<PAGE>
As filed with the Securities and Exchange Commission on June 5, 1996
REGISTRATION NO. 333-
POST-EFFECTIVE AMENDMENT NO. 1 TO REGISTRATION STATEMENT NO. 33-91504
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------------------
CHASE MANHATTAN CREDIT CARD MASTER TRUST
(Issuer of Certificates)
THE CHASE MANHATTAN BANK (USA)
(Originator of the Trust described herein)
(Exact name as specified in registrant's charter)
<TABLE>
<S> <C> <C>
DELAWARE 802 DELAWARE AVENUE 22-2382028
(State or other jurisdiction WILMINGTON, DELAWARE 19801 (I.R.S. employer
of incorporation) (302) 575-5000 identification number)
</TABLE>
(Address, including zip code, and telephone number,
including area code, of registrant's Principal Executive Offices)
ANDREW T. SEMMELMAN
SECRETARY
THE CHASE MANHATTAN BANK (USA)
802 DELAWARE AVENUE
WILMINGTON, DELAWARE 19801
(302) 575-5033
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copies to:
EDWARD M. DESEAR, ESQ. MARTIN R. JOYCE, ESQ.
ORRICK, HERRINGTON & SUTCLIFFE THE CHASE MANHATTAN BANK, N.A.
666 Fifth Avenue 270 Park Avenue
17th Floor 40th Floor
New York, New York 10103 New York, New York 10017
Approximate date of commencement of proposed sale to the public: FROM TIME
TO TIME AFTER THIS REGISTRATION STATEMENT BECOMES EFFECTIVE AS DETERMINED BY
MARKET CONDITIONS.
If any of the securities being registered on this Form are to be offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. /x/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act Registration Statement number of the earlier
effective Registration Statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
Registration Statement number of the earlier effective Registration Statement
for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
CALCULATION OF REGISTRATION FEE
================================================================================
<TABLE>
<CAPTION>
Proposed Maximum
Title of Securities to be Amount to be Aggregate Price Proposed Maximum Aggregate Amount of Registration
Registered Registered/(2)/ Per Unit Offering Price Fee
<S> <C> <C> <C> <C>
Asset-Backed Certificates $2,000,000,000 100%/(1)/ $2,000,000,000/(1)/ $689,655.52/(2)/
</TABLE>
================================================================================
/(1)/ Estimated solely for the purpose of calculating the registration fee.
/(2)/ In addition $1,000 of unissued Asset-Backed Certificates previously
registered under Registration Statement No. 33-91504
are being carried forward. A registration fee of $0.34 was previously paid
with respect to such amount.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
PURSUANT TO RULE 429 OF THE GENERAL RULES AND REGULATIONS UNDER THE
SECURITIES ACT OF 1933, THE PROSPECTUS WHICH IS PART OF THIS REGISTRATION
STATEMENT IS A COMBINED PROSPECTUS WHICH ALSO RELATES TO $1,000 OF UNISSUED
ASSET-BACKED CERTIFICATES REGISTERED UNDER REGISTRATION STATEMENT NO. 33-91504
PREVIOUSLY FILED BY THE REGISTRANT. THIS REGISTRATION STATEMENT CONSTITUTES
POST-EFFECTIVE AMENDMENT NO. 1 TO REGISTRATION STATEMENT NO. 33-91504.
================================================================================
<PAGE>
EXPLANATORY NOTE
A form of Prospectus Supplement follows immediately after this Explanatory
Note. This form, which is based on the Series most recently issued out of the
Trust, describes the issuance of Certificates in two Classes, both of which bear
interest on a floating rate basis, utilize a Controlled Amortization Period and
have the benefit of Enhancement in the form of a Collateral Interest. The
Prospectus contemplates the issuance of future Series of Certificates on either
a fixed or floating rate basis and in one or more Classes, utilizing either a
Controlled Amortization Period or an Accumulation Period. Enhancement for any
such Series can include, in addition to a Collateral Interest, various other
provisions described in the Prospectus designed to decrease the risk of loss for
Certificateholders of a particular Series or Class, including subordination, a
letter of credit, a cash collateral account, a surety bond or insurance policy
or a spread account.
The Prospectus Supplement for any Series or Class issued on a fixed rate
basis will delete the provisions set forth in the attached form of Prospectus
Supplement for determining a floating rate of interest and specify the fixed
rate of interest applicable thereto. If a Series is issued with only one Class,
references to separate Classes, including references to subordination and
reallocation between Classes, will be deleted from the attached form of
Prospectus Supplement. If a future Series utilizes an Accumulation Period,
references to a Controlled Amortization Period will be deleted from such form of
Prospectus Supplement and replaced by provisions specifying the Accumulation
Period and related matters, as contemplated by the Prospectus. In the event
that any future Series utilizes a form of Enhancement in lieu of, or in addition
to, a Collateral Interest, references to the Collateral Interest set forth in
such form of Prospectus Supplement will be deleted (if not applicable to such
Series) and disclosure regarding the applicable form of Enhancement will be
added. See "Description of the Certificates--Enhancement" in the Prospectus
regarding the scope of such Prospectus Supplement disclosure. All other
material variations in the terms of a future Series from the terms set forth in
the attached form of Prospectus Supplement will be disclosed in the Prospectus
Supplement for such Series.
<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 WITHOUT THE DELIVERY OF A FINAL PROSPECTUS +
+SUPPLEMENT AND ACCOMPANYING PROSPECTUS. THIS PROSPECTUS SHALL NOT CONSTITUTE +
+AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE +
+ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION +
+OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE +
+SECURITIES LAWS OF ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED JUNE 5, 1996
PROSPECTUS SUPPLEMENT (To Prospectus dated , 199 )
LOGO
$
CHASE MANHATTAN CREDIT CARD MASTER TRUST
$ CLASS A FLOATING RATE ASSET BACKED CERTIFICATES, SERIES 199 -
$ CLASS B FLOATING RATE ASSET BACKED CERTIFICATES, SERIES 199 -
THE CHASE MANHATTAN BANK (USA)
SELLER AND SERVICER
Each Class A Floating Rate Asset Backed Certificate, Series 199 -
(collectively, the "Class A Certificates") and each Class B Floating Rate Asset
Backed Certificate, Series 199 - (collectively, the "Class B Certificates"
and, together with the Class A Certificates, the "Certificates") will represent
an undivided interest in certain assets of Chase Manhattan Credit Card Master
Trust (the "Trust") created pursuant to a master pooling and servicing
agreement dated as of June 1, 1991 between The Chase Manhattan Bank (USA)
("Chase USA"), as seller and servicer, and Yasuda Bank and Trust Company
(U.S.A.), as trustee. The property of the Trust includes, among other things,
receivables (the "Receivables") generated from time to time in a portfolio of
VISA(R) and MasterCard(R) credit card accounts, all monies due or to become due
in payment of the Receivables and Interchange allocable to the Trust, as
described herein. Chase USA will service
(continued on next page)
There currently is no secondary market for the Certificates, and there is no
assurance that one will develop.
POTENTIAL INVESTORS SHOULD CONSIDER, AMONG OTHER THINGS, THE INFORMATION SET
FORTH IN "RISK FACTORS" AT PAGE S-13 AND IN THE PROSPECTUS AT PAGE 17.
-----------
THE CERTIFICATES REPRESENT INTERESTS IN THE TRUST ONLY AND DO NOT REPRESENT
INTERESTS IN OR OBLIGATIONS OF THE CHASE MANHATTAN BANK (USA) OR ANY
AFFILIATE THEREOF. A CERTIFICATE IS NOT A DEPOSIT AND IS NOT INSURED
BY THE FEDERAL DEPOSIT INSURANCE CORPORATION (THE "FDIC"). THE
RECEIVABLES ARE NOT INSURED OR GUARANTEED BY THE FDIC OR ANY
OTHER GOVERNMENTAL AGENCY.
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.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRICE TO UNDERWRITING PROCEEDS TO
PUBLIC DISCOUNT SELLER (1)
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Class A Certificate...................... % % %
- --------------------------------------------------------------------------------
Per Class B Certificate...................... % % %
- --------------------------------------------------------------------------------
Total........................................ $ $ $
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(1)Before deduction of expenses estimated to be $ .
-----------
This Prospectus may be used by Chase Securities Inc., an affiliate of the
Seller, in connection with offers and sales related to market-making
transactions in the Certificates. Chase Securities Inc. may act as principal or
agent in such transactions. Such sales will be made at prices related to
prevailing market prices at the time of sale.
The Certificates are being offered by the Underwriters, subject to prior
sale, when, as and if issued to and accepted by them, subject to approval of
certain legal matters by counsel for the Underwriters. The Underwriters reserve
the right to reject orders in whole or in part. It is expected that the
Certificates will be delivered in book-entry form on or about , 199
through the facilities of The Depository Trust Company and Cedel societe anoyme
and the Euroclear System.
-----------
UNDERWRITERS OF THE CLASS A CERTIFICATES
CHASE SECURITIES INC.
UNDERWRITER OF THE CLASS B CERTIFICATES
CHASE SECURITIES INC.
THE DATE OF THIS PROSPECTUS SUPPLEMENT IS , 199
<PAGE>
the Receivables and will own the undivided interest in the Trust not
represented by the Certificates, the other investor certificates issued by the
Trust and any uncertificated interests in the Trust. From time to time, Chase
USA may offer other series of certificates which evidence fractional undivided
interests in certain assets of the Trust, which may have terms significantly
different from the Certificates, by exchanging a portion of its interest in
the Trust.
Interest will accrue on the Class A Certificates from , 199 (the
"Closing Date") through , 199 and, with respect to each subsequent
Interest Period, at the rate of % per annum above the arithmetic mean of
London interbank offered quotations for -month United States dollar deposits
("LIBOR") prevailing on the related LIBOR Determination Date (the "Class A
Certificate Rate"). Interest will accrue on the Class B Certificates from the
Closing Date through , 199 and, with respect to each subsequent Interest
Period, at the rate of % per annum above LIBOR prevailing on the related
LIBOR Determination Date (the "Class B Certificate Rate"). Interest with
respect to the Certificates will be distributed on the th day of
(or, if any such day is not a business day, the next
business day) (each, an "Interest Payment Date") commencing in 199 .
Principal with respect to the Class A Certificates is scheduled to be
distributed on each Distribution Date commencing on the Distribution Date in
and ending on the Distribution Date in , but may be paid earlier or
later under certain limited circumstances described herein. Principal with
respect to the Class B Certificates is scheduled to be distributed on the
Distribution Date following the Distribution Date on which the Class A
Certificates have been paid in full, but may be paid earlier or later under
certain limited circumstances described herein. See "Maturity Assumptions" and
"Series Provisions--Pay Out Events" herein. Principal payments will not be
made to Class B Certificateholders until the final principal payment has been
paid in respect of the Class A Certificateholders. See "Series Provisions--
Principal Payments" herein.
THE CLASS B CERTIFICATES WILL BE SUBORDINATED TO THE CLASS A CERTIFICATES AS
DESCRIBED HEREIN. THE COLLATERAL INTEREST WILL BE SUBORDINATED TO THE CLASS A
CERTIFICATES AND THE CLASS B CERTIFICATES AS DESCRIBED HEREIN.
Application will be made to list the Certificates on the Luxembourg Stock
Exchange.
----------------
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE CERTIFICATES
AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH
STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
----------------
The Series 199 - Certificates offered hereby constitute a separate Series
of the Certificates being offered by the Seller from time to time pursuant to
its Prospectus dated , 199 . This Prospectus Supplement does not contain
complete information about the offering of the Certificates. Additional
information is contained in the Prospectus and potential purchasers should
read both this Prospectus Supplement and the Prospectus in full. Sales of the
Series 199 - Certificates may not be consummated unless the purchaser has
received both this Prospectus Supplement and the Prospectus.
S-2
<PAGE>
SUMMARY OF SERIES TERMS
The following is qualified in its entirety by reference to the detailed
information appearing elsewhere in this Prospectus Supplement and the
accompanying Prospectus. Certain capitalized terms used herein are defined
elsewhere in this Prospectus Supplement or, for terms not defined herein, in
the Prospectus. A listing of the pages on which some of such terms are defined
is found in the "Index of Key Terms" in each of this Prospectus Supplement and
the Prospectus.
Title of Securities....... Class A Floating Rate Asset Backed Certificates,
Series 199 - (the "Class A Certificates") and the
Class B Floating Rate Asset Backed Certificates,
Series 199 - (the "Class B Certificates" and,
together with the Class A Certificates, the
"Certificates" or "Series 199 - ").
Securities Offered........ Each of the Certificates offered hereby represents
an undivided interest in certain assets of the
Trust. Interests in the Trust's assets will be
allocated among the Class A Certificateholders (the
"Class A Investor Interest"), the Class B
Certificateholders (the "Class B Investor
Interest"), the holder of the collateral interest
(the "Collateral Interest" and, together with the
Class A Investor Interest and the Class B Investor
Interest, the "Investor Interest"), the interest of
the holders of other undivided interests in the
Trust issued pursuant to the Agreement as
supplemented from time to time and the interest of
the Seller (the "Seller Interest"), as described
below. The Collateral Interest in the initial
amount of $ (which amount represents %
of the sum of the initial Class A Investor
Interest, the initial Class B Investor Interest and
the initial Collateral Interest) constitutes
Enhancement for the Certificates. The provider of
such Enhancement is referred to herein as the
"Collateral Interest Holder." Allocations will be
made to the Collateral Interest and the Collateral
Interest Holder will have voting and certain other
rights as if the Collateral Interest were a
subordinated class of Certificates. The initial
amount of the Investor Interest will be
$ (the "Initial Investor Interest"). The
"Seller Interest" will represent the right to the
assets of the Trust not allocated to the Class A
Investor Interest, the Class B Investor Interest,
the Collateral Interest or the holders of other
undivided interests in the Trust. The principal
amount of the Seller Interest will fluctuate as the
amount of Receivables in the Trust changes from
time to time. The Seller Interest will be evidenced
by the Exchangeable Seller Certificate.
The Class A Certificates will represent the right
to receive, from the assets of the Trust, funds up
to (but not in excess of) the amounts required to
make (a) payments of interest accruing from the
Closing Date through , 199 , and with respect
to each Interest Period thereafter, at the rate of
% per annum above the arithmetic mean of London
interbank offered quotations for -month United
States dollar deposits ("LIBOR") prevailing on the
related LIBOR Determination Date (such rate, the
"Class A Certificate Rate") and (b) payments of
principal during the Controlled Amortization Period
or, under certain limited circumstances, during the
Rapid Amortization
S-3
<PAGE>
Period (each, an "Amortization Period"), to the
extent of the Class A Investor Interest, which may
be less than the unpaid principal balance of the
Class A Certificates in certain circumstances
described herein.
The Class B Certificates will represent the right
to receive, from the assets of the Trust, funds up
to (but not in excess of) the amounts required to
make (a) payments of interest accruing from the
Closing Date through , 199 , and with respect
to each Interest Period thereafter, at the rate of
% per annum above LIBOR prevailing on the
related LIBOR Determination Date (such rate, the
"Class B Certificate Rate") and (b) after the Class
A Investor Interest has been paid in full, payments
of principal during the Controlled Amortization
Period or, under certain limited circumstances,
during the Rapid Amortization Period, to the extent
of the Class B Investor Interest, which may be less
than the unpaid principal balance of the Class B
Certificates in certain circumstances described
herein. No principal will be paid to the Class B
Certificateholders until the Class A Investor
Interest is paid in full.
The aggregate principal amounts of the Class A
Certificates and the Class B Certificates will,
except as otherwise provided herein, remain fixed
at $ and $ , respectively,
until reduced during either Amortization Period as
principal is paid to the applicable
Certificateholders. The Class A Investor Interest
and the Class B Investor Interest may be reduced to
reflect the tender and cancellation of Certificates
pursuant to an Investor Exchange. The Class A
Investor Interest will decline in certain
circumstances if the amount of Receivables in
Defaulted Accounts allocated to the Class A
Certificates exceeds funds allocable thereto as
described herein and the Class B Investor Interest
and the Collateral Interest have been reduced to
zero. The Class B Investor Interest will decline in
certain circumstances as a result of (a) the
reallocation of collections of Principal
Receivables otherwise allocable to the Class B
Investor Interest to fund certain payments in
respect of the Class A Certificates and (b) the
allocation to the Class B Investor Interest of the
amount of certain Receivables in Defaulted
Accounts, including such amounts otherwise
allocable to the Class A Investor Interest when the
Collateral Interest has been reduced to zero.
The Certificates will be issued pursuant to the
Agreement as supplemented by the Series 199 -
Supplement. See "Series Provisions" herein and
"Description of the Certificates" in the
Prospectus.
The final distribution of principal and interest on
the Certificates will be made no later than the
Distribution Date (the "Scheduled Series 199 -
Termination Date") unless extended to the
Distribution Date (the "Final Series 199 -
Termination Date") in the manner provided in
"Series Provisions--Final Payment of Principal;
Termination of Trust" herein. After the Final
Series 199 -
S-4
<PAGE>
Termination Date, neither the Trust nor the Seller
will have any further obligation to pay principal
or interest on the Certificates.
The Servicer will allocate a percentage (the
"Floating Allocation Percentage") of collections of
Finance Charge Receivables received with respect to
each calendar month (a "Monthly Period") to the
Investor Interest, and the Floating Allocation
Percentage of Receivables in Defaulted Accounts
with respect to each Monthly Period to the Investor
Interest. The Servicer will further allocate
varying percentages of such amounts to the Class A
Certificateholders (the "Class A Floating
Percentage"), the Class B Certificateholders (the
"Class B Floating Percentage") and the Collateral
Interest Holder (the "Collateral Floating
Percentage") for payments or deposits to or with
respect to each such class.
The Servicer will allocate a percentage (the
"Principal Allocation Percentage") of collections
of Principal Receivables received with respect to
each Monthly Period to the Investor Interest. The
Principal Allocation Percentage will, during any
particular Monthly Period during either
Amortization Period, be based on a fraction, the
numerator of which is the Investor Interest as of
the close of business on the last day of the
Revolving Period and the denominator of which is
the greater of (a) the Aggregate Principal
Receivables as of the first day of such particular
Monthly Period and (b) the sum of the numerators
used to calculate the principal allocation
percentages with respect to Principal Receivables
for all Series of certificates outstanding with
respect to such Monthly Period. See "Series
Provisions--Allocation Percentages" and "--Pay Out
Events" herein and "Description of the
Certificates--Pay Out Events" in the Prospectus.
The term "Aggregate Principal Receivables" means in
the case of any date of determination which occurs
before the Conversion Date, the aggregate amount of
Principal Receivables as of the end of the Billing
Cycles during the Monthly Period immediately
preceding such date of determination or, in the
case of any date of determination which occurs on
or after the Conversion Date the aggregate amount
of Principal Receivables as of the end of the last
day of the Monthly Period immediately preceding
such date of determination.
Other Series.............. The Trust has previously issued Series of
Certificates that remain outstanding. See "Exhibit
A: Prior Issuance of Certificates" for a summary of
those Series. Additional Series may be issued by
the Trust from time to time; it is currently
expected, however, that no additional Series will
be issued after the issuance of all Certificates
that have been registered with the Commission prior
to the date hereof. See "Description of the
Certificates--Exchange" in the Prospectus.
Denominations............. The Certificates will be offered for purchase in
denominations of $ and integral multiples
thereof.
