and the Trustee to the effect that, for U.S. federal
income tax purposes, (a) such action will not adversely affect the tax
characterization as debt of Investor Certificates of any outstanding Series or
Class that were characterized as debt at the time of their issuance, (b)
following such action the Trust will not be deemed to be an association (or a
"publicly traded partnership" within the meaning of Section 7704(b) of the Code)
taxable as a corporation and (c) such action will not cause or constitute a
taxable event in which gain or loss would be recognized by any Investor
Certificateholder or the Trust.
"Termination Notice" shall have, with respect to any Series, the meaning
------------------
specified in subsection 10.1(d).
"Transfer Agent and Registrar" shall have the meaning specified in Section
----------------------------
6.3 and shall initially be the Chase Corporate Trust Office.
"Transfer Date" shall mean, unless otherwise specified in the related
-------------
Supplement, with respect to any Series, the Business Day immediately prior to
each Distribution Date.
"Transferor" shall mean (i) with respect to the time period prior to June
----------
1, 1996, Chase Bank and (ii) with respect to the time period beginning on June
1, 1996, Chase USA and its successors in interest and permitted assigns.
"Transferor Certificate" shall mean the certificate executed by the
----------------------
Transferor and authenticated by the Trustee, substantially in the form of
Exhibit A and exchangeable as provided in Section 6.9; provided, however, that
-------- -------
at any time there shall be only one Transferor Certificate.
"Transferor Exchange" shall have the meaning specified in subsection
-------------------
6.9(b).
21
<PAGE>
"Transferor Interest" shall mean, on any date of determination, the
-------------------
aggregate amount of Principal Receivables and the principal amounts on deposit
in the Excess Funding Account, any Principal Funding Account and any other
Series Account (if so provided in the applicable Supplement) at the end of the
day immediately prior to such date of determination, minus the Aggregate
-----
Investor Interest at the end of such day, minus the aggregate Enhancement
-----
Invested Amounts (if such amounts are not included in the Investor Interest in
the applicable Supplement), if any, for each Series outstanding at the end of
such day.
"Transferor Percentage" shall mean, on any date of determination, when used
---------------------
with respect to Principal Receivables, Finance Charge Receivables and
Receivables in Defaulted Accounts, a percentage equal to 100% minus the
-----
Aggregate Investor Percentage with respect to such categories of Receivables.
"Transferor Servicing Fee" shall have the meaning specified in Section 3.2.
------------------------
"Transferred Account" shall mean (a) an Account with respect to which a new
-------------------
credit account number has been issued by the Servicer or the Transferor under
circumstances resulting from a lost or stolen credit card or from the transfer
from one affinity group to another affinity group and not requiring standard
application and credit evaluation procedures under the Credit Card Guidelines or
(b) an Eligible Account resulting from the conversion of an Account that was a
standard account to a premium account or from a premium account to a standard
account, and which in either case can be traced or identified by reference to or
by way of the computer files or microfiche lists delivered to the Trustee
pursuant to Section 2.1 or 2.6 as an account into which an Account has been
transferred.
"Trust" shall mean the trust created by this Agreement, the corpus of which
-----
shall consist of the Receivables now existing or hereafter created and arising
in connection with the Accounts, all monies due or to become due with respect to
the Receivables, all proceeds (as defined in Section 9-306 of the UCC) of the
Receivables and Insurance Proceeds relating to the Receivables, the right to
receive certain amounts paid or payable as Interchange and Recoveries, such
funds as from time to time are deposited in the Collection Account, the Finance
Charge Account, the Principal Account, the Distribution Account, the Excess
Funding Account and any Series Account and the rights to any Credit Enhancement
with respect to any Series. The name of such Trust shall be "The Chemical
Master Credit Card Trust I" or any other name at the option of the Transferor;
provided, however, that at least 5 Business Days prior to any change in the name
- -------- -------
of Trust, the Transferor shall give written notice of such change to the
Servicer, the Trustee, each Rating Agency, any Credit Enhancement Provider and
all Certificateholders.
22
<PAGE>
"Trust Accounts" shall mean the Collection Account, the Principal Account,
--------------
the Finance Charge Account, the Distribution Account and the Excess Funding
Account.
"Trust Extension" shall have the meaning specified in subsection 12.1(a).
---------------
"Trust Pay Out Event" shall have, with respect to each Series, the meaning
-------------------
specified in Section 9.1.
"Trust Percentage" shall mean, with respect to any Monthly Period, a
----------------
fraction expressed as a percentage, the numerator of which is the aggregate
principal amount of Principal Receivables (prior to giving effect to any
reduction thereof for Finance Charge Receivables which are Discount Option
Receivables) as of the close of business on the last day of the prior Monthly
Period and the denominator of which is the aggregate principal balance of the
Bank Portfolio as of the close of business on the last day of the prior Monthly
Period.
"Trust Termination Date" shall mean (i) if a Trust Extension shall not have
----------------------
occurred, the earlier to occur of (a) the first Business Day after the
Distribution Date following the date on which funds shall have been deposited in
the Distribution Account or the applicable Series Account for the payment of
Investor Certificateholders of each Series then issued and outstanding
sufficient to pay in full such certificates, (b) the date specified in
subsection 9.2(b) and (c) August 31, 2016, and (ii) if a Trust Extension shall
have occurred, the Extended Trust Termination Date.
"Trustee" shall mean The Bank of New York, a New York banking corporation,
-------
and its successors and any corporation resulting from or surviving any
consolidation or merger to which it or its successors may be a party and any
successor trustee appointed as herein provided.
"UCC" shall mean the Uniform Commercial Code, as amended from time to time,
---
as in effect in either the State of New York or the State of Delaware, as
applicable.
"Undivided Interest" shall mean the undivided interest in the Trust
------------------
evidenced by an Investor Certificate.
Section 1.2 Other Definitional Provisions.
-----------------------------
(a) All terms defined in any Supplement or this Agreement shall have
the defined meanings when used in any certificate or other document made or
delivered pursuant hereto unless otherwise defined therein.
23
<PAGE>
(b) As used herein and in any certificate or other document made or
delivered pursuant hereto or thereto, accounting terms not defined in Section
1.1, and accounting terms partially defined in Section 1.1 to the extent not
defined, shall have the respective meanings given to them under generally
accepted accounting principles or regulatory accounting procedures applicable to
the Transferor, as applicable. To the extent that the definitions of accounting
terms herein are inconsistent with the meanings of such terms under generally
accepted accounting principles or such regulatory accounting procedures, the
definitions contained herein shall control.
(c) The agreements, representations and warranties of Chase Bank in
this Agreement and in any Supplement in each of its capacities as Transferor and
Servicer shall be deemed to be the agreements, representations and warranties of
Chase Bank solely in each such capacity for the time periods during which Chase
Bank acts in the respective capacity under this Agreement and the agreements,
representations and warranties of Chase USA in this Agreement and in any
Supplement in its capacity as Transferor shall be deemed to be the agreements,
representations and warranties of Chase USA solely in such capacity for the time
periods and for so long as Chase USA acts in such capacity under this Agreement.
(d) The words "hereof," "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to any Supplement or this
Agreement as a whole and not to any particular provision of this Agreement or
any Supplement; and Section, subsection, Schedule and Exhibit references
contained in this Agreement or any Supplement are references to Sections,
subsections, Schedules and Exhibits in or to this Agreement or any Supplement
unless otherwise specified. The Monthly Servicer Report, the form of which is
attached as Exhibit C, shall be in substantially the form of Exhibit C, with
such changes as the Servicer may determine to be necessary or desirable;
provided, however, that no such change shall serve to exclude information
- -------- -------
required by the Agreement or any Supplement. The Servicer shall, upon making
such determination, deliver to the Trustee and each Rating Agency an Officer's
Certificate to which shall be annexed the form of the related Exhibit, as so
changed. Upon the delivery of such Officer's Certificate to the Trustee, the
related Exhibit, as so changed, shall for all purposes of this Agreement
constitute such Exhibit. The Trustee may conclusively rely upon such Officer's
Certificate in determining whether the related Exhibit, as changed, conforms to
the requirements of this Agreement.
[End of Article I]
24
<PAGE>
ARTICLE II
CONVEYANCE OF RECEIVABLES;
ISSUANCE OF CERTIFICATES
Section 2.1 Conveyance of Receivables. Each of Chase Bank and Chase
-------------------------
USA does hereby transfer, assign, set over, and otherwise convey to the Trust
for the benefit of the Certificateholders, without recourse, all of its right,
title and interest in and to (i) the Receivables existing as of the Cut-Off Date
and thereafter created and arising in connection with the Accounts (other than
Additional Accounts), (ii) all monies due or to become due with respect to such
Receivables, (iii) all proceeds of such Receivables, (iv) Insurance Proceeds
relating to such Receivables, (v) Recoveries and (vi) Interchange.
In connection with such transfer, assignment, set-over and conveyance,
each of Chase Bank and Chase USA agrees to file, at its own expense, a financing
statement (including any continuation statements with respect to such financing
statement when applicable) with respect to the Receivables now existing and
hereafter created for the perfection of a security interest (as defined in the
UCC) in accounts and general intangibles (as defined in Section 9-106 of the
UCC) meeting the requirements of applicable state law in such manner and in such
jurisdictions as are necessary to perfect such security interest in favor of the
Trust, and to deliver a file-stamped copy of such financing statement or
continuation statement or other evidence at such filing (which may, for purposes
of this Section 2.1, consist of telephone confirmation of such filing) to the
Trustee on or prior to the date of issuance of the Certificates, and in the case
of any continuation statements filed pursuant to this Section 2.1, as soon as
practicable after receipt thereof by the Transferor. It is understood and
agreed that the description of collateral set forth in such financing statements
will include all credit card accounts of the Transferor. Upon receipt of
written request from the Transferor to release the receivables in such credit
card accounts as are specified in such request, the Trustee is hereby authorized
and hereby agrees to execute promptly, UCC-3 amendments or releases, releasing
such credit card accounts; provided, however, that except as permitted pursuant
-------- -------
to Section 2.7, no such release shall apply to the Accounts, including any
Additional Accounts. In addition, the Trustee is hereby authorized to execute
such intercreditor or other agreements as may be requested in writing by the
Transferor in connection with the foregoing; provided, however, that except as
-------- -------
permitted pursuant to Section 2.7, no such intercreditor agreements shall apply
to the Accounts, including any Additional Accounts, or any Receivables in such
Accounts or Additional Accounts. The foregoing transfer, assignment, set-over
and conveyance to the Trust shall be made to the Trustee, on behalf of the
Trust, and each refer-
25
<PAGE>
ence in this Agreement to such transfer, assignment, set-over and conveyance
shall be construed accordingly.
In connection with such transfer, the Transferor agrees, at its own
expense, on or prior to the Initial Closing Date (i) to indicate in its computer
files that Receivables created in connection with the Accounts have been
transferred to the Trust pursuant to this Agreement for the benefit of the
Certificateholders and (ii) to deliver to the Trustee a computer file or
microfiche list containing a true and complete list of all such Accounts,
identified by account number and setting forth the Receivable balance as of the
Cut-Off Date. Such file or list shall be marked as Schedule 1 to this
Agreement, delivered to the Trustee as confidential and proprietary, and is
hereby incorporated into and made a part of this Agreement. The Transferor
further agrees not to remove such indication in the file 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 a Defaulted
Account.
The Transferor hereby grants to the Trustee a security interest in all
of the Transferor's right, title and interest in, to and under the Receivables
existing as of the Cut-Off Date and thereafter created and arising in connection
with the Accounts (other than Additional Accounts), all moneys due or to become
due with respect to such Receivables, all proceeds of such Receivables and all
Insurance Proceeds relating to such Receivables, all Recoveries and Interchange
and all proceeds thereof to secure a loan in an amount equal to the unpaid
principal amount of the Investor Certificates issued hereunder or to be issued
pursuant to this Agreement and the interest accrued at the related Certificate
Rate, and this Agreement shall constitute a security agreement under applicable
law.
Pursuant to the request of the Transferor, the Trustee shall cause
Certificates in authorized denominations evidencing the entire interest in the
Trust to be duly authenticated and delivered to or upon the order of the
Transferor pursuant to Section 6.2.
Notwithstanding anything else in this Agreement to the contrary, it is
understood and agreed that the ownership interest or lien conveyed or granted by
Chase Bank, as Transferor, to the Trustee in Receivables and other property
under the Original Pooling and Servicing Agreement shall remain in full force
and effect and shall in no way be affected by the amendment and restatement of
the Original Pooling and Servicing Agreement by this Agreement.
26
<PAGE>
Section 2.2 Acceptance by Trustee.
---------------------
(a) The Trustee hereby acknowledges its acceptance, on behalf of the
Trust, of all right, title and interest previously held by the Transferor in and
to the Receivables existing as of the Cut-Off Date and thereafter created and
arising in connection with the Accounts, all monies due or to become due with
respect thereto (including all Finance Charge Receivables), all proceeds of such
Receivables, Insurance Proceeds relating to such Receivables, all Recoveries and
Interchange and the proceeds thereof, 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 described in the
third paragraph of Section 2.1.
(b) The Trustee hereby agrees not to disclose to any Person any of the
account numbers or other information contained in the computer files or
microfiche lists delivered to the Trustee by the Transferor pursuant to Sections
2.1, 2.6 and 2.7 ("Account Information") except as required in connection with
the performance of its duties hereunder or in enforcing the rights of the
Certificateholders or to a Successor Servicer appointed pursuant to Section
10.2, or as mandated pursuant to any Requirement of Law applicable to the
Trustee or as requested by any Person in connection with financing statements
filed with the Trust. 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, shall allow
the Transferor to inspect the Trustee's security and confidentiality
arrangements from time to time during normal business hours. In the event that
the Trustee is required by law to disclose any Account Information, the Trustee
shall provide the Transferor with prompt written notice, unless such notice is
prohibited by law, of any such request or requirement so that the Transferor may
request a protective order or other appropriate remedy. The Trustee shall use
its best efforts to provide the Transferor with written notice no later than
five Business Days prior to any disclosure pursuant to this subsection 2.2(b).
(c) The Trustee shall have no power to create, assume or incur
indebtedness or other liabilities in the name of the Trust other than as
contemplated in this Agreement.
Section 2.3 Representations and Warranties of the Transferor. The
------------------------------------------------
Transferor hereby represents and warrants to the Trust as of the Initial Closing
Date:
27
<PAGE>
(a) Organization and Good Standing. The Transferor is a banking
------------------------------
corporation duly organized and validly existing in good standing under the
laws of the jurisdiction of its organization and has full corporate power,
authority and legal right to execute, deliver and perform its obligations
under this Agreement and to execute and deliver to the Trustee the
Certificates pursuant hereto, and, in all material respects, to own its
properties and conduct its business as such properties are presently owned
and such business is presently conducted.
(b) Due Qualification. The Transferor is duly qualified to do
-----------------
business and is in good standing (or is exempt from such requirement) and
has obtained all necessary licenses and approvals with respect to the
Transferor in each jurisdiction in which failure to so qualify or to obtain
such licenses and approvals would render any Credit Card Agreement relating
to an Account or any Receivable unenforceable by the Transferor or the
Trust or would have a material adverse effect on the Certificateholders;
provided, however, that no representation or warranty is made with respect
-------- -------
to any qualifications, licenses or approvals which the Trustee would have
to obtain to do business in any state in which the Trustee seeks to enforce
any Account or Receivable.
(c) Due Authorization. The execution and delivery of this Agreement
-----------------
and the execution and delivery to the Trustee of the Certificates by the
Transferor and the consummation of the transactions provided for in this
Agreement have been duly authorized by the Transferor by all necessary
corporate action on its part and this Agreement will remain, from the time
of its execution, an official record of the Transferor.
(d) No Conflict. The execution and delivery of this Agreement and the
-----------
Certificates, the performance of the transactions contemplated by this
Agreement and the fulfillment of the terms hereof 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, except to the extent that the same could
not reasonably be expected to have a material adverse effect on the
Certificateholders.
(e) No Violation. The execution and delivery of this Agreement, any
------------
Supplement and the Certificates, the performance of the transactions
contemplated by this Agreement and the fulfillment of the terms hereof will
not conflict with or violate any Requirements of Law applicable to the
Trans-
28
<PAGE>
feror, except to the extent that the same could not reasonably be expected
to have a material adverse effect on the Certificateholders.
(f) No Proceedings. There are no proceedings or investigations
--------------
pending or, to the best knowledge of the Transferor, threatened against the
Transferor before any court, regulatory body, administrative agency, or
other tribunal or governmental instrumentality (i) asserting the invalidity
of this Agreement or the Certificates, (ii) seeking to prevent the issuance
of the Certificates or the consummation of any of the transactions
contemplated by this Agreement or the Certificates, (iii) seeking any
determination or ruling that, in the reasonable judgment of the Transferor,
would materially and adversely affect the performance by the Transferor of
its obligations under this Agreement, (iv) seeking any determination or
ruling that would materially and adversely affect the validity or
enforceability of this Agreement or the Certificates or (v) seeking to
affect adversely the income tax attributes of the Trust.
(g) Eligibility of Accounts. As of the Cut-Off Date, each Account was
-----------------------
an Eligible Account and no selection procedures adverse to the Investor
Certificateholders have been employed by the Transferor in selecting the
Accounts from among the Eligible Accounts in the Bank Portfolio.
(h) All Consents Required. All approvals, authorizations, consents,
---------------------
orders or other actions of any Person or of any governmental body or
official required in connection with the execution and delivery of this
Agreement and the Certificates, the performance of the transactions
contemplated by this Agreement and the fulfillment of the terms hereof,
have been obtained, except where the failure to obtain such approvals,
authorizations, consents, orders or other actions could not reasonably be
expected to have a material adverse effect on the Certificateholders.
For the purposes of the representations and warranties contained in
this Section 2.3 and made by the Transferor on the Initial Closing Date,
"Certificates" shall mean the Certificates issued on the Initial Closing Date.
The representations and warranties set forth in this Section 2.3 shall survive
the transfer and assignment of the respective Receivables to the Trust, and
termination of the rights and obligations of the Servicer pursuant to Section
10.1. The Transferor hereby represents and warrants to the Trust, with respect
to any Series of Certificates, as of its Closing Date, unless otherwise stated
in such Supplement, that the representations and warranties of the Transferor
set forth in Section 2.3 are true and correct as of such date (for the purposes
of such representations and warran-
29
<PAGE>
ties, "Certificates" shall mean the Certificates issued on the related Closing
Date). Upon discovery by the Transferor, the Servicer or the Trustee of a
breach of any of the foregoing representations and warranties, the party
discovering such breach shall give prompt written notice to the others.
Section 2.4 Representations and Warranties of the Transferor Relating
---------------------------------------------------------
to the Agreement and the Receivables.
- ------------------------------------
(a) Binding Obligation; Valid Transfer and Assignment. The Transferor
-------------------------------------------------
hereby represents and warrants to the Trust that, as of the Initial Closing
Date:
(i) This Agreement constitutes a valid and legally binding
obligation of the Transferor, enforceable against the Transferor in
accordance with its terms, except (A) as may be limited by applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium
or other similar laws now or hereafter in effect relating to or affecting
creditors' rights generally and the rights of creditors of banking
corporations organized under the laws of the state of its organization, and
(B) as may be limited by general equitable principles (whether considered
in a proceeding in equity or at law) and an implied covenant of good faith
and fair dealing.
(ii) This Agreement constitutes either (A) a valid transfer,
assignment, set-over and conveyance to the Trust of all right, title and
interest of the Transferor in and to the Receivables now existing and
hereafter created and arising in connection with the Accounts (other than
Receivables in Additional Accounts), all proceeds of such Receivables and
Insurance Proceeds relating thereto, and such Receivables and all proceeds
thereof and Insurance Proceeds relating thereto will be held by the Trust
free and clear of any Lien of any Person claiming through or under the
Transferor or any of its Affiliates except for (x) Liens permitted under
subsection 2.5(b), (y) the interest of the Transferor as Holder of the
Transferor Certificate and (z) the Transferor's right, if any, to interest
accruing on, and investment earnings, if any, in respect of the Finance
Charge Account, the Principal Account or any Series Account, as provided in
this Agreement or the related Supplement, or (B) a grant of a security
interest (as defined in the UCC) in such property to the Trust, which is
enforceable with respect to the existing Receivables, the proceeds thereof
and Insurance Proceeds relating thereto upon execution and delivery of this
Agreement, and which will be enforceable with respect to such Receivables
hereafter created, the proceeds thereof and Insurance Proceeds relating
thereto, upon such creation. If this Agreement constitutes the grant of a
security interest to the Trust in such property, upon
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the filing of the financing statement described in Section 2.1 and in the
case of the Receivables hereafter created and proceeds thereof and
Insurance Proceeds relating thereto, upon such creation, the Trust shall
have a first priority perfected security interest in the Transferor's
rights in such property (subject to Section 9-306 of the UCC), except for
Liens permitted under subsection 2.5(b). Neither the Transferor nor any
Person claiming through or under the Transferor shall have any claim to or
interest in the Principal Account, the Finance Charge Account, the
Distribution Account or any Series Account, except for the Transferor's
rights to receive interest accruing on, and investment earnings in respect
of, the Finance Charge Account and Principal Account as provided in this
Agreement (or, if applicable, any Series Account as provided in any
Supplement) and, if this Agreement constitutes the grant of a security
interest in such property, except for the interest of the Transferor in
such property as a debtor for purposes of the UCC.
(b) Eligibility of Receivables. The Transferor hereby represents and
--------------------------
warrants to the Trust as of the Initial Closing Date and as of each Addition
Date, as the case may be, that:
(i) Each Receivable is an Eligible Receivable as of the Cut-Off
Date or the Addition Date, as applicable.
(ii) Each Receivable then existing has been transferred to the
Trust free and clear of any Lien of any Person claiming through or under
the Transferor or any of its Affiliates (other than Liens permitted under
subsection 2.5(b)) and in compliance, in all material respects, with all
Requirements of Law applicable to the Transferor.
(iii) With respect to each Receivable then existing, all
consents, licenses, approvals or authorizations of or registrations or
declarations with any Governmental Authority required to be obtained,
effected or given by the Transferor in connection with the conveyance of
such Receivable to the Trust have been duly obtained, effected or given and
are in full force and effect.
(iv) On each day on which any new Receivable is created, the
Transferor shall be deemed to represent and warrant to the Trust that (A)
each Receivable created on such day is an Eligible Receivable, (B) each
Receivable created on such day has been conveyed to the Trust in
compliance, in all material respects, with all Requirements of Law
applicable to the Transferor, (C) with respect to each such Receivable, all
consents, licenses, approvals or authorizations of or registrations or
declarations with, any Governmental Authority required to be obtained,
effected or
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given by the Transferor in connection with the conveyance of such
Receivable to the Trust have been duly obtained, effected or given and are
in full force and effect and (D) the representations and warranties set
forth in subsection 2.4(a) are true and correct with respect to each
Receivable created on such day as if made on such day.
(v) As of the Initial Closing Date, Schedule 1 to this Agreement,
and as of the applicable Addition Date with respect to Additional Accounts
designated pursuant to Sections 2.6(a) and (b), the related computer file
or microfiche list referred to in Section 2.6, is an accurate and complete
listing in all material respects of all the Accounts as of the Cut-Off
Date, or with respect to Additional Accounts, as of the applicable Addition
Date and the information contained therein with respect to the identity of
such Accounts and the Receivables existing thereunder is true and correct
in all material respects as of the Cut-Off Date or such applicable Addition
Date. As of September 28, 1995, the aggregate amount of Receivables in all
the Accounts was $5,118,124,136.02 of which $5,016,343,299.38 were
Principal Receivables.
(c) Notice of Breach. The representations and warranties set forth in
----------------
this Section 2.4 shall survive the transfer and assignment of the respective
Receivables to the Trust. Upon discovery by the Transferor, the Servicer or the
Trustee of a breach of any of the representations and warranties set forth in
this Section 2.4, the party discovering such breach shall give prompt written
notice to the other parties mentioned above. The Transferor agrees to cooperate
with the Servicer and the Trustee in attempting to cure any such breach.
(d) Transfer of Ineligible Receivables.
----------------------------------
(i) Automatic Removal. In the event of a breach with respect to
-----------------
a Receivable of any representations and warranties set forth in subsection
2.4(b)(ii), or in the event that a Receivable is not an Eligible Receivable
as a result of the failure to satisfy the conditions set forth in clause
(d) of the definition of Eligible Receivable, and any of the following
three conditions is met: (A) as a result of such breach or event such
Receivable is charged off as uncollectible or the Trust's rights in, to or
under such Receivable or its proceeds are impaired or the proceeds of such
Receivable are not available for any reason to the Trust free and clear of
any Lien; (B) the Lien upon the subject Receivable (1) arises in favor of
the United States of America or any State or any agency or instrumentality
thereof and involves taxes or liens arising under Title IV of ERISA or (2)
has been consented to by the Transferor; or (C) the unsecured short-term
debt rating of the Transferor
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is not at least "P-1" by Moody's and "A-1" by Standard & Poor's and the
Lien upon the subject Receivable ranks prior to the Lien created pursuant
to this Agreement; then, upon the earlier to occur of the discovery of such
breach or event by the Transferor or the Servicer or receipt by the
Transferor of written notice of such breach or event given by the Trustee,
each such Receivable shall be automatically removed from the Trust on the
terms and conditions set forth in subsection 2.4(d)(iii).
(ii) Removal After Cure Period. In the event of a breach of any
-------------------------
of the representations and warranties set forth in subsection 2.4(b) other
than a breach or event as set forth in clause (d)(i) above, and as a result
of such breach the related Account becomes a Defaulted Account or the
Trust's rights in, to or under the Receivable or its proceeds are impaired
or the proceeds of such Receivable are not available for any reason to the
Trust free and clear of any Lien, then, upon the expiration of 60 days (or
such longer period as may be agreed to by the Trustee in its sole
discretion, but in no event later than 120 days) from the earlier to occur
of the discovery of any such event by either the Transferor or the
Servicer, or receipt by the Transferor of written notice of any such event
given by the Trustee, each such Receivable shall be removed from the Trust
on the terms and conditions set forth in subsection 2.4(d)(iii); provided,
--------
however, that no such removal shall be required to be made if, on any day
-------
within such applicable period, such representations and warranties with
respect to such Receivable shall then be true and correct in all material
respects as if such Receivable had been created on such day.
(iii) Procedures for Removal. When the provisions of subsection
----------------------
2.4(d)(i) or (ii) above require removal of a Receivable, the Transferor
shall accept reassignment of such Receivable (an "Ineligible Receivable")
by directing the Servicer to deduct the principal balance of each such
Ineligible Receivable from the Principal Receivables in the Trust and to
decrease the Transferor Interest by such amount. On and after the date of
such removal, each Ineligible Receivable shall be deducted from the
aggregate amount of Principal Receivables used in the calculation of any
Investor Percentage, the Transferor Percentage or the Transferor Interest.
In the event that the exclusion of an Ineligible Receivable from the
calculation of the Transferor Interest would cause the Transferor Interest
to be reduced below the Minimum Transferor Interest, the Transferor shall
immediately, but in no event later than 10 Business Days after such event,
make a deposit in the Excess Funding Account in immediately available funds
in an amount equal to the amount by which the Transferor Interest would be
reduced
33
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below the Minimum Transferor Interest. The portion of such deposit
allocated to the Investor Certificates of each Series shall be distributed
to the Investor Certificateholders of each Series in the manner specified
in Article IV, if applicable, on the Distribution Date relating to the
Monthly Period in which such deposit is made. Upon the reassignment to the
Transferor of an Ineligible Receivable, the Trust shall automatically and
without further action be deemed to transfer, assign, set-over and
otherwise convey to the Transferor, without recourse, representation or
warranty, all the right, title and interest of the Trust in and to such
Ineligible Receivable, all monies due or to become due with respect to such
Ineligible Receivable and all proceeds of such Ineligible Receivable and
Insurance Proceeds relating to such Ineligible Receivable allocated to such
Ineligible Receivable pursuant to any Supplement. Such reassigned
Ineligible Receivable shall be treated by the Trust as collected in full as
of the date on which it was transferred. The Trustee shall execute such
documents and instruments of transfer or assignment and take other actions
as shall reasonably be requested by the Transferor to evidence the
conveyance of such Ineligible Receivable pursuant to this subsection
2.4(d)(iii). The obligation of the Transferor set forth in this subsection
2.4(d)(iii), or the automatic removal of such Receivable from the Trust, as
the case may be, shall constitute the sole remedy respecting any breach of
the representations and warranties set forth in the above-referenced
subsections with respect to such Receivable available to Certificateholders
or the Trustee on behalf of Certificateholders.
(iv) Proceeds Held by Servicer. For the purposes of subsections
-------------------------
2.4(d)(i) and (ii) above, proceeds of a Receivable shall not be deemed to
be impaired hereunder solely because such proceeds are held by the Servicer
(if the Servicer is the Transferor) for more than the applicable period
under Section 9-306(3) of the UCC.
(e) Reassignment of Trust Portfolio. In the event of a breach of any
-------------------------------
of the representations and warranties set forth in subsection 2.4(a), either the
Trustee or the Holders of Investor Certificates evidencing Undivided Interests
aggregating more than 50% of the Aggregate Investor Interest, by notice then
given in writing to the Transferor (and to the Trustee and the Servicer, if
given by the Investor Certificateholders), may direct the Transferor to accept
reassignment of an amount of Principal Receivables (as specified below) within
60 days of such notice (or within such longer period as may be specified in such
notice), and the Transferor shall be obligated to accept reassignment of such
Principal Receivables on a Distribution Date specified by the Transferor (such
Distribution Date, the "Reassignment Date") occurring within such applicable
period on the
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terms and conditions set forth below; provided, however, that no such
-------- -------
reassignment shall be required to be made if, at any time during such applicable
period, the representations and warranties contained in subsection 2.4(a) shall
then be true and correct in all material respects. The Transferor shall deposit
on the Transfer Date (in New York Clearing House, next day funds) preceding the
Reassignment Date an amount equal to the reassignment deposit amount for such
Receivables in the Distribution Account or Series Account, as provided in the
related Supplement, for distribution to the Investor Certificateholders pursuant
to Article XII. The reassignment deposit amount with respect to each Series for
such reassignment, unless otherwise stated in the related Supplement, shall be
equal to (i) the Investor Interest of such Series at the end of the day on the
last day of the Monthly Period preceding the Reassignment Date, less the amount,
if any, previously allocated for payment of principal to such Certificateholders
on the related Distribution Date in the Monthly Period in which the Reassignment
Date occurs, plus (ii) an amount equal to all interest accrued but unpaid on the
Investor Certificates of such Series at the applicable Certificate Rate through
the Reassignment Date, less the amount, if any, previously allocated for payment
of interest to the Certificateholders of such Series on the related Distribution
Date in the Monthly Period in which the Reassignment Date occurs. Payment of
the reassignment deposit amount with respect to each Series, and all other
amounts in the Distribution Account or the applicable Series Account in respect
of the preceding Monthly Period, shall be considered a prepayment in full of the
Receivables represented by the Investor Certificates on the Distribution Date
following the Transfer Date on which such amount has been deposited in full into
the Distribution Account or the applicable Series Account, the Receivables and
all monies due or to become due with respect to such Receivables and all
proceeds of the Receivables and Insurance Proceeds relating to such Receivables
and Interchange (if any) and Recoveries (if any) allocable to the Series shall
be released to the Transferor after payment of all amounts otherwise due
hereunder on or prior to such dates and the Trustee shall execute and deliver
such instruments of transfer or assignment, in each case without recourse,
representation or warranty, as shall be prepared by and as are reasonably
requested by the Transferor to vest in the Transferor, or its designee or
assignee, all right, title and interest of the Trust in and to the Receivables,
all monies due or to become due with respect to such Receivables and all
proceeds of the Receivables and Insurance Proceeds relating to such Receivables
and Interchange (if any) and Recoveries (if any) allocable to the Series. If
the Trustee or the Investor Certificateholders give notice directing the
Transferor to accept reassignment as provided above, the obligation of the
Transferor to accept reassignment of the Receivables and pay the reassignment
deposit amount pursuant to this subsection 2.4(e) shall constitute the sole
remedy respecting a breach of the representations and warranties contained in
subsection
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2.4(a) available to the Investor Certificateholders or the Trustee on behalf of
the Investor Certificateholders.