Registration of The Certificates will initially be represented by
Certificates.............. Certificates registered in the name of Cede, as the
nominee of DTC. No Certificate Owner
S-5
<PAGE>
will be entitled to receive a definitive
certificate representing such person's interest,
except in the event that Definitive Certificates
are issued under the limited circumstances
described in the Prospectus. See "Description of
the Certificates--Definitive Certificates" in the
Prospectus.
Clearance and Settlement.. Certificateholders may elect to hold their
Certificates through any of DTC (in the United
States) or Cedel societe ("Cedel") or the Euroclear
System ("Euroclear") (in Europe). See "Description
of the Certificates--Book-Entry Registration" in
the Prospectus.
Interest.................. Interest is required to be distributed quarterly on
the th day of (or, if any such day is
not a business day, on the next business day)
(each, an "Interest Payment Date"), commencing ,
199 , in an amount equal to (a) in the case of the
Class A Certificates, the product of (i) the Class
A Certificate Rate for the related Interest Period,
(ii) the actual number of days in such Interest
Period divided by 360 and (iii) the outstanding
principal balance of the Class A Certificates on
the related Record Date (or, with respect to the
first Distribution Date, the initial Class A
Investor Interest), and (b) in the case of the
Class B Certificates, the product of (i) the Class
B Certificate Rate for the related Interest Period,
(ii) the actual number of days in such Interest
Period divided by 360 and (iii) the outstanding
principal balance of the Class B Certificates on
the related Record Date (or, with respect to the
first Distribution Date, the initial Class B
Investor Interest). Interest for any Interest
Payment Date will accrue from and including the
preceding Interest Payment Date (or, in the case of
the first Interest Payment Date, from and including
the Closing Date) to but excluding such Interest
Payment Date (each, an "Interest Period").
Revolving Period.......... No principal will be payable to Certificateholders
until the Distribution Date or, upon the
occurrence of a Pay Out Event as described herein,
the first Distribution Date with respect to the
Rapid Amortization Period. For each Monthly Period
(or part thereof) during the period from and
including the Closing Date, up to and including the
day prior to the day on which the Controlled
Amortization Period or the Rapid Amortization
Period commences (the "Revolving Period"),
collections of Principal Receivables otherwise
allocable to the Certificateholders will, subject
to certain limitations and unless treated as Shared
Principal Collections or Reallocated Principal
Collections (see "Series Provisions--Shared
Principal Collections" and "--Reallocation of Cash
Flows" herein), be paid to the holder of the
Exchangeable Seller Certificate. See "Series
Provisions--Pay Out Events" herein and "Description
of the Certificates--Pay Out Events" in the
Prospectus for a discussion of the events which
might lead to the termination of the Revolving
Period prior to the end of the Monthly Period.
S-6
<PAGE>
Principal Payments;
Controlled Amortization
Period....................
It is expected that the final payment with respect
to the Class A Certificates will be made on the
Distribution Date (the "Class A Expected Final
Payment Date") and that the final payment with
respect to the Class B Certificates will be made on
the Distribution Date (the "Class B Expected
Final Payment Date"), in each case in accordance
with the Controlled Amortization Amounts and based
on certain assumptions set forth herein. See
"Maturity Assumptions" herein. The controlled
amortization period with respect to the Series
199 - Certificates (the "Controlled Amortization
Period") will commence on the first day of the
Monthly Period relating to the Distribution
Date, unless a Pay Out Event has occurred or is
deemed to occur, and will end on the earliest of
(a) the commencement of the Rapid Amortization
Period, (b) the payment in full of the Investor
Interest or (c) the Scheduled Series 199 -
Termination Date (or any permitted extension
thereof). No principal will be payable to Class A
Certificateholders until the first Distribution
Date with respect to the Controlled Amortization
Period or, upon the occurrence of a Pay Out Event
as described herein, the first Distribution Date
with respect to the Rapid Amortization Period. See
"Maturity Assumptions" herein. No principal will be
payable to the Class B Certificateholders until the
Class A Investor Interest is paid in full.
Shared Principal The Series 199 - Certificates will be the
Collections............... Series issued by the Trust, outstanding as of the
Closing Date, included in Group One. During the
Revolving Period, collections of Principal
Receivables otherwise allocable to the Investor
Interest (other than Reallocated Principal
Collections) will, subject to certain limitations,
be treated as Shared Principal Collections and
applied to cover principal payments due to or for
the benefit of certificateholders of other Series
within Group One, if so specified in the
Supplements for such other Series, or paid to the
holder of the Exchangeable Seller Certificate.
Additional Series may be issued and included in
Group One; however, there can be no assurance that
any such Series will be issued. See "Series
Provisions--Shared Principal Collections" herein.
Additional Amounts
Available to
Certificateholders........ If collections of Finance Charge Receivables
allocable to the Class A Certificates for any
Monthly Period are less than the sum of (i) current
and overdue Monthly Interest on the Class A
Certificates, (ii) current and overdue Class A
Additional Interest, (iii) current and overdue
Class A Servicing Fee, and (iv) the Class A
Investor Default Amount, with respect to the
related Distribution Date, Excess Spread and Excess
Finance Charge Collections allocable to Series
199 - will be applied to fund the deficiency (the
"Class A Required Amount"). If the collections of
Finance Charge Receivables allocable to the Class B
Certificates for any Monthly Period are less than
the sum of (i) current and overdue Class B Monthly
Interest, (ii) current and overdue Class B
Additional Interest, (iii) current and overdue
Class B Servicing Fee, and (iv) the Class B
Investor Default Amount, with respect to the
related Distribution Date, Excess Spread and Excess
Finance Charge
S-7
<PAGE>
Collections allocable to Series 199 - remaining
after application thereof to the Class A Required
Amount will be applied to fund the deficiency (the
"Class B Required Amount" and, together with the
Class A Required Amount, the "Required Amount").
"Excess Spread" for any Distribution Date will
equal the sum of (a) the excess of collections of
Finance Charge Receivables allocable to the Class A
Certificates over the sum of the amounts referred
to in clauses (i), (ii), (iii) and (iv) of the
definition of Class A Required Amount above, (b)
the excess of collections of Finance Charge
Receivables allocable to the Class B Certificates
over the sum of the amounts referred to in clauses
(i), (ii) and (iii) in the definition of Class B
Required Amount above and (c) collections of
Finance Charge Receivables allocable to the
Collateral Interest or, during any period in which
Chase USA or an affiliate thereof is not the
Servicer, the excess of collections of Finance
Charge Receivables allocable to the Collateral
Interest over the current and overdue Collateral
Servicing Fee.
Subordination of Class B
Certificates and
Collateral Interest.......
If Excess Spread and Excess Finance Charge
Collections allocable to Series 199 - with respect
to such Distribution Date are less than the Class A
Required Amount, Reallocated Principal Collections
with respect to the related Monthly Period will be
used to fund the remaining Class A Required Amount.
If Reallocated Principal Collections with respect
to such Monthly Period are insufficient to fund the
remaining Class A Required Amount for the related
Distribution Date, the Collateral Interest will be
reduced by the amount of such insufficiency (but
not by more than the Class A Investor Default
Amount). If the Collateral Interest is reduced to
zero, the Class B Investor Interest will be reduced
by the remaining insufficiency (but not by more
than the excess of the Class A Investor Default
Amount over the amount of such reduction of the
Collateral Interest) to avoid a charge-off with
respect to the Class A Certificates. If the Class B
Investor Interest is reduced to zero, the Class A
Investor Interest will be reduced by any then-
remaining insufficiency (but not more than the
excess of the Class A Investor Default Amount for
such Monthly Period over the amount of such
reductions of the Collateral Interest and the Class
B Investor Interest). If the Collateral Interest
and the Class B Investor Interest are reduced to
zero, the Class A Certificateholders will bear
directly the credit and other risks associated with
their undivided interest in the Trust. See "Series
Provisions--Reallocation of Cash Flows" and "--
Receivables in Defaulted Accounts; Adjustments and
Fraudulent Charges" herein.
If Excess Spread and Excess Finance Charge
Collections allocable to Series 199 - with respect
to such Distribution Date remaining after
application with respect to the Class A Required
Amount, as described above, are less than the Class
B Required Amount, Reallocated Collateral Principal
Collections with respect to the related Monthly
Period remaining after application with respect to
the Class A Required Amount, as described above,
will be used to fund the remaining Class
S-8
<PAGE>
B Required Amount. If such remaining Reallocated
Collateral Principal Collections are insufficient
to fund the remaining Class B Required Amount for
the related Distribution Date, the Collateral
Interest will be reduced by the amount of such
insufficiency (but not by more than the Class B
Investor Default Amount) to avoid a charge-off with
respect to the Class B Certificates. If the
Collateral Interest is reduced to zero, the Class B
Investor Interest will be reduced by the remaining
insufficiency (but not by more than the excess of
the Class B Investor Default Amount over the amount
of such reduction of the Collateral Interest). If
the Collateral Interest is reduced to zero, the
Class B Certificateholders will bear directly the
credit and other risks associated with their
undivided interest in the Trust. See "Series
Provisions--Reallocation of Cash Flows" and "--
Receivables in Defaulted Accounts; Adjustments and
Fraudulent Charges" herein.
If the Class B Investor Interest is reduced, the
percentage of collections of Finance Charge
Receivables allocable to the Class B
Certificateholders with respect to subsequent
Monthly Periods will be reduced. Moreover, to the
extent the amount of such reduction in the Class B
Investor Interest is not reimbursed, the amount of
principal distributable to the Class B
Certificateholders will be reduced. See "Series
Provisions--Allocation Percentages" and "--
Subordination" herein.
Principal Payments; Rapid
Amortization Period......
During the period (the "Rapid Amortization Period")
beginning on the day on which a Pay Out Event
occurs or is deemed to occur and continuing to and
including the earlier of (a) the date on which the
Investor Interest has been paid in full or (b) the
obligation of the Trust to make payments of
principal and interest with respect to the
Certificates has terminated, collections of
Principal Receivables allocated to the Class A
Investor Interest or the Class B Investor Interest
will no longer be paid to the holder of the
Exchangeable Seller Certificate, as described
herein, but instead will be distributed monthly on
each Distribution Date to the Class A
Certificateholders and, following the payment in
full of the Class A Investor Interest, to the Class
B Certificateholders and, following the payment in
full of the Class B Investor Interest, to the
Collateral Interest Holder. Such distributions will
begin on the Distribution Date occurring in the
month following the Monthly Period in which the
Rapid Amortization Period commences. Each such
Distribution Date will also be an Interest Payment
Date. See "Series Provisions--Pay Out Events"
herein and "Description of the Certificates--Pay
Out Events" in the Prospectus for a discussion of
the events which might lead to the commencement of
a Rapid Amortization Period.
Required Collateral The "Required Collateral Interest" with respect to
Interest.................. any Transfer Date means (a) initially, $
(the "Initial Collateral Interest") and (b) on any
Transfer Date thereafter an amount equal to % of
the Investor Interest on such Transfer Date, after
taking into account
S-9
<PAGE>
payments to be made on the related Distribution
Date, but not less than $ ; provided,
however, that (i) if certain reductions in the
Collateral Interest occur or if a Pay Out Event
occurs, the Required Collateral Interest for such
Transfer Date shall equal the Required Collateral
Interest for the Transfer Date immediately
preceding the occurrence of such reduction or Pay
Out Event; (ii) in no event shall the Required
Collateral Interest exceed the outstanding
principal balance of the Certificates as of the
last day of the Monthly Period preceding such
Transfer Date after taking into account payments to
be made on the related Distribution Date; and (iii)
the Required Collateral Interest may be reduced at
any time to a lesser amount if the Rating Agency
has delivered written confirmation that such
reduction will not result in such Rating Agency
reducing or withdrawing its ratings of the
Certificates. See "Series Provisions--Required
Collateral Interest" herein.
If on any Transfer Date, the Collateral Interest is
less than the Required Collateral Interest, certain
Excess Spread amounts, if available, will be used
to increase the Collateral Interest to the extent
of such shortfall.
Optional Repurchase....... The Investor Interest will be subject to optional
repurchase by the Seller on any Distribution Date
on and after which the Investor Interest is reduced
to an amount less than or equal to % of the
Initial Investor Interest, if certain conditions
set forth in the Agreement are met. The repurchase
price will generally equal the aggregate
outstanding principal balance of the Certificates
and the Collateral Interest plus accrued and unpaid
interest thereon to the Distribution Date on which
the repurchase occurs. See "Series Provisions--
Final Payment of Principal; Termination of Trust"
herein.
Tax Status................ Special tax counsel to the Seller will deliver its
opinion to the effect that under existing law the
Certificates will be characterized as debt for
federal income tax purposes. Under the Agreement,
the Seller and the Certificate Owners will agree to
treat the Certificates as debt for federal income
tax purposes. See "Certain Federal Income Tax
Consequences" in the Prospectus for additional
information concerning the application of federal
income tax laws.
ERISA Considerations...... Under a regulation issued by the Department of
Labor (the "Plan Asset Regulation"), the Trust
assets would not be deemed "plan assets" of an
employee benefit plan or other plan (each, a
"Benefit Plan") subject to the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"),
or Section 4975 of the Internal Revenue Code of
1986, as amended (the "Code"), holding the Class A
Certificates if certain conditions are met,
including that the Class A Certificates must be
held, upon completion of the public offering being
made hereby, by at least 100 investors that are
independent of the Seller and of one another (each,
an "Independent Investor"). Based on information
provided by the Underwriters at the time of any
sale of Certificates, the Seller will notify the
Trustee in writing whether the Class A Certificates
are
S-10
<PAGE>
expected to be held by at least 100 separately
named persons at the completion of the offering
made hereby. However, the Seller will not determine
whether the Class A Certificates at that time, in
fact, will (i) be held by at least 100 separately
named persons or (ii) satisfy the 100 Independent
Investor criterion, and no assurance can be given
that the 100 Independent Investor criterion will be
met. Prospective purchasers may obtain a copy of
the above described notification from the Trustee
at its Corporate Trust Department. The Seller
anticipates that the other conditions of the Plan
Asset Regulation will be met. If the Trust's assets
were deemed to be "plan assets" of any Benefit Plan
investor (e.g., if the 100 Independent Investor
criterion is not satisfied), violations of the
"prohibited transaction" rules of ERISA could
result and generate excise tax and other
liabilities under ERISA and Section 4975 of the
Code, unless a statutory, regulatory or
administrative exemption is available. It is
uncertain whether existing class exemptions from
the "prohibited transaction" rules of ERISA and
Section 4975 of the Code would apply to all
transactions involving the Trust's assets.
Accordingly, fiduciaries or other persons
contemplating purchasing the Class A Certificates
with "plan assets" of any Benefit Plan should
consult their counsel before making a purchase. See
"ERISA Considerations" in the Prospectus.
If the Seller does not notify the Trustee that the
Class A Certificates are expected to be held by at
least 100 separately named persons at the
completion of the offering made hereby, the Class A
Certificates may not be acquired by, or with "plan
assets" of, any benefit plan or any entity whose
underlying assets include "plan assets" under the
Plan Asset Regulation by reason of any Benefit
Plan's investment in the entity. In that event, by
its acceptance of a Class A Certificate, each Class
A Certificateholder will be deemed to have
represented and warranted that it is not subject to
the foregoing limitation.
The Underwriters currently do not expect that the
Class B Certificates will be held by at least 100
Independent Investors and, therefore, the Seller
does not expect that the Class B Certificates will
qualify as publicly-offered securities under the
Plan Asset Regulation. Accordingly, the Class B
Certificates may not be acquired by, or with "plan
assets" of, any Benefit Plan or any entity whose
underlying assets include "plan assets" under the
Plan Asset Regulation by reason of any Benefit
Plan's investment in the entity. By its acceptance
of a Class B Certificate, each Class B
Certificateholder will be deemed to have
represented and warranted that it is not subject to
the foregoing limitation.
Class A Certificate It is a condition to the issuance of the Class A
Rating.................... Certificates that they be rated in the highest
rating category by at least one nationally
recognized Rating Agency. The rating of the Class A
Certificates is based primarily on the quality of
the Receivables, the terms of the Class B
Certificates and the benefits of the Collateral
Interest. See "Risk Factors--Certificate Ratings"
herein.
S-11
<PAGE>
Class B Certificate It is a condition to the issuance of the Class B
Rating.................... Certificates that they be rated in one of the three
highest rating categories by at least one
nationally recognized Rating Agency. The rating of
the Class B Certificates is based primarily on the
quality of the Receivables and the benefits of the
Collateral Interest. See "Risk Factors--Certificate
Ratings" herein.
Listing................... Application will be made to list the Certificates
on the Luxembourg Stock Exchange.
S-12
<PAGE>
RISK FACTORS
Potential investors should consider, among other risks, the risk factors
discussed under "Risk Factors" in the Prospectus and the following risk
factors in connection with the purchase of the Certificates.
Certificate Ratings. It is a condition to issuance of the Class A
Certificates that they be rated in the highest rating category by at least one
Rating Agency and that the Class B Certificates be rated in one of the three
highest rating categories by at least one Rating Agency. As used herein, the
term "Rating Agency" with respect to the Certificates, and with respect to any
other Series, means the rating agency or agencies specified in the Supplement
with respect to such Series. The ratings address such Rating Agency's
assessment of the likelihood of full payment of principal and interest of the
applicable class of Certificates by the Scheduled Series 199 - Termination
Date. The ratings are based primarily on the quality of the Receivables, the
initial amount of the Collateral Interest and, in the case of the Class A
Certificates, the initial amount of the Class B Certificates. The ratings do
not address the possibility of the occurrence of a Pay Out Event with respect
to the Certificates or the possibility of the imposition of United States
withholding tax with respect to non-U.S. Certificate Owners. The ratings are
not a recommendation to purchase, hold or sell Certificates, inasmuch as such
ratings do not comment as to the market price or suitability for a particular
investor. There is no assurance that the ratings will remain for any given
period of time or that the ratings will not be lowered or withdrawn by the
Rating Agency if in its judgment circumstances so warrant.
Enhancement. Although Enhancement with respect to the Certificates will be
provided by the Collateral Interest, up to the Required Collateral Interest,
such amount is limited. If the Collateral Interest is reduced to zero, the
Class B Certificateholders will bear directly the credit and other risks
associated with their undivided interest in the Trust. If the Class B Investor
Interest is reduced to zero, Class A Certificateholders will bear directly the
credit and other risks associated with their undivided interest in the Trust.
See "Series Provisions--Required Collateral Interest" herein.
Subordination. Payments of principal in respect of the Class B Certificates
will not commence until after the final principal payment with respect to the
Class A Certificates. In addition, if amounts available to the Class A
Certificates, including the Collateral Interest, are insufficient to cover the
Class A Required Amount, the Class B Investor Interest will be reduced. Any
reduction in the Class B Investor Interest will result in a reduction of the
portion of collections of Finance Charge Receivables allocable to the Class B
Certificates in future periods and a possible delay or reduction in principal
and interest payments on the Class B Certificates. Moreover, in the event of a
sale of the Receivables due to the insolvency of the Seller, the portion of
the net proceeds of such sale allocable to pay principal to the Certificates
will be used first to pay amounts due to the Class A Certificateholders and
any remainder will be used to pay amounts due to the Class B
Certificateholders. See "Series Provisions--Subordination" herein.
Basis Risk. A portion of the Accounts have finance charges set at variable
rates of interest that are a fixed margin greater than a designated prime rate
or other index. The Certificates bear interest based on LIBOR which may
fluctuate differently than the variable rate of interest on certain of the
Accounts. As a result, there may be periods of time in which collections of
Finance Charge Receivables decline due to interest rate changes while the
amounts payable as interest on the Certificates and other amounts to be funded
out of collections of Finance Charge Receivables may not have been reduced or
may have increased.