Section 2.5 Covenants of the Transferor. The Transferor hereby
---------------------------
covenants that:
(a) Receivables to be Accounts or General Intangibles. Except in
-------------------------------------------------
connection with the enforcement thereof, the Transferor will take no action to
cause any Receivable to be evidenced by any instrument (as defined in the UCC).
Each Receivable shall be payable pursuant to a contract which does not create a
Lien on any goods purchased thereunder. The Transferor will take no action to
cause any Receivable to be anything other than an "account" or "general
intangible" (as defined in the UCC).
(b) Security Interests. Except for the conveyances hereunder, the
------------------
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,
whether now existing or hereafter created, or any interest therein; the
Transferor will immediately notify the Trustee of the existence of any Lien on
any Receivable, and the Transferor shall defend the right, title and interest of
the Trust in, to and under the Receivables, whether now existing or hereafter
created, against all claims of third parties claiming through or under the
Transferor; provided, however, that nothing in this subsection 2.5(b) shall
-------- -------
prevent or be deemed to prohibit the Transferor from suffering to exist upon any
of the Receivables any Liens for municipal or other local taxes if such taxes
shall not at the time be due and payable or if the 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) Finance Charges and Other Fees. The Transferor, except as
------------------------------
otherwise required by any Requirement of Law, or as is deemed by the Transferor
to be necessary in order for the Transferor to maintain its credit card
business, based upon a good faith assessment by the Transferor, in its sole
discretion, of the nature of the competition in the credit card business, shall
not at any time reduce the Periodic Finance Charges assessed on any Receivable
or other fees on any Account if, as a result of such reduction, the Transferor's
reasonable expectation of the Portfolio Yield as of such date (after giving
effect to any concurrent exercise of a discount option) would be less than the
Base Rate.
(d) Credit Card Agreements and Account Guidelines. The Transferor
---------------------------------------------
shall comply with and perform its obligations under the Credit Card Agreements
relating to the Accounts and the Credit Card Guidelines and all applicable rules
and regulations of VISA U.S.A., Inc. and MasterCard International Inc., except
insofar as any failure to comply or perform would not materially
36
<PAGE>
and adversely affect the rights of the Trust or the Certificateholders hereunder
or under the Certificates. The Transferor may change the terms and provisions
of the Credit Card Agreements or the Credit Card Guidelines in any respect
(including, without limitation, the reduction of the required minimum monthly
payment, the calculation of the amount, or the timing, of charge offs and the
Periodic Finance Charges and other fees to be assessed thereon) only if such
change (i) would not, in the reasonable belief of the Transferor, cause a Pay
Out Event to occur, and (ii) is made applicable to the comparable segment of the
revolving credit card accounts owned and serviced by the Transferor which have
characteristics the same as, or substantially similar to, the Accounts that are
the subject of such change, except as otherwise restricted by an endorsement,
sponsorship, or other agreement between the Transferor and an unrelated third
party or by the terms of the Credit Card Agreements.
(e) Account Allocations.
-------------------
(i) in the event that the Transferor is unable for any reason to
transfer Receivables to the Trust in accordance with the provisions of this
Agreement (including, without limitation, by reason of the application of
the provisions of Section 9.2 or an order by any federal governmental
agency having regulatory authority over the Transferor or any court of
competent jurisdiction that the Transferor not transfer any additional
Principal Receivables to the Trust) then, in any such event, (A) the
Transferor agrees to allocate and pay to the Trust, after the date of such
inability, all Collections with respect to Principal Receivables, and all
amounts which would have constituted Collections with respect to Principal
Receivables but for the Transferor's inability to transfer such Receivables
(up to an aggregate amount equal to the amount of Principal Receivables in
the Trust on such date); (B) the Transferor agrees to have such amounts
applied as Collections in accordance with Article IV; and (C) for only so
long as all Collections and all amounts which would have constituted
Collections are allocated and applied in accordance with clauses (A) and
(B) above, Principal Receivables (and all amounts which would have
constituted Principal Receivables but for the Transferor's inability to
transfer Receivables to the Trust) that are written off as uncollectible in
accordance with this Agreement shall continue to be allocated in accordance
with Article IV, and all amounts that would have constituted Principal
Receivables but for the Transferor's inability to transfer Receivables to
the Trust shall be deemed to be Principal Receivables for the purpose of
calculating (i) the applicable Investor Percentage with respect to any
Series and (ii) the Aggregate Investor Percentage thereunder. If the
Transferor is unable pursuant to any Requirement of Law to allocate
Collections as described above, the Transferor
37
<PAGE>
agrees that it shall in any such event allocate, after the occurrence of
such event, payments on each Account with respect to the principal balance
of such Account first to the oldest principal balance of such Account and
to have such payments applied as Collections in accordance with Article IV.
The parties hereto agree that Finance Charge Receivables, whenever created,
accrued in respect of Principal Receivables that have been conveyed to the
Trust, or that would have been conveyed to the Trust but for the above
described inability to transfer such Receivables, shall continue to be a
part of the Trust notwithstanding any cessation of the transfer of
additional Principal Receivables to the Trust and that Collections with
respect thereto shall continue to be allocated and paid in accordance with
Article IV.
(ii) In the event that, pursuant to subsection 2.4(d), the
Transferor accepts reassignment of an Ineligible Receivable as a result of
a breach of the representations and warranties in subsection 2.4(b)
relating to such Receivable, then, in any such event, the Transferor agrees
to account for payments received with respect to such Ineligible Receivable
separately from its accounting for Collections on Principal Receivables
retained by the Trust. If payments received from or on behalf of an
Obligor are not specifically applicable either to an Ineligible Receivable
of such Obligor reassigned to the Transferor or to the Receivables of such
Obligor retained in the Trust, then the Transferor agrees to allocate
payments proportionately based on the total amount of Principal Receivables
of such Obligor retained in the Trust and the total amount owing by such
Obligor on any Ineligible Receivables reassigned to the Transferor, and the
portion allocable to any Principal Receivables retained in the Trust shall
be treated as Collections and deposited in accordance with the provisions
of Article IV.
(f) Conveyance of Accounts. The Transferor may transfer Accounts (i)
----------------------
directly to any Affiliate that executes an agreement assuming with respect to
such Accounts the obligations and duties of the Transferor or indirectly to any
Affiliate in one or more substantially simultaneous transactions among the
Transferor, such Affiliate and any other Affiliates of the Transferor or (ii) to
any other Person, provided that such other Person executes such an agreement and
the Rating Agency Condition is satisfied; provided, however, that the Transferor
-------- -------
shall not be prohibited hereby from conveying, assigning, exchanging or
otherwise transferring the Accounts in connection with a transaction complying
with the provisions of Section 7.2.
38
<PAGE>
Section 2.6 Addition of Accounts.
--------------------
(a) (i) If, (A) as of the end of any Monthly Period, the Transferor
Interest is less than the Minimum Transferor Interest for that period the
Transferor shall designate additional eligible MasterCard or VISA accounts
from the Bank Portfolio ("Additional Accounts") to be included as Accounts
in a sufficient amount such that the Transferor Interest after giving
effect to such addition will be at least equal to the Minimum Transferor
Interest, or (B) as of the end of any Monthly Period, the sum of the
aggregate amount of Principal Receivables is less than the Minimum
Aggregate Principal Receivables (as adjusted for any Series having a
Companion Series as described in the Supplement for such Series), the
Transferor shall designate Additional Accounts to be included as Accounts
in a sufficient amount such that the aggregate amount of Principal
Receivables will be equal to or greater than the Minimum Aggregate
Principal Receivables. Receivables from such Additional Accounts shall be
transferred to the Trust on or before the tenth Business Day following the
end of such Monthly Period.
(ii) 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 representing undivided interests in a pool of assets
primarily consisting of receivables arising under revolving credit card
accounts or other revolving credit accounts owned by the Transferor or any
Affiliate of any Transferor and collections thereon ("Participations").
--------------
The addition of Participations in the Trust pursuant to this paragraph (a)
or paragraph (b) below shall be effected by an amendment hereto, dated the
applicable Addition Date, pursuant to Section 13.1(a).
(b) In addition to its obligation under subsection 2.6(a), the
Transferor may, but shall not be obligated to, designate from time to time
Additional Accounts of the Transferor to be included as Accounts or
Participations to be included as Trust Assets, in either case as of the
applicable Addition Date.
(c) The Transferor agrees that any such transfer of Receivables from
Additional Accounts, under subsection 2.6(a) or (b) shall satisfy the following
conditions (to the extent provided below):
(i) On or before the fifth Business Day prior to the Addition
Date with respect to additions pursuant to subsection 2.6(a) and on or
before the tenth Business Day prior to the Addition Date with respect to
additions pursuant to subsection 2.6(b) (the "Notice Date"), the Transferor
-----------
shall give the Trustee, each Rating Agency and the Servicer
39
<PAGE>
written notice that such Additional Accounts or Participations will be
included, which notice shall specify the approximate aggregate amount of
the Receivables to be transferred.
(ii) On or before the Addition Date, the Transferor shall have
delivered to the Trustee a written assignment (including an acceptance by
the Trustee on behalf of the Trust for the benefit of the Investor
Certificateholders) in substantially the form of Exhibit B (the
"Assignment") and the Transferor shall have indicated in its computer files
----------
that the Receivables created in connection with the Additional Accounts
have been transferred to the Trust and, within five Business Days
thereafter, or as otherwise agreed upon between the Transferor and the
Trustee, the Transferor shall have delivered to the Trustee a computer file
or microfiche list containing a true and complete list of all Additional
Accounts, adequately identified by billing cycle and/or account number and
the aggregate amount of the Receivables in such Additional Accounts, as of
the Addition Date, which computer file or microfiche list shall be as of
the date of such Assignment incorporated into and made a part of such
Assignment and this Agreement.
(iii) The Transferor shall represent and warrant that (x) each
Additional Account is, as of the Addition Date, an Eligible Account, and
each Receivable in such Additional Account is, as of the Addition Date, an
Eligible Receivable, (y) no selection procedures believed by the Transferor
to be materially adverse to the interests of the Investor
Certificateholders were utilized in selecting the Additional Accounts from
the available Eligible Accounts from the Bank Portfolio, and (z) as of the
Addition Date, the Transferor is not insolvent.
(iv) The Transferor shall represent and warrant that, as of the
Addition Date, the Assignment constitutes either (x) a valid transfer and
assignment to the Trust of all right, title and interest of the Transferor
in and to the Receivables then existing and thereafter created in the
Additional Accounts, and all proceeds (as defined in the UCC) of such
Receivables and Insurance Proceeds relating thereto and such Receivables
and all proceeds thereof and Insurance Proceeds relating thereto will be
held by the Trust free and clear of any Lien of any Person claiming through
or under the Transferor or any of its Affiliates, except for (i) Liens
permitted under subsection 2.5(b), (ii) the interest of the Transferor as
Holder of the Transferor Certificate and (iii) the Transferor's right to
receive interest accruing on, and investment earnings in respect of, the
Finance Charge Account and the Principal Account, or any Series Account as
provided in this Agreement and any related
40
<PAGE>
Supplement or (y) a grant of a security interest (as defined in the UCC),
in such property to the Trust, which is enforceable with respect to then
existing Receivables of the Additional Accounts, the proceeds (as defined
in the UCC), thereof and Insurance Proceeds relating thereto upon the
conveyance of such Receivables to the Trust, and which will be enforceable
with respect to the Receivables thereafter created in respect of Additional
Accounts conveyed on such Addition Date, the proceeds (as defined in the
UCC), thereof and Insurance Proceeds relating thereto upon such creation;
and (z) if the Assignment constitutes the grant of a security interest to
the Trust in such property, upon the filing of a financing statement as
described in Section 2.1 with respect to such Additional Accounts and in
the case of the Receivables thereafter created in such Additional Accounts
and the proceeds (as defined in the UCC), thereof, and Insurance Proceeds
relating thereto, upon such creation, the Trust shall have a first priority
perfected security interest in such property (subject to Section 9-306 of
the UCC), except for Liens permitted under subsection 2.5(b).
(v) The Transferor shall deliver an Officer's Certificate
substantially in the form of Schedule 2 to Exhibit B to the Trustee
confirming the items set forth in paragraph (iii) above.
(vi) The Transferor shall deliver an Opinion of Counsel with
respect to the Receivables in the Additional Accounts to the Trustee
substantially in the form of Exhibit E.
(vii) the Rating Agency Condition shall have been satisfied with
respect to the inclusion of such accounts as Additional Accounts pursuant
to subsection 2.6(b).
(viii) With respect to a Participation included as Trust Assets
pursuant to subsection 2.6(b), the Transferor shall deliver a Tax Opinion.
Section 2.7 Removal of Accounts.
-------------------
(a) Subject to the conditions set forth below, the Transferor may, but
shall not be obligated to, designate Receivables from Accounts for deletion and
removal ("Removed Accounts") from the Trust; provided, however, that the
---------------- -------- -------
Transferor shall not make more than one such designation in any Monthly Period.
On or before the fifth Business Day (the "Removal Notice Date") prior to the
-------------------
date on which the designated Removed Accounts will be reassigned by the Trustee
to the Transferor (the "Removal Date"), the Transferor shall give the Trustee
------------
and the Servicer written notice that the Receivables from such Removed Accounts
are to be reassigned to the Transferor.
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(b) The Transferor shall be permitted to designate and require
reassignment to it of the Receivables from Removed Accounts only upon
satisfaction of the following conditions:
(i) The removal of any Receivables of any Removed Accounts on any
Removal Date shall not, in the reasonable belief of the Transferor, (a)
cause a Pay Out Event to occur; provided, however, that for the purposes of
-------- -------
this subsection 2.7(b)(i), the Receivables of each Removed Account shall be
considered to have been removed as of the Removal Date, (b) cause the
Transferor Interest to be less than the Minimum Transferor Interest on such
Removal Date, (c) cause the sum of the aggregate amount of Principal
Receivables and the Excess Funding Amount to be less than the Minimum
Aggregate Principal Receivables, or (d) result in the failure to make any
payment specified in the related Supplement with respect to any Series.
(ii) On or prior to the Removal Date, the Transferor shall have
delivered to the Trustee for execution a written assignment in
substantially the form of Exhibit G (the "Reassignment") and, within five
------------
Business Days thereafter, or as otherwise agreed upon between the
Transferor and the Trustee, the Transferor shall have delivered to the
Trustee a computer file or microfiche list containing a true and complete
list of all Removed Accounts identified by account number and the aggregate
amount of the Receivables in such Removed Accounts as of the Removal Date,
which computer file or microfiche list shall as of the Removal Date modify
and amend and be made a part of this Agreement.
(iii) The Transferor shall represent and warrant that no
selection procedures believed by the Transferor to be materially adverse to
the interests of the Certificateholders were utilized in selecting the
Removed Accounts to be removed from the Trust.
(iv) As of the Removal Notice Date, either (a) the Receivables
are not more than 15% delinquent by estimated principal amount and the
weighted averaged delinquency of such Receivables is not more than 60 days,
or (b) the Receivables are not more than 7% delinquent by estimated
principal amount and the weighted average delinquency of such Receivables
does not exceed 90 days.
(v) On or before the tenth Business Day prior to the Removal
Date, each Rating Agency shall have received notice of such proposed
removal of the Receivables of such Accounts and the Transferor shall have
received written confirmation from each Rating Agency that such removal
will satisfy the Rating Agency Condition; and
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(vi) The Transferor shall have delivered to the Trustee an
Officer's Certificate confirming the items set forth in clauses (i) through
(v) above. The Trustee may conclusively rely on such Officer's
Certificate, shall have no duty to make inquiries with regard to the
matters set forth therein and shall incur no liability in so relying.
Upon satisfaction of the above conditions, the Trustee shall execute
and deliver the Reassignment to the Transferor, and the Receivables from the
Removed Accounts shall no longer constitute a part of the Trust.
Section 2.8 Discount Option. The Transferor shall have the option
---------------
to designate at any time a fixed or floating percentage (the "Discount
Percentage"), of the amount of Receivables arising in the Accounts on or after
the date such designation becomes effective that would otherwise constitute
Principal Receivables (prior to subtracting from Principal Receivables, Finance
Charge Receivables that are Discount Option Receivables) to be treated as
Finance Charge Receivables. The Transferor may from time to time increase
(subject to the limitations described below), reduce or eliminate the Discount
Percentage for Discount Option Receivables arising in the Accounts on and after
the date of such change. The Transferor must provide 30 days' prior written
notice to the Servicer, the Trustee, each Credit Enhancement Provider and each
Rating Agency of any such exercise of the discount option or increase, reduction
or elimination of the Discount Percentage, and such exercise of the discount
option or increase, reduction or elimination of the Discount Percentage shall
become effective on the date specified therein only if (i) the Transferor has
delivered to the Trustee an Officer's Certificate to the effect that, based on
the facts known to such officer at the time, the Transferor reasonably believes
that such increase, reduction or elimination shall not at the time of its
occurrence cause a Pay Out Event, or an event which with notice or the lapse of
time would constitute a Pay Out Event, to occur with respect to any Series and
(ii) the Transferor, the Servicer and the Trustee shall have received written
confirmation from each Rating Agency that the Rating Agency Condition is
satisfied.
(a) On each Date of Processing after the date on which the
Transferor's exercise of its discount option takes effect, the Transferor shall
treat Discount Option Receivables Collections as Collections of Finance Charge
Receivables.
[End of Article II]
43
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ARTICLE III
ADMINISTRATION AND SERVICING
OF RECEIVABLES
Section 3.1 Acceptance of Appointment and Other Matters Relating to
-------------------------------------------------------
the Servicer.
- ------------
(a) Chase Bank agrees to act as the Servicer under this Agreement.
The Investor Certificateholders of each Series by their acceptance of the
related Certificates consent to Chase Bank acting as Servicer.
(b) The Servicer shall service and administer the Receivables and
shall collect payments due under the Receivables in accordance with its
customary and usual servicing procedures for servicing credit card receivables
comparable to the Receivables and in accordance with the Credit Card Guidelines
and shall have full power and authority, acting alone or through any party
properly designated by it hereunder, to do any and all things in connection with
such servicing and administration which it may deem necessary or desirable.
Without limiting the generality of the foregoing and subject to Section 10.1,
the Servicer is hereby authorized and empowered (i) to make withdrawals from the
Collection Account as set forth in this Agreement, (ii) unless such power and
authority is revoked by the Trustee on account of the occurrence of a Servicer
Default pursuant to Section 10.1, to instruct the Trustee to make withdrawals
and payments, from the Finance Charge Account, the Principal Account, the Excess
Funding Account and any Series Account, in accordance with such instructions as
set forth in this Agreement, (iii) unless such power and authority is revoked by
the Trustee on account of the occurrence of a Servicer Default pursuant to
Section 10.1, to instruct the Trustee in writing, as set forth in this
Agreement, (iv) to execute and deliver, on behalf of the Trust for the benefit
of the Certificateholders, any and all instruments of satisfaction or
cancellation, or of partial or full release or discharge, and all other
comparable instruments, with respect to the Receivables and, after the
delinquency of any Receivable and to the extent permitted under and in
compliance with applicable law and regulations, to commence enforcement
proceedings with respect to such Receivables and (v) to make any filings,
reports, notices, applications, registrations with, and to seek any consents or
authorizations from the Securities and Exchange Commission and any state
securities authority on behalf of the Trust as may be necessary or advisable to
comply with any federal or state securities or reporting requirements. The
Trustee agrees that it shall promptly follow the instructions of the Servicer to
withdraw funds from the Principal Account, the Finance Charge Account, the
Excess Funding Account, or any Series Account and to take any action required
under any Credit Enhancement at such time as required under this Agreement. The
Trustee shall execute
44
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at the Servicer's written request such documents prepared by the Transferor and
acceptable to the Trustee as may be necessary or appropriate to enable the
Servicer to carry out its servicing and administrative duties hereunder.
(c) In the event that the Transferor is unable for any reason to
transfer Receivables to the Trust in accordance with the provisions of this
Agreement (including, without limitation, by reason of the application of the
provisions of Section 9.2 or the order of any federal governmental agency having
regulatory authority over the Transferor or any court of competent jurisdiction
that the Transferor not transfer any additional Principal Receivables to the
Trust) then, in any such event, (A) the Servicer agrees to allocate, after such
date, all collections with respect to Principal Receivables, and all amounts
which would have constituted Collections with respect to Principal Receivables
but for the Transferor's inability to transfer such Receivables (up to an
aggregate amount equal to the aggregate amount of Principal Receivables in the
Trust as of such date) in accordance with subsection 2.5(e); (B) the Servicer
agrees to apply such amounts as Collections in accordance with Article IV, and
(C) for only so long as all Collections and all amounts which would have
constituted Collections are allocated and applied in accordance with clauses (A)
and (B) above, Principal Receivables and all amounts which would have
constituted Principal Receivables but for the Transferor's inability to transfer
Receivables to the Trust that are written off as uncollectible in accordance
with this Agreement shall continue to be allocated in accordance with Article IV
and all amounts which would have constituted Principal Receivables but for the
Transferor's inability to transfer Receivables to the Trust shall be deemed to
be Principal Receivables for the purpose of calculating the applicable Investor
Percentage thereunder. If the Servicer is unable pursuant to any Requirement of
Law to allocate payments on the Accounts as described above, the Servicer agrees
that it shall in any such event allocate, after the occurrence of such event,
payments on each Account with respect to the principal balance of such Account
first to the oldest principal balance of such Account and to have such payments
applied as Collections in accordance with Article IV. The parties hereto agree
that Finance Charge Receivables, whenever created, accrued in respect of
Principal Receivables which have been conveyed to the Trust, or which would have
been conveyed to the Trust but for the above described inability to transfer
such Receivables, shall continue to be a part of the Trust notwithstanding any
cessation of the transfer of additional Principal Receivables to the Trust and
that Collections with respect thereto shall continue to be allocated and paid in
accordance with Article IV.
(d) In the event that pursuant to subsection 2.4(d), the Transferor
accepts reassignment of an Ineligible Receivable as a result of a breach of the
representations and warranties in
45
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subsection 2.4(b) relating to such Receivable, then, in any such event, the
Servicer agrees to account for payments received with respect to such Ineligible
Receivable separately from its accounting for Collections on Principal
Receivables retained by the Trust. If payments received from or on behalf of an
Obligor are not specifically applicable either to an Ineligible Receivable of
such Obligor reassigned to the Transferor or to Receivables of such Obligor
retained in the Trust, then the Servicer agrees to allocate payments
proportionately based on the total amount of Principal Receivables of such
Obligor retained in the Trust and the total amount owing by such Obligor on any
Ineligible Receivables purchased by the Transferor, and the portion allocable to
any Principal Receivables retained in the Trust shall be treated as Collections
and deposited in accordance with the provisions of Article IV.
(e) The Servicer shall not be obligated to use separate servicing
procedures, offices, employees or accounts for servicing the Receivables from
the procedures, offices, employees and accounts used by the Servicer in
connection with servicing other credit card receivables.
(f) The Servicer shall maintain fidelity bond coverage insuring
against losses through wrongdoing of its officers and employees who are involved
in the servicing of credit card receivables covering such actions and in such
amounts as the Servicer believes to be reasonable from time to time.
Section 3.2 Servicing Compensation. As compensation for its
----------------------
servicing activities hereunder and reimbursement for its expenses as set forth
in the immediately following paragraph, the Servicer shall be entitled to
receive a servicing fee prior to the termination of the Trust pursuant to
Section 12.1. The Servicing Fee shall be payable, with respect to each Series,
at the times and in the amounts set forth in the related Supplement. The
Servicing Fee shall be allocated between the Investor Certificates (the
"Investor Servicing Fee") and the Holder of the Transferor Certificate (the
- -----------------------
"Transferor Servicing Fee").
- -------------------------
The Servicer's expenses include the amounts due to the Trustee
pursuant to Section 11.5 and the reasonable fees and disbursements of
independent public accountants and all other expenses incurred by the Servicer
in connection with its activities hereunder; provided, however that the Servicer
-------- -------
shall not be liable for any liabilities, costs or expenses of the Trust, the
Investor Certificateholders or the Certificate Owners arising under any tax law,
including without limitation any federal, state or local income or franchise
taxes or any other tax imposed on or measured by income (or any interest or
penalties with respect thereto or arising from a failure to comply therewith).
The Servicer shall be required to pay such expenses for its own
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account and shall not be entitled to any payment therefor other than the
servicing fee specified herein.
Section 3.3 Representations and Warranties of the Servicer. Chase
----------------------------------------------
Bank, as initial Servicer, hereby makes, and any successor Servicer by its
appointment hereunder shall make the following representations and warranties on
which the Trustee has relied in accepting the Receivables in Trust and in
authenticating the Certificates issued on the Initial Closing Date:
(a) Organization and Good Standing. The Servicer is a banking
------------------------------
corporation duly organized, validly existing and in good standing under the
laws of the state of its organization and has full corporate power,
authority and legal right to own its properties and conduct its credit card
business as such properties are presently owned and as such business is
presently conducted, and to execute, deliver and perform its obligations
under this Agreement.
(b) Due Qualification. The Servicer is duly qualified to do business
-----------------
and is in good standing (or is exempt from such requirement) and has
obtained all necessary licenses and approvals, except to the extent that
the failure so to qualify or register would not have a material adverse
effect on the Servicer's ability to perform its obligations hereunder.
(c) Due Authorization. The execution, delivery, and performance of
-----------------
this Agreement have been duly authorized by the Servicer by all necessary
corporate action on the part of the Servicer.
(d) Binding Obligation. This Agreement constitutes a legal, valid and
------------------
binding obligation of the Servicer, enforceable in accordance with its
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or
hereinafter in effect, affecting the enforcement of creditors' rights in
general or the rights of creditors of banking corporations organized under
the laws of the State of New York.
(e) No Violation. The execution and delivery of this Agreement by the
------------
Servicer, and the performance of the transactions contemplated by this
Agreement and the fulfillment of the terms hereof applicable to the
Servicer, will not conflict with, violate, result in any breach of any of
the material terms and provisions of, or constitute (with or without notice
or lapse of time or both) a default under, any Requirement of Law
applicable to the Servicer or any indenture, contract, agreement, mortgage,
deed of trust or other instrument to which the Servicer is a party or by
47
<PAGE>
which it is bound except to the extent that the same could not reasonably
be expected to have a material adverse effect on the Certificateholders or
any Credit Enhancement Provider.
(f) No Proceedings. There are no proceedings or investigations
--------------
pending or, to the best knowledge of the Servicer, threatened against the
Servicer before any court, regulatory body, administrative agency or other
tribunal or governmental instrumentality seeking to prevent the issuance of
the Certificates or the consummation of any of the transactions
contemplated by this Agreement, seeking any determination or ruling that,
in the reasonable judgment of the Servicer, would materially and adversely
affect the performance by the Servicer of its obligations under this
Agreement, or seeking any determination or ruling that would materially and
adversely affect the validity or enforceability of this Agreement.
(g) Compliance with Requirements of Law. The Servicer shall duly
-----------------------------------
satisfy all obligations on its part to be fulfilled under or in connection
with each Receivable and the related Account, will maintain in effect all
qualifications required under Requirements of Law in order to service
properly each Receivable and the related Account and will comply in all
material respects with all other Requirements of Law in connection with
servicing each Receivable and the related Account the failure to comply
with which would have a material adverse effect on the Certificateholders
or any Credit Enhancement Provider.
Section 3.4 Reports and Records for the Trustee.
-----------------------------------
(a) Daily Reports. On each Business Day during any period during
-------------
which the Servicer is required to make daily deposits to the Collection Account
pursuant to Section 4.3(a), the Servicer shall prepare and make available at the
office of the Servicer for inspection by the Trustee a record setting forth (i)
the aggregate amount of Collections processed by the Servicer on the preceding
Business Day and (ii) the aggregate amount of Receivables as of the close of
business on the preceding Business Day.
(b) Monthly Servicer's Certificate. Unless otherwise stated in the
------------------------------
related Supplement with respect to any Series, on each Determination Date the
Servicer shall forward, as provided in Section 13.5, to the Trustee, the Paying
Agent, any Credit Enhancement Provider and each Rating Agency, a certificate of
a Servicing Officer in the form of Exhibit C (which includes the Schedule
thereto specified as such in each Supplement) setting forth (i) the aggregate
amount of Collections processed during the preceding Monthly Period, (ii) the
aggregate amount of the
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<PAGE>
applicable Investor Percentage of Collections of Principal Receivables processed
by the Servicer pursuant to Article IV during the preceding Monthly Period with
respect to each Series then outstanding, (iii) the aggregate amount of the
applicable Investor Percentage of Collections of Finance Charge Receivables
processed by the Servicer pursuant to Article IV during the preceding Monthly
Period with respect to each Series then outstanding, (iv) the aggregate amount
of Receivables processed as of the end of the last day of the preceding Monthly
Period, (v) the balance on deposit in the Finance Charge Account, the Principal
Account or any Series Account applicable to any Series then outstanding on such
Determination Date with respect to Collections processed by the Servicer during
the preceding Monthly Period, (vi) the aggregate amount, if any, of withdrawals,
drawings or payments under any Credit Enhancement, if any, for each Series then
outstanding required to be made with respect to the previous Monthly Period in
the manner provided in the related Supplement, (vii) the sum of all amounts
payable to the Investor Certificateholders of each Series (or for a Series of
more than one Class, each such Class) on the succeeding Distribution Date in
respect of Certificate Principal and Certificate Interest with respect to such
preceding monthly Period and (viii) such other matters as are set forth in
Exhibit C.
Section 3.5 Annual Servicer's Certificate. On or before March 31 of
-----------------------------
each calendar year, beginning with March 31, 1997, the Servicer will deliver, as
provided in Section 13.5, to the Trustee, any Credit Enhancement Provider and
the Rating Agency, an Officer's Certificate substantially in the form of Exhibit
D stating that (a) a review of the activities of the Servicer during the twelve-
month period ending on December 31 of the preceding calendar year, or for the
initial period, from the Closing Date until December 31, 1996, and of its
performance under this Agreement was made under the supervision of the officer
signing such certificate and (b) to the best of such Officer's knowledge, based
on such review, the Servicer has fully performed all its obligations under this
Agreement throughout such period, or, if there has been a default in the
performance of any such obligation, specifying each such default known to such
officer and the nature and status thereof. A copy of such certificate may be
obtained by any Investor Certificateholder by a request in writing to the
Trustee addressed to the Corporate Trust office.
Section 3.6 Annual Independent Accountants' Servicing Report.
------------------------------------------------
(a) On or before March 31 of each calendar year, beginning with March
31, 1997, the Servicer shall cause a firm of nationally recognized independent
certified public accountants (who may also render other services to the Servicer
or the Transferor) to furnish, as provided in Section 13.5, a report
49
<PAGE>
addressed to the Trustee, any Credit Enhancement Provider and the Transferor, to
the effect that such firm has examined management's assertion that, as of the
date of such report, the system of internal control over servicing of
securitized credit card receivables met the criteria for effective internal
control described in the report entitled "Internal Control - Integrated
Framework" issued by the Committee of Sponsoring Organizations of the Treadway
Commission ("COSO") and that in their opinion, management's assertion is fairly
stated, in all material respects. A copy of such report shall be distributed by
the Trustee to the Rating Agency and will be available for distribution to
Certificateholders upon written request therefor addressed to the Trustee at the
Corporate Trust Office.
(b) On or before March 31 of each calendar year, beginning with March
31, 1997, the Servicer shall cause a firm of nationally recognized independent
certified public accountants (who may also render other services to the Servicer
or the Transferor) to furnish, as provided in Section 13.5, a report, prepared
using generally accepted attestation standards, addressed to the Trustee, any
Credit Enhancement Provider and the Transferor, to the effect that they have
compared the amounts set forth in the monthly certificates forwarded by the
Servicer pursuant to subsection 3.4(c) during the period covered by such report
(which shall be the twelve-month period ending on December 31 of the preceding
calendar year, or for the initial period, from the Closing Date until December
31, 1996) with the Servicer's computer reports which were the source of such
amounts and found them to be in agreement or shall disclose any exceptions
noted. Additionally, such firm shall recalculate the mathematical accuracy of
amounts derived in the monthly certificates. A copy of such report shall be
distributed by the Trustee to the Rating Agency and will be available for
distribution to Certificateholders upon written request therefor addressed to
the Trustee at the Corporate Trust Office.
Section 3.7 Tax Treatment. The Transferor has structured this
-------------
Agreement and the Investor Certificates with the intention that the Investor
Certificates will qualify under applicable federal, state, local and foreign tax
law as indebtedness. The Transferor, the Servicer, the Holder of the Transferor
Certificate, each Investor Certificateholder, and each Certificate Owner, agree
to treat and to take no action inconsistent with the treatment of the Investor
Certificates (or beneficial interest therein) as indebtedness for purposes of
federal, state, local and foreign income or franchise taxes and any other tax
imposed on or measured by income. Each Investor Certificateholder and the
Holder of the Transferor Certificate, by acceptance of its Certificate and each
Certificate Owner, by acquisition of a beneficial interest in a Certificate,
agree to be bound by the provisions of this section 3.7. Each Certificateholder
agrees that it will cause any Certificate Owner acquiring an interest in
50
<PAGE>
a Certificate through it to comply with this Agreement as to treatment as
indebtedness under applicable tax law, as described in this Section 3.7.
Section 3.8 Notices to the Transferor. In the event that the
-------------------------
Transferor is no longer acting as Servicer, any Successor Servicer appointed
pursuant to Section 10.2 shall deliver or make available to the Transferor each
certificate and report required to be prepared, forwarded or delivered
thereafter pursuant to Sections 3.4, 3.5 and 3.6.
[End of Article III]
51
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ARTICLE IV
RIGHTS OF CERTIFICATEHOLDERS AND ALLOCATION
AND APPLICATION OF COLLECTIONS
Section 4.1 Rights of Certificateholders. Each Series of Investor
----------------------------
Certificates shall represent Undivided Interests in the Trust, including the
benefits of any Credit Enhancement issued with respect to such Series and the
right to receive the Collections and other amounts at the times and in the
amounts specified in this Article IV to be deposited in the Investor Accounts
and any other Series Account (if so specified in the related Supplement) or to
be paid to the Investor Certificateholders of such Series; provided, however,
-------- -------
that the aggregate interest represented by such Certificates at any time in the
Principal Receivables shall not exceed an amount equal to the Investor Interest
at such time. The Transferor Certificate shall represent the remaining
undivided interest in the Trust, including the right to receive the Collections
and other amounts at the times and in the amounts specified in this Article IV
to be paid to the Holder of the Transferor Certificate; provided, however, that
-------- -------
the aggregate interest represented by such Transferor Certificate at any time in
the Principal Receivables shall not exceed the Transferor Interest at such time
and such Certificate shall not represent any interest in the Investor Accounts,
except as provided in this Agreement, or the benefits of any Credit Enhancement
issued with respect to any Series.
Section 4.2 Establishment of Accounts.
-------------------------
(a) The Collection Account. The Servicer, for the benefit of the
----------------------
Certificateholders, shall establish and maintain in the name of the Trustee, on
behalf of the Trust, an Eligible Deposit Account bearing a designation clearly
indicating that the funds deposited therein are held in trust for the benefit of
the Certificateholders (the "Collection Account"). Pursuant to authority
------------------
granted to it pursuant to subsection 3.1(b), the Servicer shall have the
revocable power to withdraw funds from the Collection Account for the purposes
of carrying out its duties hereunder.
(b) The Finance Charge and Principal Accounts. The Trustee, for the
-----------------------------------------
benefit of the Investor Certificateholders, shall establish and maintain in the
State of New York with the Paying Agent in the name of the Trust two Eligible
Deposit Accounts (the "Finance Charge Account" and the "Principal Account",
---------------------- -----------------
respectively), bearing a designation clearly indicating that the funds therein
are held for the benefit of the Investor Certificateholders; provided, however,
-------- -------
that each of such accounts may be established as sub-accounts of the Collection
Account. The Trustee shall possess all right, title and interest in all funds
on deposit from time to time in the Finance Charge Account and
52
<PAGE>
the Principal Account and in all proceeds thereof. The Finance Charge Account
and the Principal Account shall be under the sole dominion and control of the
Trustee for the benefit of the Investor Certificateholders. Pursuant to
authority granted to it hereunder, the Servicer shall have the revocable power
to instruct the Trustee to withdraw funds from the Finance Charge Account and
Principal Account for the purpose of carrying out the Servicer's duties
hereunder. The Trustee at all times shall maintain accurate records reflecting
each transaction in the Principal Account and the Finance Charge Account and
that funds held therein shall at all times be held in trust for the benefit of
the Investor Certificateholders.
(c) The Distribution Account. The Trustee, for the benefit of the
------------------------
Investor Certificateholders, shall cause to be established and maintained in the
name of the Trust, an Eligible Deposit Account bearing a designation clearly
indicating that the funds deposited therein are held in trust for the benefit of
the Investor Certificateholders (the "Distribution Account"). The Trustee shall
--------------------
possess all right, title and interest in all funds on deposit from time to time
in the Distribution Account and in all proceeds thereof. The Distribution
Account shall be under the sole dominion and control of the Trustee for the
benefit of the Investor Certificateholders.
(d) The Excess Funding Account. The Trustee, for the benefit of the
--------------------------
Investor Certificateholders, shall establish and maintain an Eligible Deposit
Account bearing a designation clearly indicating that the funds therein are held
for the benefit of the Investor 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 Investor Certificateholders. If,
at any time, the Excess Funding Account ceases to be an Eligible Deposit
Account, the Trustee shall notify the Rating Agency and within 10 Business Days
establish a new Eligible Deposit Account which shall be designated as the new
Excess Funding Account and shall transfer any cash or any investments to such
new Excess Funding Account. From the date such new Excess Funding Account is
established, it shall be the "Excess Funding Account." Pursuant to authority
granted to it hereunder, the Servicer shall have the revocable power to instruct
the Trustee to withdraw funds from the Excess Funding Account for the purpose of
carrying out the Servicer's duties hereunder. The Trustee at all times shall
maintain accurate records reflecting each transaction in the Excess Funding
Account and that funds held therein shall at all times be held in trust for the
benefit of the Investor Certificateholders.
53
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(e) Series Accounts. If so provided in the related Supplement, the
---------------
Trustee, for the benefit of the Investor Certificateholders, shall cause to be
established and maintained in the name of the Trust, one or more Series
Accounts. Each such Series Account shall bear a designation clearly indicating
that the funds deposited therein are held for the benefit of the Investor
Certificateholders of such Series. Each such Series Account will be an Eligible
Deposit Account, if so provided in the related Supplement and will have the
other features and be applied as set forth in the related Supplement.
(f) Administration of the Finance Charge, Principal Accounts and
------------------------------------------------------------
Excess Funding Account. Funds on deposit in the Principal Account, the Finance
- ----------------------
Charge Account and the Excess Funding Account shall at all times be invested in
Permitted Investments. Any such investment shall mature and such funds shall be
available for withdrawal on or prior to the Transfer Date related to the Monthly
Period in which such funds were processed for collection, or if so specified in
the related Supplement, immediately preceding a Distribution Date. The Trustee
shall maintain for the benefit of the Investor Certificateholders possession of
the negotiable instruments or securities evidencing the Permitted Investments
described in clause (a) of the definition thereof from the time of purchase
thereof until the time of sale or maturity; provided, however that no such
-------- -------
investment shall be disposed of prior to its maturity date. At the end of each
month, all interest and earnings (net of losses and investment expenses) on
funds on deposit in the Principal Account and the Finance Charge Account shall
be deposited by the Trustee in an Eligible Deposit Account in the name of the
Transferor, or a Person designated in writing by the Servicer, which shall not
constitute a part of the Trust, or shall otherwise be turned over by the Trustee
to the Transferor not less frequently than monthly, and all interest and
earnings (net of losses and investment expenses) on funds on deposit in the
Excess Funding Account shall be deposited by the Trustee in the Finance Charge
Account for application as Collections of Finance Charge Receivables. Subject
to the restrictions set forth above, the Servicer, or a Person designated in
writing by the Servicer, of which the Trustee shall have received written
notification thereof, shall instruct the Trustee with respect to the investment
of funds on deposit in the Principal Account and the Finance Charge Account.
For purposes of determining the availability of funds or the balances in the
Finance Charge Account, the Principal Account and, except as provided in the
second preceding sentence, the Excess Funding Account, for any reason under this
Agreement, all investment earnings on such funds shall be deemed not to be
available or on deposit.
54
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Section 4.3 Collections and Allocations.
---------------------------
(a) Collections. Except as provided below, the Servicer shall deposit
-----------
all Collections in the Collection Account as promptly as possible after the Date
of Processing of such Collections, but in no event later than the second
Business Day following such Date of Processing. In the event of the insolvency
of the Servicer, then, immediately upon the occurrence of such event and
thereafter, the Servicer shall deposit all Collections into the Collection
Account, and in no such event shall the Servicer deposit any Collections
thereafter into any account established, held or maintained with the Servicer.
The Servicer shall allocate such amounts to each Series of Investor
Certificates and to the Holder of the Transferor Certificate in accordance with
this Article IV and shall withdraw the required amounts from the Collection
Account or pay such amounts to the Holder of the Transferor Certificate in
accordance with this Article IV, in both cases as modified by any Supplement.
The Servicer shall make such deposits or payments on the date indicated therein
in immediately available funds or as otherwise provided in the Supplement for
any Series of Certificates with respect to such Series.
Notwithstanding anything in this Agreement to the contrary, for so
long as, and only so long as, the Transferor shall remain the Servicer
hereunder, and (a)(i) the Servicer provides to the Trustee a letter of credit
covering risk collection of the Servicer, and (ii) the Transferor shall not have
received a notice from any Rating Agency that such a letter of credit would
result in the lowering of such Rating Agency's then-existing rating of the
Investor Certificates, or (b) the Servicer shall have and maintain a certificate
of deposit or short-term deposit rating of "P-1" by Moody's and of "A-1" by
Standard & Poor's, the Servicer need not deposit Collections into the Collection
Account, the Principal Account, the Finance Charge Account, the Excess Funding
Account or any Series Account, as provided in any Supplement, or make payments
to the Holder of the Transferor Certificate as provided in Article IV, but may
make such deposits, payments and withdrawals on each Transfer Date in an amount
equal to the net amount of such deposits, payments and withdrawals which would
have been made but for the provisions of this paragraph.
Notwithstanding anything else in this Agreement to the contrary, with
respect to any Monthly Period, whether the Servicer is required to make monthly
or daily deposits from the Collection Account into the Finance Charge Account,
the Principal Account, the Excess Funding Account or any Series Account, as
provided in any Supplement, (i) the Servicer will only be required to deposit
Collections from the Collection Account into the Finance Charge Account, the
Principal Account, the Excess
55
<PAGE>
Funding Account or any Series Account in an amount equal to the lesser of (x)
the amount required to be deposited into any such deposit account pursuant to
the terms of this Agreement or any Supplement and (y) the amount required to be
distributed on or prior to the related Distribution Date to Investor
Certificateholders or to any Credit Enhancement Provider pursuant to the terms
of any Supplement or agreement relating to such Credit Enhancement and (ii) if
at any time prior to such Distribution Date the amount of Collections deposited
in the Collection Account exceeds the amount required to be deposited pursuant
to clause (i) above, the Servicer will be permitted to withdraw the excess from
the Collection Account.
(b) Allocations for the Transferor Certificate. Throughout the
------------------------------------------
existence of the Trust, unless otherwise stated in any Supplement, the Servicer
shall allocate to the Holder of the Transferor Certificate an amount equal to
the product of (A) the Transferor Percentage and (B) the aggregate amount of
such Collections allocated to Principal Receivables and Finance Charge
Receivables, respectively, in respect of each Monthly Period. Notwithstanding
anything in this Agreement to the contrary, unless otherwise stated in any
Supplement, the Servicer need not deposit this amount or any other amounts so
allocated to the Transferor Certificate pursuant to any Supplement into the
Collection Account and shall pay, or be deemed to pay, such amounts as collected
to the Holder of the Transferor Certificate.
(c) Adjustments for Miscellaneous Credits and Fraudulent Charges. The
------------------------------------------------------------
Servicer shall be obligated to reduce on a net basis in each Monthly Period the
aggregate amount of Principal Receivables used to calculate the Transferor
Interest as provided in this subsection 4.3(c) (a "Credit Adjustment") with
-----------------
respect to any Principal Receivable (i) which was created in respect of
merchandise refused or returned by the Obligor thereunder or as to which the
Obligor thereunder has asserted a counterclaim or defense, (ii) which is reduced
by the Servicer by any rebate, refund, charge-back or adjustment (including
Servicer errors) or (iii) which was created as a result of a fraudulent or
counterfeit charge.
In the event that the inclusion of the amount of a Credit Adjustment
in the calculation of the Transferor Interest would cause the Transferor
Interest to be an amount less than the Minimum Transferor Interest, the
Transferor shall make a deposit, no later than the Business Day following the
Date of Processing of such Credit Adjustment, in the Excess Funding Account in
immediately available funds in an amount equal to the amount by which such
Credit Adjustment would cause the Transferor Interest to be less than the
Minimum Transferor Interest on such Date of Processing.
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<PAGE>
(d) Transfer of Defaulted Accounts. Unless otherwise provided in any
------------------------------
Supplement, on the date on which an Account becomes a Defaulted Account, the
Trust shall automatically and without further action or consideration be deemed
to transfer, set over, and otherwise convey to the Transferor, without recourse,
representation or warranty, all the right, title and interest of the Trust in
and to Receivables in such Defaulted Account, all monies due or to become due
with respect to such Receivables, all proceeds of such Receivables and Insurance
Proceeds relating to such Receivables allocable to the Trust with respect to
such Receivables. Notwithstanding any such transfer of accounts, amounts
recovered with respect to such defaulted accounts may still be allocated to the
Trust to the extent provided for in the definition of Recoveries.
(e) Operation of Excess Funding Account. On each Determination Date
-----------------------------------
on which one or more Series is in its Amortization Period or Accumulation
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, and the Servicer shall instruct the Trustee to withdraw such amount (up
to the Excess Funding Amount) from the Excess Funding Account on the next
succeeding Transfer Date and deposit such amount in the Distribution Account for
allocation among each such Series as Shared Principal Collections as specified
in each related Supplement. On any Business Day on which the Transferor
Interest exceeds the Minimum Transferor Interest, the Servicer shall instruct
the Trustee to withdraw the amount of such excess (up to the Excess Funding
Amount) from the Excess Funding Account on such day and pay such amount to the
Holder of the Transferor Certificate.
Section 4.4 Allocations During Funding Period. To the extent that
---------------------------------
the Servicer establishes an Eligible Deposit Account as a pre-funding account
(the "Pre-Funding Account") with respect to any Series, bearing a designation
indicating that the funds deposited therein are for the benefit of such Series,
during the period (the "Funding Period"), as set forth in the related
Supplement, that the Pre-Funding Account maintains a balance, the date upon
which an increase in the Invested Amount of such Series in accordance with the
terms of such related Supplement occurs shall be treated as an Addition Date
solely for the purpose of calculating the applicable Investor Percentages. Such
Addition Date shall be deemed to occur on the date of each such increase and the
applicable Investor Percentages shall be calculated accordingly.
Section 4.5 Certain Fees.
------------
(a) On or prior to each Determination Date following a Monthly Period
all of the days of which follow the Fee Determination Date, the Transferor shall
notify the Servicer
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<PAGE>
of the amounts of Late Fees and similar fees and charges and Special Fees to be
included as Collections of Finance Charge Receivables arising from the Chase
Accounts with respect to the preceding Monthly Period. Until the date specified
by the Servicer in an Officer's Certificate delivered to the Trustee as a date
after which the Servicer can compute the actual amount of Collections of such
fees and charges (the "Fee Determination Date"), such amounts shall be deemed to
be equal to the product of (x) the amount of Late Fees and similar fees and
charges and Special Fees, as the case may be, billed with respect to such
Monthly Period and (y) a fraction, the numerator of which is the amount of
Collections of Periodic Finance Charges and Annual Membership Fees arising from
the Chase Accounts with respect to such Monthly Period, and the denominator of
which is the amount of Periodic Finance Charges and Annual Membership Fees
arising from the Chase Accounts billed with respect to such Monthly Period.
(b) On and after the Fee Determination Date, in the case of the Chase
Accounts, and at all times, in the case of the Chemical Accounts, the amounts of
Late Fees and similar fees and charges and Special Fees to be included as
Collections of Finance Charge Receivables shall be the actual amounts of such
fees and charges, as computed by the Servicer.
(c) On each Transfer Date prior to the first Monthly Period all of the
days of which follow the Fee Determination Date, the Transferor shall pay to the
Servicer and the Servicer shall deposit into the Collection Account, for
allocation as Collections of Finance Charge Receivables in the manner provided
in Article IV (in immediately available funds) the amounts of Late Fees and
similar fees and charges and Special Fees arising from the Chase Accounts to be
so included as Collections of Finance Charge Receivables with respect to the
preceding Monthly Period, as calculated pursuant to this Section 4.5.
[THE REMAINDER OF ARTICLE IV IS RESERVED AND SHALL BE SPECIFIED IN ANY
SUPPLEMENT WITH RESPECT TO ANY SERIES]
[End of Article IV]
58
<PAGE>
ARTICLE V
[ARTICLE V IS RESERVED AND SHALL
BE SPECIFIED IN ANY SUPPLEMENT
WITH RESPECT TO ANY SERIES]
[End of Article V]
59
<PAGE>
ARTICLE VI
THE CERTIFICATES
Section 6.1 The Certificates. Subject to Sections 6.10 and 6.13, the
----------------
Investor Certificates of each Series and any Class thereof may be issued in
bearer form (the "Bearer Certificates") with attached interest coupons and a
-------------------
special coupon (collectively, the "Coupons") or in fully registered form (the
-------
"Registered Certificates"), and shall be substantially in the form of the
- ------------------------
exhibits with respect thereto attached to the related Supplement. The
Transferor Certificate shall be substantially in the form of Exhibit A. The
Investor Certificates and the Transferor Certificate shall, upon issue pursuant
hereto or to Section 6.9 or Section 6.10, be executed and delivered by the
Transferor to the Trustee for authentication and redelivery as provided in
Sections 2.1 and 6.2. Any Investor Certificate shall be issuable in a minimum
denomination of $1,000 Undivided Interest and integral multiples thereof, unless
otherwise specified in any Supplement. The Transferor Certificate shall be
issued as a single certificate. Each Certificate shall be executed by manual or
facsimile signature on behalf of the Transferor by its President or any Vice
President. Certificates bearing the manual or facsimile signature of the
individual who was, at the time when such signature was affixed, authorized to
sign on behalf of the Transferor or the Trustee shall not be rendered invalid,
notwithstanding that such individual has ceased to be so authorized prior to the
authentication and delivery of such Certificates or does not hold such office at
the date of such Certificates. No Certificate shall be entitled to any benefit
under this Agreement, or be valid for any purpose, unless there appears on such
Certificate a certificate of authentication substantially in the form provided
for herein, executed by or on behalf of the Trustee by the manual signature of a
duly authorized signatory, and such certificate upon any Certificate shall be
conclusive evidence, and the only evidence, that such Certificate has been duly
authenticated and delivered hereunder. All Certificates shall be dated the date
of their authentication except Bearer Certificates which shall be dated the
applicable Issuance Date as provided in the related Supplement.
Section 6.2 Authentication of Certificates. Contemporaneously with
------------------------------
the initial assignment and transfer of the Receivables, whether now existing or
hereafter created (other than Receivables in Additional Accounts) and the other
components to the Trust, the Trustee shall authenticate and deliver the initial
Series of Investor Certificates, upon the written order of the Transferor, to
the underwriters for the sale of the Book-Entry Certificates evidenced by such
Investor Certificates, and against payment to the Transferor of the Initial
Investor Interest (net of any purchase or underwriting discount). Upon the
receipt of such payment and the issuance of the Investor Certificates, such
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Investor Certificates shall be fully paid and non-assessable. The Trustee shall
authenticate and deliver the Transferor Certificate to the Transferor
simultaneously with its delivery to the Transferor of the initial Series of
Investor Certificates. Upon an Exchange as provided in Section 6.9 and the
satisfaction of certain other conditions specified therein, the Trustee shall
authenticate and deliver the Investor Certificates of additional Series (with
the designation provided in the related Supplement), upon the order of the
Transferor, to the Persons designated in such Supplement. Upon the order of the
Transferor, the Certificates of any Series shall be duly authenticated by or on
behalf of the Trustee, in authorized denominations. If specified in the related
Supplement for any Series, the Trustee shall authenticate and deliver outside
the United States the Global Certificate that is issued upon original issuance
thereof, upon the written order of the Transferor, to the Depository against
payment of the purchase price therefor. If specified in the related Supplement
for any Series, the Trustee shall authenticate Book-Entry Certificates that are
issued upon original issuance thereof, upon the written order of the Transferor,
to a Clearing Agency or is nominee as provided in Section 6.10 against payment
of the purchase price thereof.
Section 6.3 Registration of Transfer and Exchange of Certificates.
-----------------------------------------------------
(a) The Trustee shall cause to be kept at the office or agency to be
maintained by a transfer agent and registrar (the "Transfer Agent and
------------------
Registrar"), in accordance with the provisions of Section 11.16, a register (the
"Certificate Register") in which, subject to such reasonable regulations as it
--------------------
may prescribe, the Transfer Agent and Registrar shall provide for the
registration of the Investor Certificates of each Series (unless otherwise
provided in the related Supplement) and of transfers and exchanges of the
Investor Certificates as herein provided. Chase Bank is hereby initially
appointed Transfer Agent and Registrar for the purposes of registering the
Investor Certificates and transfers and exchanges of the Investor Certificates
as herein provided. If any form of Investor Certificate is issued as a Global
Certificate, the Trustee may, or if and so long as any Series of Investor
Certificates are listed an the Luxembourg Stock Exchange and such exchange shall
so require, the Trustee shall appoint a co-transfer agent and co-registrar in
Luxembourg or another European city. Any reference in this Agreement to the
Transfer Agent and Registrar shall include any co-transfer agent and co-
registrar unless the context otherwise requires. Chase Bank shall be permitted
to resign as Transfer Agent and Registrar upon 30 days' written notice to the
Servicer. In the event that Chase Bank shall no longer be the Transfer Agent
and Registrar, the Trustee shall appoint a successor Transfer Agent and
Registrar.
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Upon surrender for registration of transfer of any Certificate at any
office or agency of the Transfer Agent and Registrar, the Transferor shall
execute, subject to the provisions of subsection 6.3(c), and the Trustee shall
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Certificates in authorized denominations of like
aggregate Undivided Interests; provided, however that the provisions of this
-------- -------
paragraph shall not apply to Bearer Certificates.
At the option of an Investor Certificateholder, Investor Certificates
may be exchanged for other Investor Certificates of the same Series in
authorized denominations of like aggregate Undivided Interests, upon surrender
of the Investor Certificates to be exchanged at any such office or agency. At
the option of any Holder of Registered Certificates, Registered Certificates may
be exchanged for other Registered Certificates of the same Series in authorized
denominations of like aggregate Undivided Interests in the Trust, upon surrender
of the Registered Certificates to be exchanged at any office or agency of the
Transfer Agent and Registrar maintained for such purpose. At the option of a
Bearer Certificateholder, subject to applicable laws and regulations (including
without limitation, the Bearer Rules), Bearer Certificates may be exchanged for
other Bearer Certificates or Registered Certificates of the same Series in
authorized denominations of like aggregate Undivided Interests in the Trust, in
the manner specified in the Supplement for such Series, upon surrender of the
Bearer Certificates to be exchanged at an office or agency of the Transfer Agent
and Registrar located outside the United States. Each Bearer Certificate
surrendered pursuant to this Section 6.3 shall have attached thereto (or be
accompanied by) all unmatured Coupons, provided that any Bearer Certificate so
surrendered after the close of business on the Record Date preceding the
relevant Distribution Date after the related Series Termination Date need not
have attached the coupons relating to such Distribution Date.
Whenever any Investor Certificates of any Series are so surrendered
for exchange, the Transferor shall execute, and the Trustee shall authenticate
and (unless the Transfer Agent and Registrar is different than the Trustee, in
which case the Transfer Agent and Registrar shall) deliver, the Investor
Certificates of such Series which the Certificateholder making the exchange is
entitled to receive. Every Investor Certificate presented or surrendered for
registration of transfer or exchange shall be accompanied by a written
instrument of transfer in a form satisfactory to the Trustee and the Transfer
Agent and Registrar duly executed by the Certificate holder thereof or his
attorney-in-fact duly authorized in writing.
The preceding provisions of this Section 6.3 notwithstanding, the
Trustee or the Transfer Agent and Registrar, as the
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<PAGE>
case may be, shall not be required to register the transfer of or exchange any
Investor Certificate of any Series for a period of 15 days preceding the due
date for any payment with respect to the Investor Certificates of such Series.
Unless otherwise provided in the related Supplement, no service charge
shall be made for any registration of transfer or exchange of Certificates, but
the Transfer Agent and Registrar may require payment of a sum sufficient to
cover any tax or governmental charge that may be imposed in connection with any
transfer or exchange of Certificates.
All Investor Certificates (together with any Coupons attached to
Bearer Certificates) surrendered for registration of transfer and exchange shall
be canceled by the Transfer Agent and Registrar and disposed of in a manner
satisfactory to the Trustee. The Trustee shall cancel and destroy any Global
Certificates upon its exchange in full for Definitive Certificates and shall
deliver a certificate of destruction to the Transferor. Such certificate shall
also state that a certificate or certificates of each Foreign Clearing Agency to
the effect referred to in Section 6.13 was received with respect to each portion
of such Global Certificate exchanged for Definitive Certificates.
The Transferor shall execute and deliver to the Trustee or the
Transfer Agent and Registrar, as applicable, Bearer Certificates and Registered
Certificates in such amounts and at such times as are necessary to enable the
Trustee to fulfill its responsibilities under this Agreement and the
Certificates.
(b) Except as provided in Section 6.9 or 7.2 or in any Supplement, in
no event shall the Transferor Certificate or any interest therein be transferred
hereunder, in whole or in part, unless the Trustee shall have consented in
writing to such transfer; provided, however, that the Trustee may not withhold
-------- -------
such consent if it shall have received (1) written confirmation from each Rating
Agency that such transfer will satisfy the Rating Agency Condition and (2) a Tax
Opinion with respect to such transfer.
(c) Unless otherwise provided in the related Supplement, registration
of transfer of Registered Certificates containing a legend relating to the
restrictions on transfer of such Registered Certificates (which legend shall be
set forth in the Supplement relating to such Investor Certificates) shall be
effected only if the conditions set forth in such related Supplement are
satisfied.
Whenever a Registered Certificate containing the legend sat forth in
the related Supplement is presented to the Transfer Agent and Registrar for
registration of transfer, the Transfer Agent and Registrar shall promptly seek
instructions from the
63
<PAGE>
Servicer regarding such transfer. The Transfer Agent and Registrar and the
Trustee shall be entitled to receive written instructions signed by a Servicing
Officer prior to registering any such transfer or authenticating new Registered
Certificates, as the case may be. The Servicer hereby agrees to indemnify the
Transfer Agent and Registrar and the Trustee and to hold each of them harmless
against any loss, liability or expense incurred without negligence or bad faith
on their part arising out of or in connection with actions taken or omitted by
them in reliance on any such written instructions furnished pursuant to this
subsection 6.3(c).
(d) The Transfer Agent and Registrar will maintain at its expense in
the Borough of Manhattan, the City of New York (and subject to this Section 6.3,
if specified in the related Supplement for any Series, any other city designated
in such Supplement) an office or offices or an agency or agencies where Investor
Certificates of such Series may be surrendered for registration of transfer or
exchange.
Section 6.4 Mutilated, Destroyed, Lost or Stolen Certificates. If
-------------------------------------------------
(a) any mutilated Certificate (together, in the case of Bearer Certificates,
with all unmatured Coupons, if any, appertaining thereto) is surrendered to the
Transfer Agent and Registrar, or the Transfer Agent and Registrar receives
evidence to its satisfaction of the destruction, loss or theft of any
Certificate and (b) there is delivered to the Transfer Agent and Registrar and
the Trustee such security or indemnity as may be reasonably 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 and the Trustee shall authenticate and (unless the Transfer Agent
and Registrar is different from the Trustee, in which case the Transfer Agent
and Registrar shall) deliver (in compliance with applicable law), in exchange
for or in lieu of any such mutilated, destroyed, lost or stolen Certificate, a
new Certificate of like tenor and aggregate Undivided Interest. In connection
with the issuance of any new Certificate under this Section 6.4, the Trustee or
the Transfer Agent and Registrar may require the payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in relation
thereto and any other expenses (including the fees and expenses of the Trustee
and the Transfer Agent and Registrar) connected therewith. Any duplicate
Certificate issued pursuant to this Section 6.4 shall constitute complete and
indefeasible evidence of ownership in the Trust, as if originally issued,
whether or not the lost, stolen or destroyed certificate shall be found at any
time.