Concentration of Accounts. The New York and New Jersey area represents the
largest concentration of Accounts. The loss experience in these states is
currently more favorable than the experience of the Bank Portfolio as a whole.
The Seller, however, is unable to determine and has no basis to predict
whether, or to what extent, social, legal or economic factors will affect
future credit card usage or payment patterns.
Book-Entry Registration. Each class of Certificates will be represented
initially by one or more Certificates registered in the name of Cede, the
nominee for DTC, and will not be registered in the names of the Certificate
Owners or their nominees. Because of this, unless and until Definitive
Certificates are issued, Certificate Owners
S-13
<PAGE>
will not be recognized by the Trustee as Certificateholders, as that term is
used in the Pooling and Servicing Agreement. Accordingly, until such time
Certificate Owners will only be able to exercise the rights of
Certificateholders indirectly through DTC and its participating organizations.
See "Description of the Certificates--Book-Entry Registration" and "--
Definitive Certificates" in the Prospectus.
MATURITY ASSUMPTIONS
The Pooling and Servicing Agreement provides that Class A Certificateholders
will not receive payments of principal until the Distribution Date,
which is the first Distribution Date with respect to the Controlled
Amortization Period (which will commence with the Monthly Period)
except in the event of a Pay Out Event, which will result in the commencement
of the Rapid Amortization Period. The Class B Certificateholders will not
begin to receive payments of principal until the final payment of principal on
the Class A Certificates has been made.
A Pay Out Event occurs, either automatically or after specified notice, upon
(a) the failure of the Seller to make certain payments or transfers of funds
for the benefit of the Certificateholders within the time periods stated in
the Pooling and Servicing Agreement, (b) material breaches of certain
representations, warranties or covenants of the Seller, (c) certain insolvency
events involving the Seller, (d) a reduction in the Portfolio Yield averaged
for any consecutive Monthly Periods to a rate which is less than the Base
Rate averaged for the same Monthly Periods, (e) the Trust becoming subject to
regulation by the Securities and Exchange Commission as an "investment
company" within the meaning of the Investment Company Act of 1940, as amended,
(f) the failure of the Seller to convey Receivables arising under Additional
Accounts when required by the Pooling and Servicing Agreement or (g) the
occurrence of a Servicer Default which would have a material adverse effect on
the Certificateholders. See "Series Provisions--Pay Out Events" herein and
"Description of the Certificates--Pay Out Events" in the Prospectus.
During the Controlled Amortization Period, distributions of monthly
principal will be made to the Class A Certificateholders on each Distribution
Date (beginning with the Distribution Date) until the Class A Investor
Interest has been paid in full or the Scheduled Series 199 - Termination Date
(or any permitted extension thereof) has occurred, equal to the least of (a)
the Available Principal Collections on deposit in the Principal Account with
respect to the related Transfer Date, (b) the applicable Controlled
Distribution Amount, which is equal to the sum of the Controlled Amortization
Amount and any existing Deficit Controlled Amortization Amount for such
Distribution Date and (c) the Class A Investor Interest on the related
Transfer Date. Should the Rapid Amortization Period commence, the Class A
Certificateholders will be entitled to receive monthly payments of principal
on each Distribution Date until the Class A Investor Interest has been paid in
full or the Scheduled Series 199 - Termination Date (or any extension
thereof) has occurred (beginning with the Distribution Date in the month
following the month in which the Rapid Amortization Period commences) equal to
the Available Principal Collections on deposit in the Principal Account with
respect to the related Transfer Date. During the Controlled Amortization
Period, distributions of monthly principal will be made to the Class B
Certificateholders on each Distribution Date, beginning with the Distribution
Date occurring after the Distribution Date on which the Class A Investor
Interest is paid in full (the "Class B Principal Commencement Date"), until
the Class B Investor Interest has been paid in full, or the Scheduled Series
199 - Termination Date (or any extension thereof) has occurred, equal to the
least of (a) the Available Principal Collections on deposit in the Principal
Account with respect to such Distribution Date, (b) the Controlled
Distribution Amount for such Distribution Date and (c) the Class B Investor
Interest on the related Transfer Date. Should the Rapid Amortization Period
commence, the Class B Certificateholders will be entitled to receive monthly
payments of principal on each Distribution Date (beginning with the
Distribution Date on which the Class A Investor Interest has been paid in
full) until the Class B Investor Interest has been paid in full or the
Scheduled Series 199 - Termination Date (or any permitted extension thereof)
has occurred equal to the Available Principal Collections on deposit in the
Principal Account with respect to the related Transfer Date minus the portion
of such Available Principal Collections applied to Class A Monthly Principal
on such Distribution Date. Each such Distribution
S-14
<PAGE>
Date will also be an Interest Payment Date. Allocations of Principal
Receivables based upon the Principal Allocation Percentage during either the
Controlled Amortization Period or the Rapid Amortization Period may result in
distributions of principal to Certificateholders greater relative to the
declining balance of the Investor Interest than would be the case if a
percentage based on such declining balance were used to determine the
percentage of collections to be distributed in respect of the Investor
Interest.
THE BANK PORTFOLIO
GENERAL
Set forth below is certain information with respect to the Bank Portfolio.
See "The Credit Card Business of Chase USA" in the Prospectus. There can be no
assurance that the yield, loss and delinquency experience with respect to the
Receivables will be comparable to that set forth below with respect to the
entire Bank Portfolio.
[Effective June 1, 1996, Chase USA acquired the credit card business of
Chemical Bank. In connection with such acquisition, Chase USA eliminated, as
of April 1, 1996, certain exceptions to its charge-off policy and expects to
eliminate certain other exceptions in the fourth quarter of 1996. It is
expected that the combined credit card business may be operated and serviced
differently in certain respects from Chase USA's credit card business prior to
such acquisition. Chase USA does not expect any such variations or the
foregoing transactions to have any material adverse effect on the interests of
the Certificateholders. See "Risk Factors--Ability to Change Terms of the
Accounts" in the Prospectus and "Chase USA and The Chase Manhattan
Corporation" herein.]
If certain criteria set forth in the Pooling and Servicing Agreement are
satisfied, Additional Accounts may be selected from the Bank Portfolio or, in
the alternative, Accounts may be removed from the Trust Portfolio. It is
expected that, in connection with the combination of the credit card business
of Chase USA with that of Chemical Bank, Accounts will be removed from the
Trust Portfolio. Any such removal will be effected in compliance with the
Pooling and Servicing Agreement. See "Description of the Certificates--Removal
of Accounts." Any such removal is not expected to materially adversely affect
the interests of the Certificateholders. See "The Receivables."
S-15
<PAGE>
LOSS AND DELINQUENCY EXPERIENCE
The following tables set forth the delinquency and loss experience for each
of the periods shown for the Bank Portfolio. The delinquency and loss
experience shown in the tables below is comprised of segments which may, when
taken individually, have delinquency and loss characteristics different from
those of the overall Bank Portfolio. Because the Accounts were selected on a
basis which excluded certain accounts in the Bank Portfolio as described in
the Prospectus and because of changes in the Bank Portfolio since the
Selection Date, actual delinquency and loss experience with respect to the
Accounts may be different from that set forth below for the Bank Portfolio.
The Servicer files with the Commission monthly reports with respect to the
Trust, including information with respect to revenues, losses and Portfolio
Yield with respect to the Accounts. There can be no assurance that the
delinquency and loss experience for the Receivables in the future will be
similar to the historical experience of the Bank Portfolio included in the
tables set forth below.
LOSS EXPERIENCE BANK PORTFOLIO (DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
MONTHS
ENDED YEAR ENDED ,
---------- ------------------------------------
,
199 199 199 199
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Average Receivables
Outstanding(1)................. $ $ $ $
Gross Charge Offs(/2/)(/3/).... $ $ $ $
Recoveries..................... $ $ $ $
Net Charge Offs(/3/)........... $ $ $ $
Net Charge Offs as Percent of
Average
Receivables Outstanding(3).... %(/4/) % % %
</TABLE>
- --------
(1) Average Receivables Outstanding is the average of the daily receivable
balance during the period indicated.
(2) Gross Charge Offs are calculated before recoveries and do not include the
amount of any reductions in Average Receivables Outstanding due to fraud,
returned goods or customer disputes. Gross Charge Offs do not include
certain reserves established against future charge-offs of accounts
affected by changes in Chase USA's charge off policy.
(3) The charge off amounts shown include only the principal portion of charged
off receivables.
(4) Annualized.
DELINQUENCY EXPERIENCE BANK PORTFOLIO
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------------------------------------------------------------
, 199 199 199 199
NUMBER OF DAYS ------------------------ ------------------------ ------------------------ ------------------------
DELINQUENT(1) AMOUNT PERCENTAGE(/2/) AMOUNT PERCENTAGE(/2/) AMOUNT PERCENTAGE(/2/) AMOUNT PERCENTAGE(/2/)
- --------------------- -------- --------------- -------- --------------- -------- --------------- -------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
30 to 59 Days........ $ % $ % $ % $ %
60 to 89 Days........
90 Days or Greater...
-------- ---- -------- ---- -------- --- -------- ---
Total.............. $ % $ % $ % $ %
======== ==== ======== ==== ======== === ======== ===
</TABLE>
- --------
(1) Number of days delinquent means the number of days after the first billing
date following the original billing date. For example, 30 days delinquent
means that no payment was received within 60 days after the original
billing date.
(2) Delinquencies are calculated as a percentage of outstanding receivables as
of their respective cycle date rather than as a percentage of the average
monthly outstanding receivables. Delinquencies are calculated before the
reversal of finance charges and include bankruptcies that have not been
charged-off.
S-16
<PAGE>
REVENUE EXPERIENCE
The gross revenues from finance charges and fees relating to accounts in the
Bank Portfolio for each of the three years contained in the period ended
, 199 and the months ended , 199 , are set forth in the following
table. The historical yield figures in the table are calculated on an accrual
basis. Collections of Receivables included in the Trust will be on a cash
basis. The yield on both an accrual and a cash basis will be affected by
numerous factors, including the monthly periodic finance charges on the
Receivables, the amount of the annual membership fees, cash advance fees and
other fees, Interchange, changes in the delinquency rate on the Receivables
and the percentage of cardholders who pay their balances in full each month
and do not incur monthly periodic finance charges. Due to such factors and the
factors discussed under "--Loss and Delinquency Experience" above, there can
be no assurance that the revenue experience for the Receivables in the future
will be similar to the historical experience of the Bank Portfolio included in
the table set forth below.
REVENUE EXPERIENCE BANK PORTFOLIO
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
MONTHS
ENDED YEAR ENDED ,
---------- ----------------------------------
, 1996 199 199 199
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Finance Charges and
Fees(1).................... $ $ $ $
Average Receivables
Outstanding(2)............. $ $ $
Yield From Finance Charges
and Fees(3)................ %(/4/) % % %
</TABLE>
- --------
(1) Finance Charges and Fees include periodic finance charges, annual
membership fees, cash advance transaction fees and Interchange, late fees,
returned check fees, insurance commissions, overlimit fees and other
administration fees and services charges. Annual membership fees are
presented in accordance with SFAS No. 91.
(2) Average Receivables Outstanding is the average of the daily receivable
balance on each day during the period indicated.
(3) Yield from Finance Charges and Fees represents Finance Charges and Fees as
a percentage of Average Receivables Outstanding.
(4) Annualized.
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 this
Interchange in connection with cardholder charges for merchandise and services
is passed from the banks which clear the transactions for merchants to credit
card issuing banks. Interchange percentages are set by the VISA and MasterCard
associations and may be changed by either of them respectively from time to
time. Chase USA will be required, pursuant to the terms of the Pooling and
Servicing Agreement, to transfer to the Trust, Interchange attributed to
cardholder charges for merchandise and services in the Accounts. Interchange
received by Chase USA will be allocated to the Trust on the basis of the
percentage equivalent of a fraction, the numerator of which is the amount of
cardholder charges for merchandise and services in the Accounts and the
denominator of which is the total amount of cardholder charges for merchandise
and services in all of the VISA and MasterCard credit card accounts owned by
Chase USA. Interchange allocated to the Trust will be treated as collections
of Finance Charge Receivables.
S-17
<PAGE>
PAYMENT RATES
The following table sets forth the highest and lowest cardholder monthly
payment rates for the Bank Portfolio during any month in the period shown and
the average cardholder monthly payment rates for the Bank Portfolio for all
months during the periods shown, in each case calculated as a percentage of
the prior month's ending outstanding receivables balance during the periods
shown. Payment rates shown in the table are based on amounts which would be
deemed payments of Principal Receivables and Finance Charge Receivables with
respect to the Accounts.
CARDHOLDER MONTHLY PAYMENT RATES BANK PORTFOLIO
<TABLE>
<CAPTION>
MONTHS
ENDED YEAR ENDED DECEMBER 31,
------------- -----------------------
, 1996 199 199 199
------------- ------- ------- -------
<S> <C> <C> <C> <C>
Lowest(1).............................. % % % %
Highest(1)............................. % % % %
Average(2)............................. % % % %
</TABLE>
- --------
(1) Monthly Payment Rates represent total payments collected during a given
month expressed as a percentage of the prior month's ending outstanding
receivables.
(2) The Average Monthly Payment Rates shown are expressed as an arithmetic
average of the payment rate during each month of the period indicated.
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 (i) collections of
Principal Receivables with respect to the Trust Portfolio (which differs from
the Bank Portfolio as discussed above in "--Loss and Delinquency Experience"),
and thus the rate at which Certificateholders could expect to receive payments
of principal on the Certificates during either the Controlled Amortization
Period or the Rapid Amortization Period, will be similar to the historical
experience set forth above or (ii) the terms of any subsequently issued Series
will not adversely impact the amount or timing of any payments to the Series
199 - Certificateholders. In particular, the occurrence of a pay out event
with respect to an Excluded Series during an Amortization Period could cause
the Amortization Period to be longer than if such Excluded Series had not been
issued. In addition, if a Pay Out Event occurs, the average life and maturity
of the Certificates could be significantly reduced or lengthened.
Because there may be a slowdown in the payment rate below the payment rate
used to determine the Controlled Amortization Amount, or because a Pay Out
Event may occur which would initiate the Rapid Amortization Period, there can
be no assurance that the Class A Certificates will be paid in full by the
Class A Expected Final Payment Date or that the Class B Certificates will be
paid in full by the Class B Expected Final Payment Date.
THE RECEIVABLES
The Receivables conveyed to the Trust arise in Accounts which were selected
from the Initial Portfolio of VISA and MasterCard credit card accounts and in
Additional Accounts added to the Trust on May 1, 1995 and June 1, 1995, in
each case, on the basis of criteria set forth in the Pooling and Servicing
Agreement (the "Trust Portfolio"). Prior to the Conversion Date, balances with
respect to the Receivables will be determined by reference to the aggregate of
such balances as of the end of each Billing Cycle ending in the related
Monthly Period, and monthly calculations with respect to each Account will be
computed based on the activity during the applicable Billing Cycle for that
Account. Thus, in the case of the Distribution Date, for example,
monthly collections would be based on the Monthly Period and would
reflect collection activity for all Billing Cycles commencing at the opening
of business on any day during , and ending at the close of
S-18
<PAGE>
business on the day preceding the corresponding day of , with respect
to Accounts in each of the Billing Cycles. Distributions on each Distribution
Date will be funded from the Finance Charge Receivables or Principal
Receivables, as appropriate, collected during the Billing Cycles which ended
during the preceding Monthly Period which were allocated to the Investor
Interest.
Pursuant to the Pooling and Servicing Agreement, the Seller has the right
(subject to certain limitations and conditions) to designate from time to time
Additional Accounts to be added to the Trust Portfolio. See "Description of
the Certificates--Addition of Accounts" in the Prospectus. The Seller added
Accounts to the Trust Portfolio on May 1, 1995 and June 1, 1995, and has and
will transfer to the Trust all Receivables of such Additional Accounts,
whether such Receivables are then existing or thereafter created. The
aggregate outstanding amount of Principal Receivables arising under those
Additional Accounts was approximately $5.7 billion as of the respective
addition dates. In addition, the Seller is required to designate Eligible
Additional Accounts as Additional Accounts under the circumstances described
under "Description of the Certificates--Addition of Accounts" in the
Prospectus.
The Pooling and Servicing Agreement also provides that the Seller has the
right (subject to certain limitations and conditions) to designate from time
to time Accounts to be removed from the Trust Portfolio. See "Description of
the Certificates--Removal of Accounts." It is expected that, in connection
with the combination of the credit card business of Chase USA with that of
Chemical Bank, Accounts will be removed from the Trust Portfolio. Any such
removal is not expected to materially adversely affect the interests of the
Certificateholders.
The Servicer has delivered a notice to the Trustee and the Rating Agency
that it has changed the software that it uses to service the Accounts and
that, effective as of [July 1, 1996], it will be able to calculate the
aggregate amount of Receivables, Principal Receivables and Finance Charge
Receivables effective as of any date of determination, and is not limited to
calculating such amounts by reference to the amount thereof as of the end of
the Billing Cycles which ended during a specified period. The "Conversion
Date" is expected to occur on [July 1, 1996].
On each date of determination that occurs on or after the Conversion Date,
the Aggregate Principal Receivables will equal the aggregate amount thereof as
of the last day of the preceding Monthly Period. During the Monthly Period in
which the Conversion Date occurs, and in each Monthly Period thereafter,
monthly calculations with respect to each Account will generally be based on
the activity during such Monthly Period for such Account. As a result,
references herein to collections received during the Billing Cycles which end
in a particular month shall, if such month begins on or after the Conversion
Date, instead be deemed to refer to collections received during such month.
Thus, in the case of the Distribution Date, for example, assuming the
Conversion Date occurred on or before , distributions would be based on
the collections received during the Monthly Period.
The Receivables in the Trust Portfolio, as of , 199 (based on billing
cycles ending in the preceding month), included $ billion of Principal
Receivables and $ billion of Finance Charge Receivables. The Accounts had,
as of , 199 , an average outstanding balance of $ and an average
credit limit of $ . The percentage of the aggregate total Receivable
balance to the aggregate total credit limit was %, and the weighted
average age of the Accounts was approximately months. As of , 199 , all
but a negligible number of cardholders whose Accounts are included in the
Trust Portfolio have billing addresses in one of the 50 States or the District
of Columbia. As of , 199 , % of the Accounts were premium accounts
and % were standard accounts, and the aggregate Principal Receivables
balances of premium accounts and standard accounts, as a percentage of the
total Aggregate Principal Receivables, were % and %, respectively.
S-19
<PAGE>
The following tables summarize the Trust Portfolio's balance and account
characteristics as of , 199 . Because the future composition of the Trust
Portfolio may change over time, these tables may not necessarily be indicative
of the composition of the Trust Portfolio after , 199 .
COMPOSITION BY ACCOUNT BALANCE TRUST PORTFOLIO
<TABLE>
<CAPTION>
PERCENTAGE
OF TOTAL PERCENTAGE
ACCOUNT NUMBER OF NUMBER OF OF TOTAL
BALANCE RANGE ACCOUNTS ACCOUNTS RECEIVABLES RECEIVABLES
------------- --------- ---------- -------------- -----------
<S> <C> <C> <C> <C>
Credit Balance................ % $ %
No Balance....................
$0.01-$500.00.................
$500.01-$1,000.00.............
$1,000.01-$3,000.00...........
$3,000.01-$5,000.00...........