Section 6.5 Persons Deemed Owners. Prior to due presentation of a
---------------------
Certificate for registration of transfer, the Trustee, the Paying Agent, the
Transfer Agent and Registrar and
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<PAGE>
any agent of any of them may treat the Person in whose name any Certificate is
registered as the owner of such Certificate for the purpose of receiving
distributions pursuant to Article V (as described in any Supplement) and for all
other purposes whatsoever, and neither the Trustee, the Paying Agent, the
Transfer Agent and Registrar nor any agent of any of them shall be affected by
any notice to the contrary; provided, however, that in determining whether the
-------- -------
holders of Investor Certificates evidencing the requisite Undivided Interests
have given any request, demand, authorization, direction, notice, consent or
waiver hereunder, unless otherwise expressly specified herein or in the related
Supplement, Investor Certificates owned by the Transferor, the Servicer or any
Affiliate thereof shall be disregarded and deemed not to be outstanding, except
that, in determining whether the Trustee shall be protected in relying upon any
such request, demand, authorization, direction, notice, consent or waiver, only
Investor Certificates which a Responsible Officer in the Corporate Trust Office
of the Trustee knows to be so owned shall be so disregarded. Investor
Certificates so owned that have been pledged in good faith shall not be
disregarded as outstanding, if the pledgee establishes to the satisfaction of
the Trustee the pledgee's right so to act with respect to such Investor
Certificates and that the pledgee is not the Transferor, the Servicer or an
Affiliate thereof.
In the case of a Bearer Certificate, the Trustee, the Paying Agent,
the Transfer Agent and Registrar and any agent of any of them may treat the
holder of a Bearer Certificate or Coupon as the owner of such Bearer Certificate
or Coupon for the purpose of receiving distributions pursuant to Article IV and
Article XII and for all other purposes whatsoever, and neither the Trustee, the
Paying Agent, the Transfer Agent and Registrar nor any agent of any of them
shall be affected by any notice to the contrary. Certificates so owned which
have been pledged in good faith shall not be disregarded and may be regarded as
outstanding, if the pledgee establishes to the satisfaction of the Trustee the
pledgee's right so to act with respect to such Investor Certificates and that
the pledgee is not the Transferor, the Servicer or an Affiliate thereof.
Section 6.6 Appointment of Paying Agent.
---------------------------
(a) The Paying Agent shall make distributions to Investor
Certificateholders from the appropriate account or accounts maintained for the
benefit of Certificateholders as specified in this Agreement or the related
Supplement for any Series pursuant to Articles IV and V hereof. Any Paying
Agent shall have the revocable power to withdraw funds from such appropriate
account or accounts for the purpose of making distributions referred to above.
The Trustee (or the Servicer if the Trustee is the Paying Agent) may revoke such
power and remove the Paying Agent, if the Trustee (or the Servicer if the
Trustee is
65
<PAGE>
the Paying Agent) determines in its sole discretion that the Paying Agent shall
have failed to perform its obligations under this Agreement in any material
respect or for other good cause. The Trustee (or the Servicer if the Trustee is
the Paying Agent) shall notify the Rating Agency of the removal of any Paying
Agent. The Paying Agent, unless the Supplement with respect to any Series
states otherwise, shall initially be Chase Bank. If any form of Investor
Certificate is issued as a Global Certificate, or if and so long as any Series
of Investor Certificates are listed on the Luxembourg Stock Exchange and such
exchange shall so require, the Trustee shall appoint a co-paying agent in
Luxembourg or another European city. The Paying Agent shall be permitted to
resign as Paying Agent upon 30 days' written notice to the Servicer. In the
event that any Paying Agent shall no longer be the Paying Agent, the Trustee
shall appoint a successor to act as Paying Agent (which shall be a bank or trust
company). The provisions of Sections 11.1, 11.2 and 11.3 shall apply to the
Trustee also in the capacity of Paying Agent, for so long as the Trustee shall
act as Paying Agent. Any reference in this Agreement to the Paying Agent shall
include any co-paying agent unless the context requires otherwise.
If specified in the related Supplement for any Series, so long as the
Investor Certificates of such Series are outstanding, the Transferor shall
maintain a co-paying agent in New York City (for Registered Certificates only)
or any other city designated in such Supplement which, if and so long as any
Series of Investor Certificates is listed on the Luxembourg Stock Exchange or
other stock exchange and such exchange so requires, shall be in Luxembourg or
the location required by such other stock exchange.
(b) The Trustee shall cause the Paying Agent (other than itself) to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee that such Paying Agent will hold all sums, if any,
held by it for payment to the Certificateholders in trust for the benefit of the
Certificateholders entitled thereto until such sums shall be paid to such
Certificateholders and shall agree, and if the Trustee is the Paying Agent it
hereby agrees, that it shall comply with all requirements of the Internal
Revenue Code regarding the withholding by the Trustee of payments in respect of
federal income taxes due from Certificate Owners.
Section 6.7 Access to List of Certificateholders' Names and
-----------------------------------------------
Addresses. The Trustee will furnish or cause to be furnished by the Transfer
Agent and Registrar to the Servicer or the Paying Agent, within five Business
Days after receipt by the Trustee of a request therefor from the Servicer or the
Paying Agent, respectively, in writing, a list in such form as the Servicer or
the Paying Agent may reasonably require, of the names and addresses of the
Investor Certificateholders as of the most
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recent Record Date for payment of distributions to Investor Certificateholders.
Unless otherwise provided in the related Supplement, holders of Investor
Certificates evidencing Undivided Interests aggregating not less than 10% of the
Investor Interest of the Investor Certificates of any Series (the "Applicants")
----------
may apply in writing to the Trustee, and if such application states that the
Applicants desire to communicate with other Investor Certificateholders of any
Series with respect to their rights under this Agreement or under the Investor
Certificates and is accompanied by a copy of the communication which such
Applicants propose to transmit, then the Trustee, after having been adequately
indemnified by such Applicants for its costs and expenses, shall afford or shall
cause the Transfer Agent and Registrar to afford such Applicants access during
normal business hours to the most recent list of Certificateholders held by the
Trustee and shall give the Servicer notice that such request has been made,
within five Business Days after the receipt of such application. Such list
shall be as of a date no more than 45 days prior to the date of receipt of such
Applicants' request. Every Certificateholder, by receiving and holding a
Certificate, agrees with the Trustee that neither the Trustee, the Transfer
Agent and Registrar, nor any of their respective agents shall be held
accountable by reason of the disclosure of any such information as to the names
and addresses of the Certificateholders hereunder, regardless of the source from
which such information was obtained.
Section 6.8 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 a certificate of authentication executed on behalf
of the Trustee by an authenticating agent. Each authenticating agent must be
acceptable to the Transferor.
(b) Any institution succeeding to the corporate agency business of an
authenticating agent shall continue to be an authenticating agent without the
execution or filing of any paper or any further act on the part of the Trustee
or such authenticating agent.
(c) An authenticating agent may at any time resign by giving written
notice of resignation to the Trustee and to the Transferor. The Trustee may at
any time terminate the agency of an authenticating agent by giving notice of
termination to such
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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 affect as if originally named as an authenticating agent. No successor
authenticating agent shall be appointed unless acceptable to the Trustee and the
Transferor.
(d) The Trustee agrees to pay each authenticating agent from time to
time reasonable compensation for its services under this Section 6.8, and the
Trustee shall be entitled to be reimbursed and the Servicer shall reimburse the
Trustee for such reasonable payments actually made, subject to the provisions of
Section 11.5.
(e) The provisions of Sections 11.1, 11.2 and 11.3 shall be applicable
to any authenticating agent.
(f) Pursuant to an appointment made under this Section 6.8, the
Certificates may have endorsed thereon, in lieu of 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 signatory
Section 6.9 Tender of Transferor Certificate.
--------------------------------
(a) Upon any Exchange, the Trustee shall issue to the Holder of the
Transferor Certificate under Section 6.1, for execution and redelivery to the
Trustee for authentication under Section 6.2, one or more new Series of Investor
Certificates. Any such Series of Investor Certificates shall be substantially
in the form specified in the related Supplement and shall bear, upon its face,
the designation for such Series to which it belongs, as selected by the
Transferor. Except as specified in any Supplement for a related Series, all
Investor Certificates of any Series shall rank pari passu and be equally and
---- -----
ratably entitled as provided herein to the benefits hereof (except that the
Credit Enhancement provided for any Series shall not be available for any other
Series) without preference, priority or
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distinction on account of the actual time or times of authentication and
delivery, all in accordance with the terms and provisions of this Agreement and
the related Supplement.
(b) The Holder of the Transferor Certificate may tender the Transferor
Certificate to the Trustee in exchange for (i) one or more newly issued Series
of Investor Certificates or in connection with a Companion Series, interests in
such Series and (ii) a reissued Transferor Certificate (any such tender, a
"Transferor Exchange"). In addition, to the extent permitted for any Series of
- --------------------
Investor Certificates as specified in the related Supplement, the Investor
Certificateholders of such Series may tender their Investor Certificates and the
Holder of the Transferor Certificate may tender the Transferor Certificate to
the Trustee pursuant to the terms and conditions set forth in such Supplement in
exchange for (i) one or more newly issued Series of Investor Certificates and
(ii) a reissued Transferor Certificate (an "Investor Exchange"). The Transferor
-----------------
Exchange and Investor Exchange are referred to collectively herein as an
"Exchange." The Holder of the Transferor Certificate may perform an Exchange by
- ---------
notifying the Trustee, in writing at least three days in advance (an "Exchange
--------
Notice") of the date upon which the Exchange is to occur (an "Exchange Date").
- ------
Any Exchange Notice shall state the designation of any Series (and Class
thereof, if applicable) to be issued on the Exchange Date and, with respect to
each such Series: (a) its Initial Investor Interest (or the method for
calculating such Initial Investor Interest) (b) its Certificate Rate (or the
method for allocating interest payments or other cash flows to such Series), if
any, and (c) the Credit Enhancement Provider, if any, with respect to such
Series. On the Exchange Date, the Trustee shall authenticate and deliver any
such Series of Investor Certificates only upon delivery to it of the following:
(a) a Supplement satisfying the criteria set forth in subsection 6.9(c) executed
by the Transferor and specifying the Principal Terms of such Series, (b) the
applicable Credit Enhancement, if any, (c) the agreement, if any, pursuant to
which the Credit Enhancement Provider agrees to provide the Credit Enhancement,
if any, (d) an Opinion of Counsel to the effect that, unless otherwise stated in
the related Supplement, the newly issued Series or Class of Investor
Certificates will be treated as debt secured by the Receivables for United
States federal income and Delaware and New York state income and corporate
franchise tax purposes, (e) a Tax Opinion, (f) written confirmation from each
Rating Agency that the Exchange will satisfy the Rating Agency Condition, (g) an
Officer's Certificate signed by a Vice President (or any more senior officer) of
the Transferor, that on the Exchange Date (i) the Transferor, after giving
effect to the Exchange, would not be required to add Additional Accounts
pursuant to subsection 2.6(a), and (ii) after giving effect to such Exchange,
the Transferor Interest would be at least equal to the Minimum Transferor
Interest and (h) the existing Transferor Certificate or applicable Investor
Certifi-
69
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cates, as the case may be. Upon satisfaction of such conditions, the Trustee
shall cancel the existing Transferor Certificate or applicable Investor
Certificates, as the case may be, and issue, as provided above, such Series of
Investor Certificates and a new Transferor Certificate, dated the Exchange Date.
There is no limit to the number of Exchanges that may be performed under the
Agreement.
(c) In conjunction with an Exchange, the parties hereto shall execute
a Supplement, which shall specify the relevant terms with respect to any newly
issued Series of Investor Certificates, which may include without limitation:
(i) its name or designation, (ii) an Initial Investor Interest or the method of
calculating the Initial Investor Interest, (iii) the method of determining any
adjusted Investor Interest, if applicable, (iv) the Certificate Rate (or formula
for the determination thereof), (v) the Closing Date, (vi) each Rating Agency
rating such Series, (vi) the name of the Clearing Agency, if any, (vii) the
rights of the Holder of the Transferor Certificate that have been transferred to
the Holders of such Series pursuant to such Exchange (including any rights to
allocations of Collections of Finance Charge Receivables and Principal
Receivables), (ix) the interest payment date or dates and the date or dates from
which interest shall accrue, (x) the periods during which or dates on which
principal will be paid or accrued, (xi) the method of allocating Collections
with respect to Principal Receivables for such Series and, if applicable, with
respect to other Series and the method by which the principal amount of Investor
Certificates of such Series shall amortize or accrete and the method for
allocating Collections with respect to Finance Charge Receivables and
Receivables in Defaulted Accounts, (xii) any other Collections with respect to
Receivables or other amounts available to be paid with respect to such Series,
(xii) the names of any accounts to be used by such Series and the terms
governing the operation of any such accounts and use of moneys therein, (xiv)
the Series Servicing Fee and the Series Servicing Fee Percentage, (xv) the
Minimum Transferor Interest and the Series Termination Date, (xvi) the terms of
any Credit Enhancement with respect to such Series, and the Credit Enhancement
Provider, if applicable, (xvii) the base rate applicable to such Series, (xviii)
the terms on which the Certificates of such Series may be repurchased or
remarketed to other investors, (xix) any deposit into any account provided for
such Series, (xx) the number of Classes of such Series, and if more than one
Class, the rights and priorities of each such Class, (xxi) whether Interchange
or other fees will be included in the funds available to be paid for such
Series, (xxii) the priority of any Series with respect to any other Series,
(xxiii) the rights, if any, of the holders of the Transferor Certificate that
have been transferred to the holders of such Series, (xxiv) the Pool Factor,
(xxv) the Minimum Aggregate Principal Receivables, (xxvi) whether such Series
will be part of a Group, (xxvii) whether such Series will or may be a Companion
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Series and the Series with which it will be paired, if applicable and (xxviii)
any other relevant terms of such Series (including whether or not such Series
will be pledged as collateral for an issuance of any other securities, including
commercial paper) (all such terms, the "Principal Terms" of such Series). The
---------------
terms of such Supplement may modify or amend the terms of this Agreement solely
as applied to such new Series. If on the date of the issuance of such Series
there is issued and outstanding one or more Series of Investor Certificates and
no Series of Investor Certificates is currently rated by a Rating Agency, then
as a condition to such Exchange a nationally recognized investment banking firm
or commercial bank shall also deliver to the Trustee an Officer's certificate
stating, in substance, that the Exchange will not have an adverse effect on the
timing or distribution of payments to such other Series of Investor Certificates
then issued and outstanding.
Section 6.10 Book-Entry Certificates. Unless otherwise provided in
-----------------------
any related Supplement, the Investor Certificates, upon original issuance, shall
be issued in the form of typewritten Certificates representing the Book-Entry
Certificates, to be delivered to the depository specified in such Supplement
(the "Depository") which shall be the Clearing Agency or Foreign Clearing
----------
Agency, by or on behalf of such Series. The Investor Certificates of each
Series shall, unless otherwise provided in the related Supplement, initially be
registered on the Certificate Register in the name of the nominee of the
Clearing Agency or Foreign Clearing Agency. No Certificate Owner will receive a
definitive certificate representing such Certificate Owner's interest in the
related Series of Investor Certificates, except as provided in Section 6.12.
Unless and until definitive, fully registered Investor Certificates of any
Series ("Definitive Certificates") have been issued to Certificate Owners
-----------------------
pursuant to Section 6.12;
(i) the provisions of this Section 6.10 shall be in full force
and effect with respect to each such Series;
(ii) the Transferor, the Servicer, the Paying Agent, the Transfer
Agent and Registrar and the Trustee may deal with the Clearing Agency and
the Clearing Agency Participants for all purposes (including the making of
distributions on the Investor Certificates of each such Series) as the
authorized representatives of the Certificate Owners;
(iii) to the extent that the provisions of this Section 6.10
conflict with any other provisions of this Agreement, the provisions of
this Section 6.10 shall control with respect to each such Series; and
71
<PAGE>
(iv) the rights of Certificate Owners of each such Series shall
be exercised only through the Clearing Agency or Foreign Clearing Agency
and the applicable Clearing Agency Participants and shall be limited to
those established by law and agreements between such Certificate Owners and
the Clearing Agency or Foreign Clearing Agency and/or the Clearing Agency
Participants. Pursuant to the Depository Agreement applicable to a Series,
unless and until Definitive Certificates of such Series are issued pursuant
to Section 6.12, the initial Clearing Agency will make book-entry transfers
among the Clearing Agency Participants and receive and transmit
distributions of principal and interest on the Investor Certificates to
such Clearing Agency Participants.
Section 6.11 Notices to Clearing Agency. Whenever notice or other
--------------------------
communication to the Certificateholders is required under this Agreement, unless
and until Definitive Certificates shall have been issued to Certificate Owners
pursuant to Section 6.12, the Trustee shall give all such notices and
communications specified herein to be given to Holders of the Investor
Certificates to the Clearing Agency or Foreign Clearing Agency for distribution
to Holders of Investor Certificates.
Section 6.12 Definitive Certificates. If (i) (A) the Transferor
-----------------------
advises the Trustee in writing that the Clearing Agency or Foreign Clearing
Agency is no longer willing or able to discharge properly its responsibilities
under the applicable Depository Agreement, and (B) the Trustee or the Transferor
is unable to locate a qualified successor, (ii) the Transferor, at its option,
advises the Trustee in writing that it elects to terminate the book-entry system
through the Clearing Agency or Foreign Clearing Agency with respect to any
Series of Certificates or (iii) after the occurrence of a Servicer Default,
Certificate Owners of a Series representing beneficial interests aggregating not
less than 50% of the Investor Interest of such Series advise the Trustee and the
applicable Clearing Agency or Foreign Clearing Agency through the applicable
Clearing Agency Participants in writing that the continuation of a book-entry
system through the applicable Clearing Agency or Foreign Clearing Agency is no
longer in the best interests of the Certificate Owners, the Trustee shall notify
all Certificate Owners of such Series, through the applicable Clearing Agency
Participants, of the occurrence of any such event and of the availability of
Definitive Certificates to Certificate Owners of such Series requesting the
same. Upon surrender to the Trustee of the Investor Certificates of such Series
by the applicable Clearing Agency or Foreign Clearing Agency, accompanied by
registration instructions from the applicable Clearing Agency or Foreign
Clearing Agency for registration, the Trustee shall issue the Definitive
Certificates of such Series. Neither the Transferor nor the Trustee shall be
liable for any delay in delivery of such
72
<PAGE>
instructions and may conclusively rely on, and shall be protected in relying on,
such instructions. Upon the issuance of Definitive Certificates of such Series
all references herein to obligations imposed upon or to be performed by the
applicable Clearing Agency or Foreign Clearing Agency shall be deemed to be
imposed upon and performed by the Trustee, to the extent applicable with respect
to such Definitive Certificates, and the Trustee shall recognize the Holders of
the Definitive Certificates of such Series as Certificateholders of such Series
hereunder.
Section 6.13 Global Certificate. If specified in the related
------------------
Supplement for any Series, the Investor Certificates may be initially issued in
the form of a single temporary Global Certificate (the "Global Certificate") in
------------------
bearer form, without interest coupons, in the denomination of the Initial
Investor Interest and substantially in the form attached to the related
Supplement. Unless otherwise specified in the related Supplement, the
provisions of this Section 6.13 shall apply to such Global Certificate. The
Global Certificate will be authenticated by the Trustee upon the same
conditions, in substantially the same manner and with the same effect as the
Definitive Certificates. The Global Certificate may be exchanged in the manner
described in the related Supplement for Registered or Bearer Certificates in
definitive form.
Section 6.14 Meetings of Certificateholders. To the extent provided
------------------------------
by the Supplement for any Series issued in whole or in part in Bearer
Certificates, the Servicer or the Trustee may at any time call a meeting of the
Certificateholders of such Series, to be held at such time and at such place as
the Servicer or the Trustee, as the case may be, shall determine, for the
purpose of approving a modification of or amendment to, or obtaining a waiver
of, any covenant or condition set forth in this Agreement with respect to such
Series or in the Certificates of such Series, subject to Section 13.1 of the
Agreement.
[End of Article VI]
73
<PAGE>
ARTICLE VII
OTHER MATTERS RELATING
TO THE TRANSFEROR
Section 7.1 Liability of the Transferor. The Transferor shall be
---------------------------
liable in accordance herewith to the extent of the obligations specifically
undertaken by the Transferor.
Section 7.2 Merger or Consolidation of, or Assumption of the
------------------------------------------------
Obligations of, the Transferor.
- ------------------------------
(a) The Transferor 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:
(i) (A) the Transferor is the surviving entity or (B) if the
Transferor is not the surviving entity, the corporation formed by such
consolidation or into which the Transferor is merged or the Person which
acquires by conveyance or transfer the properties and assets of the
Transferor substantially as an entirety shall be organized and existing
under the laws of the United States of America or any State or the District
of Columbia, and shall be a national banking association, state banking
corporation or other entity which is not subject to the bankruptcy laws of
the United States of America and shall expressly assume, by an agreement
supplemental hereto, executed and delivered to the Trustee, in form
satisfactory to the Trustee, the performance of every covenant and
obligation of the Transferor, as applicable hereunder and shall benefit
from all the rights granted to the Transferor, as applicable hereunder. To
the extent that any right, covenant or obligation of the Transferor, as
applicable hereunder, is inapplicable to the successor entity, such
successor entity shall be subject to such covenant or obligation, or
benefit from such right, as would apply, to the extent practicable, to such
successor entity. In furtherance hereof, in applying this Section 7.2 to a
successor entity, Section 9.2 hereof shall be applied by reference to
events of involuntary liquidation, receivership or conservatorship
applicable to such successor entity as shall be set forth in the Officer's
Certificate described in subsection 7.2(a)(ii);
(ii) the Transferor shall have delivered to the Trustee an
Officer's Certificate signed by a Vice President (or any more senior
officer) of the Transferor stating that such consolidation, merger,
conveyance or transfer and such supplemental agreement comply with this
Section 7.2 and that all conditions precedent herein provided for relating
to such transaction have been complied with and an Opinion of
74
<PAGE>
Counsel that such supplemental agreement is legal, valid and binding; and
(iii) the Transferor shall have delivered notice to the Rating
Agency of such consolidation, merger, conveyance or transfer.
(b) The obligations of the Transferor hereunder shall not be
assignable nor shall any Person succeed to the obligations of the Transferor
hereunder (i) except for mergers, consolidations, assumptions or transfers in
accordance with the provisions of the foregoing paragraph or (ii) unless the
assignee with respect to such obligations shall be organized and existing under
the laws of the United States of America or any State or the District of
Columbia, and shall be a national banking association, state banking corporation
or other entity which is not subject to the bankruptcy laws of the United States
of America and shall expressly assume, by an agreement supplemental hereto,
executed and delivered to the Trustee, in form satisfactory to the Trustee, the
performance of every covenant and obligation of the Transferor, as applicable
hereunder and shall benefit from all the rights granted to the Transferor, as
applicable hereunder. To the extent that any right, covenant or obligation of
the Transferor, as applicable hereunder, is inapplicable to the assignee, such
assignee shall be subject to such covenant or obligation, or benefit from such
right, as would apply, to the extent practicable, to such assignee.
Section 7.3 Limitation of Liability. The directors, officers,
-----------------------
employees or agents of the Transferor shall not be under any liability to the
Trust, the Trustee, the Certificateholders, any Credit Enhancement Provider or
any other Person hereunder or pursuant to any document delivered hereunder, it
being expressly understood that all such liability is expressly waived and
released as a condition of, and as consideration for, the execution of this
Agreement and any Supplement and the issuance of the Certificates; provided,
--------
however, that this provision shall not protect the officers, directors,
- -------
employees, or agents of the Transferor against any liability which would
otherwise be imposed by reason of willful misfeasance or gross negligence in the
performance of duties or by reason of reckless disregard of obligations and
duties hereunder. Except as provided in Section 7.4, the Transferor shall not
be under any liability to the Trust, the Trustee, the Certificateholders, any
Credit Enhancement Provider or any other Person for any action taken or for
refraining from the taking of any action in its capacity as Transferor pursuant
to this Agreement or any Supplement whether arising from express or implied
duties under this Agreement or any Supplement; provided, however, that this
-------- -------
provision shall not protect the Transferor against any liability which would
otherwise be imposed by reason of willful misfeasance or gross negligence in the
performance of duties or by reason of reckless
75
<PAGE>
disregard of obligations and duties hereunder. The Transferor and any director,
officer, employee or agent may rely in good faith on any document of any kind
prima facie properly executed and submitted by any Person respecting any matters
- ----- -----
arising hereunder.
Section 7.4 Liabilities. Notwithstanding Section 7.3 (and
-----------
notwithstanding Sections 3.2, 8.3, 8.4 and 11.11), or any other provision
herein, the Transferor by entering into this Agreement, and any holder of an
interest in the Transferor Certificate by its acceptance thereof, agree to be
liable, directly to any creditor or claimant for the entire amount of any
liabilities, including without limitation, any taxes imposed on the Trust,
losses, claims or damages (other than those that would be incurred by an
Investor Certificateholder or a Credit Enhancement Provider, if any, if the
Investor Certificates or Collateral Interest, as the case may be, were notes
secured by the Receivables, for example, as a result of the performance of the
Receivables, market fluctuations, a shortfall or failure to make payment under
any Credit Enhancement or other similar market or investment risks associated
with ownership of the Investor Certificates) arising out of or based on the
arrangement created by this Agreement (to the extent that, if the Trust assets
at the time the claim is made were used to pay in full all outstanding
Certificates of all Series, the Trust assets that would remain after the
Investor Certificateholders and Credit Enhancement Providers, if any, were paid
in full would be insufficient to pay any such losses, claims, damages or
liabilities) as though this Agreement created a partnership under the New York
Revised Limited Partnership Act in which the Transferor and such holder of an
interest in the Transferor Certificate were the general partners of such
partnership. The rights created by this Section 7.4 shall run directly to and
be enforceable by the injured party subject to the limitations hereof. To the
extent provided in Section 8.4, the Servicer will (from its own assets and not
from the assets of the Trust) indemnify and hold harmless the Transferor and
each holder of an interest in the Transferor Certificate against and from
certain losses, claims, damages and liabilities of the Transferor as described
in this Section arising from the actions or omissions of the Servicer.
[End Of Article VII]
76
<PAGE>
ARTICLE VIII
OTHER MATTERS RELATING
TO THE SERVICER
Section 8.1 Liability of the Servicer. The Servicer shall be liable
-------------------------
in accordance herewith only to the extent of the obligations specifically
undertaken by the Servicer in such capacity herein.
Section 8.2 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:
(i) (A) the Servicer is the surviving entity or (B) if the
Servicer is not the surviving entity, 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 a corporation organized and
existing under the laws of the United States of America or any State or the
District of Columbia, and shall be a state or national banking association
or other entity which is not subject to the bankruptcy laws of the United
States of America and shall expressly assume, by an agreement supplemental
hereto, executed and delivered to the Trustee in form satisfactory to the
Trustee, the performance of every covenant and obligation of the Servicer
hereunder (to the extent that any right, covenant or obligation of the
Servicer, as applicable hereunder, is inapplicable to the successor entity,
such successor entity shall be subject to such covenant or obligation, or
benefit from such right, as would apply, to the extent practicable, to such
successor entity);
(ii) the Servicer shall have delivered to the Trustee an
Officer's Certificate that such consolidation, merger, conveyance or
transfer and such supplemental agreement comply with this Section 8.2 and
that all conditions precedent herein provided for relating to such
transaction have been complied with and an Opinion of Counsel that such
supplemental agreement is legal, valid and binding with respect to the
Servicer; and
(iii) the Servicer shall have delivered notice to the Rating
Agency of such consolidation, merger, conveyance or transfer.
Section 8.3 Limitation of Liability of the Servicer and Others. The
--------------------------------------------------
directors, officers, employees or agents of the
77
<PAGE>
Servicer shall not be under any liability to the Trust, the Trustee, the
Certificateholders, any Credit Enhancement Provider or any other Person
hereunder or pursuant to any document delivered hereunder, it being expressly
understood that all such liability is expressly waived and released as a
condition of, and as consideration for, the execution of this Agreement and any
Supplement and the issuance of the Certificates; provided, however, that this
-------- -------
provision shall not protect the directors, officers, employees and agents of the
Servicer against any liability which would otherwise be imposed by reason of
willful misfeasance or gross negligence in the performance of duties or by
reason of reckless disregard of obligations and duties hereunder. Except as
provided in Section 8.4 with respect to the Trust and the Trustee, its officers,
directors, employees and agents, the Servicer shall not be under any liability
to the Trust, the Trustee, its officers, directors, employees and agents, the
Certificateholders or any other Person for any action taken or for refraining
from the taking of any action in its capacity as Servicer pursuant to this
Agreement or any Supplement; provided, however, that this provision shall not
-------- -------
protect the Servicer against any liability which would otherwise be imposed by
reason of willful misfeasance or gross negligence in the performance of duties
or by reason of its reckless disregard of its obligations and duties hereunder
or under any Supplement. The Servicer may rely in good faith on any document of
any kind prima facie properly executed and submitted by any Person respecting
----- -----
any matters arising hereunder. The Servicer shall not be under any obligation
to appear in, prosecute or defend any legal action which is not incidental to
its duties to service the Receivables in accordance with this Agreement which in
its reasonable opinion may cause it to incur any expense or liability.
Section 8.4 Servicer Indemnification of the Trust and the Trustee.
-----------------------------------------------------
The Servicer shall indemnify and hold harmless the Trust and the Trustee, its
officers, directors, employees and agents, from and against any reasonable loss,
liability, expense, damage or injury suffered or sustained by reason of any acts
or omissions or alleged acts or omissions of the Servicer with respect to
activities of the Trust or the Trustee pursuant to this Agreement or any
Supplement, including, but not limited to any judgment, award, settlement,
reasonable attorneys' fees and other costs or expenses incurred in connection
with the defense of any actual or threatened action, proceeding or claim;
provided, however, that the Servicer shall not indemnify the Trustee if such
- -------- -------
acts, omissions or alleged acts or omissions constitute or are caused by fraud,
negligence, bad faith 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
78
<PAGE>
Certificateholders or the Certificate owners as to any losses, claims or damages
incurred by any of them in their capacities as investors, including without
limitation losses incurred as a result of Defaulted Accounts or Receivables
which are written off as uncollectible; and provided, further, that the Servicer
-------- -------
shall not indemnify the Trust, the Investor Certificateholders or the
Certificate Owners for any liabilities, costs or expenses of the Trust, the
Investor Certificateholders or the Certificate Owners arising under any tax law,
including without limitation, any federal, state, local or foreign income or
franchise taxes or any other tax imposed on or measured by income (or any
interest or penalties with respect thereto or arising from a failure to comply
therewith) required to be paid by the Trust, the Investor Certificateholders or
the Certificate Owners in connection herewith to any taxing authority. Any such
indemnification shall not be payable from the assets of the Trust. The
provisions of this indemnity shall run directly to and be enforceable by an
injured party subject to the limitations hereof. The provisions of this Section
8.4 shall survive termination of this Agreement and the resignation or removal
of the Trustee.
Section 8.5 The Servicer Not to Resign. The Servicer shall not
--------------------------
resign from the obligations and duties hereby imposed on it except upon
determination that (i) the performance of its duties hereunder is no longer
permissible under applicable law and (ii) there is no reasonable action which
the Servicer could take to make the performance of its duties hereunder
permissible under applicable law. Any such determination permitting the
resignation of the Servicer shall be evidenced as to clause (i) above by an
Opinion of Counsel to such effect delivered to the Trustee. No such resignation
shall become effective until the Trustee or a Successor Servicer shall have
assumed the responsibilities and obligations of the Servicer in accordance with
Section 10.2 hereof. If the Trustee is unable within 120 days of the date of
such determination to appoint a Successor Servicer, the Trustee shall serve as
Successor Servicer hereunder.
Section 8.6 Access to Certain Documentation and Information Regarding
---------------------------------------------------------
the Receivables. The Servicer shall provide to the Trustee access to the
- ---------------
documentation regarding the Accounts and the Receivables in such cases where the
Trustee is required in connection with the enforcement of the rights of the
Investor Certificateholders, or by applicable statutes or regulations to review
such documentation, such access being afforded without charge but only (i) upon
reasonable request, (ii) during normal business hours, (iii) subject to the
Servicer's normal security and confidentiality procedures and (iv) at offices
designated by the Servicer. Nothing in this Section 8.6 shall derogate from the
obligation of the Transferor, the Trustee or the Servicer to observe any
applicable law prohibiting disclosure of information regarding the Obligors and
the failure of the Servicer to provide access as provided in this Section 8.6 as
a
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<PAGE>
result of such obligations shall not constitute a breach of this Section 8.6.
Section 8.7 Delegation of Duties. It is understood and agreed by the
--------------------
parties hereto that the Servicer may delegate certain of its duties hereunder to
First Data Resources, Inc. ("FDR"), a credit card processor located in Omaha,
---
Nebraska. In the ordinary course of business, the Servicer may at any time
delegate any duties hereunder to any Person who agrees to conduct such duties in
accordance with the Credit Card Guidelines. Any such delegations shall not
relieve the Servicer of its liability and responsibility with respect to such
duties, and shall not constitute a resignation within the meaning of Section 8.5
hereof. If any such delegation is to a party other than FDR notification
thereof shall be given to each Rating Agency.
Section 8.8 Examination of Records. The Servicer shall clearly and
----------------------
unambiguously identify each Account (including any Additional Account designated
pursuant to Section 2.6) in its computer or other records to reflect that the
Receivables arising in such Account have been conveyed to the Trust pursuant to
this Agreement. 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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<PAGE>
ARTICLE IX
PAY OUT EVENTS
Section 9.1 Pay Out Events. If any one of the following events
--------------
(each, a "Trust Pay Out Event") shall occur:
-------------------
(a) (i) a court having jurisdiction in the premises shall enter a
decree or order for relief in respect of the Transferor in an involuntary
case under the Bankruptcy Code or any applicable bankruptcy, insolvency or
other similar law now or hereafter in effect, which decree or order is not
stayed, or any other similar relief shall be granted under any applicable
federal or state law, (ii) an involuntary case is commenced against the
Transferor under any applicable bankruptcy, insolvency or other similar law
now or hereafter in effect which remains undismissed, undischarged or
unbonded for a period of 60 days or (iii) the Transferor shall have a
decree or an order for relief entered with respect to it or commence a
voluntary case under the Bankruptcy Code or any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect;
(b) the Transferor 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 all or substantially all of its property, or a decree or order of a
court or agency or supervisory authority having jurisdiction in the
premises for the appointment of a conservator or receiver or liquidator in
any insolvency, readjustment of debt, marshalling of assets and liabilities
or similar proceedings, or for the winding-up or liquidation of its
affairs, shall have been entered against the Transferor; or the Transferor
shall admit in writing its inability to pay its debts generally as they
become due, file a petition to take advantage of any applicable insolvency
or reorganization statute, make an assignment for the benefit of its
creditors or voluntarily suspend payment of its obligations; or the
Transferor shall become unable for any reason to transfer Receivables to
the Trust in accordance with the provisions of this Agreement; or
(c) the Trust shall become subject to regulation by the Securities and
Exchange Commission as an "investment company" within the meaning of the
Investment Company Act;
then a Pay Out Event with respect to all Series of Certificates shall occur
without any notice or other action on the part of the Trustee or the Investor
Certificateholders immediately upon the occurrence of such event.
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Section 9.2 Additional Rights Upon the Occurrence of Certain Events.
-------------------------------------------------------
(a) If any event set forth in Section 9.1(a) or (b) shall occur (any
such event, an "Insolvency Event"), the Transferor shall on the day of such
----------------
Insolvency Event (the "Appointment Day") immediately cease to transfer Principal
---------------
Receivables to the Trust and shall promptly give notice to the Trustee of such
Insolvency Event and the arrangement among the parties created hereby shall be
deemed to have been dissolved, subject to the liquidation and winding up
procedures described below. Notwithstanding any cessation of the transfer to
the Trust of additional Principal Receivables, Finance Charge Receivables,
whenever created, accrued in respect of Principal Receivables which have been
transferred to the Trust shall continue to be a part of the Trust, and
Collections with respect thereto shall continue to be allocated and paid in
accordance with Article IV. Within 15 days of the Appointment Day, the Trustee
shall (i) publish a notice in an Authorized Newspaper that an Insolvency Event
has occurred and that the Trustee intends to sell, dispose of or otherwise
liquidate the Receivables in a commercially reasonable manner and (ii) send
written notice to the Investor Certificateholders describing the provisions of
this Section 9.2 and requesting instructions from such Holders. Unless within
75 days from the day notice pursuant to clause (i) above is first published, the
Trustee shall have received written instructions of Holders of Investor
Certificates evidencing more than 50% of the Investor Interest of each Series
issued and outstanding (or, if any such Series has two or more Classes, each
Class) to the effect that such Certificateholders disapprove of the liquidation
of the Receivables. If such vote disapproving of liquidation of the Receivables
has not been obtained, the Trustee shall use its best efforts to sell, dispose
of or otherwise liquidate the Receivables in a commercially reasonable manner
and on commercially reasonable terms, which shall include the solicitation of
competitive bids. The Trustee may obtain a prior determination from any such
conservator, receiver or liquidator that the terms and manner of any proposed
sale, disposition or liquidation are commercially reasonable. The provisions of
Sections 9.1 and 9.2 shall not be deemed to be mutually exclusive.
(b) The proceeds from the sale, disposition or liquidation of the
Receivables pursuant to subsection (a) above shall be treated as Collections on
the Receivables and shall be allocated and deposited in accordance with the
provisions of Article IV; provided, that the Trustee shall determine
--------
conclusively in its sole discretion the amount of such proceeds which are
allocable to Finance Charge Receivables and the amount of such proceeds which
are allocable to Principal Receivables. On the day following the last
Distribution Date in the Monthly Period during which such proceeds are
distributed to the Investor Certificateholders of each Series, the Trust shall
terminate.
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(c) The Trustee may appoint an agent or agents to assist with its
responsibilities pursuant to this Article IX with respect to competitive bids.
[End of Article IX]
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ARTICLE X
SERVICER DEFAULTS
Section 10.1 Servicer Defaults. If any one of the following events
-----------------
(a "Servicer Default") shall occur and be continuing:
----------------
(a) any failure by the Servicer to make any payment, transfer or
deposit or to give instructions or notice to the Trustee pursuant to
Article IV or to instruct the Trustee to make any required drawing,
withdrawal, or payment under any Credit Enhancement on or before the date
occurring ten Business Days after the date such payment, transfer, deposit
withdrawal or drawing or such instruction or notice is required to be made
or given, as the case may be, under the terms of this Agreement;
(b) failure on the part of the Servicer duly to observe or perform in
any respect any other covenants or agreements of the Servicer set forth in
this Agreement, which has a material adverse effect on the Investor
Certificateholders of any Series and which continues unremedied for a
period of 60 days after the date on which written notice of such failure,
requiring the same to be remedied, shall have been given to the Servicer by
the Trustee, or to the Servicer and the Trustee by the Holders of Investor
Certificates evidencing Undivided Interests aggregating not less than 50%
of the Investor Interest of any Series adversely affected thereby and
continues to materially adversely affect such Investor Certificateholders
for such period; or the Servicer shall delegate its duties under this
Agreement, except as permitted by Section 8.7;
(c) any representation, warranty or certification made by the Servicer
in this Agreement or in any certificate delivered pursuant to this
Agreement shall prove to have been incorrect when made, which has a
material adverse effect an the Investor Certificateholders of any Series
and which continues to be incorrect in any material respect for a period of
60 days after the date on which written notice of such failure, requiring
the same to be remedied, shall have been given to the Servicer by the
Trustee, or to the Servicer and the Trustee by the Holders of Investor
Certificates evidencing Undivided Interests aggregating not less than 50%
of the Investor Interest of any Series adversely affected thereby and
continues to materially adversely affect such Investor Certificateholders
for such period; or
(d) the Servicer shall consent to the appointment of a conservator or
receiver or liquidator in any insolvency, readjustment of debt, marshalling
of assets and liabilities
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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 entered against the Servicer, and such decree or order
shall have remained in force undischarged or unstayed for a period of 60
days; or the Servicer shall admit in writing its inability to pay its debts
generally as they become due, file a petition to take advantage of any
applicable insolvency or reorganization statute, make any assignment for
the benefit of its creditors or voluntarily suspend payment of its
obligations; then, so long as such Servicer Default shall not have been
remedied, either the Trustee, or the Holders of Investor Certificates
evidencing Undivided Interests aggregating more than 50% of the Aggregate
Investor Interest, by notice then given in writing to the Servicer (and to
the Trustee if given by the Investor Certificateholders) (a "Termination
-----------
Notice"), may terminate all of the rights and obligations of the Servicer
------
as Servicer under this Agreement. After receipt by the Servicer of such
Termination Notice, and on the date that a Successor Servicer shall have
been appointed by the Trustee pursuant to Section 10.2, all authority and
power of the Servicer under this Agreement shall pass to and be vested in a
Successor Servicer; and, without limitation, the Trustee is hereby
authorized and empowered (upon the failure of the Servicer to cooperate) to
execute and deliver, on behalf of the Servicer, as attorney-in-fact or
otherwise, all documents and other instruments upon the failure of the
Servicer to execute or deliver such documents or instruments, and to do and
accomplish all other acts or things necessary or appropriate to effect the
purposes of such transfer of servicing rights and obligations. The
Servicer agrees to cooperate with the Trustee and such Successor Servicer
in effecting the termination of the responsibilities and rights of the
Servicer to conduct servicing hereunder including, without limitation, the
transfer to such Successor Servicer of all authority of the Servicer to
service the Receivables provided for under this Agreement, including,
without limitation, all authority over all Collections which shall on the
date of transfer be held by the Servicer for deposit, or which have been
deposited by the Servicer, in the Collection Account, the Finance Charge
Account, the Principal Account, the Excess Funding Account and any Series
Account, or which shall thereafter be received with respect to the
Receivables, and in assisting the Successor Servicer and in enforcing all
rights to Insurance Proceeds and Interchange (if any) applicable to the
Trust. The Servicer shall promptly transfer its electronic records
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or electronic copies thereof relating to the Receivables to the Successor
Servicer in such electronic form as the Successor Servicer may reasonably
request and shall promptly transfer to the Successor Servicer all other
records, correspondence and documents necessary for the continued servicing
of the Receivables in the manner and at such times as the Successor
Servicer shall reasonably request. To the extent that compliance with this
Section 10.1 shall require 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 each
customary licensing and confidentiality agreements as the Servicer shall
deem necessary to protect its interests. The Servicer shall, on the date
of any servicing transfer, transfer all of its rights and obligations under
the Credit Enhancement with respect to any Series to the Successor
Servicer.
Notwithstanding the foregoing, a delay in or failure of performance
referred to in subsection 10.1(a) for a period of 10 Business Days or in
subsection 10.1(b) or (c) for a period of 60 Business Days, shall not constitute
a Servicer Default if such delay or failure could not be prevented by the
exercise of reasonable diligence by the Servicer and such delay or failure was
caused by an act of God or the public enemy, acts of declared or undeclared war,
public disorder, rebellion, riot or sabotage, epidemics, landslides, lightning,
fire, hurricanes, tornadoes, earthquakes, nuclear disasters or meltdowns,
floods, power outages or similar causes. The preceding sentence shall not
relieve the Servicer from using its best efforts to perform its obligations in a
timely manner in accordance with the terms of this Agreement and the Servicer
shall provide the Trustee, any Credit Enhancement Provider, the Transferor and
the Holders of Investor Certificates with an Officer's Certificate giving prompt
notice of such failure or delay by it, together with a description of the cause
of such failure or delay and its efforts so to perform its obligations.
Section 10.2 Trustee to Act; Appointment of Successor.
----------------------------------------
(a) On and after the receipt by the Servicer of a Termination Notice
pursuant to Section 10.1, the Servicer shall continue to perform all servicing
functions under this Agreement until the date specified in the Termination
Notice or otherwise specified by the Trustee in writing or, if no such date is
specified in such Termination Notice, or otherwise specified by the Trustee,
until a date mutually agreed upon by the Servicer and Trustee. The Trustee
shall notify each Rating Agency of such removal of the Servicer. The Trustee
shall, as promptly as possible after the giving of a Termination Notice appoint
a successor Servicer (the "Successor Servicer"), and such Successor Servicer
------------------
shall accept its appointment by a written assumption in
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a form acceptable to the Trustee. The Trustee may obtain bids from any
potential successor Servicer. If the Trustee is unable to obtain any bids from
any potential successor Servicer and the Servicer delivers an Officer's
Certificate to the effect that the Servicer cannot in good faith cure the
Servicer Default which gave rise to a transfer of servicing, and if the Trustee
is legally unable to act as Successor Servicer, then the Trustee shall notify
each Credit Enhancement Provider of the proposed sale of the Receivables and
shall provide each such Credit Enhancement Provider an opportunity to bid on the
Receivables and shall offer the Transferor the right of first refusal to
purchase the Receivables on terms equivalent to the best purchase offer as
determined by the Trustee, but in no event less than an amount equal to the
Aggregate Investor Interest on the date of such purchase plus all interest
----
accrued but unpaid on all of the outstanding Investor Certificates at the
applicable Certificate Rate through the date of such purchase. The proceeds of
such sale shall be deposited in the Distribution Account or any Series Account,
as provided in the related Supplement, for distribution to the Investor
Certificateholders of each outstanding Series pursuant to Section 12.3 of the
Agreement. In the event that a Successor Servicer has not been appointed and
has not accepted its appointment at the time when the Servicer ceases to act as
Servicer, the Trustee without further action shall automatically be appointed
the Successor Servicer. Notwithstanding the above, the Trustee shall, if it is
legally unable so to act, petition a court of competent jurisdiction to appoint
any established financial institution having, in the case of an entity that is
subject to risk-based capital adequacy requirements, risk-based capital of at
least $50,000,000 or, in the case of an entity that is not subject to risk-based
capital requirements, having a net worth of not less than $50,000,000 and whose
regular business includes the servicing of VISA or MasterCard credit card
receivables as the Successor Servicer hereunder.
(b) Upon its appointment, the Successor Servicer shall be the
successor in all respects to the Servicer with respect to servicing functions
under this Agreement and shall be subject to all the responsibilities, duties
and liabilities relating thereto placed on the Servicer by the terms and
provisions hereof, and all references in this Agreement to the Servicer shall be
deemed to refer to the Successor Servicer. Any Successor Servicer, by its
acceptance of its appointment, will automatically agree to be bound by the terms
and provisions of each Credit Enhancement.
(c) In connection with such appointment and assumption, the Trustee
shall be entitled to such compensation, or may make such arrangements for the
compensation of the Successor Servicer out of Collections, as it and such
Successor Servicer shall agree; provided, however, that no such compensation
-------- -------
shall be in excess of the Servicing Fee permitted to be paid to the Servicer
pursuant to Section 3.2. The Transferor agrees that if
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the Servicer is terminated hereunder, it will agree to deposit a portion of the
Collections in respect of Finance Charge Receivables that it is entitled to
receive pursuant to Article IV to pay its share of the compensation of the
Successor Servicer.
(d) All authority and power granted to the Successor Servicer under
this Agreement shall automatically cease and terminate upon termination of the
Trust pursuant to Section 12.1 and shall pass to and be vested in 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 10.2
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 10.3 Notification to Certificateholders. Within two Business
----------------------------------
Days after the Servicer becomes aware of any Servicer Default, the Servicer
shall give written notice thereof to the Trustee and any Credit Enhancement
Provider and the Trustee shall give notice to the Investor Certificateholders at
their respective addresses appearing in the Certificate Register. Upon any
termination or appointment of a Successor Servicer pursuant to this Article X,
the Trustee shall give prompt written notice thereof to Investor
Certificateholders at their respective addresses appearing in the Certificate
Register.
Section 10.4 Waiver of Past Defaults. The Holders of Investor
-----------------------
Certificates evidencing Undivided Interests aggregating not less than 66-2/3% of
the Investor Interest of each Series adversely affected by any default by the
Services or Transferor may, on behalf of all Certificateholders of such Series,
waive any default by the Servicer or Transferor in the performance of its
obligations hereunder and its consequences, except a default in the failure to
make any required deposits or payments of interest or principal relating to such
Series pursuant to Article IV which default does not result from the failure of
the Paying Agent to perform its obligations to make any required deposits or
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payments of interest and principal in accordance with Article IV. Upon any such
waiver of a past default, such default shall cease to exist, and any default
arising therefrom shall be deemed to have been remedied for every purpose of
this Agreement. No such waiver shall extend to any subsequent or other default
or impair any right consequent thereon except to the extent expressly so waived.
[End of Article X]
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ARTICLE XI
THE TRUSTEE
Section 11.1 Duties of Trustee.
-----------------
(a) The Trustee, prior to the occurrence of any Servicer Default and
after the curing of all Servicer Defaults which may have occurred, undertakes to
perform such duties and only such duties as are specifically set forth in this
Agreement. If a Responsible Officer has received written notice that a Servicer
Default has occurred (which has not been cured or waived), the Trustee shall
exercise such of the rights and powers vested in it by this Agreement, and use
the same degree of care and skill in its exercise, as a prudent person would
exercise or use under the circumstances in the conduct of such person's own
affairs.
(b) The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments furnished
to the Trustee which are specifically required to be furnished pursuant to any
provision of this Agreement, shall examine them to determine whether they
substantially conform to the requirements of this Agreement.
(c) Subject to subsection 11.1(a), no provision of this Agreement
shall be construed to relieve the Trustee from liability for its own negligent
action, its own negligent failure to act or its own misconduct; provided,
--------
however, that:
- -------
(i) the Trustee shall not be personally liable for an error of
judgment made in good faith by a Responsible Officer or Responsible
Officers of the Trustee, unless it shall be proved that the Trustee was
negligent in ascertaining the pertinent facts;
(ii) the Trustee shall not be personally liable with respect to
any action taken, suffered or omitted to be taken by it in good faith in
accordance with the direction of the Holders of Investor Certificates
evidencing Undivided Interests aggregating more than 50% of the Investor
Interest of any Series relating to the time, method and place of conducting
any proceeding for any remedy available to the Trustee, or exercising any
trust or power conferred upon the Trustee in relation to such Series, under
this Agreement; and
(iii) the Trustee shall not be charged with knowledge of any
failure by the Servicer referred to in clauses (a) and (b) of Section 10.1
unless a Responsible Officer of the Trustee obtains actual knowledge of
such failure or the Trustee receives written notice of such
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failure from the Servicer or any Holders of Investor Certificates
evidencing Undivided Interests aggregating not less than 10% of the
Investor Interest of any Series adversely affected thereby.
(d) The Trustee shall not be required to expend or risk its own funds
or otherwise incur financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, if there is
reasonable ground for believing that the repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it, and
none of the provisions contained in this Agreement shall in any event require
the Trustee to perform, or be responsible for the manner of performance of, any
of the obligations of the Servicer under this Agreement except during such time,
if any, as the Trustee shall be the successor to, and be vested with the rights,
duties, powers and privileges of, the Servicer in accordance with the terms of
this Agreement.
(e) Except for actions expressly authorized by this Agreement, the
Trustee shall take no action reasonably likely to impair the interests of the
Trust in any Receivable now existing or hereafter created or to impair the value
of any Receivable now existing or hereafter created.
(f) Except as provided in this subsection 11.1(f), the Trustee shall
have no power to vary the corpus of the Trust including, without limitation, the
power to (i) accept any substitute obligation for a Receivable initially
assigned to the Trust under Section 2.1 or 2.6 hereof, (ii) add any other
investment, obligation or security to the Trust, except for an addition
permitted under Section 2.6 or (iii) withdraw from the Trust any Receivables,
except for a withdrawal permitted under Sections 2.7, 9.2, 10.2, 12.1 or 12.2 or
subsections 2.4(d), 2.4(e) or Article IV.
(g) 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 promptly to perform such obligation, duty or agreement in the manner
so required.
(h) If the Transferor has agreed to transfer any of its 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 identify separately the rights, if any, of the Trust and such other
Person in the Transferor's credit card receivables; provided, however that the
-------- -------
Trustee shall not be required to enter into
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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 11.2 Certain Matters Affecting the Trustee. Except as
-------------------------------------
otherwise provided in Section 11.1:
(a) the Trustee may rely on and shall be protected in acting on, or in
refraining from acting in accord with, any assignment of Receivables in
Additional Accounts, the initial report, the monthly Servicer's
certificate, the annual Servicer's certificate, the monthly payment
instructions and notification to the Trustee, the monthly
Certificateholder's statement, any resolution, Officer's Certificate,
certificate of auditors or any other certificate, statement, instrument,
opinion, report, notice, request, consent, order, appraisal, bond or other
paper or document reasonably 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 of its selection, and any
Opinion of Counsel shall be full and complete authorization and protection
in respect of any action taken or suffered or omitted by it hereunder in
good faith and in accordance with such Opinion of Counsel;
(c) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Agreement or any Credit Enhancement,
or to institute, conduct or defend any litigation hereunder or in relation
hereto, at the request, order or direction of any of the Certificateholders
or any Credit Enhancement Provider, pursuant to the provisions of this
Agreement, unless such Certificateholders or Credit Enhancement Provider
shall have offered to the Trustee reasonable security or indemnity against
the costs, expenses and liabilities which may be incurred therein or
thereby; nothing contained herein shall, however, relieve the Trustee of
the obligations, upon the occurrence of any Servicer Default (which has not
been cured), to exercise such of the rights and powers vested in it by this
Agreement and any Credit Enhancement, and to use the same degree of care
and skill in its exercise as a prudent person would exercise or use under
the circumstances in the conduct of his own affairs;
(d) the Trustee shall not be personally liable for any action taken,
suffered or omitted by it in good faith and believed by it to be authorized
or within the discretion or
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rights or powers conferred upon it by this Agreement except to the extent
of the Trustee's negligence;
(e) the Trustee shall not be bound to make any investigation into the
facts of matters stated in any assignment of Receivables in Additional
Accounts, the initial report, the monthly Servicer's certificate, the
annual Servicer's certificate, the monthly payment instructions and
notification to the Trustee, the monthly Certificateholder's statement, any
resolution, certificate, statement, instrument, opinion, report, notice,
request, consent, order, approval, bond or other paper or document, unless
requested in writing so to do by Holders of Investor Certificates
evidencing Undivided Interests aggregating more than 50% of the Investor
Interest of any Series which could be adversely affected if 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 by or through agents or
attorneys or a custodian appointed with due care by it hereunder; and
(g) except as may be required by subsection 11.1(a), or otherwise
expressly required herein or in any Supplement 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 11.3 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 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 in respect of the Receivables or deposited in or
withdrawn from the Collection Account, the Principal Account or the Finance
Charge Account, or any Series Account by the Servicer.
Section 11.4 Trustee May Own Certificates. The Trustee in its
----------------------------
individual or any other capacity may become the owner or pledgee of Investor
Certificates with the same rights as it would have if it were not the Trustee.
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Section 11.5 The Servicer to Pay Trustee's Fees and Expenses. The
-----------------------------------------------
Servicer covenants and agrees to pay to the Trustee from time to time, and the
Trustee shall be entitled to receive such reasonable compensation as shall be
agreed upon from time to time between the Servicer and the Trustee (which shall
not be limited by any provision of law in regard to the compensation of a
trustee of an express trust) for all services rendered by it in the execution of
the Trust hereby created and in the exercise and performance of any of the
powers and duties hereunder of the Trustee, and, subject to Section 8.4, the
Servicer will pay or reimburse the Trustee (without reimbursement from any
Investor Account, any Series Account or otherwise) upon its request for all
reasonable expenses, disbursements and advances incurred or made by the Trustee
in accordance with any of the provisions of this Agreement except any such
expense, disbursement or advance as may arise from its own negligence, bad faith
or wilful misfeasance and except as provided in the following sentence. If the
Trustee is appointed Successor Servicer pursuant to section 10.2, the provisions
of this Section 11.5 shall not apply to expenses, disbursements and advances
made or incurred by the Trustee in its capacity as Successor Servicer.
The obligations of the Servicer under this Section 11.5 shall survive
the termination of the Trust and the resignation or removal of the Trustee.
Section 11.6 Eligibility Requirements for Trustee. The Trustee
------------------------------------
hereunder shall at all times be a corporation organized and doing business under
the laws of the United States of America or any state thereof authorized under
such laws to exercise corporate trust powers, having a long-term unsecured debt
rating of at least "Baa3" by Moody's and "BBB-" by Standard & Poor's having, in
the case of an entity that is subject to risk-based capital adequacy
requirements, risk-based capital of at least $50,000,000 or, in the case of an
entity that is not subject to risk-based capital adequacy requirements, having a
combined capital and surplus of at least $50,000,000 and subject to supervision
or examination by federal or state authority. If such corporation publishes
reports of condition at least annually, pursuant to law or to the requirements
of the aforesaid supervising or examining authority, then for the purpose of
this Section 11.6, the combined capital and surplus of such corporation shall be
deemed to be its combined capital and surplus as set forth in the 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 11.6, the
Trustee shall resign immediately in the manner and with the effect specified in
Section 11.7.
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Section 11.7 Resignation or Removal of Trustee.
---------------------------------
(a) The Trustee may at any time resign and be discharged from the
Trust hereby created by giving written notice thereof to the Servicer. Upon
receiving such notice of resignation, the Servicer shall promptly appoint a
successor trustee by written instrument, in duplicate, one copy of which
instrument shall be delivered to the resigning Trustee and one copy to the
successor trustee. If no successor trustee shall have been so appointed and
have accepted within 30 days after the giving of such notice of resignation, the
resigning Trustee may petition any court of competent jurisdiction for the
appointment of a successor trustee.
(b) If at any time the Trustee shall cease to be eligible in
accordance with the provisions of Section 11.6 hereof and shall fail to resign
after written request therefor by 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
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 11.7 shall
not become effective until acceptance of appointment by the successor trustee as
provided in Section 11.8 hereof and any liability of the Trustee arising
hereunder shall survive such appointment of a successor trustee.
Section 11.8 Successor Trustee.
-----------------
(a) Any successor trustee appointed as provided in Section 11.7 hereof
shall execute, acknowledge and deliver to the Transferor and to its predecessor
Trustee an instrument accepting such appointment hereunder, and thereupon the
resignation or removal of the predecessor Trustee shall become effective and
such successor trustee, without any further act, deed or conveyance, shall
become fully vested with all the rights, powers, duties and obligations of its
predecessor hereunder, with the like effect as if originally named as Trustee
herein. The predecessor Trustee shall deliver to the successor trustee all
documents and statements held by it hereunder, and 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
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successor trustee all such rights, powers, duties and obligations.
(b) No successor trustee shall accept appointment as provided in this
Section 11.8 unless at the time of such acceptance such successor trustee shall
be eligible under the provisions of Section 11.6 hereof.
(c) Upon acceptance of appointment by a successor trustee as provided
in this Section 11.8, such successor trustee shall mail notice of such
succession hereunder to all Certificateholders at their addresses as shown in
the Certificate Register.
Section 11.9 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 11.6 hereof, without the execution or filing of any paper
or any further act on the part of any of the parties hereto, anything herein to
the contrary notwithstanding.
Section 11.10 Appointment of Co-Trustee or Separate Trustee.
---------------------------------------------
(a) Notwithstanding any other provisions of this Agreement, at any
time, for the purpose of meeting any legal requirements of any jurisdiction in
which any part of the Trust may at the time be located, the Trustee shall have
the power and may execute and deliver all instruments to appoint one or more
Persons to act as a co-trustee or co-trustees, or separate trustee or separate
trustees, of all or any part of the Trust, and to vest in such Person or
Persons, in such capacity and for the benefit of the Certificateholders, such
title to the trust, or any part thereof, and, subject to the other provisions of
this Section 11.10, such powers, duties, obligations, rights and trusts as the
Trustee may consider necessary or desirable. No co-trustee or separate trustee
hereunder shall be required to meet the terms of eligibility as a successor
trustee under Section 11.6 and no notice to Certificateholders of the
appointment of any co-trustee or separate trustee shall be required under
Section 11.8 hereof.
(b) Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) all rights, powers, duties and obligations conferred or
imposed upon the Trustee shall be conferred or
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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.
(d) Any separate trustee or co-trustee may at any time constitute the
Trustee as its agent or attorney-in-fact with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect to this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee.
Section 11.11 Tax Returns. In the event the Trust shall be required
-----------
to file tax returns, the Trustee, as soon as practicable after it is made aware
of such requirement, shall prepare or cause to be prepared any tax returns
required to be filed by the Trust and, to the extent possible, shall file such
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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, in the
event that the Trustee is determined to be the person required by law to sign
such return. 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, in the event that the Trustee is determined to be the person required
by law to sign such return, 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 the Holders any Series of Certificates, as their interests
may appear, in respect of which such judgment has been obtained.
Section 11.13 Suits for Enforcement. If a Servicer Default shall
---------------------
occur and be continuing, the Trustee, in its discretion may, subject to the
provisions of Section 10.1, proceed to protect and enforce its rights and the
rights of the Holders 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 the Holders of any Series of Certificates.
Section 11.14 Rights of Certificateholders to Direct Trustee.
----------------------------------------------
Holders of Investor Certificates evidencing Undivided Interests aggregating more
than 50% of the Aggregate Investor Interest (or, with respect to any remedy,
trust or power that
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does not relate to all Series, 50% of the Aggregate Investor Interest of the
Investor Certificates of all Series to which such remedy, trust or power
relates) shall have the right to direct the time, method, and place of
conducting any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred on the Trustee; provided, however, that, subject to
-------- -------
Section 11.1, 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 subject it to personal liability or
be unduly prejudicial to the rights of Certificateholders not parties to such
direction; and provided further that nothing in this Agreement shall impair the
-------- -------
right of the Trustee to take any action deemed proper by the Trustee and which
is not inconsistent with such direction of such Holders of Investor
Certificates.
Section 11.15 Representations and Warranties of Trustee. The Trustee
-----------------------------------------
represents and warrants that:
(i) the Trustee is a banking corporation organized, existing and
authorized to engage in the business of banking under the laws of the State
of New York;
(ii) the Trustee has full power, authority and right to execute,
deliver and perform this Agreement, and has taken all necessary action to
authorize the execution, delivery and performance by it of this Agreement;
and
(iii) this Agreement has been duly executed and delivered by the
Trustee.
Section 11.16 Maintenance of Office or Agency. The Trustee will
-------------------------------
maintain at its expense in the Borough of Manhattan, the City of New York an
office or offices, or agency or agencies, where notices and demands to or upon
the Trustee in respect of the Certificates and this Agreement may be served.