$5,000.01-$10,000.00..........
Over $10,000.00...............
--------- ------ -------------- ------
TOTAL....................... 100.00% $ 100.00%
========= ====== ============== ======
COMPOSITION BY CREDIT LIMIT
TRUST PORTFOLIO
<CAPTION>
PERCENTAGE
OF TOTAL PERCENTAGE
NUMBER OF NUMBER OF OF TOTAL
CREDIT LIMIT RANGE ACCOUNTS ACCOUNTS RECEIVABLES RECEIVABLES
------------------ --------- ---------- -------------- -----------
<S> <C> <C> <C> <C>
$0.01-$1,000.00............... % $ %
$1,000.01-$2,000.00...........
$2,000.01-$3,000.00...........
$3,000.01-$4,000.00...........
$4,000.01-$5,000.00...........
$5,000.01-$10,000.00..........
Over $10,000.00...............
--------- ------ -------------- ------
TOTAL....................... 100.00% $ 100.00%
========= ====== ============== ======
</TABLE>
COMPOSITION BY PERIOD OF DELINQUENCY TRUST PORTFOLIO
<TABLE>
<CAPTION>
PERIOD OF PERCENTAGE
DELINQUENCY OF TOTAL PERCENTAGE
(DAYS CONTRACTUALLY NUMBER OF NUMBER OF OF TOTAL
DELINQUENT) ACCOUNTS ACCOUNTS RECEIVABLES RECEIVABLES
------------------- --------- ---------- -------------- -----------
<S> <C> <C> <C> <C>
Current(/1/).................... % $ %
1 to 29 days....................
30 to 59 Days...................
60 or More Days.................
--------- ------ -------------- ------
TOTAL......................... 100.00% $ 100.00%
========= ====== ============== ======
</TABLE>
- --------
(1) Includes Accounts on which the minimum payment has not been received
within 59 days following the original billing date.
S-20
<PAGE>
COMPOSITION BY ACCOUNT AGE TRUST PORTFOLIO
<TABLE>
<CAPTION>
PERCENTAGE
OF TOTAL PERCENTAGE
NUMBER OF NUMBER OF OF TOTAL
ACCOUNT AGE ACCOUNTS ACCOUNTS RECEIVABLES RECEIVABLES
----------- --------- ---------- ----------- -----------
<S> <C> <C> <C> <C>
Over 7 Months to 12 Months......... % $ %
Over 12 Months to 24 Months........
Over 24 Months to 48 Months........
Over 48 Months.....................
--- ------- --- ------
TOTAL............................ 100.00% $ 100.00%
=== ======= === ======
GEOGRAPHIC DISTRIBUTION OF ACCOUNTS
TRUST PORTFOLIO
<CAPTION>
PERCENTAGE
OF TOTAL PERCENTAGE
NUMBER OF NUMBER OF OF TOTAL
STATE ACCOUNTS ACCOUNTS RECEIVABLES RECEIVABLES
----- --------- ---------- ----------- -----------
<S> <C> <C> <C> <C>
New York........................... % $ %
California.........................
New Jersey.........................
Texas..............................
Florida............................
Michigan...........................
Pennsylvania.......................
Illinois...........................
Massachusetts......................
Ohio...............................
All Others(1)......................
--- ------- --- ------
TOTAL............................ 100.00% $ 100.00%
=== ======= === ======
</TABLE>
- --------
(1) No other state contains Accounts representing more than 2% of total
Receivables outstanding.
S-21
<PAGE>
USE OF PROCEEDS
The net proceeds from the sale of the Certificates, $ before deduction of
expenses, will be paid to the Seller. The Seller will use such proceeds for
its general corporate purposes.
CHASE USA AND THE CHASE MANHATTAN CORPORATION
Chase USA, a wholly-owned banking subsidiary of The Chase Manhattan
Corporation (the "Corporation"), was formed in 1982 and is headquartered in
Wilmington, Delaware. Chase USA is incorporated under the laws of Delaware
and, as a state chartered non-member bank, is regulated by the Office of the
Delaware State Bank Commissioner and by the Federal Deposit Insurance
Corporation. At , 199 , Chase USA's total assets were approximately $
billion, total liabilities were approximately $ billion, and total
stockholder's equity was approximately $ billion. Chase USA's activities are
primarily related to credit card lending and other forms of unsecured consumer
lending. Chase USA also takes deposits and offers associated financial
services for consumers.
The Corporation is a bank holding company the principal bank subsidiaries of
which are The Chase Manhattan Bank (National Association) (the "Bank") and
Chemical Bank, a New York state bank. At , 199 the Corporation's
consolidated assets were greater than $ billion, and total stockholders'
equity was greater than $ billion.
SERIES PROVISIONS
GENERAL
The Certificates will be issued pursuant to the Pooling and Servicing
Agreement and a Supplement thereto relating to the Certificates (the "Series
199 - Supplement"), forms of which have been filed as exhibits to the
registration statement (the "Registration Statement") of which the Prospectus
and this Prospectus Supplement are a part. The following describes certain
terms applicable to the Certificates. Reference should be made to the
Prospectus for additional information concerning the Certificates and the
Pooling and Servicing Agreement.
INTEREST PAYMENTS
Interest will accrue on the Class A Investor Interest and the Class B
Investor Interest at the Class A Certificate Rate and the Class B Certificate
Rate, respectively, from the Closing Date and will be distributed on the
15th day of (or if any such day is not a business day, the next
business day). Interest for any Interest Payment Date will accrue from and
including the preceding Interest Payment Date (or, in the case of the first
Interest Payment Date, from and including the Closing Date) to but excluding
such Interest Payment Date (each, an "Interest Period"). On each Interest
Payment Date, to the extent of the funds available therefor, Class A
Certificateholders will be entitled to receive interest on the Class A
Certificates at the Class A Certificate Rate for the related Interest Period
and Class B Certificateholders will receive interest on the Class B
Certificates at the Class B Certificate Rate for the related Interest Period.
Amounts paid as interest or deposited in the Interest Funding Account on any
Distribution Date will be funded from collections of Finance Charge
Receivables and certain other funds described herein allocated to the Investor
Interest during the Billing Cycles which ended during the preceding Monthly
Period. See "--Allocation of Funds" below.
"Class A Monthly Interest" with respect to any Distribution Date will equal
the product of (i) the Class A Certificate Rate for the related Interest
Period, (ii) the actual number of days in the period from and including the
prior Distribution Date to and excluding such Distribution Date divided by 360
and (iii) the outstanding principal balance of the Class A Certificates on the
related Record Date; provided, however, with respect to the first Distribution
Date, Class A Monthly Interest shall be equal to the interest accrued on the
initial Class A Investor Interest at the applicable Class A Certificate Rate
for the period from the Closing Date through , 199 .
S-22
<PAGE>
"Class B Monthly Interest" with respect to any Distribution Date will equal
the product of (i) the Class B Certificate Rate for the related Interest
Period, (ii) the actual number of days in the period from and including the
prior Distribution Date to and excluding such Distribution Date divided by 360
and (iii) the outstanding principal balance of the Class B Certificates on the
related Record Date, provided, however, with respect to the first Distribution
Date, Class B Monthly Interest shall be equal to the interest accrued on the
initial Class B Investor Interest at the applicable Class B Certificate Rate
for the period from the Closing Date through , 199 .
"Class A Certificate Rate" from the Closing Date through , 1996 and with
respect to any subsequent Interest Period will be the per annum rate equal to
LIBOR in effect on the applicable LIBOR Determination Date plus %.
"Class B Certificate Rate" from the Closing Date through , 1996 and with
respect to any subsequent Interest Period will be the per annum rate equal to
LIBOR in effect on the applicable LIBOR Determination Date plus %.
"LIBOR" means, for any Interest Period, the London interbank offered rate
for -month United States dollar deposits determined by the Trustee for each
Interest Period in accordance with the following provisions. On each LIBOR
Determination Date, the Trustee (or the Paying Agent on behalf of the Trustee)
will determine LIBOR on the basis of the rate for -month United States
dollar deposits that appears on Telerate Page 3750 as of 11:00 a.m., London
time, on such date. If such rate does not appear on Telerate Page 3750, the
rate for that date will be determined on the basis of the rates at which -
month United States dollars are offered by the Reference Banks at
approximately 11:00 a.m., London time, on that day to prime banks in the
London interbank market. The Trustee (or the Paying Agent on behalf of the
Trustee) will request the principal London office of each of the Reference
Banks to provide a quotation of its rate. If at least two such quotations are
provided, the rate for that date will be the arithmetic mean of the
quotations. If fewer than two quotations are provided as requested, the rate
for that date will be the arithmetic mean of the rates quoted by major banks
in New York City, selected by the Servicer, at approximately 11:00 a.m., New
York City time, on that day for -month loans in United States dollars to
leading European banks. If on the LIBOR Determination Date, the banks selected
as aforesaid are not quoting as described above, LIBOR for such Interest
Period will be LIBOR as determined on the previous LIBOR Determination Date.
"LIBOR Determination Date" means , 199 for the period from the Closing
Date to , 199 and for each Interest Period thereafter, the second London
Business Day prior to the commencement of such Interest Period. "London
Business Day" means any business day on which dealings in deposits in United
States dollars are transacted in the London interbank market. "Reference
Banks" means four major banks in the London interbank market selected by the
Servicer. "Telerate Page 3750" means the display page currently designated as
such on the Dow Jones Telerate Service (or a replacement page on that service
for displaying comparable rates or prices).
PRINCIPAL PAYMENTS
During the Revolving Period (which begins on the Closing Date and ends on
the day before either Amortization Period begins), no principal payments will
be made to Certificateholders. The controlled amortization period with respect
to the Series 199 - Certificates (the "Controlled Amortization Period") will
commence on the first day of the Monthly Period relating to the
Distribution Date, unless a Pay Out Event has occurred or is deemed to occur,
and will end on the earliest of (a) the commencement of the Rapid Amortization
Period, (b) the payment in full of the Investor Interest or (c) the Scheduled
Series 199 - Termination Date (or any permitted extension thereof). No
principal will be payable to Class A Certificateholders until the first
Distribution Date with respect to the Controlled Amortization Period or, upon
the occurrence of a Pay Out Event as described herein, the first Distribution
Date with respect to the Rapid Amortization Period. No principal will be
payable to the Class B Certificateholders until the Class A Investor Interest
is paid in full.
S-23
<PAGE>
Principal payments on any Distribution Date will be funded from the
collections of Principal Receivables allocated to the Investor Interest during
the Billing Cycles which ended during the preceding Monthly Period and other
amounts which are required to be applied as collections of Principal
Receivables. See "--Pay Out Events" below for a discussion of events which
might lead to the commencement of the Rapid Amortization Period. See "--
Allocation of Collections" and "--Allocation of Funds" below for a discussion
of the method by which collections of Principal Receivables are allocated
during either the Controlled Amortization Period or Rapid Amortization Period.
SERIES 199 - ACCOUNTS
The Servicer will establish and maintain with a Qualified Institution in the
name of the Trust, three separate accounts in a segregated trust account
maintained in the corporate trust department of such Qualified Institution
(which accounts need not be deposit accounts), a "Finance Charge Account," an
"Interest Funding Account" and a "Principal Account," for the benefit of the
Certificateholders and the Collateral Interest Holder, as their interests
appear in the Pooling and Servicing Agreement and the Series 199 -
Supplement. The Servicer will also establish a "Distribution Account" (a non-
interest bearing segregated or unsegregated demand deposit account established
with a Qualified Institution).
Funds in the Principal Account, the Interest Funding Account and the Finance
Charge Account will be invested, at the direction of the Seller, in Permitted
Investments. Any earnings (net of losses and investment expenses) on funds in
the Finance Charge Account, the Interest Funding Account or the Principal
Account will be paid to the holder of the Exchangeable Seller Certificate. The
Servicer will have the revocable power to withdraw funds from the Finance
Charge Account, the Interest Funding Account and the Principal Account for the
purpose of carrying out the Servicer's duties under the Pooling and Servicing
Agreement. The Paying Agent shall have the revocable power to withdraw funds
from the Distribution Account for the purpose of making distributions to the
Certificateholders. The Paying Agent shall initially be the Bank.
The Finance Charge Account, the Principal Account, the Interest Funding
Account and the Distribution Account are collectively referred to as the
"Series 199 - Accounts."
RETENTION ACCOUNT
When the Conversion Date occurs, the Pooling and Servicing Agreement will be
amended, which amendment shall not require the consent of the
Certificateholders, in order to provide for the conversion from calculations
on a Billing Cycle basis to calculations on a daily basis. Such amendment may
also provide for use of the Retention Account to satisfy the Minimum Seller
Interest and Minimum Aggregate Principal Receivables requirements. See
"Description of the Certificates--Addition of Accounts" and "--Exchanges" in
the Prospectus.
ALLOCATION OF COLLECTIONS
On each day that collections of Principal Receivables or Finance Charge
Receivables are deposited in the Collection Account, the Servicer will
withdraw the following amounts from the Collection Account for application as
indicated:
(a) An amount equal to the Floating Allocation Percentage of the
aggregate amount of such deposits in respect of Finance Charge Receivables
will be deposited into the Finance Charge Account.
(b) During the Revolving Period, an amount equal to the Principal
Allocation Percentage of the aggregate amount of such deposits in respect
of Principal Receivables (the "Percentage Allocation") remaining after
setting aside in the Collection Subaccount maintained for Series 199 -
(the "Series 199 - Collection Subaccount") amounts required as Reallocated
Principal Collections on the next Transfer Date,
S-24
<PAGE>
will be applied to other Series in Group One as Shared Principal
Collections or, if not required for such purpose, be paid to the holder of
the Exchangeable Seller Certificate. If such amount exceeds the Seller
Interest, the excess will be deposited into the Principal Account. Under
certain circumstances, amounts otherwise payable to the holder of the
Exchangeable Seller Certificate will be deposited into the Retention
Subaccount maintained for Series 199 - (the "Series 199 - Retention
Subaccount").
(c) During the Controlled Amortization Period, an amount equal to the
Percentage Allocation remaining after setting aside in the Series 199 -
Collection Subaccount amounts required as Reallocated Principal Collections
on the next Transfer Date, up to, during any Monthly Period, an amount
equal to the sum of the Controlled Amortization Amount and any existing
Deficit Controlled Amortization Amount (such sum, the "Controlled
Distribution Amount") will be deposited in the Principal Account. Any
excess of such remaining Percentage Allocation over the Controlled
Distribution Amount will be applied to other Series in Group One as Shared
Principal Collections and, if not required for such purpose, be paid to the
holder of the Exchangeable Seller Certificate. If the Percentage Allocation
is less than the Controlled Distribution Amount, then the excess of the
Controlled Distribution Amount over the Percentage Allocation will be the
Deficit Controlled Amortization Amount for the next Monthly Period. Under
certain circumstances, amounts otherwise payable to the holder of the
Exchangeable Seller Certificate will be deposited into the Series 199 -
Retention Subaccount.
(d) During the Rapid Amortization Period, if any, an amount equal to the
Percentage Allocation remaining after setting aside in the Series 199 -
Collection Subaccount amounts required as Reallocated Principal Collections
on the next Transfer Date, up to the amount of the Investor Interest, will
be deposited into the Principal Account.
Any amounts in respect of Principal Receivables allocated to the
Certificates and not distributed to the holder of the Exchangeable Seller
Certificate because such amounts would exceed the Seller Interest in Principal
Receivables (after giving effect to any new Receivables transferred to the
Trust for the Monthly Period relating to any Determination Date) ("Unallocated
Principal Collections") will be held in the Principal Account, until
distributable to the holder of the Exchangeable Seller Certificate or, if an
Amortization Period has commenced, on each Distribution Date will be treated
as part of collections of Principal Receivables. Any readjustments
necessitated because of a rebate, refund or billing error and any proceeds
from any repurchase of the certificates occurring in connection with a Service
Transfer and the proceeds of any sale, disposition or liquidation of
Receivables following the occurrence of a Pay Out Event caused by the
appointment of a receiver or conservator for the Seller or in connection with
the termination of the Trust will also be deposited into the Collection
Account immediately upon receipt and will be allocated as collections of
Principal Receivables or Finance Charge Receivables, as applicable.
If, on any date of processing after the Implementation Date and prior to the
Conversion Date, the Retention Percentage is less than 3% during the Revolving
Period or 5% during the Controlled Amortization Period or the Rapid
Amortization Period, collections of Principal Receivables allocated to the
Certificates and otherwise payable to the holder of the Exchangeable Seller
Certificate shall not be paid to the holder of the Exchangeable Seller
Certificate, but shall be deposited to the Series 199 - Retention Subaccount.
The "Retention Percentage" generally means, for any date of determination on
or after the Implementation Date, the quotient of (1) an amount equal to (a)
the sum of (i) the product of (x) a fraction, the numerator of which is the
Investor Interest on such date of determination, and the denominator of which
is the aggregate investor interest for all outstanding Series on such date of
determination and (y) the aggregate amount of Receivables determined at the
end of the day immediately prior to such date of determination, (ii) the
amount on deposit in the Principal Account and the amount on deposit in the
Series 199 - Retention Subaccount at the end of the day immediately prior to
such date of determination, and (iii) the amount of certain unallocated
collections of Principal Receivables at the end of the day immediately prior
to such date of determination (collectively, the "Pool Amount"), less (b) the
Investor Interest on such date of determination, divided by (2) the Pool
Amount for such date of determination. The "Implementation Date" is the date
specified by the Servicer to the Rating Agency as the date on which it is able
to determine the Pool Amount on a daily basis.
S-25
<PAGE>
REQUIRED COLLATERAL INTEREST
The "Required Collateral Interest" with respect to the business day
immediately prior to any Distribution Date (a "Transfer Date") means (a)
initially, $ (the "Initial Collateral Interest") and (b) on any Transfer
Date thereafter an amount equal to % of the Investor Interest on such
Transfer Date, after taking into account payments to be made on the related
Distribution Date, but not less than $ ; provided, however, that (i) if
certain reductions in the Collateral Interest occur or if a Pay Out Event
occurs, the Required Collateral Interest for such Transfer Date shall equal
the Required Collateral Interest for the Transfer Date immediately preceding
the occurrence of such reduction or Pay Out Event; (ii) in no event shall the
Required Collateral Interest exceed the outstanding principal balance of the
Certificates as of the last day of the Monthly Period preceding such Transfer
Date after taking into account payments to be made on the related Distribution
Date; and (iii) the Required Collateral Interest may be reduced at any time to
a lesser amount if the Rating Agency has delivered written confirmation that
such reduction will not result in such Rating Agency reducing or withdrawing
its ratings of the Certificates.
If on any Transfer Date, the Collateral Interest is less than the Required
Collateral Interest, certain Excess Spread amounts, if available, will be used
to increase the Collateral Interest to the extent of such shortfall.
SUBORDINATION
The Class B Certificates and the Collateral Interest will be subordinated to
the extent necessary to fund certain payments with respect to the Class A
Certificates. In addition, the Collateral Interest will be subordinated to the
extent necessary to fund certain payments with respect to the Class B
Certificates. Certain principal payments otherwise allocable to the Class B
Certificateholders may be reallocated to cover amounts in respect of the Class
A Certificates and the Class B Investor Interest may be reduced if the
Collateral Interest is equal to zero. Similarly, certain principal payments
allocable to the Collateral Interest may be reallocated to cover amounts in
respect of the Class A Certificates and the Class B Certificates, and the
Collateral Interest may be reduced. To the extent the Class B Investor
Interest is reduced, the percentage of collections of Finance Charge
Receivables allocated to the Class B Certificates in subsequent Monthly
Periods will be reduced. Moreover, to the extent the amount of such reduction
in the Class B Investor Interest is not reimbursed, the amount of principal
and interest distributable to the Class B Certificateholders will be reduced.