The Trustee initially designates its Corporate Trust Office as its office for
such purposes in New York. The Trustee will give prompt written notice to the
Servicer and to Certificateholders (or in the case of Holders of Bearer
Certificates, in the manner provided for in the related Supplement) of any
change in the location of the Certificate Register or any such office or agency.
[End of Article XI]
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ARTICLE XII
TERMINATION
Section 12.1 Termination of Trust.
--------------------
(a) 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 Certificateholders as hereinafter set forth) shall
terminate, except with respect to the duties described in Sections 8.4 and 11.5
and subsections 2.4(c) and 12.3(b), on the Trust Termination Date; provided,
--------
however, that the Trust shall not terminate on the date specified in clause (i)
- -------
of the definition of "Trust Termination Date" if each of the Servicer and the
Holder of the Transferor Certificate notify the Trustee in writing, not later
than five Business Days preceding such date, that they desire that the Trust not
terminate on such date, which notice (such notice, a "Trust Extension") shall
---------------
specify the date on which the Trust shall terminate (such date, the "Extended
--------
Trust Termination Date"); provided, however, that the Extended Trust Termination
- ---------------------- -------- -------
Date shall be not later than the day prior to the expiration of 21 years after
the death of the last survivor of the descendants living on the date of this
Agreement of Joseph P. Kennedy, the late ambassador of the United States of
America to the Court of St. James's. The Servicer and the Holder of the
Transferor Certificate may, on any date following the Trust Extension, so long
as no Series of Certificates is outstanding, deliver a notice in writing to the
Trustee changing the Extended Trust Termination Date.
(b) All principal or interest with respect to any Series of Investor
Certificates shall be due and payable no later than the Series Termination Date
with respect to such Series. Unless otherwise provided in a Supplement, in the
event that the Investor Interest of any Series of Certificates is greater than
zero on its Series Termination Date (after giving effect to all transfers,
withdrawals, deposits and drawings to occur on such date and the payment of
principal to be made on such Series on such date), the Trustee will sell or
cause to be sold, and pay the proceeds first, to all Certificateholders of such
-----
Series pro rata in final payment of all principal of and accrued interest on
such Series of Certificates, and second, as provided in the related Supplement,
------
an amount of Principal Receivables and the related Finance Charge Receivables
(or interests therein) up to 110% of the sum of the Investor Interest of such
Series plus the Enhancement Invested Amount or the Collateral Interest (if not
included in the Investor Interest) of such Series, if any, at the close of
business on such date (but not more than an amount of Principal Receivables and
the related Finance Charge Receivables equal to the sum of (1) the product of
(A) the Transferor Percentage, (B) the aggregate amount of Principal Receivables
in the
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Trust and (C) a fraction the numerator of which is the applicable Investor
Percentage with respect to Finance Charge Receivables and the denominator of
which is the sum of all Investor Percentages with respect to Finance Charge
Receivables of all Series and (2) the Investor Interest of such Series plus the
Enhancement Invested Amount or the Collateral Interest (if not included in the
Investor Interest) of such Series). The Trustee shall notify each Credit
Enhancement Provider of the proposed sale of such Receivables and shall provide
each Credit Enhancement Provider an opportunity to bid on such Receivables. The
Transferor shall be permitted to purchase such Receivables in such case and
shall have a right of first refusal with respect thereto. Any proceeds of such
sale in excess of such principal and interest paid shall be paid to the Holder
of the Transferor Certificate. Upon such Series Termination Date with respect
to the applicable Series of Certificates, final payment of all amounts allocable
to any Investor Certificates of such Series shall be made in the manner provided
in Section 12.3.
Section 12.2 Optional Purchase. (a) If so provided in any
-----------------
Supplement, the Transferor may, but shall not be obligated to, cause a final
distribution to be made in respect of the related Series of Certificates on a
Distribution Date specified in such Supplement by depositing into the
Distribution Account or the applicable Series Account, not later than the
Transfer Date preceding such Distribution Date, for application in accordance
with Section 12.3, the amount specified in such Supplement.
(b) The amount deposited pursuant to subsection 12.2(a) shall be paid
to the Investor Certificateholders of the related Series pursuant to Section
12.3 on the related Distribution Date following the date of such deposit. All
Certificates of a Series which are purchased by the Transferor pursuant to
subsection 12.2(a) shall be delivered by the Transferor upon such purchase to,
and be canceled by, the Transfer Agent and Registrar and be disposed of in a
manner satisfactory to the Trustee and the Transferor. The Investor Interest of
each Series which is purchased by the Transferor pursuant to subsection 12.2(a)
shall, for the purposes of the definition of "Transferor Interest," be deemed to
be equal to zero on the Distribution Date following the making of the deposit,
and the Transferor Interest shall thereupon be deemed to have been increased by
the Investor Interest of such Series.
Section 12.3 Final Payment with Respect to any Series.
----------------------------------------
(a) Written notice of any termination, specifying the Distribution
Date upon which the Investor Certificateholders of any Series may surrender
their Certificates for payment of the final distribution with respect to such
Series and cancellation, shall be given by the Trustee to Investor
Certificateholders of such Series mailed not later than the fifth day of the
month of
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such final distribution (subject to at least two Business Days' prior notice
from the Servicer to the Trustee) (or in the manner provided by the Supplement
relating to such Series) specifying (i) the Distribution Date (which shall be
the Distribution Date in the month (x) in which the deposit is made pursuant to
subsection 2.4(e), 9.2(a), 10.2(a) or 12.2(a) of the Agreement or such other
section as may be specified in the related Supplement, or (y) in which the
related Series Termination Date occurs) upon which final payment of such
Investor Certificates will be made upon presentation and surrender of such
Investor Certificates at the office or offices therein designated (which, in the
case of Bearer Certificates, shall be outside the United States), (ii) the
amount of any such final payment and (iii) that the Record Date otherwise
applicable to such Distribution Date is not applicable, payments being made only
upon presentation and surrender of the Investor Certificates at the office or
offices therein specified. The Servicer's notice to the Trustee in accordance
with the preceding sentence shall be accompanied by an Officers' Certificate
setting forth the information specified in Article V of this Agreement covering
the period during the then current calendar year through the date of such notice
and setting forth the date of such final distribution. The Trustee shall give
such notice to the Transfer Agent and Registrar and the Paying Agent at the time
such notice is given to such Investor Certificateholders.
(b) Notwithstanding the termination of the Trust pursuant to
subsection 12.1(a) or the occurrence of the Series Termination Date with respect
to any Series, all funds then on deposit in the Finance Charge Account, the
Principal Account, the Excess Funding Account, the Distribution Account or any
Series Account applicable to the related Series shall continue to be held in
trust for the benefit of the Certificateholders of the related Series and the
Paying Agent or the Trustee shall pay such funds to the Certificateholders of
the related Series upon surrender of their Certificates (which surrenders and
payments, in the case of Bearer Certificates, shall be made only outside the
United States). In the event that all of the Investor Certificateholders of any
Series shall not surrender their Certificates for cancellation within six months
after the date specified in the above-mentioned written notice, the Trustee
shall give a second written notice (or, in the case of Bearer Certificates,
publication notice) to the remaining Investor Certificateholders of such Series
upon receipt of the appropriate records from the Transfer Agent and Registrar to
surrender their Certificates for cancellation and receive the final distribution
with respect thereto. If within one and one-half years after the second notice
with respect to a Series, all the Investor Certificates of such Series shall not
have been surrendered for cancellation, the Trustee may take appropriate steps
or may appoint an agent to take appropriate steps, to contact the remaining
Investor Certificateholders of such Series concerning surrender of
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their Certificates, and the cost thereof shall be paid out of the funds in the
Distribution Account or any Series Account held for the benefit of such Investor
Certificateholders. The Trustee and the Paying Agent shall pay to the
Transferor upon request any monies held by them for the payment of principal or
interest which 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) All Certificates surrendered for payment of the final distribution
with respect to such Certificates and cancellation shall be canceled by the
Transfer Agent and Registrar and be disposed of in a manner satisfactory to the
Trustee and the Transferor.
Section 12.4 Termination Rights of Holder of Transferor Certificate.
------------------------------------------------------
Upon the termination of the Trust pursuant to Section 12.1, and after payment of
all amounts due hereunder on or prior to such termination and the surrender of
the Transferor Certificate, the Trustee shall execute a written reconveyance
substantially in the form of Exhibit H pursuant to which it shall reconvey to
the Holder of the Transferor Certificate, without recourse, representation or
warranty, all right, title and interest of the Trust in the Receivables, whether
then existing or thereafter created, all moneys due or to become due with
respect to such Receivables (including all accrued interest theretofore posted
as Finance Charge Receivables) and all proceeds of such Receivables and
Insurance Proceeds relating to such Receivables and Interchange (if any)
allocable to the Trust, except for amounts held by the Trustee pursuant to
subsection 12.3(b). The Trustee shall execute and deliver such instruments of
transfer and assignment, in each case without recourse, as shall be reasonably
requested by the Holder of the Transferor Certificate to vest in such Holder all
right, title and interest which the Trust had in the Receivables.
Section 12.5 Defeasance. Notwithstanding anything to the contrary in
----------
this Agreement or any Supplement:
(a) The Transferor may at its option be discharged from its
obligations with respect to all of the Investor Certificates issued by the
Trust or any specified Series thereof on the date the applicable conditions
set forth in Section 12.5(c) are satisfied ("Defeasance"); provided
---------- --------
however, that the following rights, obligations, powers, duties and
-------
immunities shall survive until otherwise terminated or discharged
hereunder: (A) the rights of Holders of Investor Certificates of the Trust
or any specified Series thereof to receive, solely from the trust fund
provided for in Section 12.5(c), payments in respect of principal of and
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interest on such Investor Certificates when such payments are due; (B) the
Transferor's obligations with respect to such Series of Certificates under
Sections 6.3, 6.4 and 12.3; (C) the rights, powers, trusts, duties and
immunities of the Trustee, the Paying Agent and the Transfer Agent and
Registrar hereunder; and (D) this Section 12.5.
(b) Subject to Section 12.5(c), the Transferor at its option may use
Collections to purchase Permitted Investments rather than additional
Receivables for transfer to the Trust until such time as no Receivables
remain in the Trust.
(c) The following shall be the conditions to Defeasance under Section
12.5(a): (1) the Transferor irrevocably shall have deposited or caused to
be deposited with the Trustee, under the terms of an irrevocable trust
agreement in form and substance satisfactory to the Trustee, as trust funds
in trust for making the payments described below: (A) Dollars in an
amount, or (B) Permitted Investments which through the scheduled payment of
principal and interest in respect thereof will provide, not later than the
due date of payment thereon, money in an amount, or (C) a combination
thereof, in each case sufficient to pay and discharge, and, which shall be
applied by the Trustee to pay and discharge, all remaining scheduled
interest and principal payments on all outstanding Investor Certificates of
the Trust or any specified Series thereof on the dates scheduled for such
payments in this Agreement and the applicable Supplements and all amounts
owed to the Credit Enhancement Provider for any Series if so provided in
the related Supplements or agreements with such Credit Enhancement
Provider; (2) prior to each exercise of its right to substitute money or
Permitted Investments for Receivables, the Transferor shall deliver to the
Trustee a Tax Opinion with respect to such substitution and an Opinion of
Counsel to the effect that the Trust will not be required to register as an
"investment company" within the meaning of the Investment Company Act of
1940, as amended; and (3) such deposit and termination of obligations will
not result in a Pay Out Event for any Series.
[End of Article XII]
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ARTICLE XIII
MISCELLANEOUS PROVISIONS
Section 13.1 Amendment.
---------
(a) This Agreement (including any Supplement) may be amended from time
to time by the Bank, the Servicer and the Trustee, without the consent of any of
the Certificateholders, (i) to cure any ambiguity, to revise any exhibits or
schedules (other than Schedule 1), to correct or supplement any provisions
herein or thereon or (ii) to add any other provisions with respect to matters or
questions raised under this Agreement which shall not be inconsistent with the
provisions of this Agreement; provided, however, that such action shall not, as
-------- -------
evidenced by an Opinion of Counsel, adversely affect in any material respect the
interests of any of the Certificateholders unless such Certificateholders have
consented thereto.
(b) This Agreement (including any Supplement) and any schedule or
exhibit thereto may also be amended from time to time by the Transferor, the
Servicer and the Trustee, without the consent of any of the Certificateholders,
for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Agreement, or of modifying in any
manner the rights of the Holders of Certificates; provided, however, that (i)
-------- -------
the Servicer shall have provided an Officer's Certificate to the Trustee to the
effect that such amendment will not materially and adversely affect the
interests of any Certificateholder, (ii) the Servicer shall have provided a Tax
Opinion with respect to such amendment and (iii) the Servicer shall have
provided at least ten Business Days' prior written notice to each Rating Agency
of such amendment and shall have received written confirmation from each Rating
Agency that such action will satisfy the Rating Agency Condition; provided,
--------
further, that such amendment shall not, without the consent of each
- -------
Certificateholder of each Series affected thereby, (i) reduce in any manner the
amount of, or delay the timing of, distributions which are required to be made
on any Certificate of such Series, (ii) alter the requirements for changing the
Minimum Transferor Interest Percentage for such Series, (iii) change the
definition of or the manner of calculating the interest of any Certificateholder
of such Series, (iv) change the manner in which the Transferor Interest is
determined or (v) reduce the percentage pursuant to Subsection 13.1(c) required
to consent to any such amendment.
(c) This Agreement and any Supplement may also be amended from time to
time by the Transferor, the Servicer and the Trustee with the consent of
Certificateholders evidencing undivided interests aggregating more than 50% of
the Investor Interest of each and every Series adversely affected, for the
purpose of adding any provisions to or changing in any manner or elimi-
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nating any of the provisions of this Agreement or of modifying in any manner the
rights of the Certificateholders of any Series then issued and outstanding;
provided, however, that no such amendment under this subsection shall (i) reduce
- -------- -------
in any manner the amount of, or delay the timing of, distributions which are
required to be made on any Certificate of such Series without the consent of all
of the related Certificateholders; (ii) change the definition of or the manner
of calculating the Investor Interest, the Investor Percentage or the Investor
Default Amount of such Series without the consent of the related
Certificateholders or (iii) reduce the aforesaid percentage required to consent
to any such amendment, in each case without the consent of each
Certificateholder of all Series affected.
(d) It shall not be necessary to obtain the consent of
Certificateholders under this Section 13.1 to approve the particular form of any
proposed amendment, but it shall be sufficient if such consent shall approve the
substance thereof. The manner of obtaining such consents and of evidencing the
authorization of the execution thereof by Certificateholders shall be subject to
such reasonable requirements as the Trustee may prescribe.
(e) Promptly after the execution of any amendment pursuant to
subsections 13.1(a) or 13.1(c) above, the Trustee shall furnish notification of
the substance of such amendment to each Rating Agency providing a rating for any
Series.
(f) Any Supplement executed and delivered pursuant to Section 6.9 and
any amendments regarding the addition to or removal of Receivables from the
Trust as provided in Sections 2.6 or 2.7, executed in accordance with the
provisions hereof, shall not be considered amendments to this Agreement for the
purpose of Section 13.1.
(g) In connection with any amendment, the Trustee may request, in
addition to the Opinion of Counsel required by subsection 13.2(d), an Opinion of
Counsel from the Transferor or the Servicer to the effect that the amendment
complies with all requirements of this Agreement. The Trustee may, but shall
not be obligated to, enter into any amendment which affects the Trustee's
rights, duties or immunities under this Agreement or otherwise.
Section 13.2 Protection of Right, Title and Interest to Trust.
------------------------------------------------
(a) The Servicer shall cause this Agreement, all amendments hereto
and/or all financing statements and continuation statements and any other
necessary documents covering the Certificateholders and the Trustee's right,
title and interest to the Trust to be promptly recorded, registered and filed,
and at all times to be kept recorded, registered and filed, all in such
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manner and in such places as may be required by law fully to preserve and
protect the right, title and interest of the Certificateholders or the Trustee,
as the case may be, hereunder to all property comprising the Trust. The
Servicer shall deliver to the Trustee file-stamped copies of, or filing receipts
for, any document recorded, registered or filed as provided above, promptly
after the same become available following such recording, registration of
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 subsection 13.2(a).
(b) Within 30 days after the Transferor makes any change in its name,
identity or corporate structure which would make any financing statement or
continuation statement filed in accordance with paragraph (a) above seriously
misleading within the meaning of Section 9-402(7) of the UCC, the 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 of the Transferor and the Servicer will give the Trustee
prompt written notice of any relocation of any office from which it services
Receivables or keeps records concerning the Receivables or of its principal
executive office and whether, as a result of such relocation, the applicable
provisions of the UCC would require the filing of any amendment of any
previously filed financing or continuation statement or of any new financing
statement and shall file such financing statements or amendments as may be
necessary to continue the perfection of the Trust's security interest in the
Receivables and the proceeds thereof. Each of the Transferor and the Servicer
will at all times maintain each office from which it services Receivables and
its principal executive office within the United States of America.
(d) The Servicer will deliver to the Trustee: (i) upon each date that
any Additional Accounts are to be included in the Accounts pursuant to Section
2.6(a) or (b), an Opinion of Counsel substantially in the form of Exhibit E; and
(ii) on or before March 31 of each year, beginning with March 31, 1996, an
Opinion of Counsel, substantially in the form of Exhibit F.
Section 13.3 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 Certificateholder's legal representatives or heirs to claim an
accounting or to take any action or commence any proceeding in any court for a
parti-
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tion or winding up of the Trust, nor otherwise affect the rights, obligations
and liabilities of the parties hereto or any of them.
(b) No Certificateholder shall have any right to vote (except with
respect to the Investor Certificateholders as provided in Section 13.1 hereof)
or in any manner otherwise control the operation and management of the Trust, or
the obligations of the parties hereto, nor shall anything herein set forth, or
contained in the terms of the Certificates, be construed so as to constitute the
Certificateholders from time to time as partners or members of an association;
nor shall any Certificateholder be under any liability to any third person by
reason of any action taken by the parties to this Agreement pursuant to any
provision hereof.
(c) No Certificateholder shall have any right by virtue of any
provisions of this Agreement to institute any suit, action or proceeding in
equity or at law upon or under or with respect to this Agreement, unless such
Certificateholder previously shall have given written notice to the Trustee, and
unless the Holders of Certificates evidencing Undivided Interests aggregating
more than 50% of the Investor Interest of any Series which may be adversely
affected but for the institution of such suit, action or proceeding, shall have
made written request upon the Trustee to institute such action, suit or
proceeding in its own name as Trustee hereunder and shall have offered to the
Trustee such reasonable indemnity as it may require against the costs, expenses
and liabilities to be incurred therein or thereby, and the Trustee, for 60 days
after its receipt of such notice, request and offer of indemnity, shall have
neglected or refused to institute any such action, suit or proceeding; it being
understood and intended, and being expressly covenanted by each
Certificateholder with every other Certificateholder and the Trustee, that no
one or more Certificateholders shall have the right in any manner whatever by
virtue or by availing itself or themselves of any provisions of this Agreement
to affect, disturb or prejudice the rights of the Certificateholders of any
other of the Certificates, or to obtain or seek to obtain priority over or
preference to any other such Certificateholder, or to enforce any right under
this Agreement, except in the manner herein provided and for the equal, ratable
and common benefit of all Certificateholders. For the protection and
enforcement of the provisions of this Section 13.3, each and every
Certificateholder and the Trustee shall be entitled to such relief as can be
given either at law or in equity.
SECTION 13.4 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, AND WITHOUT,
LIMITING THE GENERALITY OF THE FOREGOING, THE IMMUNITY AND STANDARD OF
108
<PAGE>
CARE OF THE TRUSTEE IN THE ADMINISTRATION OF THE TRUST HEREUNDER SHALL BE
GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
Section 13.5 Notices. All demands, notices and communications
-------
hereunder shall be in writing and shall be deemed to have been duly given (i)
when personally delivered at, sent by facsimile to, (ii) two Business Days after
being sent by courier at or (iii) five Business Days after being mailed by
registered mail, return receipt requested, to (a) in the case of the Transferor,
to Chase USA, 802 Delaware Avenue, Wilmington, Delaware 19801, Attention:
Corporate Secretary, (b) in the case of the Servicer, to Chase Bank, 270 Park
Avenue, New York, New York 10017, Attention: Chief Corporate Finance officer,
(c) in the case of the Trustee, to the Corporate Trust Office, (d) in the case
of the Credit Enhancement Provider for a particular Series, the address, if any,
specified in the Supplement relating to such Series and (e) in the case of the
Rating Agency for a particular Series, the address, if any, specified in the
Supplement relating to such Series; or, as to each party, at such other address
as shall be designated by such party in a written notice to each other party.
Unless otherwise provided with respect to any Series in the related Supplement
any notice required or permitted to be mailed to a Certificateholder shall be
given by first class mail, postage prepaid, at the address of such
Certificateholder as shown in the Certificate Register, or with respect to any
notice required or permitted to be made to the Holders of Bearer Certificates,
by publication in the manner provided in the related Supplement. If and so long
as any Series or Class is listed on the Luxembourg Stock Exchange and such
Exchange shall so require, any Notice to Investor Certificateholders shall be
published in an authorized newspaper of general circulation in Luxembourg within
the time period prescribed in this Agreement. Any notice so mailed within the
time prescribed in this Agreement shall be conclusively presumed to have been
duly given, whether or not the Certificateholder receives such notice.
Section 13.6 Severability of Provisions. If any one or more of the
--------------------------
covenants, agreements, provisions or terms of this Agreement shall for any
reason whatsoever be held invalid, then such covenants, agreements, provisions
or terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity of
enforceability of the other provisions of this Agreement or of the Certificates
or rights of the Certificateholders thereof.
Section 13.7 Assignment. Notwithstanding anything to the contrary
----------
contained herein, except as provided in Section 8.2, this Agreement may not be
assigned by the Servicer without the prior consent of Holders of Investor
Certificates evidencing Undivided Interests aggregating not less than 66 2/3% of
the Investor Interest of each Series on a Series by Series basis.
109
<PAGE>
Section 13.8 Certificates Non-Assessable and Fully Paid. It is the
------------------------------------------
intention of the parties to this Agreement that the Certificateholders shall not
be personally liable for obligations of the Trust, that the Undivided Interests
represented by the Certificates shall be non-assessable for any losses or
expenses of the Trust or for any reason whatsoever, and that Certificates upon
authentication thereof by the Trustee pursuant to Sections 2.1 and 6.2 are and
shall be deemed fully paid.
Section 13.9 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, without limitation,
the execution of any financing statements or continuation statements relating to
the Receivables for filing under the provisions of the Uniform Commercial Code
of any applicable jurisdiction.
Section 13.10 No Waiver; Cumulative Remedies. No failure to exercise
------------------------------
and no delay in exercising, on the part of the Trustee, any Credit Enhancement
Provider or the Investor Certificateholders, any right, remedy, power or
privilege hereunder, shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, remedy, power or privilege hereunder preclude any
other or further exercise thereof or the exercise of any other right, remedy,
power or privilege. The rights, remedies, powers and privileges herein provided
are cumulative and not exhaustive of any rights, remedies, powers and privileges
provided by law.
Section 13.11 Counterparts. This Agreement may be executed in two or
------------
more counterparts (and by different parties on separate counterparts), each of
which shall be an original, but all of which together shall constitute one and
the same instrument.
Section 13.12 Third-Party Beneficiaries. This Agreement will inure
-------------------------
to the benefit of and be binding upon the parties hereto, the Certificateholders
and, to the extent provided in the related Supplement, to the Credit Enhancement
Provider named therein, and their respective successors and permitted assigns.
Except as otherwise provided in this Article XIII, no other Person will have any
right or obligation hereunder.
Section 13.13 Actions by Certificateholders.
-----------------------------
(a) Wherever in this Agreement a provision is made that an action may
be taken or a notice, demand or instruction given by Investor
Certificateholders, such action, notice or instruction may be taken or given by
any Investor Certificateholder, unless such provision requires a specific
percentage of Investor Certificateholders.
110
<PAGE>
(b) Any request, demand, authorization, direction, notice, consent,
waiver or other act by a Certificateholder shall bind such Certificateholder and
every subsequent holder of such Certificate issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done or omitted to be done by the Trustee or the Servicer in reliance
thereon, whether or not notation of such action is made upon such Certificate.
Section 13.14 Rule 144A Information. For so long as any of the
---------------------
Investor Certificates of any Series or any Class are "restricted securities"
within the meaning of Rule 144(a)(3) under the Securities Act, each of the
Transferor, the Servicer, the Trustee and the Enhancement Provider for such
Series agree to cooperate with each other to provide to any Investor
Certificateholders of such Series or Class and to any prospective purchaser of
Certificates designated by such an Investor Certificateholder upon the request
of such Investor Certificateholder or prospective purchaser, any information
required to be provided to such holder or prospective purchaser to satisfy the
condition set forth in Rule 144A(d)(4) under the Securities Act.
Section 13.15 Merger and Integration. Except as specifically stated
----------------------
otherwise herein, this Agreement sets forth the entire understanding of the
parties relating to the subject matter hereof, and all prior understandings,
written or oral, are superseded by this Agreement. This Agreement may not be
modified, amended, waived or supplemented except as provided herein.
Section 13.16 Headings. The headings herein are for purposes of
--------
reference only and shall not otherwise affect the meaning or interpretation of
any provision hereof.
[End of Article XIII]
111
<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.
CHASE MANHATTAN BANK USA, NATIONAL ASSOCIATION
Transferor on and after June 1, 1996
By:/s/ Keith Schuck
---------------------------------------------------
Name: Keith Schuck
Title: Vice President
THE CHASE MANHATTAN BANK,
Transferor prior to June 1, 1996 and
Servicer
By:/s/ Richard L. Craig
---------------------------------------------------
Name: Richard L. Craig
Title: Managing Director
THE BANK OF NEW YORK,
Trustee
By:/s/ Joe Ernst
---------------------------------------------------
Name: Joe Ernst
Title: Assistant Vice President
<PAGE>
EXHIBIT A
---------
TRANSFEROR CERTIFICATE
----------------------
No. 1 One Unit
CHEMICAL MASTER CREDIT CARD TRUST I
ASSET BACKED CERTIFICATE
THIS CERTIFICATE WAS ISSUED PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE ACT), AND MAY BE SOLD ONLY PURSUANT
TO A REGISTRATION STATEMENT EFFECTIVE UNDER THE ACT OR AN EXEMPTION FROM THE
PROVISIONS OF SECTION 5 OF THE ACT. IN ADDITION, THE TRANSFER OF THIS
CERTIFICATE IS SUBJECT TO RESTRICTIONS SET FORTH IN THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN. A COPY OF THE POOLING AND SERVICING AGREEMENT
WILL BE FURNISHED TO THE HOLDER OF THIS CERTIFICATE BY THE TRUSTEE UPON WRITTEN
REQUEST.
This Certificate represents an
------------------------------
Undivided Interest in the
-------------------------
Chemical Master Credit Card Trust I
-----------------------------------
Evidencing an Undivided Interest in a trust, the corpus of which consists of a
portfolio of MasterCard and VISA* credit card receivables generated or
acquired by The Chase Manhattan Bank (USA) and other assets and interests
constituting the Trust under the Pooling and Servicing Agreement described
below.
(Not an interest in or an obligation of Chemical Bank or The Chase Manhattan
Bank (USA) or any Affiliate thereof.)
This certifies that The Chase Manhattan Bank (USA) (the "Holder") is
the registered owner of an undivided interest in a trust (the "Trust"), the
corpus of which consists of a portfolio of receivables (the "Receivables") now
existing or hereafter created under selected MasterCard and VISA credit card
accounts (the
- --------------
* MasterCard and VISA are registered trademarks of MasterCard International
Inc. and of VISA U.S.A., Inc., respectively.
<PAGE>
"Accounts") of The Chase Manhattan Bank (USA) (the "Transferor"), a banking
corporation organized and existing under the laws of the State of Delaware, all
monies due or to become due in payment of the Receivables (including all Finance
Charge Receivables), all proceeds of such Receivables and Insurance Proceeds
relating to the Receivables, the other assets and interests constituting the
Trust and the proceeds thereof pursuant to an Amended and Restated Pooling and
Servicing Agreement dated as of June 1, 1996, as supplemented by any Supplement
relating to a Series of Investor Certificates (the "Pooling and Servicing
Agreement"), by and between Chemical Bank, as Transferor prior to June 1, 1996
and Servicer, The Chase Manhattan Bank (USA), as Transferor on and after June 1,
1996, and The Bank of New York, as Trustee (the "Trustee"), a summary of certain
of the pertinent provisions of which is set forth herein.
To the extent not defined herein, the capitalized terms used herein
have the meanings assigned to them in the Pooling and Servicing Agreement. This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Pooling and Servicing Agreement, to which Pooling and
Servicing Agreement, as amended from time to time, the Holder by virtue of the
acceptance hereof assents and by which the Holder is bound.
This Certificate has not been registered or qualified under the
Securities Act of 1933, as amended, or any state securities law. No sale,
transfer or other disposition of this Certificate shall be permitted other than
in accordance with the provisions of Section 6.3, 6.9 or 7.2 of the Pooling and
Servicing Agreement.
The Receivables consist of Principal Receivables which arise generally
from the purchase of goods and services and of amounts advanced to cardholders
as cash advances, and of Finance Charge Receivables which arise generally from
Periodic Finance Charges and other fees and charges, as more fully specified in
the Pooling and Servicing Agreement.
This Certificate is the Transferor Certificate (the "Certificate"),
which represents an Undivided Interest in the Trust, including the right to
receive the Collections and other amounts at the times and in the amounts
specified in the Pooling and Servicing Agreement
A-2
<PAGE>
to be paid to the Holder of the Transferor Certificate. The aggregate interest
represented by this Certificate in the Principal Receivables in the Trust shall
not at any time exceed the Transferor Interest at such time. In addition to
this Certificate, Series of Investor Certificates will be issued to investors
pursuant to the Pooling and Servicing Agreement, each of which will represent an
Undivided Interest in the Trust. This Certificate shall not represent any
interest in the Investor Accounts, any Series Accounts or any Credit
Enhancement, except to the extent provided in the Pooling and Servicing
Agreement. The Transferor Interest on any date of determination will be an
amount equal to the aggregate amount of Principal Receivables and the principal
amounts on deposit in the Excess Funding Account, any Principal Funding Account
and any other Series Account (if so provided in the applicable Supplement) at
the end of the day immediately prior to such date of determination minus the
-----
Aggregate Investor Interest at the end of such day, minus the aggregate
-----
Enhancement Invested Amounts (if such amounts are not included in the Investor
Interest in the applicable Supplement), if any, for each Series outstanding at
the end of such day.
The Servicer shall deposit all Collections in the Collection Account
as promptly as possible after the Date of Processing of such Collections, but in
no event later than the second Business Day following such Date of Processing
(except as provided below and except as provided in any Supplement to the
Pooling and Servicing Agreement). Unless otherwise stated in any Supplement,
throughout the existence of the Trust, the Servicer shall allocate to the Holder
of the Certificate an amount equal to the product of (A) the Transferor
Percentage and (B) the aggregate amount of such Collections allocated to
Principal Receivables and Finance Charge Receivables, respectively, in respect
of each Monthly Period. Notwithstanding the first sentence of this paragraph,
the Servicer need not deposit this amount or any other amounts so allocated to
the Certificate pursuant to the Pooling and Servicing Agreement into the
Collection Account and shall pay, or be deemed to pay, such amounts as collected
to the Holder of the Certificate.