See "--Allocation Percentages," "--Reallocation of Cash Flows" and "--
Allocation of Funds --Excess Spread" herein.
ALLOCATION PERCENTAGES
Pursuant to the Pooling and Servicing Agreement, the Servicer will allocate
among the Investor Interest, the investor interest of all other Series of
certificates issued and outstanding and the Seller Interest, 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 percentage represented by the
Investor Interest and the Seller Interest in each case.
Finance Charge Receivables and Receivables in Defaulted
Accounts. Collections of Finance Charge Receivables and Receivables in
Accounts, which have been written off as uncollectible at any time ("Defaulted
Accounts"), will be allocated to the Investor Interest on any Transfer Date
based on the Floating Allocation Percentage for the related Monthly Period.
"Floating Allocation Percentage" means, with respect to any particular Monthly
Period, the percentage equivalent (not to exceed 100%) of a fraction, the
numerator of which is the Investor Interest as of the close of business on the
last day of the preceding Monthly Period (or, in the case of the first
Distribution Date, the Initial Investor Interest) and the denominator of which
is the greater of (i) the Aggregate Principal Receivables in the Trust as of
the first day of such particular Monthly Period and (ii) the sum of the
numerators used to calculate the floating allocation percentage with respect
to the same Monthly Period for all Series then outstanding.
S-26
<PAGE>
Such amounts allocable to the Investor Interest will be further allocated
among the Class A Certificateholders, the Class B Certificateholders and the
Collateral Interest Holder based on the Class A Floating Percentage, the Class
B Floating Percentage and the Collateral Floating Percentage, respectively.
The "Class A Floating Percentage" means, with respect to any Monthly Period,
the percentage equivalent (not to exceed 100%) of a fraction, the numerator of
which is equal to the Class A Investor Interest as of the close of business on
the last day of the preceding Monthly Period, and the denominator of which is
equal to the Investor Interest as of the close of business on such day;
provided, however, that with respect to the first Monthly Period, the
numerator shall be the initial Class A Investor Interest and the denominator
shall be the Initial Investor Interest. The "Class B Floating Percentage"
means, with respect to any Monthly Period, the percentage equivalent (not to
exceed 100%) of a fraction, the numerator of which is equal to the Class B
Investor Interest as of the close of business on the last day of the preceding
Monthly Period and the denominator of which is equal to the Investor Interest
as of the close of business on such day; provided, however, that with respect
to the first Monthly Period, the numerator shall be the initial Class B
Investor Interest and the denominator shall be the Initial Investor Interest.
The "Collateral Floating Percentage" means, with respect to any Monthly
Period, the percentage equivalent (not to exceed 100%) of a fraction, the
numerator of which is equal to the Collateral Interest as of the close of
business on the last day of the preceding Monthly Period and the denominator
of which is equal to the Investor Interest as of the close of business on such
day; provided, however, that with respect to the first Monthly Period, the
numerator shall be the initial Collateral Interest and the denominator shall
be the Initial Investor Interest.
"Class A Investor Interest" for any date means an amount equal to (a) the
initial Class A Investor Interest, minus (b) the aggregate amount of principal
payments made to Class A Certificateholders on or prior to such date, minus
(c) the excess, if any, of the aggregate amount of Class A Investor Charge-
Offs for all Transfer Dates preceding such date over the aggregate amount of
any reimbursements of Class A Investor Charge-Offs prior to such date, minus
(d) the principal amount of Class A Certificates previously tendered and
exchanged pursuant to an Investor Exchange; provided, however, that the Class
A Investor Interest may not be reduced below zero.
"Class B Investor Interest" for any date means an amount equal to (a) the
initial Class B Investor Interest, minus (b) the aggregate amount of principal
payments made to Class B Certificateholders on or prior to such date, minus
(c) the aggregate amount of Class B Investor Charge-Offs for all prior
Transfer Dates, minus (d) the amount of Reallocated Class B Principal
Collections for all prior Transfer Dates, minus (e) an amount equal to the
amount by which the Class B Investor Interest has been reduced to cover the
Class A Investor Default Amount on all prior Transfer Dates as described below
under "--Receivables in Defaulted Accounts; Adjustments and Fraudulent
Charges," plus (f) the amount of Excess Spread and Excess Finance Charge
Receivables allocated and available on all prior Transfer Dates for the
purpose of reimbursing amounts reduced pursuant to the foregoing clauses (c),
(d) and (e), minus (g) the principal amount of Class B Certificates previously
tendered and exchanged pursuant to an Investor Exchange; provided, however,
that the Class B Investor Interest may not be reduced below zero.
"Collateral Interest" for any date means an amount equal to (a) the initial
Collateral Interest, minus (b) the aggregate amount of principal payments made
to the Collateral Interest Holder on or prior to such date, minus (c) the
aggregate amount of Collateral Charge-Offs for all prior Transfer Dates, minus
(d) the amount of Reallocated Principal Collections for all prior Transfer
Dates, minus (e) an amount equal to the amount by which the Collateral
Interest has been reduced to cover the Class A Investor Default Amount and the
Class B Investor Default Amount on all prior Transfer Dates as described under
"--Receivables in Defaulted Accounts; Adjustments and Fraudulent Charges,"
plus (f) the amount of Excess Spread and Excess Finance Charge Receivables
allocated and available on all prior Transfer Dates for the purpose of
reimbursing amounts reduced pursuant to the foregoing clauses (c), (d) and
(e), minus (g) the principal amount by which the Collateral Interest has been
reduced pursuant to an Exchange; provided, however, that the Collateral
Interest may not be reduced below zero.
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The "Seller Percentage" will, in all cases, be equal to 100% minus the sum
of the Floating Allocation Percentage or the Principal Allocation Percentage,
as applicable, and the applicable investor percentages with respect to all
Series of investor certificates issued and outstanding.
Principal Receivables. Collections of Principal Receivables will be
allocated to the Investor Interest based on the Principal Allocation
Percentage for the related Monthly Period. "Principal Allocation Percentage"
means, with respect to any particular Monthly Period, the percentage
equivalent (not to exceed 100%) of a fraction, (a) the numerator of which is
(i) during the Revolving Period, the Investor Interest as of the close of
business on the last day of the preceding Monthly Period (or in the case of
the first Distribution Date, the Initial Investor Interest) and (ii) during
the Controlled Amortization Period or the Rapid Amortization Period, the
Investor Interest as of the last day of the Revolving Period and (b) the
denominator of which is the greater of (i) the Aggregate Principal Receivables
in the Trust as of the first day of such particular Monthly Period and (ii)
the sum of the numerators used to calculate the principal allocation
percentages with respect to Principal Receivables for all Series then
outstanding with respect to such Monthly Period.
REALLOCATION OF CASH FLOWS
On each Determination Date, the Servicer will determine the amount (the
"Class A Required Amount"), if any, by which the sum of (a) Class A Monthly
Interest due on the related Distribution Date and overdue Class A Monthly
Interest, Class A Additional Interest thereon and overdue Class A Additional
Interest, if any, (b) the Class A Servicing Fee for the related Monthly Period
and overdue Class A Servicing Fee, if any, and (c) the Class A Investor
Default Amount, if any, for the related Transfer Date exceeds the Class A
Available Funds. If the Class A Required Amount is greater than zero, Excess
Spread and Excess Finance Charge Collections allocated to Series 199 - for
such Monthly Period will be used to fund the Class A Required Amount with
respect to such Transfer Date. If such Excess Spread and Excess Finance Charge
Collections are insufficient to fund the Class A Required Amount, first,
Reallocated Collateral Principal Collections and, then, Reallocated Class B
Principal Collections will be used to fund the remaining Class A Required
Amount. If Reallocated Principal Collections with respect to the related
Monthly Period, together with Excess Spread and Excess Finance Charge
Collections, are insufficient to fund the Class A Required Amount for such
related Monthly Period, then the Collateral Interest (after giving effect to
reductions for any Collateral Charge-Offs and Reallocated Principal
Collections on such Transfer Date) will be reduced by the amount of such
insufficiency (but not by more than the Class A Investor Default Amount for
such Transfer Date). In the event that such reduction would cause the
Collateral Interest to be a negative number, the Collateral Interest will be
reduced to zero, and the Class B Investor Interest (after giving effect to
reductions for any Class B Investor Charge-Offs and any Reallocated Class B
Principal Collections on such Transfer Date) will be reduced, by the amount by
which the Collateral Interest would have been reduced below zero (but not by
more than the excess of the Class A Investor Default Amount, if any, for such
Transfer Date over the amount of such reduction, if any, of the Collateral
Interest for such Transfer Date). In the event that such reduction would cause
the Class B Investor Interest to be a negative number, the Class B Investor
Interest will be reduced to zero and the Class A Investor Interest will be
reduced by the amount by which the Class B Investor Interest would have been
reduced below zero (but not by more than the excess of the Class A Investor
Default Amount for such Transfer Date over the amount of the reductions, if
any, of the Collateral Interest and the Class B Investor Interest for such
Transfer Date). Any such reduction in the Collateral Interest or the Class B
Investor Interest will have the effect of slowing the return of principal to
the Class A Certificateholders. Any such reduction in the Class A Investor
Interest will have the effect of slowing or reducing the return of principal
and interest to the Class A Certificateholders. In such case, the Class A
Certificateholders will bear directly the credit and other risks associated
with their interests in the Trust. See "--Receivables in Defaulted Accounts;
Adjustments and Fraudulent Charges" below.
On each Determination Date, the Servicer will determine the amount (the
"Class B Required Amount"), by which the sum of (a) Class B Monthly Interest
due on the related Distribution Date and any overdue Class B Monthly Interest,
Class B Additional Interest thereon and overdue Class B Additional Interest,
if any, (b) the Class B Servicing Fee for the related Monthly Period and
overdue Class B Servicing Fee, if any, and (c) the Class B Investor Default
Amount, if any, for the related Transfer Date exceeds the Class B Available
Funds. If
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<PAGE>
the Class B Required Amount is greater than zero, Excess Spread and Excess
Finance Charge Collections allocated to Series 199 - for such Monthly Period,
not required to pay the Class A Required Amount or reimburse Class A Investor
Charge-Offs, will be used to fund the Class B Required Amount with respect to
such Transfer Date. If such Excess Spread and Excess Finance Charge
Collections are insufficient to fund the Class B Required Amount, Reallocated
Collateral Principal Collections not required to fund the Class A Required
Amount for the related Monthly Period will be used to fund the remaining Class
B Required Amount. If such Reallocated Collateral Principal Collections with
respect to the related Monthly Period, together with Excess Spread and Excess
Finance Charge Collections, are insufficient to fund the remaining Class B
Required Amount, then the Collateral Interest (after giving effect to
reductions for any Collateral Charge-Offs and Reallocated Principal
Collections on such Transfer Date and after any adjustments made thereto for
the benefit of the Class A Certificateholders) will be reduced by the amount
of such insufficiency, but not by more than the Class B Investor Default
Amount for such Transfer Date. In the event that such a reduction would cause
the Collateral Interest to be a negative number, the Collateral Interest will
be reduced to zero, and the Class B Investor Interest will be reduced by the
amount by which the Collateral Interest would have been reduced below zero
(but not by more than the excess of the Class B Investor Default Amount for
such Transfer Date over the amount of such reduction of the Collateral
Interest). Any such reduction in the Collateral Interest will have the effect
of slowing the return of principal to the Class B Certificateholders. Any such
reduction in the Class B Investor Interest will have the effect of slowing or
reducing the return of principal and interest to the Class B
Certificateholders. In such case, the Class B Certificateholders will bear
directly the credit and other risks associated with their interests in the
Trust. See "--Receivables in Defaulted Accounts; Adjustments and Fraudulent
Charges" below.
Reductions of the Class A Investor Interest or Class B Investor Interest
described above shall be reimbursed by, and the Class A Investor Interest or
Class B Investor Interest increased to the extent of, Excess Spread and Excess
Finance Charge Collections available for such purposes on each Transfer Date.
See "--Allocation of Funds--Excess Spread" below. When such reductions of the
Class A Investor Interest and Class B Investor Interest have been fully
reimbursed, reductions of the Collateral Interest shall be reimbursed out of
Excess Spread and Excess Finance Charge Collections available for such purpose
on each Transfer Date, until reimbursed in full, in a similar manner.
"Reallocated Class B Principal Collections," with respect to any Transfer
Date, means collections of Principal Receivables allocable to the Class B
Investor Interest for the related Monthly Period in an amount not to exceed
the amount applied to fund the Class A Required Amount, if any; provided,
however, that such amount will not exceed the Class B Investor Interest after
giving effect to any Class B Investor Charge-Offs for such Transfer Date.
"Reallocated Collateral Principal Collections," with respect to any Transfer
Date, means collections of Principal Receivables allocable to the Collateral
Interest for the related Monthly Period in an amount not to exceed the amount
applied to fund the Class A Required Amount and the Class B Required Amount,
if any; provided, however, that such amount will not exceed the Collateral
Interest after giving effect to any Collateral Charge-Offs for such Transfer
Date.
"Reallocated Principal Collections," with respect to any Transfer Date,
means the sum of (a) the Reallocated Class B Principal Collections for such
Transfer Date, if any, and (b) the Reallocated Collateral Principal
Collections for such Transfer Date, if any.
ALLOCATION OF FUNDS
Payment of Fees, Interest and Other Items. On each Transfer Date (except as
noted below), the Servicer or the Trustee, acting pursuant to the Servicer's
instructions, will withdraw all amounts on deposit in the Finance Charge
Account in respect of allocations of Finance Charge Receivables during Billing
Cycles which ended
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<PAGE>
during the immediately preceding Monthly Period, and make the following
payments and deposits in the following order:
(a) On each Transfer Date, an amount equal to the Class A Available Funds
will be distributed in the following priority:
(i) an amount equal to Class A Monthly Interest for the related
Distribution Date, plus the amount of any overdue Class A Monthly
Interest, interest on such overdue Class A Monthly Interest at the
Class A Certificate Rate ("Class A Additional Interest") and any
overdue Class A Additional Interest will be (x) deposited into the
Distribution Account for distribution to Class A Certificateholders if
such Distribution Date is an Interest Payment Date or (y) deposited in
the Interest Funding Account, if such Distribution Date is not an
Interest Payment Date, for distribution to the Class A
Certificateholders on the next Interest Payment Date;
(ii) an amount equal to the Class A Servicing Fee for such Transfer
Date, plus the amount of any overdue Class A Servicing Fee, will be
paid to the Servicer;
(iii) an amount equal to the Class A Investor Default Amount, if any,
for such Transfer Date, will be treated as a portion of Available
Principal Collections for such Transfer Date and deposited into the
Principal Account; and
(iv) the balance, if any, will constitute a portion of Excess Spread
and will be allocated and distributed as described under "--Excess
Spread" below.
(b) On each Transfer Date, an amount equal to the Class B Available Funds
will be distributed in the following priority:
(i) an amount equal to Class B Monthly Interest for the related
Distribution Date, plus the amount of any overdue Class B Monthly
Interest, interest on such overdue Class B Monthly Interest at the
Class B Certificate Rate ("Class B Additional Interest") and any
overdue Class B Additional Interest will (x) be deposited into the
Distribution Account for distribution to Class B Certificateholders if
such Distribution Date is an Interest Payment Date or (y) deposited in
the Interest Funding Account, if such Distribution Date is not an
Interest Payment Date, for distribution to the Class B
Certificateholders on the next Interest Payment Date;
(ii) an amount equal to the Class B Servicing Fee for such Transfer
Date, plus the amount of any overdue Class B Servicing Fee, will be
paid to the Servicer; and
(iii) the balance, if any, will constitute a portion of Excess Spread
and will be allocated and distributed as described under "--Excess
Spread" below.
(c) On each Transfer Date, an amount equal to the Collateral Available
Funds will be distributed in the following priority:
(i) during any period in which Chase USA or an affiliate thereof is
not the Servicer, an amount equal to the Collateral Interest Servicing
Fee, plus the amount of any overdue Collateral Interest Servicing Fee,
for such Transfer Date will be paid to the Servicer; and
(ii) the balance, if any, will constitute a portion of Excess Spread
and will be allocated and distributed as described under "--Excess
Spread" below.
"Class A Available Funds" means, with respect to any Monthly Period, an
amount equal to the Class A Floating Percentage of collections of Finance
Charge Receivables with respect to such Monthly Period.
"Class B Available Funds" means, with respect to any Monthly Period, an
amount equal to the Class B Floating Percentage of collections of Finance
Charge Receivables with respect to such Monthly Period.
"Collateral Available Funds" means, with respect to any Monthly Period, an
amount equal to the Collateral Floating Percentage of collections of Finance
Charge Receivables with respect to such Monthly Period.
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<PAGE>
"Excess Spread" shall mean, with respect to any Transfer Date, an amount
equal to the sum of the amounts described in clause (a)(iv), clause (b)(iii)
and clause (c)(ii) above.
Excess Spread. On each Transfer Date, the Servicer or the Trustee, acting
pursuant to the Servicer's instructions, will apply Excess Spread and Excess
Finance Charge Collections allocated to Series 199 - with respect to the
related Monthly Period, to make the following distributions in the following
priority:
(a) an amount equal to the Class A Required Amount, if any, with respect
to such Transfer Date will be used to fund the Class A Required Amount;
provided, however, that in the event the Class A Required Amount for such
Transfer Date exceeds the amount of Excess Spread and Excess Finance Charge
Collections, such Excess Spread and Excess Finance Charge Collections
allocated to Series 199 - shall be applied first to pay amounts due with
respect to such Transfer Date pursuant to clause (a)(i) above under "--
Payment of Fees, Interest and Other Items," second, to pay amounts due with
respect to such Transfer Date pursuant to clause (a)(ii) above under "--
Payment of Fees, Interest and Other Items" and third to pay amounts due
with respect to such Transfer Date pursuant to clause (a)(iii) above under
"--Payment of Fees, Interest and Other Items";
(b) an amount equal to the aggregate amount of Class A Investor Charge-
Offs which have not been previously reimbursed (after giving effect to the
allocation on such Transfer Date of any amounts applied for that purpose)
will be deposited into the Principal Account and treated as a portion of
Available Principal Collections for such Transfer Date as described under
"--Payments of Principal" below;
(c) an amount equal to the Class B Required Amount, if any, with respect
to such Transfer Date will be used to fund the Class B Required Amount and
will be applied first to pay amounts due with respect to such Transfer Date
pursuant to clause (b)(i) above under "--Payment of Fees, Interest and
Other Items," second, to pay amounts due with respect to such Transfer Date
pursuant to clause (b)(ii) above under "--Payment of Fees, Interest and
Other Items" and third, the amount remaining, up to the Class B Investor
Default Amount, will be deposited into the Principal Account and treated as
a portion of Available Principal Collections for such Transfer Date as
described under "--Payments of Principal" below;
(d) an amount equal to the aggregate amount by which the Class B Investor
Interest has been reduced below the initial Class B Investor Interest for
reasons other than the payment of principal to the Class B
Certificateholders or any reduction in principal caused by an Exchange (but
not in excess of the aggregate amount of such reductions which have not
been previously reimbursed) will be deposited into the Principal Account
and treated as a portion of Available Principal Collections for such
Transfer Date as described under "--Payments of Principal" below;
(e) an amount equal to the Collateral Monthly Interest for such Transfer
Date, plus the amount of any Collateral Monthly Interest previously due but
not distributed to the Collateral Interest Holder on a prior Transfer Date
(plus interest thereon at the Collateral Rate), will be distributed to the
Collateral Interest Holder for distribution in accordance with the Loan
Agreement;
(f) an amount equal to the unpaid Monthly Servicing Fee, if any, plus the
amount of any overdue Monthly Servicing Fee, for the related Monthly Period
will be paid to the Servicer;
(g) an amount equal to the aggregate Collateral Default Amount, if any,
for such Transfer Date will be deposited into the Principal Account and
treated as a portion of Available Principal Collections for such Transfer
Date as described under "--Payments of Principal" below;
(h) an amount equal to the aggregate amount by which the Collateral
Interest has been reduced below the Required Collateral Interest for
reasons other than the payment of principal to the Collateral Interest
Holder (but not in excess of the aggregate amount of such reductions which
have not been previously reimbursed) will be deposited into the Principal
Account and treated as a portion of Available Principal Collections for
such Transfer Date as described under "--Payments of Principal" below;
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<PAGE>
(i) an amount equal to the aggregate of any other amounts payable
(including any such amounts payable only when funds are available therefor)
pursuant to the loan agreement, among the Seller, the Trustee and the
Collateral Interest Holder (the "Loan Agreement") (to the extent such
amounts are payable pursuant to the Loan Agreement out of Excess Spread and
Excess Finance Charge Collections) shall be distributed to the Collateral
Interest Holder for application in accordance with the Loan Agreement; and
(j) the balance, if any, after giving effect to the payments made
pursuant to subparagraphs (a) through (i) above shall be applied as Excess
Finance Charge Collections allocable to other Series in Group One and, if
not required, such proceeds will be paid to the holder of the Exchangeable
Seller Certificate.
"Collateral Monthly Interest" with respect to any Distribution Date will
equal the product of (i) LIBOR plus the fixed margin set forth in the Loan
Agreement which shall not exceed % per annum, or such lesser amount as may be
designated in the Loan Agreement (the "Collateral Rate"), for the related
Interest Period, (ii) the actual number of days in the related Interest Period
divided by 360 and (iii) the outstanding principal balance of the Collateral
Interest on the related Record Date; provided, however, that with respect to
the first Distribution Date, Collateral Monthly Interest shall be equal to the
interest accrued on the Initial Collateral Interest at the applicable
Collateral Rate for the period from the Closing Date through , 1996.
Payments of Principal. On each Transfer Date, the Servicer or the Trustee,
acting pursuant to the Servicer's instructions, will distribute the Principal
Allocation Percentage of collections of Principal Receivables and other
amounts which are required to be applied as collections of Principal
Receivables ("Available Principal Collections") on deposit in the Principal
Account in the following priority:
(a) on each Transfer Date with respect to a Monthly Period (or part
thereof) during the Revolving Period, all such Available Principal
Collections will be distributed or deposited in the following priority:
(i) if the Collateral Interest is in excess of the Required Collateral
Interest, an amount equal to the Collateral Monthly Principal will be
deposited into the Distribution Account for distribution to the
Collateral Interest Holder on the Distribution Date to reduce the
Collateral Interest to the Required Collateral Interest, in accordance
with the Loan Agreement; and
(ii) the balance will be treated as Shared Principal Collections and
applied as described under "Series Provisions--Shared Principal
Collections" herein;
(b) on each Transfer Date with respect to a Monthly Period (or part
thereof) during the Controlled Amortization Period or the Rapid
Amortization Period, all such Available Principal Collections will be
distributed or deposited in the following priority:
(i) an amount equal to Class A Monthly Principal will be deposited
into the Distribution Account for distribution to the Class A
Certificateholders on the Distribution Date; and
(ii) for each Transfer Date after the Class A Investor Interest has
been paid in full (after taking into account, in the case of the Rapid
Amortization Period, payments to be made on the related Distribution
Date), an amount equal to the Class B Monthly Principal for such
Transfer Date will be deposited into the Distribution Account for
distribution to the Class B Certificateholders on the Distribution Date;
(c) on each Transfer Date with respect to the Controlled Amortization
Period in which a reduction in the Required Collateral Interest has
occurred, Available Principal Collections not applied to Class A Monthly
Principal or Class B Monthly Principal up to an amount equal to Collateral
Monthly Principal will be applied to reduce the Collateral Interest to the
Required Collateral Interest; and
(d) on each Transfer Date with respect to the Controlled Amortization
Period, the balance of Available Principal Collections not applied pursuant
to (b) and (c) above, if any, will be treated as Shared Principal
Collections and applied as described under "Series Provisions--Shared
Principal Collections" herein.
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<PAGE>
"Class A Monthly Principal" with respect to any Transfer Date relating to
the Controlled Amortization Period or the Rapid Amortization Period, prior to
the payment in full of the Class A Investor Interest, will equal the least of
(i) the Available Principal Collections on deposit in the Principal Account
with respect to such Transfer Date, (ii) for each Transfer Date with respect
to the Controlled Amortization Period, the Controlled Distribution Amount for
the related Distribution Date and (iii) the Class A Investor Interest on such
Transfer Date.
"Class B Monthly Principal" with respect to any Transfer Date relating to
the Controlled Amortization Period or the Rapid Amortization Period, after the
Class A Certificates have been paid in full (after taking into account, in the
case of the Rapid Amortization Period, payments to be made on the related
Distribution Date), will equal the least of (i) the Available Principal
Collections on deposit in the Principal Account with respect to such Transfer
Date (minus the portion, if any, of such Available Principal Collections to be
applied to Class A Monthly Principal on the related Distribution Date), (ii)
for each Transfer Date with respect to the Controlled Amortization Period, the
Controlled Distribution Amount for the related Distribution Date and (iii) the
Class B Investor Interest on such Transfer Date.
"Collateral Monthly Principal" means (a) with respect to any Transfer Date
relating to the Revolving Period following any reduction of the Required
Collateral Interest pursuant to clause (iii) of the proviso in the definition
thereof an amount equal to the lesser of (i) the excess, if any, of the
Collateral Interest (after giving effect to reductions for any Collateral
Charge-Offs and Reallocated Principal Collections on such Transfer Date) over
the Required Collateral Interest on such Transfer Date, or (ii) the Available
Principal Collections on deposit in the Principal Account with respect to such
Transfer Date or (b) with respect to any Transfer Date relating to the
Controlled Amortization Period or Rapid Amortization Period an amount equal to
the lesser of (i) the excess, if any, of the Collateral Interest (after giving
effect to reductions for any Collateral Charge-Offs and Reallocated Principal
Collections on such Transfer Date) over the Required Collateral Interest on
such Transfer Date, or (ii) the excess, if any, of (A) the Available Principal
Collections on such Transfer Date over (B) the sum of the Class A Monthly
Principal and the Class B Monthly Principal for such Transfer Date.
"Controlled Amortization Amount" means (a) for the first Transfer Dates
with respect to the Controlled Amortization Period, one- of the Class A
Investor Interest as of the end of the Revolving Period and (b) for the
Transfer Date with respect to the Controlled Amortization Period after the
payment in full of the Class A Investor Interest, an amount equal to the Class
B Investor Interest as of the end of the Revolving Period.
"Deficit Controlled Amortization Amount" means (a) on the first Transfer
Date with respect to the Controlled Amortization Period, the excess, if any,
of the Controlled Amortization Amount for such Distribution Date over the
amount available for distribution from the Principal Account as Class A
Monthly Principal for such Transfer Date and (b) on each subsequent Transfer
Date with respect to the Controlled Amortization Period, the excess, if any,
of the applicable Controlled Amortization Amount for such subsequent Transfer
Date plus any Deficit Controlled Amortization Amount for the prior Transfer
Date over the amount available for distribution from the Principal Account as
Class A Monthly Principal for such subsequent Transfer Date.
RECEIVABLES IN DEFAULTED ACCOUNTS; ADJUSTMENTS AND FRAUDULENT CHARGES
On the eighth calendar day of each month (or, if such day is not a business
day, the immediately preceding business day) (such date, a "Determination
Date"), the Servicer will calculate the Investor Default Amount for the
preceding Monthly Period. The term "Investor Default Amount" means, for any
Billing Cycle, the product of the Floating Allocation Percentage for the
Monthly Period in which such Billing Cycle ends times the amount of
Receivables in Defaulted Accounts. "Receivables in Defaulted Accounts," for
any Billing Cycle, are Receivables which in such Billing Cycle were written
off as uncollectible in accordance with the Servicer's policies and procedures
for servicing credit card receivables comparable to the Receivables. The term
"Aggregate Investor Default Amount" means, with respect to any Determination
Date, an amount equal to the sum of (a) the Investor Default Amounts
determined with respect to each Billing Cycle which ended during the
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<PAGE>
preceding Monthly Period minus (b) the Floating Allocation Percentage for such
Monthly Period (determined with respect to Receivables in Defaulted Accounts)
of Recoveries with respect to such Monthly Period; provided, however, that the
Aggregate Investor Default Amount with respect to any Monthly Period shall not
be less than zero. Any Recoveries in excess of amounts referred to in (a)
above will be allocated as though such amounts were collections of Finance
Charge Receivables.
A portion of the Aggregate Investor Default Amount will be allocated to the
Class A Certificateholders (the "Class A Investor Default Amount") on each
Transfer Date in an amount equal to the product of the Class A Floating
Percentage applicable during the related Monthly Period and the Aggregate
Investor Default Amount for such Monthly Period. A portion of the Aggregate
Investor Default Amount will be allocated to the Class B Certificateholders
(the "Class B Investor Default Amount") on each Transfer Date in an amount
equal to the product of the Class B Floating Percentage applicable during the
related Monthly Period and the Aggregate Investor Default Amount for such
Monthly Period. A portion of the Aggregate Investor Default Amount will be
allocated to the Collateral Interest Holder (the "Collateral Default Amount")
on each Transfer Date in an amount equal to the product of the Collateral
Floating Percentage applicable during the related Monthly Period and the
Aggregate Investor Default Amount for such Monthly Period.
On each Transfer Date, if the Class A Investor Default Amount for such
Transfer Date exceeds the amount of Excess Spread and Excess Finance Charge
Collections allocable to Series 199 - and Reallocated Principal Collections
available to fund such amount with respect to the Monthly Period immediately
preceding such Transfer Date, as described above under "--Allocation of
Funds--Excess Spread," the Collateral Interest (after giving effect to
reductions for any Collateral Charge-Offs and any Reallocated Principal
Collections on such Transfer Date) will be reduced by the amount of such
excess, but not more than the lesser of the Class A Investor Default Amount
and the Collateral Interest (after giving effect to reductions for any
Collateral Charge-Offs and any Reallocated Principal Collections on such
Transfer Date) for such Transfer Date. In the event that such reduction would
cause the Collateral Interest to be a negative number, the Collateral Interest
will be reduced to zero, and the Class B Investor Interest (after giving
effect to reductions for any Class B Investor Charge-Offs and any Reallocated
Class B Principal Collections on such Transfer Date) will be reduced by the
amount by which the Collateral Interest would have been reduced below zero. In
the event that such reduction would cause the Class B Investor Interest to be
a negative number, the Class B Investor Interest will be reduced to zero, and
the Class A Investor Interest will be reduced by the amount by which the Class
B Investor Interest would have been reduced below zero, but not more than the
excess of the Class A Investor Default Amount over the aggregate amount of the
reductions of the Collateral Interest and Class B Investor Interest for such
Distribution Date (a "Class A Investor Charge-Off"). Any such reduction in the
Class A Investor Interest will have the effect of slowing or reducing the
return of principal and interest to the Class A Certificateholders. If the
Class A Investor Interest has been reduced by the amount of any Class A
Investor Charge-Offs, it will be reimbursed on any Distribution Date (but not
by an amount in excess of the aggregate Class A Investor Charge-Offs) by the
amount of Excess Spread and Excess Finance Charge Collections allocated and
available for such purpose as described above under "--Allocation of Funds--
Excess Spread."
On each Transfer Date, if the Class B Investor Default Amount for such
Transfer Date exceeds the amount of Excess Spread and Excess Finance Charge
Collections allocable to Series 199 - and Reallocated Collateral Principal
Collections which are allocated and available to fund such amount with respect
to the Monthly Period preceding such Transfer Date, as described above under
"--Allocation of Funds--Excess Spread," the Collateral Interest (after giving
effect to reductions for any Collateral Charge-Offs and any Reallocated
Principal Collections on such Transfer Date and after giving effect to any
adjustments with respect thereto as described in the preceding paragraph) will
be reduced by the amount of such excess but not more than the lesser of the
Class B Investor Default Amount and the Collateral Interest (after giving
effect to reductions for any Collateral Charge-Offs and any Reallocated
Principal Collections on such Transfer Date and after giving effect to any
adjustments with respect thereto as described in the preceding paragraph) for
such Transfer Date. In the event that such reduction would cause the
Collateral Interest to be a negative number, the Collateral Interest will be
reduced to zero and the Class B Investor Interest will be reduced by the
amount by which the Collateral Interest would
S-34
<PAGE>
have been reduced below zero, but not more than the excess of Class B Investor
Default Amount over the aggregate amount of reductions of the Collateral
Interest (other than reductions pursuant to the preceding paragraph) for such
Distribution Date (a "Class B Investor Charge-Off"). The Class B Investor
Interest will also be reduced by the amount of Reallocated Class B Principal
Collections in excess of the Collateral Interest (after giving effect to
reductions for any Collateral Charge-Offs and any Reallocated Principal
Collections on such Distribution Date and after giving effect to any
adjustments with respect thereto as described in the preceding paragraph) and
the amount of any portion of the Class B Investor Interest allocated to the
Class A Certificates to avoid a reduction in the Class A Investor Interest.
Any such reduction in the Class B Investor Interest will have the effect of
slowing or reducing the return of principal and interest to the Class B
Certificateholders. The Class B Investor Interest will thereafter be
reimbursed on any Distribution Date (but not by an amount in excess of the
aggregate Class B Investor Charge-Offs) by the amount of Excess Spread and
Excess Finance Charge Collections allocated and available for that purpose as
described above under "--Allocation of Funds--Excess Spread."
On each Transfer Date, if the Collateral Default Amount for such Transfer
Date exceeds the amount of Excess Spread and Excess Finance Charge Collections
allocable to Series 199 - which is allocated and available to fund such
amount as described above under "--Allocation of Funds--Excess Spread," the
Collateral Interest will be reduced by the amount of such excess but not more
than the lesser of the Collateral Default Amount and the Collateral Interest
for such Distribution Date (a "Collateral Charge-Off"). The Collateral
Interest will also be reduced by the amount of Reallocated Principal
Collections and the amount of any portion of the Collateral Interest allocated
to the Class A Certificates to avoid a reduction in the Class A Investor
Interest or to the Class B Certificates to avoid a reduction in the Class B
Investor Interest. The Collateral Interest will thereafter be reimbursed on
any Distribution Date (but not by an amount in excess of the aggregate
Collateral Investor Charge-Offs) by the amount of Excess Spread and Excess
Finance Charge Collections allocated to Series 199 - allocated and available
for that purpose as described above under "--Allocation of Funds--Excess
Spread."
The Servicer shall be obligated to reduce on a net basis at the end of each
Billing Cycle the aggregate amount of Principal Receivables in such Billing
Cycle as provided in the Pooling and Servicing Agreement with respect to any
Principal Receivable in such Billing Cycle (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,
(iii) which was created as a result of a fraudulent or counterfeit charge,
(iv) which results from adjustments relating to returned or dishonored checks
or (v) which results from Servicer error.
SHARED PRINCIPAL COLLECTIONS
Collections of Principal Receivables for any Monthly Period allocated to the
investor interest of any Series in Group One will first be used to cover
certain amounts specified in the related Supplement. The Servicer will
determine the amount of collections of Principal Receivables for any Monthly
Period (plus certain other amounts described in the related Supplement)
allocated to such Series remaining after covering such required deposits and
distributions and any similar amount remaining for any other Series
(collectively, "Shared Principal Collections"). The Servicer will allocate the
Shared Principal Collections to cover any principal distributions to
certificateholders for any Series in Group One that are either scheduled or
permitted and that have not been covered out of the collections of Principal
Receivables allocable to such Series and certain other amounts for such Series
(collectively, "Principal Shortfalls"). If Principal Shortfalls exceed Shared
Principal Collections for any Monthly Period, Shared Principal Collections
will be allocated pro rata among the applicable Series in Group One based on
the respective Principal Shortfalls of such Series. To the extent that Shared
Principal Collections exceed Principal Shortfalls, the balance will be paid to
the holder of the Exchangeable Seller Certificate on the related Transfer
Date. Any such reallocation of collections of Principal Receivables will not
result in a reduction in the investor interest of the Series to which such
collections were initially allocated. Group One includes Series 1995-1, Series
1995-2, Series 1996-1, Series 1996-2 and Series 199 - . There can be no
assurance that any other Series will be included in Group One or that there
will be any Shared Principal Collections with respect to such Group for any
Monthly Period.
S-35
<PAGE>
SHARING OF EXCESS FINANCE CHARGE COLLECTIONS
Each Series in Group One will be entitled to share Excess Finance Charge
Collections in the manner, and to the extent, described below with each other
Series in Group One. The Supplement with respect to each subsequently issued
Series will specify whether such Series will be included in Group One.
Collections of Finance Charge Receivables and certain other amounts allocable
to the investor interest of any Series that is included in Group One in excess
of the amounts necessary to make required payments with respect to such Series
(including payments to the provider of any related credit enhancement) that
are payable out of collections of Finance Charge Receivables (any such excess,
the "Excess Finance Charge Collections") will be applied to cover any
shortfalls with respect to amounts payable from collections of Finance Charge
Receivables allocable to any other Series included in Group One, based upon
the respective investor interests on the related Transfer Date of each Series
in Group One having a shortfall; provided, however, that the sharing of Excess
Finance Charge Collections among Series in Group One will cease if the Seller
shall deliver to the Trustee a certificate of an authorized representative to
the effect that, in the reasonable belief of the Seller, the continued sharing
of Excess Finance Charge Collections among Series in Group One would have
adverse regulatory implications with respect to the Seller. Following the
delivery by the Seller of any such certificate to the Trustee there will not
be any further sharing of Excess Finance Charge Collections among the Series
in Group One. In all cases, any Excess Finance Charge Collections remaining
after covering shortfalls with respect to all outstanding Series in Group One
will be paid to the holder of the Exchangeable Seller Certificate. Group One
includes Series 1995-1, Series 1995-2, Series 1996-1, Series 1996-2 and Series
- . While any Series offered hereafter may be included in Group One, there
can be no assurance that (a) any other Series will be included in Group One,
(b) there will be any Excess Finance Charge Collections with respect to Group
One for any Monthly Period or (c) the Seller will not at any time deliver a
certificate as described above.
FINAL PAYMENT OF PRINCIPAL; TERMINATION OF TRUST
The Investor Interest will be subject to optional repurchase by the Seller
on any Distribution Date on or after which the Investor Interest is reduced to
an amount less than or equal to 5% of the Initial Investor Interest, if
certain conditions set forth in the Pooling and Servicing Agreement are met.