Chemical Bank, as Servicer, is entitled to receive as servicing
compensation a monthly servicing fee. The portion of the servicing fee which
will be
A-3
<PAGE>
allocable to the Holder of the Certificate pursuant to the Pooling and Servicing
Agreement will be payable by the Holder of the Certificate and neither the Trust
nor the Trustee or the Investor Certificateholders will have any obligations to
pay such portion of the servicing fee.
This Certificate does not represent an obligation of, or any interest
in, the Transferor or the Servicer, and neither the Certificates nor the
Accounts or Receivables are insured or guaranteed by the Federal Deposit
Insurance Corporation or any other governmental agency. This Certificate is
limited in right of payment to certain Collections respecting the Receivables,
all as more specifically set forth hereinabove and in the Pooling and Servicing
Agreement.
Upon the termination of the Trust pursuant to Section 12.1 of the
Pooling and Servicing Agreement, the Trustee shall assign and convey to the
Holder of the Certificate (without recourse, representation or warranty) all
right, title and interest of the Trust in the Receivables, whether then existing
or thereafter created, all monies due or to become due with respect thereto
(including all accrued interest theretofore posted as Finance Charge
Receivables) and all proceeds thereof and Insurance Proceeds relating thereto
and Interchange allocable to the Trust pursuant to any Supplement, except for
amounts held by the Trustee pursuant to Section 12.3(b) of the Pooling and
Servicing Agreement. The Trustee shall execute and deliver such instruments of
transfer and assignment, in each case without recourse, as shall be reasonably
requested by the Holder of the Certificate to vest in such Holder all right,
title and interest which the Trustee had in the Receivables.
Unless the certificate of authentication hereon has been executed by
or on behalf of the Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Pooling and Servicing Agreement, or be valid
for any purpose.
A-4
<PAGE>
IN WITNESS WHEREOF, The Chase Manhattan Bank(USA) has caused this
Certificate to be duly executed under its official seal.
THE CHASE MANHATTAN BANK (USA)
By:_______________________
Authorized Officer
Date:
A-5
<PAGE>
Trustee's Certificate of Authentication
---------------------------------------
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is the Transferor Certificate referred to in
the within-mentioned Pooling and Servicing Agreement.
THE BANK OF NEW YORK,
as Trustee
By:______________________
Authorized Officer
A-6
<PAGE>
EXHIBIT B
---------
FORM OF ASSIGNMENT OF RECEIVABLES IN ADDITIONAL ACCOUNTS
- --------------------------------------------------------
ASSIGNMENT No. _____ OF RECEIVABLES IN ADDITIONAL ACCOUNTS, dated as
___________ __, by and between The Chase Manhattan Bank (USA), a banking
corporation organized and existing under the laws of the State of Delaware
("Chase USA"), to The Bank of New York, a banking corporation organized and
existing under the laws of the State of New York (the "Trustee") pursuant to the
Pooling and Servicing Agreement referred to below.
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Chase USA, Chemical Bank and the Trustee are parties to the
Amended and Restated Pooling and Servicing Agreement, dated as of June 1, 1996
(hereinafter as such agreement may have been, or may from time to time be,
amended, supplemented or otherwise modified, the "Pooling and Servicing
Agreement");
WHEREAS, pursuant to the Pooling and Servicing Agreement, Chase USA
wishes to designate Additional Accounts of Chase USA to be included as Accounts
and to convey the Receivables of such Additional Accounts, whether now existing
or hereafter created, to the Trust as part of the corpus of the Trust (as each
such term is defined in the Pooling and Servicing Agreement); and
WHEREAS, the Trustee is willing to accept such designation and
conveyance subject to the terms and conditions hereof;
NOW, THEREFORE, Chase USA and the Trustee hereby agree as follows:
1. Defined Terms. All terms defined in the Pooling and
-------------
Servicing Agreement and used herein shall have such defined meanings when
used herein, unless otherwise defined herein.
"Addition Date" shall mean, with respect to the Additional
-------------
Accounts designated hereby, ___________, ____.
B-1
<PAGE>
"Notice Date" shall mean, with respect to the Additional Accounts
-----------
designated hereby, __________, ____ (which shall be a date on or prior to
the fifth Business Day prior to the Addition Date with respect to additions
pursuant to subsection 2.6(a) of the Pooling and Servicing Agreement and
the tenth Business Day prior to the Addition Date with respect to additions
pursuant to subsection 2.6(b) of the Pooling and Servicing Agreement).
2. Designation of Additional Accounts. Chase USA shall deliver
----------------------------------
to the Trustee not later than five Business Days after the Addition Date, a
computer file or microfiche list containing a true and complete list of
each MasterCard and VISA account which as of the Addition Date shall be
deemed to be an Additional Account, such accounts being identified by
account number and by the amount of Receivables in such accounts as of the
close of business on the Addition Date. Such list shall be delivered five
Business Days after the date of this Agreement and shall be marked as
Schedule 1 to this Assignment and, as of the Addition Date, shall be
incorporated into and made a part of this Assignment.
3. Conveyance of Receivables.
-------------------------
(a) Chase USA does hereby transfer, assign, set-over and
otherwise convey to the Trust for the benefit of the Certificateholders,
without recourse on and after the Addition Date, all right, title and
interest of Chase USA in and to the Receivables now existing and hereafter
created in the Additional Accounts designated hereby, all monies due or to
become due with respect thereto (including all Finance Charge Receivables)
and all proceeds of such Receivables, Insurance Proceeds relating to such
Receivables and the proceeds thereof.
(b) In connection with such transfer, Chase USA agrees to record
and file, at its own expense, a financing statement with respect to the
Receivables now existing and hereafter created in the Additional Accounts
designated hereby (which may be a single financing statement with respect
to all such Receivables) for the transfer of accounts as defined in Section
9-106 of the UCC as in effect in the State of New York meeting
B-2
<PAGE>
the requirements of applicable state law in such manner and such
jurisdictions as are necessary to perfect the assignment of such
Receivables to the Trust, and to deliver a file-stamped copy of such
financing statement or other evidence of such filing (which may, for
purposes of this Section 3, consist of telephone confirmation of such
filing) to the Trustee on or prior to the date of this Agreement.
(c) In connection with such transfer, Chase USA further agrees,
at its own expense, on or prior to the date of this Assignment to indicate
in its computer files that Receivables created in connection with the
Additional Accounts designated hereby have been transferred to the Trust
pursuant to this Assignment for the benefit of the Certificateholders.
4. Acceptance by Trustee. The Trustee hereby acknowledges its
---------------------
acceptance on behalf of the Trust for the benefit of the Certificateholders
of all right, title and interest previously held by Chase USA in and to the
Receivables now existing and hereafter created, and declares that it shall
maintain such right, title and interest, upon the Trust herein set forth,
for the benefit of all Certificateholders.
5. Representations and Warranties of Chase USA. Chase USA
-------------------------------------------
hereby represents and warrants to the Trust as of the Addition Date:
(a) Legal, Valid and Binding Obligation. This Assignment
-----------------------------------
constitutes a legal, valid and binding obligation of Chase USA
enforceable against Chase USA in accordance with its terms, except as
such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect affecting the enforcement of creditors' rights in
general and the rights of creditors of [banking associations] and
except as such enforceability may be limited by general principles of
equity (whether considered in a suit at law or in equity).
B-3
<PAGE>
(b) Eligibility of Accounts and Receivables. Each Additional
---------------------------------------
Account designated hereby is an Eligible Account and each Receivable
in such Additional Account is an Eligible Receivable.
(c) Selection Procedures. No selection procedures believed by
--------------------
Chase USA to be materially adverse to the interests of the Investor
Certificateholders were utilized in selecting the Additional Accounts
designated hereby from the available Eligible Accounts in the Bank
Portfolio.
(d) Insolvency. Chase USA is not insolvent and, after giving
----------
effect to the conveyance set forth in Section 3 of this Assignment,
will not be insolvent.
(e) Security Interest. This Assignment constitutes either: (i)
-----------------
a valid transfer and assignment to the Trust of all right, title and
interest of Chase USA in and to Receivables now existing and hereafter
created in the Additional Accounts designated hereby, and all proceeds
(as defined in the UCC as in effect in the State of New York) of such
Receivables and Insurance Proceeds relating thereto, and such
Receivables and any proceeds thereof and Insurance Proceeds relating
thereto will be held by the Trust free and clear of any Lien of any
Person claiming through or under Chase USA or any of its Affiliates
except for (x) Liens permitted under subsection 2.5(b) of the Pooling
and Servicing Agreement, (y) the interest of the holder of the
Transferor Certificate and (z) Chase USA's right to receive interest
accruing on, and investment earnings in respect of, the Finance Charge
Account and the Principal Account as provided in the Pooling and
Servicing Agreement; or (ii) a grant of a security interest (as
defined in the UCC as in effect in the State of New York) in such
property to the Trust, which is enforceable with respect to existing
Receivables of the Additional Accounts, the proceeds (as defined in
the UCC as in effect in the State of New York) thereof and Insurance
Proceeds relating thereto, upon the conveyance of such Receivables to
the Trust, and which will be enforceable with respect to the
Receivables thereafter created in respect of Addi-
B-4
<PAGE>
tional Accounts designated hereby, the proceeds (as defined in the UCC
as in effect in the State of New York) thereof and Insurance Proceeds
relating thereto, upon such creation; and (iii) if this Assignment
constitutes the grant of a security interest to the Trust in such
property, upon the filing of a financing statement described in
Section 3 of this Assignment with respect to the Additional Accounts
designated hereby and in the case of the Receivables of such
Additional Accounts thereafter created and the proceeds (as defined in
the UCC as in effect in the State of New York) thereof, and Insurance
Proceeds relating to such Receivables, upon such creation, the Trust
shall have a first priority perfected security interest in such
property (subject to Section 9-306 of the UCC as in effect in the
State of New York), except for Liens permitted under subsection 2.5(b)
of the Pooling and Servicing Agreement.
6. Conditions Precedent. The acceptance by the Trustee set
--------------------
forth in Section 4 and the amendment of the Pooling and Servicing Agreement
set forth in Section 7 are subject to the satisfaction, on or prior to the
Addition Date, of the following conditions precedent:
(a) Officer's Certificate. Chase USA shall have delivered
---------------------
to the Trustee a certificate of a Vice President or more senior
officer substantially in the form of Schedule 2 hereto, certifying
that (i) all requirements set forth in Section 2.6 of the Pooling and
Servicing Agreement for designating Additional Accounts and conveying
the Principal Receivables of such Account, whether now existing or
hereafter created, have been satisfied and (ii) each of the
representations and warranties made by Chase USA in Section 5 is true
and correct as of the Addition Date. The Trustee may conclusively
rely on such Officer's Certificate, shall have no duty to make
inquiries with regard to the matters set forth therein, and shall
incur no liability in so relying.
(b) Opinion of Counsel. Chase USA shall have delivered to
------------------
the Trustee an Opinion of Counsel with respect to the Additional
Accounts
B-5
<PAGE>
designated hereby substantially in the form of Exhibit E to the
Pooling and Servicing Agreement.
(c) Additional Information. Chase USA shall have delivered
----------------------
to the Trustee such information as was reasonably requested by the
Trustee to satisfy itself as to the accuracy of the representation and
warranty set forth in subsection 5(d) to this Agreement.
7. Amendment of the Pooling and Servicing Agreement. The
------------------------------------------------
Pooling and Servicing Agreement is hereby amended to provide that all
references therein to the "Pooling and Servicing Agreement," to "this
Agreement" and "herein" shall be deemed from and after the Addition Date to
be a dual reference to the Pooling and Servicing Agreement as supplemented
by this Assignment. Except as expressly amended hereby, all of the
representations, warranties, terms, covenants and conditions to the Pooling
and Servicing Agreement shall remain unamended and shall continue to be,
and shall remain, in full force and effect in accordance with its terms and
except as expressly provided herein shall not constitute or be deemed to
constitute a waiver of compliance with or a consent to noncompliance with
any term or provisions of the Pooling and Servicing Agreement.
8. Counterparts. This Assignment may be executed in two or more
------------
counterparts (and by different parties on separate counterparts), each of
which shall be an original, but all of which together shall constitute one
and the same instrument.
9. GOVERNING LAW. THIS AGREEMENT SHALL BE 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, AND
WITHOUT, LIMITING THE GENERALITY OF THE FOREGOING, THE IMMUNITY AND
STANDARD OF CARE OF THE TRUSTEE IN THE ADMINISTRATION OF THE TRUST
HEREUNDER SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
B-6
<PAGE>
IN WITNESS WHEREOF, the undersigned have caused this Assignment of
Receivables in Additional Accounts to be duly executed and delivered by their
respective duly authorized officers on the day and year first above written.
THE CHASE MANHATTAN BANK (USA)
By:________________________
Name:
Title:
THE BANK OF NEW YORK,
as Trustee
By:________________________
Name:
Title:
B-7
<PAGE>
Schedule 1
to Assignment of
Receivables in
Additional Accounts
-------------------
ADDITIONAL ACCOUNTS
-------------------
B-8
<PAGE>
Schedule 2
to Assignment of
Receivables in
Additional Accounts
-------------------
The Chase Manhattan Bank (USA)
Chemical Master Credit Card Trust I
Officer's Certificate
__________________________, a duly authorized officer of The Chase
Manhattan Bank (USA), a banking corporation organized and existing under the
laws of the State of Delaware, ("Chase USA"), hereby certifies and acknowledges
on behalf of Chase USA that to the best of his knowledge the following
statements are true on ____________, ____, (the "Addition Date"), and
acknowledges on behalf of Chase USA that this Officer's Certificate will be
relied upon by The Bank of New York, as Trustee (the "Trustee") of the Chemical
Master Credit Card Trust I in connection with the Trustee entering into
Assignment No. ______ of Receivables in Additional Accounts, dated as of the
Addition Date (the "Assignment"), by and between Chase USA and the Trustee, in
connection with the Amended and Restated Pooling and Servicing Agreement, dated
as of June 1, 1996, as heretofore supplemented and amended (the "Pooling and
Servicing Agreement") pursuant to which Chemical, as Transferor prior to June 1,
1996 and Servicer, Chase USA as Transferor on and after June 1, 1996 and the
Trustee are parties. The undersigned hereby certifies and acknowledges on
behalf of Chase USA that:
(a) on or prior to the Addition Date, Chase USA has delivered to the
Trustee the Assignment (including an acceptance by the Trustee on behalf of the
Trust for the benefit of the Investor Certificateholders) and Chase USA has
indicated in its computer files that the Receivables created in connection with
the Additional Accounts have been transferred to the Trust and within five
Business Days after the Addition Date Chase USA shall deliver to the Trustee a
computer file or microfiche list containing a true and complete list of all
Additional Accounts identified by account number and the aggregate amount of the
Receivables in such Additional Accounts as of the Addition Date, which computer
file or microfiche list shall be as of the date of such Assignment, incorporated
into and made a part of such Assignment and the Pooling and Servicing Agreement.
B-9
<PAGE>
(b) Legal, Valid and Binding Obligation. The Assignment constitutes
-----------------------------------
a legal, valid and binding obligation of Chase USA, enforceable against Chase
USA in accordance with its terms, except as such enforceability may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect affecting the enforcement of creditors'
rights in general and the rights of creditors of (banking associations) and
except as such enforceability may be limited by general principles of equity
(whether considered in a suit at law or in equity).
(c) Eligibility Of Accounts. Each Additional Account designated
-----------------------
pursuant to the Assignment is an Eligible Account and each Receivable in such
Additional Account is an Eligible Receivable.
(d) Selection Procedures. No selection procedures believed by Chase
--------------------
USA to be materially adverse to the interests of the Investor Certificateholders
were utilized in selecting the Additional Accounts designated hereby from the
available Eligible Accounts in the Bank Portfolio.
(e) Insolvency. Chase USA is not insolvent and, after giving effect
----------
to the conveyance set forth in Section 3 of the Assignment, will not be
insolvent.
(f) Security Interest. The Assignment constitutes either: (i) a
-----------------
valid transfer and assignment to the Trust of all right, title and interest of
Chase USA in and to Receivables now existing and hereafter created in the
Additional Accounts designated pursuant to the Assignment, and all proceeds (as
defined in the UCC as in effect in the State of New York) of such Receivables
and Insurance Proceeds relating thereto, and such Receivables and any proceeds
thereof and Insurance Proceeds relating thereto will be held by the Trust free
and clear of any Lien of any Person claiming through or under the Transferor or
any of its Affiliates except for (x) Liens permitted under subsection 2.5(b) of
the Pooling and Servicing Agreement, (y) the interest of Chase USA as holder of
the Transferor Certificate and (z) Chase USA's right to receive interest
accruing on, and investment earnings in respect of, the Finance Charge Account
and the Principal Account as provided in the Pooling and Servicing Agreement and
any Supplement; or (ii) a grant of a security interest (as defined in the UCC as
in effect in the State of New York) in such property to the
B-10
<PAGE>
Trust, which is enforceable with respect to the existing Receivables of the
Additional Accounts designated pursuant to the Assignment, the proceeds (as
defined in the UCC as in effect in the State of New York) thereof and Insurance
Proceeds relating thereto upon the conveyance of such Receivables to the Trust,
and which will be enforceable with respect to the Receivables thereafter created
in respect of Additional Accounts designated pursuant to the Assignment, the
proceeds (as defined in the UCC as in effect in the State of New York) thereof
and Insurance Proceeds relating thereto, upon such creation; and (iii) if the
Assignment constitutes the grant of a security interest to the Trust in such
property, upon the filing of a financing statement described in Section 3 of the
Assignment with respect to the Additional Accounts designated pursuant to the
Assignment and in the case of the Receivables of such Additional Accounts
thereafter created and the proceeds (as defined in the UCC as in effect in the
State of New York) thereof, and Insurance Proceeds relating to such Receivables,
upon such creation, the Trust shall have a first priority perfected security
interest in such property (subject to Section 9-306 of the UCC as in effect in
the State of New York), except for Liens permitted under subsection 2.5(b) of
the Pooling and Servicing Agreement.
(g) Requirements of Pooling and Servicing Agreement. All
-----------------------------------------------
requirements set forth in Section 2.6 of the Pooling and Servicing Agreement for
designating Additional Accounts and conveying the Principal Receivables of such
Accounts, whether now existing or hereafter created, have been satisfied.
B-11
<PAGE>
Initially capitalized terms used herein and not otherwise defined are
used as defined in the Pooling and Servicing Agreement.
IN WITNESS WHEREOF, I have hereunto set my hand this _____ day
of___________, ____.
THE CHASE MANHATTAN BANK
(USA)
By:________________________
Name:
Title:
B-12
<PAGE>
EXHIBIT C
---------
FORM OF MONTHLY SERVICER'S CERTIFICATE
--------------------------------------
Chemical Bank
________________________________________
CHEMICAL MASTER CREDIT CARD TRUST I
________________________________________
1. Capitalized terms used in this Certificate have their respective
meanings set forth in the Pooling and Servicing Agreement; provided, that the
--------
"preceding Monthly Period" shall mean the Monthly Period immediately preceding
the calendar month in which this Certificate is delivered. This Certificate is
delivered pursuant to subsection 3.4(b) of the Pooling and Servicing Agreement.
References herein to certain sections and subsections are references to the
respective sections and subsections of the Pooling and Servicing Agreement.
2. Chemical is Servicer under the Pooling and Servicing Agreement.
3. The undersigned is a Servicing Officer.
4. The date of this Certificate is a Determination Date under the
Pooling and Servicing.
5. The aggregate amount of
Collections processed
during the preceding
Monthly Period was equal
to (excluding Annual $_________
Membership Fees and
Interchange)...............
6. The Aggregate Investor
Percentage of Receivables
processed by the Servicer
during the preceding
Monthly Period was equal to $_________
<PAGE>
7. The Aggregate Investor
Percentage of Collections
of Finance Charge
Receivables processed by
the Servicer during the
preceding Monthly Period
was equal to (excluding
Annual Membership Fees and
Interchange)............... $_________
8. The aggregate amount of
Receivables processed by
the Servicer as of the end
of the last day of the
preceding Monthly Period... $_________
9. Of the balance on deposit in
the Finance Charge Account, the
amount attributable to the
Aggregate Investor Percentage of
Collections processed by the
Servicer during the preceding
Monthly Period...............$_________
10. Of the balance on deposit in
the Principal Account, the amount
attributable to the Aggregate
Investor Percentage of
Collections processed by the
Servicer during the preceding
Monthly Period.............. $_________
11. The aggregate amount, if any,
of withdrawals, drawings or
payments under any Credit
Enhancement, if any, required to
be made with respect to any
Series outstanding for the
preceding Monthly Period..... $_________
12. The Aggregate Investor
Percentage of Collections
of Principal Receivables
processed by the Servicer
during the current month
is equal to................ $_________
C-2
<PAGE>
13. The amount equal to the
Aggregate Investor Percentage of
Annual Membership Fees deposited
to the Finance Charge Account or
any Series Account on or before
the Transfer Date during the
current month is equal to..... $_________
14. The aggregate amount
of Interchange to be
deposited in the Finance
Charge Account on the
Transfer Date of the
current month is equal to.. $_________
15. The aggregate amount
of all sums payable to the
Investor Certificateholder
of each Series on the
succeeding Distribution
Date with respect to
Certificate Principal...... $_________
16. The aggregate amount
of all sums payable to the
Investor Certificateholder
of each Series on the
succeeding Distribution
Date with respect to
Certificate Interest....... $_________
17. To the knowledge of the undersigned, there are no Liens on any
Receivables in the Trust except as described below:
[If applicable, insert "None."]
C-3
<PAGE>
IN WITNESS WHEREOF, the undersigned has duly executed and delivered
this certificate this ____ day of __________, ____.
CHEMICAL BANK,
Servicer
By:________________________
Name:
Title:
C-4
<PAGE>
Schedule to Monthly
Servicer's Certificate*
----------------------
Chemical Bank
________________________________________
CHEMICAL MASTER CREDIT CARD TRUST I
________________________________________
* A separate schedule is to be attached for each Series, with appropriate
changes and additions to reflect the specifics of the related Series
Supplement.
C-5
<PAGE>
EXHIBIT D
---------
FORM OF ANNUAL SERVICER'S CERTIFICATE
-------------------------------------
Chemical Bank
-------------------------------------
CHEMICAL MASTER CREDIT CARD TRUST I
-------------------------------------
The undersigned, a duly authorized representative of CHEMICAL BANK, a
banking corporation organized and existing under the laws of the State of New
York ("Chemical"), as Servicer pursuant to the Amended and Restated Pooling and
Servicing Agreement dated as of June 1, 1996 (the "Pooling and Servicing
Agreement") by and among Chemical, The Chase Manhattan Bank (USA) and The Bank
of New York, as trustee (the "Trustee") does hereby certify that:
1. Chemical is Servicer under the Pooling and Servicing
Agreement.
2. The undersigned is duly authorized pursuant to the Pooling
and Servicing Agreement to execute and deliver this Certificate to the
Trustee.
3. This Certificate is delivered pursuant to Section 3.5 of the
Pooling and Servicing Agreement.
4. A review of the activities of the Servicer during [the period
from the Closing date until December 31, 1996] or [the twelve-month period
ended December 31, ___] was conducted under the supervision of the
undersigned.
5. Based on such review, the Servicer has, to the best of the
knowledge of the undersigned, fully performed all its obligations under the
Pooling and Servicing Agreement throughout such period and no default in
the performance of such obligations has occurred or is continuing except as
set forth in paragraph 6 below.
6. The following is a description of each default in the
performance of the Servicer's obliga-
<PAGE>
tions under the provisions of the Pooling and Servicing Agreement,
including any Supplement, known to the undersigned to have been made during
such period which sets forth in detail (i) the nature of each such default,
(ii) the action taken by the Servicer, if any, to remedy each such default
and (iii) the current status of each such default:
[If applicable, insert "None."]
IN WITNESS WHEREOF, the undersigned has duly executed this certificate
this ____ day of ____________, ____.
By: ____________________________
Name:
Title: Vice President
D-2
<PAGE>
EXHIBIT E
---------
FORM OF OPINION OF COUNSEL REGARDING ADDITIONAL ACCOUNTS
--------------------------------------------------------
PROVISIONS TO BE INCLUDED IN OPINION OF COUNSEL
TO BE DELIVERED PURSUANT TO SECTION 2.6(c)(vi)
OF THE POOLING AND SERVICING AGREEMENT
--------------------------------------
The opinions set forth below may be subject to certain qualifications,
assumptions, limitations and exceptions taken or made in the opinion of
Transferor's counsel with respect to similar matters delivered on the Closing
Date.
The Assignment has been duly authorized, executed and delivered by the
Transferor and constitutes the legal, valid and binding agreement of the
Transferor, enforceable against the Transferor in accordance with its terms
subject to the effects of bankruptcy, insolvency, liquidation, receivership,
conservatorship, fraudulent conveyance, reorganization, moratorium and other
similar laws relating to or affecting creditors' rights generally, general
equitable principles (whether considered in a proceeding in equity or at law)
and an implied covenant of good faith and fair dealing.
If the transfer of the Receivables in the Additional Accounts
designated in the Assignment to the Trust pursuant to the Pooling and Servicing
Agreement constitutes a true sale of such Receivables to the Trust:
With respect to such Receivables in existence on the date
hereof, such sale transfers all of the right, title and interest of
the Transferor in and to such Receivables and the proceeds thereof to
the Trust, free and clear of any liens now existing (other than
existing liens as to which a filing under the Code is not required to
perfect such liens) or hereafter created but subject to the rights of
the Transferor as holder of the Transferor Certificate.
With respect to such Receivables which come into existence
after the date hereof, upon the creation of such Receivables, such
sale will
<PAGE>
transfer all of the right, title and interest of the Transferor in and
to such Receivables and the proceeds thereof to the Trust free and
clear of any liens other than liens which are in existence on the date
of such transfer ("Intervening Liens") but subject to the rights of
the Transferor as holder of the Transferor Certificate. Any such
Intervening Liens would be subject to the prior perfected security
interest in favor of the Trustee as set forth in paragraph 3 below.
In either case, no further action will thereafter be required under New
York or federal law to protect the Trust's ownership interest in such
Receivables against creditors of, or subsequent purchasers from, the
Transferor. We note, however, that unless the obligor in respect of a
Receivable has received notice of such assignment, bona fide payments made
by such obligor to a second assignee of such Receivable will discharge such
obligor's obligations to the extent of such payment, and such payment will
be recoverable only from such second assignee.
If the transfer of the Receivables to the Trust pursuant to the
Pooling and Servicing Agreement as supplemented by the Assignment does not
constitute a true sale of such Receivables to the Trust, then the Pooling and
Servicing Agreement creates a valid security interest in favor of the Trustee,
for the benefit of the Investor Certificateholders in the Transferor's right,
title and interest in and to such Receivables and the proceeds thereof. If the
transfer of such Receivables to the Trust constitutes a true sale of such
Receivables to the Trust but such sale is not effective as of such date to
convey Receivables not existing on such date, the Pooling and Servicing
Agreement as supplemented by the Assignment creates a valid security interest in
favor of the Trustee, for the benefit of the Investor Certificateholders, in the
Transferor's interest in such Receivables and the proceeds thereof to the extent
such interest is not so conveyed to the Trust. In either event, such security
interest constitutes a perfected security interest in such Receivables subject
to no prior or equal liens, enforceable as such against creditors of, and
purchasers from, the Transferor and the FDIC as conservator or receiver for the
Transferor, except:
(i) as enforceability may be subject to (A) the
E-2
<PAGE>
right of the FDIC, as receiver for the Transferor, to enforce the
Pooling and Servicing Agreement, notwithstanding any provision thereof
providing for termination, default, acceleration, or exercise of
rights upon, or solely by reason of, insolvency or the appointment of
a conservator or receiver, (B) the FDIC's authority, as receiver for
the Transferor, to transfer any asset or liability of the Transferor
to another depository institution, (C) the statutory prohibition on
any attachment or execution being issued by any court upon assets in
the possession of the FDIC as receiver for the Transferor, (D) the
right of the FDIC to obtain a stay, for a period not to exceed 90
days, in any judicial action or proceeding to which the Transferor is
a party and (E) the right of the FDIC, as receiver for the Transferor,
to require a secured party to establish its right to payments by
submitting to and completing the claims procedure established by the
Financial Institutions Reform, Recovery and Enforcement Act of 1989;
(ii) as perfection may be limited (A) with respect to any such
Receivables which are evidenced by instruments (as defined in Section
9-105(l)(i) of the Code) which are not in the possession of the
Trustee; and (B) in the case of proceeds, by Section 9-306 of the
Code; and
(iii) as priority may be subject to (A) any liens, claims or other
interests that arise by operation of law and do not require any filing
or similar action in order to take priority over a perfected security
interest; (B) any claim or lien in favor of the United States, any
state or any agency or instrumentality thereof (including, without
limitation, liens arising under the federal, state or local tax laws
or under the Employee Retirement Income Security Act of 1974, as
amended); (C) the security interest of any Person claiming any portion
of the collateral as proceeds (other than Receivables in which the
Trustee has a prior lien) of such Person's security interest or (D)
the security interest of any Person previously perfected without
filing or the taking of possession pursuant to Section 9-304(4) of the
UCC; (E) liens
E-3
<PAGE>
under Section 4-208 of the Code (relating to the security interest of
a collecting bank); (F) with respect to any Receivables represented by
chattel paper (and proceeds thereof), the interest of a purchaser of
such chattel paper under Section 9-308 of the Code; and (G) a claim by
the FDIC or any other receiver or conservator of the Transferor for
administrative expenses. Such perfection and priority of the security
interest of the Trustee for the benefit of the Investor
Certificateholders would not be affected by an increase or a decrease
in the relative interests in the Receivables of the Transferor as
holder of the Transferor Certificate and the Investor
Certificateholders.
In addition, in connection with the opinions set forth in paragraph 2
and this paragraph 3, no opinion is expressed herein with respect to Receivables
or the proceeds thereof other than the Receivables in the Additional Accounts
designated by the Assignment and the proceeds thereof. No opinion is expressed
herein with respect to the perfection, priority or enforceability of the Trust's
interest in proceeds of the Receivables except to the extent such proceeds
consist of either (1) identifiable cash proceeds held in the Collection Account
maintained by a Eligible Institution in the name of the Trust in accordance with
the terms of the Pooling and Servicing Agreement and the Supplements or (2)
Permitted Investments held by or on behalf of the Trustee in accordance with the
terms of the Pooling and Servicing Agreement and the Supplements. We do not
express any opinion herein: (i) as to the creation, validity or enforceability
of any interest of the Transferor in the Receivables or the proceeds thereof,
(ii) as to the Transferor's title to any of the Receivables or the proceeds
thereof, (iii) as to whether the transfer of the Receivables constitutes a true
sale or a grant of a security interest, (iv) as to whether the purported sale of
all Receivables now existing and hereafter created is effective to convey as a
true sale to the Trust, as of the purported date of sale, Receivables which do
not exist as of such date of sale, or as to whether Receivables hereafter
created in an Account are deemed to exist as of the date hereof or (v) as to
whether a court may temporarily restrain the exercise of the Trust's rights to
the Receivables and the proceeds thereof. Further, we point out that delays in
the exercise of the rights and interests of the Trust may occur with respect to
E-4
<PAGE>
the Receivables and their proceeds in the possession of a receiver or
conservator, regardless of whether the transaction constitutes a true sale or a
secured transaction, by actions unilaterally taken by such receiver or
conservator.