The repurchase price will generally be equal to the aggregate outstanding
principal balance of the Certificates and the Collateral Interest, all as of
the last day of the Monthly Period preceding the Distribution Date on which
the purchase price will be distributed, plus accrued and unpaid interest
thereon to the Distribution Date on which the repurchase occurs less the
amounts, if any, previously accumulated for the payment of principal and
interest. Subject to prior termination as provided above, the Pooling and
Servicing Agreement provides that the final distribution of principal and
interest on the Certificates and the Collateral Interest will be made on the
Distribution Date (the "Scheduled Series 199 - Termination Date"),
unless the Certificateholders (treating the Collateral Interest Holder as a
Certificateholder), by vote of holders of Certificates (treating the
Collateral Interest as a class of Certificates) evidencing undivided interests
aggregating more than 66 2/3% of any class elect, prior to the Distribution
Date in the month two months prior to the month in which the Scheduled Series
199 - Termination Date occurs, to continue to receive payments on the
Certificates and the Collateral Interest. In the event of such an extension,
the final distribution of principal and interest on the Certificates and the
Collateral Interest will be made on the day after the Distribution Date
following the date on which funds have been deposited sufficient to pay the
Certificateholders and the Collateral Interest in full and during the period
after the Scheduled Series 199 - Termination Date, the Class A
Certificateholders, the Class B Certificateholders and the Collateral Interest
Holder will be treated as holders of a single class of Certificates and will
be entitled to receive distributions on a pari passu basis. Notwithstanding
the above, the final distribution of principal and interest on the
Certificates and the Collateral Interest will be made no later than the
Distribution Date (the "Final Series 199 - Termination Date").
PAY OUT EVENTS
The Revolving Period will continue through the end of the Monthly
Period and the Controlled Amortization Period will begin on the following day,
unless a Pay Out Event occurs. The Rapid Amortization
S-36
<PAGE>
Period will commence when a Pay Out Event occurs or is deemed to occur. A "Pay
Out Event" with respect to the Certificates refers to each event so specified
in the Prospectus (see "Description of the Certificates--Pay Out Events" in
the Prospectus) and any of the following events:
(i) failure on the part of the Seller or the holder of the Exchangeable
Seller Certificate (a) to make any payment or deposit on the date required
under the Pooling and Servicing Agreement (or within the applicable grace
period which will not exceed five business days) or (b) duly to observe or
perform in any material respect any covenants or agreements of the Seller,
which in the case of subclause (b) hereof has a material adverse effect on
the Certificateholders, continues unremedied for a period of 60 days after
written notice and continues to affect materially and adversely the
interests of the Series 199 - Certificateholders for such period;
(ii) any representation or warranty made by the Seller in the Pooling and
Servicing Agreement, including the Series 199 - Supplement, or any
information in a computer file or microfiche list required to be given by
the Seller to the Trustee to identify the Accounts proves to have been
incorrect in any material respect when made and continues to be incorrect
in any material respect for a period of 60 days after written notice as a
result of which the interests of the Certificateholders are materially and
adversely affected; provided, however, that a Pay Out Event described in
this clause (ii) shall not be deemed to occur if the Seller has accepted
the transfer of the related Receivable or all such Receivables, if
applicable, during such period in accordance with the provisions of the
Pooling and Servicing Agreement;
(iii) the Portfolio Yield averaged for any consecutive Monthly Periods
is less than the Base Rate averaged for the same Monthly Periods;
(iv) a failure by the Seller to convey Receivables in Additional Accounts
to the Trust when required by the Pooling and Servicing Agreement; or
(v) any Servicer Default occurs which would have a material adverse
effect on the certificateholders.
In the case of any event described in clause (i), (ii) or (v), a Pay Out
Event will be deemed to have occurred with respect to the Certificates only
if, after any applicable grace period described in such clauses, either the
Trustee or Certificateholders evidencing undivided interests aggregating more
than 50% of the Investor Interest, by written notice to the Seller and the
Servicer (and to the Trustee, if given by the Certificateholders) declare that
a Pay Out Event has occurred as of the date of such notice. In the case of any
event described in clause (iii) or (iv), a Pay Out Event with respect to only
the Certificates, will be deemed to have occurred without any notice or other
action on the part of the Trustee, the provider of the Enhancement, or the
Certificateholders, or any other certificateholders, immediately upon the
occurrence of such event. The Rapid Amortization Period will commence on the
date a Pay Out Event occurs or is deemed to have occurred. Monthly
distributions of principal to the Certificateholders will begin (if they have
not already) on the first Distribution Date following the Monthly Period in
which such Pay Out Event occurs. Thus, Certificateholders may begin receiving
distributions of principal earlier than they otherwise would have, which may
shorten the final maturity of the Certificates.
SERVICING COMPENSATION AND PAYMENT OF EXPENSES
The portion of the Servicing Fee allocable to the Certificateholders on each
Distribution Date (the "Monthly Servicing Fee") generally will be equal to
one-twelfth of the product of % per annum and the Investor Interest with
respect to the related Monthly Period. The Monthly Servicing Fee will be paid
each month from the Finance Charge Account as described above. See "--
Allocation of Funds" above.
The share of the Monthly Servicing Fee allocable to the Class A
Certificateholders with respect to any Transfer Date (the "Class A Servicing
Fee") shall be equal to one-twelfth of the product of (a) the Class A Floating
Percentage, (b) % and (c) the Investor Interest as of the last day of the
Monthly Period preceding such Transfer Date. The share of the Monthly
Servicing Fee allocable to the Class B Certificateholders with
S-37
<PAGE>
respect to any Transfer Date (the "Class B Servicing Fee") shall be equal to
one-twelfth of the product of (a) the Class B Floating Percentage, (b) % and
(c) the Investor Interest as of the last day of the Monthly Period preceding
such Transfer Date. The share of the Monthly Servicing Fee allocable to the
Collateral Interest Holder with respect to any Transfer Date (the "Collateral
Interest Servicing Fee") shall be equal to one-twelfth of the product of (a)
the Collateral Floating Percentage, (b) % and (c) the Investor Interest as
of the last day of the Monthly Period preceding such Transfer Date. On any
Distribution Date with respect to any Monthly Period, the Seller Servicing
Fee, will equal one-twelfth of the product of (a) the Seller Interest and (b)
the lesser of % and the smallest servicing fee percentage with respect to
any Series of certificates.
UNDERWRITING
Subject to the terms and conditions set forth in the underwriting agreement
(the "Underwriting Agreement") between the Seller and the underwriters of the
Class A Certificates named below (the "Class A Underwriters") and the
underwriter of the Class B Certificates named below (the "Class B Underwriter"
and, together with the Class A Underwriters, the "Underwriters") the Seller
has agreed to sell to the Underwriters, and each of the Underwriters has
severally agreed to purchase, the principal amount of the Certificates set
forth opposite its name:
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT OF
CLASS A UNDERWRITER CLASS A CERTIFICATES
------------------- --------------------
<S> <C>
Chase Securities Inc.................................... $
Total...............................................
=======
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT OF
CLASS B UNDERWRITER CLASS B CERTIFICATES
-------------------- --------------------
<S> <C>
Chase Securities Inc.................................... $
======
</TABLE>
In the Underwriting Agreement, the Class A Underwriters have agreed, subject
to the terms and conditions set forth therein, to purchase all the Class A
Certificates offered hereby if any of the Class A Certificates are purchased
and the Class B Underwriter has agreed, subject to the terms and conditions
set forth therein, to purchase all of the Class B Certificates offered hereby
if any of the Class B Certificates are purchased. The Underwriters have agreed
to reimburse the Seller for certain expenses of the issuance and distribution
of the Certificates.
The Seller has been advised by the Class A Underwriters that they propose
initially to offer the Class A Certificates to the public at the price set
forth on the cover page hereof and to certain dealers at such price less
concessions not in excess of % of the principal amount of the Class A
Certificates. The Class A Underwriters may allow, and such dealers may
reallow, concessions not in excess of % of the principal amount of the Class
A Certificates to certain brokers and dealers. After the initial public
offering, the public offering price and other selling terms may be changed by
the Class A Underwriters.
The Seller has been advised by the Class B Underwriter that it proposes
initially to offer the Class B Certificates to the public at the price set
forth on the cover page hereof and to certain dealers at such price less
concessions not in excess of % of the principal amount of the Class B
Certificates. The Class B Underwriter may allow, and such dealers may reallow,
concessions not in excess of % of the principal amount of the Class B
Certificates to certain brokers and dealers. After the initial public
offering, the public offering price and other selling terms may be changed by
the Class B Underwriter.
Chase Securities Inc. is an affiliate of Chase USA and a subsidiary of The
Chase Manhattan Corporation.
The Seller will indemnify the Underwriters against certain liabilities,
including liabilities under the Securities Act, or contribute to payments the
Underwriters may be required to make in respect thereof.
S-38
<PAGE>
Each Underwriter has represented and agreed that (a) it has complied and
will comply with all applicable provisions of the Financial Services Act 1986
and the Public Offers of Securities Regulations 1995 (the "Regulations") with
respect to anything done by it in relation to the Series 199 - Certificates
in, from or otherwise involving the United Kingdom; (b) it has only issued or
passed on and will only issue or pass on to any person in the United Kingdom
any document received by it in connection with the issue of the Series 199 -
Certificates if that person is of a kind described in Article 11(3) of the
Financial Services Act 1986 (Investment Advertisements) (Exemptions) Order
1995; and (c) it has not offered or sold and, during the period of six months
from the date hereof, will not offer or sell any Series 199 - Certificates to
persons in the United Kingdom except to persons whose ordinary activities
involve them in acquiring, holding, managing, or disposing of investments (as
principal or agent) for the purposes of their businesses or otherwise in
circumstances which have not resulted and will not result in an offer to the
public in the United Kingdom within the meaning of the Regulations.
This Prospectus Supplement and the Prospectus may be used by Chase
Securities Inc. in connection with offers and sales related to market-making
transactions in the Certificates. Chase Securities Inc. may act as principal
or agent in such transactions. Such sales will be made at prices related to
prevailing market prices at the time of sale. Chase Securities Inc. does not
have any obligation to make a market in the Certificates, and may discontinue
any such market-making activities at any time without notice, in its sole
discretion. Chase Securities Inc. is an Underwriter participating in the
initial distribution of the Certificates.
LEGAL MATTERS
Certain legal matters relating to the issuance of the Certificates will be
passed upon for the Seller by Andrew T. Semmelman, a Senior Associate Counsel
of Chase USA, and Martin R. Joyce, a Senior Associate Counsel of The Chase
Manhattan Bank, N.A., an affiliate of Chase USA. Certain legal matters
relating to the Certificates under the laws of the State of Delaware will be
passed upon for the Seller by Richards, Layton & Finger. Certain legal matters
relating to the federal tax consequences of the issuance of the Certificates
and certain other matters relating thereto will be passed upon for the Seller
by Orrick, Herrington & Sutcliffe. Certain legal matters relating to the
issuance of the Certificates will be passed upon for the Underwriters by
Orrick, Herrington & Sutcliffe.
S-39
<PAGE>
INDEX OF KEY TERMS
<TABLE>
<CAPTION>
TERM PAGE
- ---- ----
<S> <C>
Aggregate Investor Default Amount................................ S-33
Aggregate Principal Receivables.................................. S-5
Amortization Period.............................................. S-4
Available Principal Collections.................................. S-32
Bank............................................................. S-22
Benefit Plan..................................................... S-10
Certificates..................................................... S-1, S-3
Chase USA........................................................ S-1
Class A Additional Interest...................................... S-30
Class A Available Funds.......................................... S-30
Class A Certificate Rate......................................... S-2, S-3, S-23
Class A Certificates............................................. S-1, S-3
Class A Expected Final Payment Date.............................. S-7
Class A Floating Percentage...................................... S-5, S-27
Class A Investor Charge-Off...................................... S-34
Class A Investor Default Amount.................................. S-34
Class A Investor Interest........................................ S-3, S-27
Class A Monthly Interest......................................... S-22
Class A Monthly Principal........................................ S-33
Class A Required Amount.......................................... S-7, S-28
Class A Servicing Fee............................................ S-37
Class A Underwriter.............................................. S-38
Class B Additional Interest...................................... S-30
Class B Available Funds.......................................... S-30
Class B Certificate Rate......................................... S-2, S-4, S-23
Class B Certificates............................................. S-1, S-3
Class B Expected Final Payment Date.............................. S-7
Class B Floating Percentage...................................... S-5, S-27
Class B Investor Charge-Off...................................... S-35
Class B Investor Default Amount.................................. S-34
Class B Investor Interest........................................ S-3, S-27
Class B Monthly Interest......................................... S-23
Class B Monthly Principal........................................ S-33
Class B Principal Commencement Date.............................. S-14
Class B Required Amount.......................................... S-8, S-28
Class B Servicing Fee............................................ S-38
Class B Underwriter.............................................. S-38
Closing Date..................................................... S-2
Code............................................................. S-10
Collateral Available Funds....................................... S-30
Collateral Charge-Off............................................ S-35
Collateral Default Amount........................................ S-34
Collateral Floating Percentage................................... S-5, S-27
Collateral Interest.............................................. S-3, S-27
Collateral Interest Holder....................................... S-3
Collateral Interest Servicing Fee................................ S-38
Collateral Monthly Interest...................................... S-32
Collateral Monthly Principal..................................... S-33
Collateral Rate.................................................. S-32
</TABLE>
S-40
<PAGE>
<TABLE>
<CAPTION>
TERM PAGE
- ---- ----
<S> <C>
Controlled Amortization Amount.................................. S-33
Controlled Amortization Period.................................. S-7, S-23
Controlled Distribution Amount.................................. S-25
Conversion Date................................................. S-19
Corporation..................................................... S-22
Defaulted Accounts.............................................. S-26
Deficit Controlled Amortization Amount.......................... S-33
Determination Date.............................................. S-33
Distribution Account............................................ S-24
ERISA........................................................... S-10
Excess Finance Charge Collections............................... S-36
Excess Spread................................................... S-8, S-31
FDIC............................................................ S-1
Final Series 1996-2 Termination Date............................ S-4, S-36
Finance Charge Account.......................................... S-24
Floating Allocation Percentage.................................. S-5, S-26
Implementation Date............................................. S-25
Independent Investor............................................ S-10
Initial Collateral Interest..................................... S-9, S-26
Initial Investor Interest....................................... S-3
Interchange..................................................... S-17
Interest Funding Account........................................ S-24
Interest Payment Date........................................... S-2, S-6
Interest Period................................................. S-6, S-22
Investor Default Amount......................................... S-33
Investor Interest............................................... S-3
LIBOR........................................................... S-2, S-3, S-23
LIBOR Determination Date........................................ S-23
Loan Agreement.................................................. S-32
London Business Day............................................. S-23
Monthly Period.................................................. S-5
Monthly Servicing Fee........................................... S-37
Pay Out Event................................................... S-37
Percentage Allocation........................................... S-24
Plan Asset Regulation........................................... S-10
Pool Amount..................................................... S-25
Principal Account............................................... S-24
Principal Allocation Percentage................................. S-5, S-28
Principal Shortfalls............................................ S-35
Rapid Amortization Period....................................... S-9
Rating Agency................................................... S-13
Reallocated Class B Principal Collections....................... S-29
Reallocated Collateral Principal Collections.................... S-29
Reallocated Principal Collections............................... S-29
Receivables..................................................... S-1
Receivables in Defaulted Accounts............................... S-33
Reference Banks................................................. S-23
Registration Statement.......................................... S-22
Regulations..................................................... S-39
Required Amount................................................. S-8
</TABLE>
S-41
<PAGE>
<TABLE>
<CAPTION>
TERM PAGE
- ---- ----
<S> <C>
Required Collateral Interest.......................................... S-9, S-26
Retention Percentage.................................................. S-25
Revolving Period...................................................... S-6
Scheduled Series 1996-2 Termination Date.............................. S-4, S-36
Seller................................................................ S-1
Seller Interest....................................................... S-3
Seller Percentage..................................................... S-28
Series 1996-2......................................................... S-3
Series 1996-2 Accounts................................................ S-24
Series 1996-2 Collection Subaccount................................... S-24
Series 1996-2 Retention Subaccount.................................... S-25
Series 1996-2 Supplement.............................................. S-22
Servicer.............................................................. S-1
Shared Principal Collections.......................................... S-35
Telerate Page 3750.................................................... S-23
Transfer Date......................................................... S-26
Trust................................................................. S-1
Trust Portfolio....................................................... S-18
Unallocated Principal Collections..................................... S-25
Underwriter........................................................... S-38
Underwriting Agreement................................................ S-38
</TABLE>
S-42
<PAGE>
EXHIBIT A
PRIOR ISSUANCES OF CERTIFICATES
The table below sets forth the principal characteristics of the Series 199
Certificates, the Series 199 - Certificates, and the Series 199 -
Certificates, the Series heretofore issued by the Trust. For more specific
information with respect to any Series, any prospective investor should
contact the Controller of Chase USA at . Chase USA will provide without
charge, to any prospective purchaser of the Certificates, a copy of the
Disclosure Document for any previous publicly-issued Series.
SERIES 199 -
Initial Principal Amount... $
Certificate Rate........... %
Current Principal Amount... $
Investor Percentage of
Principal Receivables.....
Controlled Amortization $
Amount....................
Commencement of Controlled
Amortization Period.......
199 Monthly Period
Monthly Servicing Fee %
Percentage................
Enhancement................
Minimum Seller Interest.... %
Scheduled Series
Termination Date..........
Final Series Termination
Date......................
Repurchase Terms...........
SERIES 199 -
Initial Principal Amount... $
Certificate Rate........... %
Current Principal Amount... $
Investor Percentage of
Principal Receivables.....
Controlled Amortization $
Amount....................
Commencement of Controlled
Amortization Period.......
199 Monthly Period
Monthly Servicing Fee %
Percentage................
Enhancement................
Minimum Seller Interest.... %
Scheduled Series
Termination Date..........
Final Series Termination
Date......................
Repurchase Terms...........
SERIES 199 -
Initial Principal Amount... $
Certificate Rate........... %
Current Principal Amount... $
Investor Percentage of
Principal Receivables.....
Controlled Amortization
Amount.................... $
S-A-1
<PAGE>
Commencement of Controlled
Amortization Period.......
199 Monthly Period
Monthly Servicing Fee %
Percentage................
Enhancement................
Minimum Seller Interest.... %
Scheduled Series
Termination Date..........
Final Series Termination
Date......................
Repurchase Terms...........
S-A-2
<PAGE>
PROSPECTUS
(LOGO OF CHASE APPEARS HERE)
CHASE MANHATTAN CREDIT CARD MASTER TRUST
ASSET BACKED CERTIFICATES
THE CHASE MANHATTAN BANK (USA)
SELLER AND SERVICER
---------------
The Chase Manhattan Bank (USA) ("Chase USA"), as seller (in such capacity,
the "Seller"), may sell from time to time one or more series (each, a
"Series") of asset backed certificates (the "Certificates") evidencing
undivided interests in certain assets of Chase Manhattan Credit Card Master
Trust (the "Trust") created 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 property of the
Trust includes, among other things, receivables (the "Receivables") generated
from time to time in a portfolio of VISA(R) and MasterCard(R) credit card
accounts, all monies due or to become due in payment of the Receivables and
Interchange allocable to the Trust, as described herein.
Certificates will be sold from time to time under this Prospectus on terms
determined for each Series at the time of the sale and described in the
related prospectus supplement (each, a "Prospectus Supplement"). Each Series
will consist of one or more classes of Certificates (each, a "Class"). Each
Certificate will represent an undivided interest in certain assets of the
Trust and the interest of the holders of each Class or Series will include the
right to receive a varying percentage of each month's collections with respect
to the Receivables at the times, in the manner and to the extent described
herein and, with respect to any Series offered hereby, in the related
Prospectus Supplement. Interest and principal payments with respect to each
Series offered hereby will be made as specified in the related Prospectus
Supplement. A Series offered hereby (or any Class within such Series) may be
entitled to the benefits of a cash collateral account, letter of credit,
surety bond, 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 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 offered hereby will be rated
in one of the four highest categories by at least one nationally recognized
statistical rating organization.