With respect to the opinions expressed in paragraphs 2 and 3, we note
that pursuant to Section 2.1 of the Pooling and Servicing Agreement, the
Transferor has filed the Financing Statements with the Office of the Secretary
of State of the State of New York and the City Register in the County of New
York. In expressing the opinions set forth herein, we have assumed that in the
event that a change in the Transferor's name, identity or corporate structure
makes the Financing Statements seriously misleading within the meaning of
Section 9-402(7) of the New York Uniform Commercial Code (the "Code"), or the
Transferor moves the location of its executive office outside the State of New
York, the Transferor will file such financing statements or amendments as may be
necessary to continue the perfection of the Trust's interest in the Receivables
and the proceeds thereof as required by Section 13.2 of the Pooling and
Servicing Agreement within the time specified in Section 9-402(7) of the Code or
Section 9-103(3)(e) of the Code, as the case may be.
In expressing the opinions set forth herein, we have relied, without
independent investigation, upon reports received from the Office of the
Secretary of State of the State of New York and the City Register in the County
of New York with respect to financing statements and related filings and with
respect to certain notices of federal government liens, New York State
government tax liens, certain attachment liens and judgment liens with respect
to the Transferor on file with such offices. The effective dates of the latest
of such reports are set forth in Schedule A attached hereto (the "UCC Report
Schedule"). [In addition, with respect to the items identified on Schedule B
attached hereto, we have relied without independent investigation, on a
certificate of an officer of the Transferor attached hereto to the effect that
such items do not represent a lien or security interest on the Receivables.]
[We have assumed that no such filings or notices were made with respect to the
Transferor between the effective time of such reports and the time of the filing
of the Financing Statements. We note that the Transferor has delivered to us a
certificate to the effect of the preceding sentence.] In the Pooling and
Servicing Agreement, the Transferor represents and
E-5
<PAGE>
warrants that it has good and marketable title to the Receivables free and clear
of all Liens, and we note that the Transferor has delivered to us a certificate
to such effect.
In addition, we call to your attention the fact that if the FDIC were
appointed receiver for the Transferor, the FDIC could repudiate any contract it
determined to be burdensome and the repudiation of which it determined would
promote the orderly administration of the Transferor's affairs. 12 U.S.C. (S)
1821(e)(1), (2). However, Section 1821 provides that the FDIC's power as
receiver to repudiate contracts is not to be construed to permit the avoidance
of a properly perfected security interest except where such an interest is taken
in contemplation of insolvency or with the intent to hinder, delay, or defraud
the institution or the creditors of the institution. 12 U.S.C. (S) 1821(e)(11).
We have relied, without independent verification, upon on a certificate of an
officer of the Transferor (attached hereto as Annex I), to the effect that (i)
the Transferor was not as of the date of transfer of the Receivables, insolvent
or on the verge of insolvency and was not rendered insolvent or on the verge of
insolvency by reason thereof, (ii) the transfer was not made in contemplation of
insolvency and (iii) the transfer was made in good faith and without the intent
to hinder, delay or defraud any of the Transferor's creditors. In reliance upon
the certificate of the Transferor referred to above, we are of the opinion that
the transfer of, or the grant of a security interest in, the Receivables to the
Trust would not be subject to repudiation by the FDIC.
E-6
<PAGE>
EXHIBIT F
---------
FORM OF ANNUAL OPINION OF COUNSEL
---------------------------------
The opinions set forth below, which are to be delivered pursuant to
subsection 13.2(d)(ii) of the Pooling and Servicing Agreement, may be subject to
certain qualifications, assumptions, limitations and exceptions taken or made in
the opinion of counsel to the Transferor with respect to similar matters
delivered on the Closing Date.
1. If the transfer of the Receivables to the Trust pursuant to the
Pooling and Servicing Agreement constitutes a true sale of such Receivables to
the Trust:
a. With respect to such Receivables in existence on the date
hereof, such sale transfers all of the right, title and interest of
the Transferor in and to such Receivables and the proceeds thereof to
the Trust, free and clear of any liens now existing (other than
existing liens as to which a filing under the Code is not required to
perfect such liens) or hereafter created but subject to the rights of
the Transferor as holder of the Transferor Certificate.
b. With respect to such Receivables which come into existence
after the date hereof, upon the creation of such Receivables, such
sale will transfer all of the right, title and interest of the
Transferor in and to such Receivables and the proceeds thereof to the
Trust free and clear of any liens other than liens which are in
existence on the date of such transfer ("Intervening Liens") but
subject to the rights of the Transferor as holder of the Transferor
Certificate. Any such Intervening Liens would be subject to the prior
perfected security interest in favor of the Trustee as set forth in
paragraph 3 below.
In either case, no further action will thereafter be required under New
York or federal law to protect the Trust's ownership interest in such
Receivables against creditors of, or subsequent purchasers from, the
Transferor. We note, however, that unless the obligor in
<PAGE>
respect of a Receivable has received notice of such assignment, bona fide
payments made by such obligor to a second assignee of such Receivable will
discharge such obligor's obligations to the extent of such payment, and
such payment will be recoverable only from such second assignee.
2. If the transfer of the Receivables to the Trust pursuant to the
Pooling and Servicing Agreement does not constitute a true sale of such
Receivables to the Trust, then the Pooling and Servicing Agreement creates a
valid security interest in favor of the Trustee, for the benefit of the Investor
Certificateholders in the Transferor's right, title and interest in and to such
Receivables and the proceeds thereof. If the transfer of such Receivables to
the Trust constitutes a true sale of such Receivables to the Trust but such sale
is not effective as of such date to convey Receivables not existing on such
date, the Pooling and Servicing Agreement creates a valid security interest in
favor of the Trustee, for the benefit of the Investor Certificateholders, in the
Transferor's interest in such Receivables and the proceeds thereof to the extent
such interest is not so conveyed to the Trust. In either event, such security
interest constitutes a perfected security interest in such Receivables subject
to no prior or equal liens, enforceable as such against creditors of, and
purchasers from, the Transferor and the FDIC as conservator or receiver for the
Transferor, except:
(i) as enforceability may be subject to (A) the right of the FDIC, as
receiver for the Transferor, to enforce the Pooling and Servicing
Agreement, notwithstanding any provision thereof providing for
termination, default, acceleration, or exercise of rights upon, or
solely by reason of, insolvency or the appointment of a conservator or
receiver, (B) the FDIC's authority, as receiver for the Transferor, to
transfer any asset or liability of the Transferor to another
depository institution, (C) the statutory prohibition on any
attachment or execution being issued by any court upon assets in the
possession of the FDIC as receiver for the Transferor, (D) the right
of the FDIC to obtain a stay, for a period not to exceed 90 days, in
any judicial action or proceeding to which the Transferor is a party
and (E) the right of the FDIC, as receiver for the Transferor, to
F-2
<PAGE>
require a secured party to establish its right to payments by
submitting to and completing the claims procedure established by the
Financial Institutions Reform, Recovery and Enforcement Act of 1989;
(ii) as perfection may be limited (A) with respect to any such
Receivables which are evidenced by instruments (as defined in Section
9-105(l)(i) of the Code) which are not in the possession of the
Trustee; and (B) in the case of proceeds, by Section 9-306 of the
Code; and
(iii) as priority may be subject to (A) any liens, claims or other
interests that arise by operation of law and do not require any filing
or similar action in order to take priority over a perfected security
interest; (B) any claim or lien in favor of the United States, any
state or any agency or instrumentality thereof (including, without
limitation, liens arising under the federal, state or local tax laws
or under the Employee Retirement Income Security Act of 1974, as
amended); (C) the security interest of any Person claiming any portion
of the collateral as proceeds (other than Receivables in which the
Trustee has a prior lien) of such Person's security interest or (D)
the security interest of any Person previously perfected without
filing or the taking of possession pursuant to Section 9-304(4) of the
UCC; (E) liens under Section 4-208 of the Code (relating to the
security interest of a collecting bank); (F) with respect to any
Receivables represented by chattel paper (and proceeds thereof), the
interest of a purchaser of such chattel paper under Section 9-308 of
the Code; and (G) a claim by the FDIC or any other receiver or
conservator of the Transferor for administrative expenses. Such
perfection and priority of the security interest of the Trustee for
the benefit of the Investor Certificateholders would not be affected
by an increase or a decrease in the relative interests in the
Receivables of the Transferor as holder of the Transferor Certificate
and the Investor Certificateholders.
In addition, in connection with the opinions set
F-3
<PAGE>
forth in paragraph 1 and this paragraph 2, no opinion is expressed herein with
respect to Receivables or the proceeds thereof other than the Receivables in the
Additional Accounts designated by the Assignment and the proceeds thereof. No
opinion is expressed herein with respect to the perfection, priority or
enforceability of the Trust's interest in proceeds of the Receivables except to
the extent such proceeds consist of either (1) identifiable cash proceeds held
in the Collection Account maintained by a Eligible Institution in the name of
the Trust in accordance with the terms of the Pooling and Servicing Agreement
and the Supplements or (2) Permitted Investments held by or on behalf of the
Trustee in accordance with the terms of the Pooling and Servicing Agreement and
the Supplements. We do not express any opinion herein: (i) as to the creation,
validity or enforceability of any interest of the Transferor in the Receivables
or the proceeds thereof, (ii) as to the Transferor's title to any of the
Receivables or the proceeds thereof, (iii) as to whether the transfer of the
Receivables constitutes a true sale or a grant of a security interest, (iv) as
to whether the purported sale of all Receivables now existing and hereafter
created is effective to convey as a true sale to the Trust, as of the purported
date of sale, Receivables which do not exist as of such date of sale, or as to
whether Receivables hereafter created in an Account are deemed to exist as of
the date hereof or (v) as to whether a court may temporarily restrain the
exercise of the Trust's rights to the Receivables and the proceeds thereof.
Further, we point out that delays in the exercise of the rights and interests of
the Trust may occur with respect to the Receivables and their proceeds in the
possession of a receiver or conservator, regardless of whether the transaction
constitutes a true sale or a secured transaction, by actions unilaterally taken
by such receiver or conservator.
With respect to the opinions expressed in paragraphs 1 and 2, we note
that pursuant to Section 2.1 of the Pooling and Servicing Agreement, the
Transferor has filed the Financing Statements with the Office of the Secretary
of State of the State of New York and the City Register in the County of New
York. In expressing the opinions set forth herein, we have assumed that in the
event that a change in the Transferor's name, identity or corporate structure
makes the Financing Statements seriously misleading within the meaning of
Section 9-402(7) of the New York Uniform Commercial Code (the "Code"), or the
Transferor moves the location of its executive office outside the State of New
York, the
F-4
<PAGE>
Transferor will file such financing statements or amendments as may be necessary
to continue the perfection of the Trust's interest in the Receivables and the
proceeds thereof as required by Section 13.2 of the Pooling and Servicing
Agreement within the time specified in Section 9-402(7) of the Code or Section
9-103(3)(e) of the Code, as the case may be.
In expressing the opinions set forth herein, we have relied, without
independent investigation, upon reports received from the Office of the
Secretary of State of the State of New York and the City Register in the County
of New York with respect to financing statements and related filings and with
respect to certain notices of federal government liens, New York State
government tax liens, certain attachment liens and judgment liens with respect
to the Transferor on file with such offices. The effective dates of the latest
of such reports are set forth in Schedule A attached hereto (the "UCC Report
Schedule"). [In addition, with respect to the items identified on Schedule B
attached hereto, we have relied without independent investigation, on a
certificate of an officer of the Transferor attached hereto to the effect that
such items do not represent a lien or security interest on the Receivables.]
[We have assumed that no such filings or notices were made with respect to the
Transferor between the effective time of such reports and the time of the filing
of the Financing Statements. We note that the Transferor has delivered to us a
certificate to the effect of the preceding sentence.] In the Pooling and
Servicing Agreement, the Transferor represents and warrants that it has good and
marketable title to the Receivables free and clear of all Liens, and we note
that the Transferor has delivered to us a certificate to such effect.
In addition, we call to your attention the fact that if the FDIC were
appointed receiver for the Transferor, the FDIC could repudiate any contract it
determined to be burdensome and the repudiation of which it determined would
promote the orderly administration of the Transferor's affairs. 12 U.S.C. (S)
1821(e)(1), (2). However, Section 1821 provides that the FDIC's power as
receiver to repudiate contracts is not to be construed to permit the avoidance
of a properly perfected security interest except where such an interest is taken
in contemplation of insolvency or with the intent to hinder, delay, or defraud
the institution or the creditors of the institution. 12 U.S.C. (S) 1821(e)(11).
We have relied, without independent verification, upon on a
F-5
<PAGE>
certificate of an officer of the Transferor (attached hereto as Annex I), to the
effect that (i) the Transferor was not as of the date of transfer of the
Receivables, insolvent or on the verge of insolvency and was not rendered
insolvent or on the verge of insolvency by reason thereof, (ii) the transfer was
not made in contemplation of insolvency and (iii) the transfer was made in good
faith and without the intent to hinder, delay or defraud any of the Transferor's
creditors. In reliance upon the certificate of the Transferor referred to
above, we are of the opinion that the transfer of, or the grant of a security
interest in, the Receivables to the Trust would not be subject to repudiation by
the FDIC.
F-6
<PAGE>
EXHIBIT G
---------
FORM OF REASSIGNMENT OF RECEIVABLES
-----------------------------------
REASSIGNMENT NO. ____ OF RECEIVABLES, dated as of __________ ___,
____, by and between The Chase Manhattan Bank (USA), a banking corporation
organized and existing under the laws of the State of Delaware (the "Bank"), and
The Bank of New York, a banking corporation organized under the laws of the
State of New York (the "Trustee") pursuant to the Pooling and Servicing
Agreement referred to below.
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Bank, Chemcial Bank and the Trustee are parties to the
Amended and Restated Pooling and Servicing Agreement, dated as of June 1, 1996
(hereinafter as such agreement may have been, or may from time to time be,
amended, supplemented or otherwise modified, the "Pooling and Servicing
Agreement");
WHEREAS, pursuant to the Pooling and Servicing Agreement, the Bank
wishes to remove all Receivables from certain designated Accounts of the Bank
(the "Removed Accounts") and to cause the Trustee to reconvey the Receivables of
such Removed Accounts, whether now existing or hereafter created, from the Trust
to the Bank (as each such term is defined in the Pooling and Servicing
Agreement); and
WHEREAS, the Trustee is willing to accept such designation and to
reconvey the Receivables in the Removed Accounts subject to the terms and
conditions hereof;
NOW, THEREFORE, the Bank and the Trustee hereby agree as follows:
1. Defined Terms. All terms defined in the Pooling and
-------------
Servicing Agreement and used herein shall have such defined meanings when
used herein, unless otherwise defined herein.
<PAGE>
"Removal Date" shall mean, with respect to the Removed Accounts
------------
designated hereby, ___________, _____.
"Removal Notice Date" shall mean, with respect to the Removed
-------------------
Accounts designated hereby, ___________, _____ (which shall be a date on
or prior to the fifth Business Day prior to the Removal Date).
2. Designation of Removed Accounts. The Bank shall deliver to
-------------------------------
the Trustee, not later than five Business Days after the Removal Date, a
computer file or microfiche list containing a true and complete list of
each MasterCard and VISA account which as of the Removal Date shall be
deemed to be a Removed Account, such accounts being identified by account
number and by the aggregate amount of Receivables in such accounts as of
the close of business on the Removal Date. Such list shall be marked as
Schedule 1 to this Reassignment and shall be incorporated into and made a
part of this Reassignment as of the Removal Date.
3. Conveyance of Receivables.
-------------------------
(a) The Bank does hereby reconvey to the Bank, without recourse
on and after the Removal Date, all right, title and interest of the Trust
in and to the Receivables now existing and hereafter created in the Removed
Accounts designated hereby, all monies due or to become due with respect
thereto (including all Finance Charge Receivables), all proceeds (as
defined in Section 9-306 of the UCC as in effect in the State of New York)
of such Receivables, Insurance Proceeds relating to such Receivables and
the proceeds thereof.
(b) In connection with such transfer, the Trustee agrees to
execute and deliver to the Bank on or prior to the date of this
Reassignment, a termination statement with respect to the Receivables now
existing and hereafter created in the Removed Accounts designated hereby
(which may be a single termination statement with respect to all such
Receivables) evidencing the release by the Trust of its Lien on the
Receivables in the Removed Accounts, and meeting the requirements of
applicable state law, in such manner and such jurisdictions as are
necessary to remove such Lien.
G-2
<PAGE>
4. Representations and Warranties of the Bank. The Bank hereby
------------------------------------------
represents and warrants to the Trust as of the Removal Date:
(a) Legal Valid and Binding Obligation. This Reassignment
----------------------------------
constitutes a legal, valid and binding obligation of the Bank
enforceable against the Bank in accordance with its terms, except as
such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect affecting the enforcement of creditors' rights in
general and the rights of creditors of banking associations and except
as such enforceability may be limited by general principles of equity
(whether considered in a suit at law or in equity).
(b) Selection Procedures. No selection procedures believed
--------------------
by the Bank to be materially adverse to the interests of the Investor
Certificateholders were utilized in selecting the Removed Accounts
designated hereby.
5. Conditions Precedent. The amendment of the Pooling and
--------------------
Servicing Agreement set forth in Section 6 hereof is subject to the
satisfaction, on or prior to the Removal Date, of the following condition
precedent:
The Bank shall have delivered to the Trustee an Officer's
Certificate certifying that (i) as of the Removal Date, all
requirements set forth in Section 2.7 of the Pooling and Servicing
Agreement for designating Removed Accounts and reconveying the
Receivables of such Removed Accounts, whether now existing or
hereafter created, have been satisfied, and (ii) each of the
representations and warranties made by the Bank in Section 4 hereof is
true and correct as of the Removal Date. The Trustee may conclusively
rely on such Officer's Certificate, shall have no duty to make
inquiries with regard to the matters set forth therein, and shall
incur no liability in so relying.
6. Amendment of the Pooling and Servicing
--------------------------------------
G-3
<PAGE>
Agreement. The Pooling and Servicing Agreement is hereby amended to
---------
provide that all references therein to the "Pooling and Servicing
Agreement," to "this Agreement" and "herein" shall be deemed from and after
the Removal Date to be a dual reference to the Pooling and Servicing
Agreement as supplemented by this Reassignment. Except as expressly
amended hereby, all of the representations, warranties, terms, covenants
and conditions to the Pooling and Servicing Agreement shall remain
unamended and shall continue to be, and shall remain, in full force and
effect in accordance with its terms and except as expressly provided herein
shall not constitute or be deemed to constitute a waiver of compliance with
or a consent to non-compliance with any term or provision of the Pooling
and Servicing Agreement.
7. Counterparts. This Reassignment may be executed in two or
------------
more counterparts (and by different parties on separate counterparts), each
of which shall be an original, but all of which together shall constitute
one and the same instrument.
8. GOVERNING LAW. THIS REASSIGNMENT SHALL BE CONSTRUED IN
-------------
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS, AND
WITHOUT, LIMITING THE GENERALITY OF THE FOREGOING, THE IMMUNITY AND
STANDARD OF CARE OF THE TRUSTEE IN THE ADMINISTRATION OF THE TRUST
HEREUNDER SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
G-4
<PAGE>
IN WITNESS WHEREOF, the undersigned have caused this Reassignment of
Receivables to be duly executed and delivered by their respective duly
authorized officers on the day and year first above written.
THE CHASE MANHATTAN BANK (USA)
By: ____________________________
Name:
Title:
THE BANK OF NEW YORK,
as Trustee
By: ____________________________
Name:
Title:
G-5
<PAGE>
Schedule I
to Reassignment
of Receivables
--------------
REMOVED ACCOUNTS
----------------
G-6
<PAGE>
EXHIBIT H
---------
FORM OF RECONVEYANCE OF RECEIVABLES
-----------------------------------
RECONVEYANCE OF RECEIVABLES, dated as of ____________ ___, ____, by
and between The Chase Manhattan Bank (USA), a banking corporation organized and
existing under the laws of the State of Delaware (the "Transferor"), and The
Bank of New York, a banking corporation organized and existing under the laws of
New York (the "Trustee") pursuant to the Pooling and Servicing Agreement
referred to below.
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Transferor, Chemical Bank and the Trustee are parties to
the Amended and Restated Pooling and Servicing Agreement dated as of June 1,
1996 (hereinafter as such agreement may have been, or may from time to time be,
amended, supplemented or otherwise modified, the "Pooling and Servicing
Agreement");
WHEREAS, pursuant to the Pooling and Servicing Agreement, the
Transferor wishes to cause the Trustee to reconvey all of the Receivables and
proceeds thereof, whether now existing or hereafter created, from the Trust to
the Transferor pursuant to the terms of Section 12.4 of the Pooling and
Servicing Agreement upon termination of the Trust pursuant to subsection 12.1(a)
of the Pooling and Servicing Agreement (as each such term is defined in the
Pooling and Servicing Agreement);
WHEREAS, the Trustee is willing to reconvey Receivables subject to the
terms and conditions hereof;
NOW, THEREFORE, the Transferor and the Trustee hereby agree as
follows:
1. Defined Terms. All terms defined in the Pooling and Servicing
-------------
Agreement and used herein shall have such defined meanings when used herein,
unless otherwise defined herein.
"Reconveyance Date" shall mean ______________, ____.
-----------------
<PAGE>
2. Return of Lists of Accounts. The Trustee shall deliver to the
---------------------------
Transferor, not later than three Business Days after the Reconveyance Date, each
and every computer file or microfiche list of Accounts delivered to the Trustee
pursuant to the terms of the Pooling and Servicing Agreement.
3. Conveyance of Receivables. (a) The Trustee does hereby reconvey
-------------------------
to the Transferor, without recourse, on and after the Reconveyance Date, all
right, title and interest of the Trust in and to each and every Receivable now
existing and hereafter created in the Accounts, all monies due or to become due
with respect thereto (including all Finance Charge Receivables), all proceeds
(as defined in Section 9-306 of the UCC as in effect in the State of New York)
of such Receivables and Insurance Proceeds relating to such Receivables and any
Interchange, except for amounts, if any, held by the Trustee pursuant to
subsection 12.3(b) of the Pooling and Servicing Agreement.
(b) In connection with such transfer, the Trustee agrees to execute
and deliver to the Transferor on or prior to the date of this Reconveyance, such
UCC termination statements as the Transferor may reasonably request, evidencing
the release by the Trust of its lien on the Receivables.
4. Counterparts. This Reconveyance may be executed in two or more
------------
counterparts (and by different parties on separate counterparts), each of which
shall be an original, but all of which together shall constitute one and the
same instrument.
5. GOVERNING LAW. THIS RECONVEYANCE SHALL BE CONSTRUED IN
-------------
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS, AND WITHOUT,
LIMITING THE GENERALITY OF THE FOREGOING, THE IMMUNITY AND STANDARD OF CARE OF
THE TRUSTEE IN THE ADMINISTRATION OF THE TRUST HEREUNDER SHALL BE GOVERNED BY
THE LAWS OF THE STATE OF NEW YORK.
H-2
<PAGE>
IN WITNESS WHEREOF, the undersigned have caused this Reconveyance of
Receivables to be duly executed and delivered by their respective duly
authorized officers on the day and year first above written.
THE CHASE MANHATTAN BANK (USA)
By: ____________________________
Name:
Title:
THE BANK OF NEW YORK,
as Trustee
By: ____________________________
Name:
Title:
H-3
<PAGE>
SCHEDULE I
----------
LIST OF ACCOUNTS
----------------
Delivered to Trustee only
[Deemed Incorporated]
<PAGE>
EXHIBIT 5.1
SIMPSON THACHER & BARTLETT
A PARTNERSHIP WHICH INCLUDES PROFESSIONAL CORPORATIONS
425 LEXINGTON AVENUE
NEW YORK, N.Y. 10017-3954
(212) 455-2000 LONDON
___ HONG KONG
TOKYO
WRITER'S DIRECT DIAL NUMBER TELECOPIER: 455-2502 COLUMBUS
TELEX: 129158
(212) 455-2000
October 31, 1996
Chase Manhattan Bank USA,
National Association
802 Delaware Avenue
Wilmington, Delaware 19801
Re: Chemical Master Credit Card Trusts
Asset-Backed Certificates
-------------------------
Ladies and Gentlemen:
We have acted as counsel for Chase Manhattan Bank USA, National
Association, a banking corporation organized under the laws of the United
States (the "Bank"), in connection with the filing by the Bank, on behalf of
the Chase Credit Card Master Trusts (the "Trusts"), with the Securities and
Exchange Commission under the Securities Act of 1933, as amended, of a
Registration Statement on Form S-3, Registration No. 333-04607 (the
"Registration Statement"), and Amendment No. 1 to the Registration Statement
filed by the Bank under the Act, registering Asset-Backed Certificates
representing undivided interests in certain assets of the Trusts (the
"Certificates"). The Certificates of a particular Series will be issued
pursuant to the Second Amended and Restated Pooling and Servicing Agreement,
dated as of September 1, 1996 (the "Pooling and Servicing Agreement") between
the Bank, The Chase Manhattan Bank and The Bank of New York, as Trustee (the
"Trustee"), and filed as Exhibit 4.1 to the Registration Statement, and a
related Series Supplement to the Pooling and Servicing Agreement (a "Series
Supplement") between the Bank and the Trustee, substantially in the form filed
as Exhibit 4.2 to the Registration Statement.
In that connection, we have examined, and relied as to matters of fact
upon, originals or copies, certified or otherwise identified to our
satisfaction, of such corporate records, agreements, documents, and other
instruments and such certificates or comparable documents of public officials
and of officers and representatives of the Bank,
<PAGE>
Securities and Exchange Commission -2- October 31, 1996
and have made such other and further investigations, as we have deemed relevant
and necessary as a basis for the opinions hereinafter set forth.
In such examination, we have assumed the genuineness of all
signatures, the legal capacity of natural persons, the authenticity of all
documents submitted to us as originals, the conformity to original documents of
all documents submitted to us as certified or photostatic copies, and the
authenticity of the originals of such latter documents.
Based upon the foregoing, and subject to the qualifications and
limitations set forth herein, we are of the opinion that:
1. The Pooling and Servicing Agreement has been duly authorized,
executed and delivered by the Bank, and assuming due authorization,
execution and delivery by the Trustee, the Pooling and Servicing Agreement
constitutes a valid and legally binding obligation of the Bank enforceable
against the Bank in accordance with its terms.
2. When the Series Supplement relating to a particular Series of
Certificates has been duly authorized, executed and delivered by each of
the Bank and the Trustee, such Series Supplement will constitute a valid
and legally binding obligation of the Bank enforceable against the Bank in
accordance with its terms.
3. When the Certificates of a particular Series have been duly
authorized by the Bank, when such Certificates have been duly executed and
authenticated in accordance with the terms of the Pooling and Servicing
Agreement and the related Series Supplement and when such Certificates have
been delivered and sold as contemplated by the Registration Statement, such
Certificates will be validly issued and outstanding and entitled to the
benefits provided for by the Pooling and Servicing Agreement and such
Series Supplement.
Our opinions set forth in paragraphs 1 and 2 above are subject to the
effects of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors' rights
generally, general equitable principles (whether considered in a proceeding in
equity or at law) and an implied covenant of good faith and fair dealing.
We hereby confirm that the statements set forth in the prospectus (the
"Prospectus") forming a part of the Registration Statement under the heading
"Tax Matters" accurately describe the material federal income tax consequences
to holders of the Certificates.
<PAGE>
Securities and Exchange Commission -3- October 31, 1996
We are members of the Bar of the State of New York, and we do not
express any opinion herein concerning any law other than the law of the State
of New York and the federal law of the United States.
We hereby consent to the use of our name under the headings "Tax
Matters" and "Legal Matters" in the Prospectus forming a part of the
Registration Statement and to the use of this opinion for filing with the
Registration Statement as Exhibits 5.1 and 24.1 thereto.
Very truly yours,
/s/ Simpson Thacher & Bartlett
SIMPSON THACHER & BARTLETT
<PAGE>
EXHIBIT 24.1
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, in his or her capacity
as an officer or director of Chase Manhattan Bank USA, National Association
(the "Bank"), hereby constitutes and appoints, DEBORAH L. DUNCAN, CHARLES R.
WALSH, RICHARD L. CRAIG, MICHAEL H. GANZ, KEITH SCHUCK AND ANDREW T. SEMMELMAN,
and each of them severally, his or her true and lawful attorneys-in-fact and
agents, with full power to act with or without the others and with full power of
substitution and resubstitution for and on behalf of him or her and in his or
her name, place and stead, in any and all capacities, to perform any and all
acts and do all things and to execute any and all instruments which said
attorneys-in-fact and agents and each of them may deem necessary or desirable to
enable the Bank to comply with the Securities Act of 1933, as amended (the
"Act"), and any rules, regulations and requirements of the Securities and
Exchange Commission (the "SEC") thereunder in connection with the filing of the
Bank's registration statement number 333-04607 under the Act for this
registration of (i) debt obligations of the Bank or a limited purpose subsidiary
of the Bank, or other entity secured by a pledge of identified financial assets
of the Bank, (ii) fixed, fractional, undivided ownership interests in the corpus
of a grantor trust to which identified financial assets of the Bank will be
conveyed, (iii) certificates representing a participation interest in identified
financial assets of the Bank, or in a financial instrument acquired with such
assets, (iv) interests in a real estate mortgage investment conduit (as defined
in Section 860D of the Internal Revenue Code of 1986, as amended) or (v)
interests in a limited purpose subsidiary or other entity of the Bank, to which
identified assets of the Bank will be conveyed, authorized for offer and
issuance by the Board of Directors of the Bank pursuant to resolutions adopted
by such Board of Directors on July 17, 1991 (the "Securities"), including
specifically, but without limiting the generality of the foregoing, the power
and authority to sign the name of each undersigned director and officer in such
capacity to a registration statement on Form S-1, Form S-3, Form S-11 or such
other form as may be determined to be applicable, and, if appropriate, a second
registration statement that will become effective upon filing pursuant to Rule
462(b) under the Act ("Registration Statements") to be filed with the SEC with
respect to such Securities, to any and all amendments to any such Registration
Statements (including post-effective amendments) and to any or all other
instruments or documents to be filed as a part of or in connection with any such
Registration Statements or any and all amendments thereto (including post-
effective amendments), whether such instruments or documents are filed before or
after the effective date of any such Registration Statements, and to appear
before the SEC in connection with any matter relating thereto, hereby granting
such attorneys-in-fact and agents, and each of them, full power to do and
perform any and all acts and things requisite and necessary to be done in
connection therewith as the undersigned might or could do in person, and hereby
ratifying and confirming all that said attorneys-in-fact and agents and each of
them may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney as
of October 31, 1996.
/s/ Kevin Hurley
-----------------------------------
Name: Kevin Hurley