POTENTIAL INVESTORS SHOULD CONSIDER, AMONG OTHER THINGS, THE INFORMATION SET
FORTH IN "RISK FACTORS" HEREIN, BEGINNING ON PAGE 17, AND IN THE RELATED
PROSPECTUS SUPPLEMENT.
---------------
THE CERTIFICATES WILL REPRESENT INTERESTS IN THE TRUST ONLY AND WILL NOT
REPRESENT INTERESTS IN OR OBLIGATIONS OF THE CHASE MANHATTAN BANK (USA)
OR ANY AFFILIATE THEREOF. A CERTIFICATE IS NOT A DEPOSIT AND IS NOT
INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION (THE "FDIC").
THE RECEIVABLES ARE NOT INSURED OR GUARANTEED BY THE FDIC OR ANY
OTHER GOVERNMENTAL AGENCY.
---------------
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 the Seller directly to purchasers, through
agents designated from time to time, through underwriting syndicates led by
one or more managing underwriters or through one or more underwriters acting
alone. If underwriters or agents are involved in the offering of the
Certificates of any Series offered hereby, the name of the managing
underwriter or underwriters or agents will be set forth in the related
Prospectus Supplement. If an underwriter, agent or dealer is involved in the
offering of the Certificates of any Series offered hereby, the underwriter's
discount, agent's commission or dealer's purchase price will be set forth in,
or may be calculated from, the related Prospectus Supplement, and the net
proceeds to the Seller from such offering will be the public offering price of
such Certificates less such discount in the case of an underwriter, the
purchase price of such Certificates less such commission in the case of an
agent or the purchase price of such Certificates in the case of a dealer, and
less, in each case, the other expenses of the Seller associated with the
issuance and distribution of such Certificates. See "Plan of Distribution."
---------------
This Prospectus may not be used to consummate sales of Certificates of any
Series unless accompanied by the related Prospectus Supplement.
THE DATE OF THIS PROSPECTUS IS JUNE 5, 1996
<PAGE>
PROSPECTUS SUPPLEMENT
The Prospectus Supplement relating to any Series 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 Rate (or method of
determining the Certificate Rate) of each such Class; (c) the expected date or
dates on which the Investor Interest with respect to each such Class will have
been paid to the holders of the Certificates of such Class; (d) the extent to
which any Class within a Series is subordinated to any other Class of such
Series or any other Series; (e) the Distribution Dates for the respective
Classes; (f) relevant financial information with respect to the Receivables;
(f) additional information with respect to any Enhancement relating to such
Series; and (g) the plan of distribution of such Series.
REPORTS TO CERTIFICATEHOLDERS
Unless and until Definitive Certificates (defined herein) are issued,
monthly and annual reports, containing information concerning the Trust and
prepared by the Servicer, will be sent on behalf of the Trust to Cede & Co.
("Cede"), as nominee of The Depository Trust Company ("DTC") and the
registered holder of the Certificates offered hereby, pursuant to the Pooling
and Servicing 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 Seller does not
intend to send any of its financial reports to Certificateholders or to the
owners of beneficial interests in the Certificates ("Certificate Owners"). The
Servicer will file with the Securities and Exchange Commission (the
"Commission") such periodic reports with respect to the Trust as are required
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
and the rules and regulations of the Commission thereunder.
AVAILABLE INFORMATION
The Seller, as originator of the Trust, has filed a Registration Statement
under the Securities Act of 1933, as amended (the "Securities Act"), with the
Commission on behalf of the Trust with respect to the Certificates offered
pursuant to this Prospectus. The Prospectus, which forms a part of such
Registration Statement, omits certain information contained in the
Registration Statement pursuant to the rules and regulations of the
Commission. For further information, reference is made to the Registration
Statement and amendments thereof and exhibits thereto, which are available for
inspection without charge at the public reference facilities maintained by the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549; 7 World Trade
Center, New York, New York 10048; and Citicorp Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661-2511. Copies of the Registration
Statement and amendments thereof and exhibits thereto may be obtained from the
Public Reference Section of the Commission, 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
All reports and other documents filed by the Servicer, on behalf of the
Trust, pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act
subsequent to the date of this Prospectus and prior to the termination of the
offering of the Certificates offered hereby shall be deemed to be incorporated
by reference into this Prospectus and to be part hereof. Any statement
contained herein or in a document deemed to be incorporated by reference
herein shall be deemed to be modified or superseded for purposes of this
Prospectus to the extent that a statement contained in any other subsequently
filed document which also is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as modified or superseded, to
constitute a part of this Prospectus.
The Servicer will provide without charge to each person to whom a copy of
this Prospectus is delivered, on the written or oral request of any such
person, a copy of any or all of the documents incorporated herein by
reference, except the exhibits to such documents (unless such exhibits are
specifically incorporated by reference in such documents). Requests for such
copies should be directed to the Controller of Chase USA at (302) 575-5450.
2
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
PROSPECTUS SUPPLEMENT............... 2
REPORTS TO CERTIFICATEHOLDERS....... 2
AVAILABLE INFORMATION............... 2
INCORPORATION OF CERTAIN DOCUMENTS
BY REFERENCE....................... 2
PROSPECTUS SUMMARY.................. 4
RISK FACTORS........................ 17
THE TRUST........................... 21
THE CREDIT CARD BUSINESS OF CHASE
USA................................ 22
General........................... 22
Account Origination............... 22
Underwriting Procedures........... 23
Billing and Payments.............. 23
Collection of Delinquent Accounts. 25
Interchange....................... 25
THE RECEIVABLES..................... 26
DESCRIPTION OF THE CERTIFICATES..... 27
General........................... 27
Book-Entry Registration........... 28
Definitive Certificates........... 31
Interest.......................... 31
Principal......................... 32
Conveyance of Receivables......... 33
Exchanges......................... 33
Representations and Warranties.... 35
Sale of Accounts.................. 37
Addition of Accounts.............. 37
Removal of Accounts............... 38
Collection and Other Servicing
Procedures....................... 39
The Collection Account............ 39
Allocation Percentages............ 40
Allocation of Collections......... 40
Receivables in Defaulted Accounts;
Adjustments and Fraudulent
Charges.......................... 41
Groups of Series.................. 41
Shared Principal Collections...... 42
Sharing of Excess Finance Charge
Collections...................... 42
</TABLE>
<TABLE>
<S> <C>
Excluded Series................... 42
Enhancement....................... 43
Termination of Trust.............. 44
Pay Out Events.................... 45
Servicer Covenants................ 46
Servicing Compensation and Payment
of Expenses...................... 46
Certain Matters Regarding the
Seller and the Servicer.......... 47
Servicer Default.................. 48
Reports to Certificateholders..... 49
Evidence as to Compliance......... 50
Amendments........................ 50
List of Certificateholders........ 51
CERTAIN LEGAL ASPECTS OF THE
RECEIVABLES........................ 51
Transfer of Receivables........... 51
Certain Matters Relating to
Receivership..................... 52
Consumer Protection Laws.......... 53
Claims and Defenses of Cardholders
Against the Trust................ 54
CERTAIN FEDERAL INCOME TAX
CONSEQUENCES....................... 54
General........................... 54
Characterization of an Investment
in Certificates.................. 54
Taxation of Interest Income of
U.S. Certificate Owners.......... 56
Sale or Exchange of Certificates.. 57
Non-U.S. Certificate Owners....... 57
Information Reporting and Backup
Withholding...................... 58
State and Local Taxation.......... 58
ERISA CONSIDERATIONS................ 58
PLAN OF DISTRIBUTION................ 60
LEGAL MATTERS....................... 61
INDEX OF KEY TERMS.................. 62
</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 herein are defined
elsewhere in this Prospectus. A listing of the pages on which some of such
terms are defined is found in the "Index of Key Terms." Unless the context
requires otherwise, certain capitalized terms, when used herein and in any
accompanying Prospectus Supplement, relate only to the particular Series being
offered by such Prospectus Supplement.
Issuer.................... The Certificates offered hereby represent an
undivided interest in certain assets of Chase
Manhattan Credit Card Master Trust (the "Trust").
The Trust's fiscal year ends December 31. As used
herein, the term "Pooling and Servicing Agreement"
refers to the Pooling and Servicing Agreement dated
as of June 1, 1991, and, unless the context
requires otherwise, refers to the Pooling and
Servicing Agreement as supplemented by the
supplements relating to any particular Series being
offered hereby and all Series issued prior to such
Series; the term "Certificateholders" refers to
holders of record of the Certificates; the term
"Certificate Owners" refers to the beneficial
owners of book-entry Certificates as reflected on
the books of DTC, Cedel or Euroclear, or on the
books of a person directly or indirectly
maintaining an account with DTC, Cedel or
Euroclear; the term "Series" refers to any series
of Certificates issued by the Trust; the term
"Seller" refers to Chase USA; and the term
"Trustee" means Yasuda Bank and Trust Company
(U.S.A.).
Trust Assets.............. The property of the Trust includes receivables (the
"Receivables") arising under certain VISA* and
MasterCard* credit card accounts including any
Additional Accounts and Automatic Additional
Accounts added to the Trust from time to time
(collectively, the "Accounts"), all monies due or
to become due in payment of the Receivables, all
proceeds of the Receivables, Recoveries and the
right to receive Interchange allocable to the
Trust, all monies on deposit in certain bank
accounts of the Trust, all monies on deposit in
certain bank accounts established and maintained
for the benefit of certificateholders of any Series
(such accounts, "Series Accounts"), and any
Enhancement with respect to any other Series (the
benefits of such Enhancement and Series Accounts
with respect to other Series are not available for
the benefit of the Certificateholders). The term
"Enhancement" shall mean, with respect to any
Series, any letter of credit, collateral account,
uncertificated subordinated investor interest,
guaranteed rate agreement, maturity guaranty
facility, tax protection agreement, interest rate
swap or other contract or agreement for the benefit
of certificateholders of such Series.
The Seller has conveyed to the Trust, and the
assets of the Trust include, Receivables arising in
Accounts selected from the portfolio of
- --------
* VISA(R) and MasterCard(R) are registered trademarks of VISA USA, Inc. and
MasterCard International Incorporated, respectively.
4
<PAGE>
VISA and MasterCard credit card accounts owned by
the Seller (the "Bank Portfolio") excluding
Affinity Program Accounts, Agent Bank Accounts and
Purchased Accounts (the "Initial Portfolio") which
met the criteria set forth in the Pooling and
Servicing Agreement as applied on April 3, 1991
(the "Selection Date") and Receivables arising in
Additional Accounts (including Affinity Program
Accounts, Agent Bank Accounts and certain Purchased
Accounts) which met the criteria set forth in the
Pooling and Servicing Agreement and were included
as Accounts on May 1, 1995 and June 1, 1995.
Receivables arising in other Additional Accounts or
Automatic Additional Accounts may be added to the
Trust from time to time as described herein.
The Seller has conveyed and will convey to the
Trustee all Receivables arising under the Accounts
from time to time thereafter until termination of
the Trust. The Trust will not include the
Receivables of any Removed Accounts which may be
removed from the Trust from time to time. See
"Description of the Certificates--Removal of
Accounts." Additional Accounts and Automatic
Additional Accounts may, subject to certain
conditions, include Affinity Program Accounts,
Agent Bank Accounts, Purchased Accounts and other
consumer revolving credit accounts. See
"Description of Certificates--Addition of
Accounts."
The Certificates.......... The Certificates will be issued in Series, each of
which will consist of one or more Classes. The
specific terms of a Series or Class will be
established as described herein under "Description
of the Certificates--Exchanges." However, while the
specific terms of any Series or Class offered
hereby will be described in the related Prospectus
Supplement, the terms of such Series or Class will
not be subject to prior review by, or consent of,
the holders of the Certificates of any previously
issued Series.
Unless otherwise specified in the related
Prospectus Supplement, the Certificates of a Series
offered hereby will be available for purchase in
minimum denominations of $1,000 and in integral
multiples thereof, and will only be available in
book-entry form except in certain limited
circumstances as described herein under
"Description of the Certificates--Definitive
Certificates." Interests in the Trust assets will
be allocated among (a) the Certificateholders, as
well as Enhancement providers holding
uncertificated interests (each, an "Enhancement
Investor Interest"), of a particular Series (the
"Investor Interest"), (b) the Certificateholders
(as well as such holders of Enhancement Investor
Interests) of other Series, if any, and (c) the
interest of the Seller (the "Seller Interest"), as
described below. The aggregate principal amount of
the Investor Interest of a Series offered hereby
will, except as otherwise provided herein and in
the related Prospectus Supplement, remain fixed at
the aggregate initial principal amount of the
Certificates of such Series. The Investor Interest
of a Series will include the right to receive (but
only to the extent needed to make required payments
under the Pooling and Servicing Agreement,
including the related
5
<PAGE>
Supplement, and subject to any reallocation of such
amounts if the related Supplement so provides)
varying percentages of collections of Finance
Charge Receivables and Principal Receivables and
will be allocated a varying percentage of the
Receivables in Defaulted Accounts with respect to
each calendar month (each, "Monthly Period"). See
"Description of the Certificates--Interest" and "--
Principal." If the Certificates of a Series offered
hereby include more than one Class of Certificates,
the collections allocable to the Investor Interest
of such Series may be further allocated among each
Class in such Series as described in the related
Prospectus Supplement.
As new Receivables are added to the Trust and as
payments are made on the Seller Interest, the
amount of the Seller Interest will fluctuate over
time. The Seller may tender the certificate which
represents the Seller Interest (the "Exchangeable
Seller Certificate") or, if provided in the
relevant Supplement, certificates representing any
Series of certificates and the Exchangeable Seller
Certificate, to the Trustee and, upon satisfying
certain conditions, cause the Trustee to issue one
or more new Series, as described in "Description of
the Certificates--Exchanges," which Exchange may
have the effect of decreasing the Seller Interest.
Chase USA has notified the Trustee that Chase USA
is able to calculate the aggregate amount of
Finance Charge Receivables and Principal
Receivables on a daily basis rather than on a
Billing Cycle basis, and on the date when certain
other conditions described herein are satisfied
(the "Conversion Date"), references herein to
collections received during Billing Cycles which
end in a particular month shall instead refer to
collections received during such month. The
Conversion Date is expected to occur on [July 1,
1996]. See "The Receivables."
The Certificates represent interests in the Trust
only and do not represent interests in or
obligations of the Seller or any affiliate thereof.
A Certificate is not a deposit and is not insured
by the Federal Deposit Insurance Corporation (the
"FDIC"). The Receivables are not insured or
guaranteed by the FDIC or any other governmental
agency.
Receivables............... The Receivables arise in Accounts that have been
selected from the VISA and MasterCard credit card
accounts owned by the Seller based on criteria
provided in the Pooling and Servicing Agreement as
applied with respect to each Account at the time of
its selection. The Receivables consist of amounts
charged by cardholders for goods and services and
the amount of cash advances, (the "Principal
Receivables"), plus the related periodic finance
charges billed to the Accounts and amounts, if any,
billed to the Accounts in respect of annual fees
and cash advance fees as well as amounts billed to
the Accounts for late fees, returned check fees and
certain other fees and charges (the "Finance Charge
Receivables"). Amounts received with respect to
Receivables in Defaulted Accounts ("Recoveries")
will be allocated as collections of Principal
Receivables, except that if, in any
6
<PAGE>
Monthly Period, Recoveries allocable to the
Investor Interest exceed the sum of the Investor
Default Amounts with respect to such Monthly
Period, Recoveries equal to such excess will be
allocated as collections of Finance Charge
Receivables. See "Description of the Certificates--
Receivables in Defaulted Accounts; Adjustments and
Fraudulent Charges." Interchange allocable to the
Trust will be treated as collections of Finance
Charge Receivables. The Finance Charge Receivables
will not affect the amount of the Investor Interest
or the amount of the Seller Interest, which are
determined on the basis of the amount of the
Principal Receivables in the Trust.
During the term of the Trust, all new Receivables
arising in the Accounts will be automatically
transferred (without further action by the Seller)
to the Trust by the Seller. The total amount of
Receivables in the Trust will fluctuate from day to
day because the amount of new Receivables arising
in the Accounts and the amount of payments
collected on existing Receivables usually differ
each day. Because the Seller Interest represents
the interest in the Principal Receivables in the
Trust not represented by the Certificates or any
other Series of certificates, the amount of the
Seller Interest will fluctuate from day to day as
Receivables are collected and new Receivables are
transferred to the Trust. See "The Receivables."
Pursuant to the Pooling and Servicing Agreement,
the Seller has the right (subject to certain
limitations and conditions) and in some
circumstances is obligated to designate additional
eligible consumer revolving credit accounts to be
included as Accounts (the "Additional Accounts")
and to convey to the Trust all of the Receivables
in the Additional Accounts whether such Receivables
are then existing or thereafter created. In
addition, pursuant to the Pooling and Servicing
Agreement, the Seller has the right (subject to
certain limitations and conditions) to designate
additional eligible consumer credit accounts
originated in the ordinary course of the Seller's
business (the "Automatic Additional Accounts") and
to convey to the Trust all of the Receivables in
the Automatic Additional Accounts whether such
Receivables are then existing or thereafter
created. See "Description of the Certificates--
Addition of Accounts."
Further, pursuant to the Pooling and Servicing
Agreement, the Seller has the right (subject to
certain limitations and conditions) to remove from
the Trust Receivables in certain Accounts
designated by the Seller (the "Removed Accounts")
and accept the conveyance of all the Receivables in
the Removed Accounts, whether such Receivables are
then existing or thereafter created. See
"Description of the Certificates--Removal of
Accounts."
The aggregate undivided interest in the Principal
Receivables in the Trust evidenced by the
Certificates will never exceed the amount of the
Investor Interest regardless of the total amount of
Principal Receivables in the Trust at any time.
7
<PAGE>
Exchanges................. The Pooling and Servicing Agreement authorizes the
Trustee to issue two types of certificates: (i) one
or more Series of certificates which will be
transferable and have the characteristics described
below and (ii) the Exchangeable Seller Certificate,
a certificate which evidences the Seller Interest,
which initially is held by the Seller and which is
transferable only as provided in the Pooling and
Servicing Agreement. The Pooling and Servicing
Agreement also provides that, pursuant to any one
or more supplements to the Pooling and Servicing
Agreement (each, a "Supplement"), the Seller may
tender the Exchangeable Seller Certificate (a
"Seller Exchange") or, if provided in the relevant
Supplement, certificates representing any Series of
certificates and the Exchangeable Seller
Certificate to the Trustee in exchange for one or
more new Series and a reissued Exchangeable Seller
Certificate (an "Investor Exchange"; any tender
pursuant to a Seller Exchange or an Investor
Exchange is collectively referred to as an
"Exchange"). See "Description of the Certificates--
Exchanges." However, at all times, the interest in
the Principal Receivables in the Trust represented
by the Seller Interest must equal or exceed the
Minimum Seller Interest. Under the Pooling and
Servicing Agreement, the Seller may define, with
respect to any Series, the Principal Terms of the
Series. See "Description of the Certificates--
Exchanges." The Seller may offer any Series to the
public or other investors under a prospectus or
other disclosure document (a "Disclosure Document")
in transactions either registered under the
Securities Act or exempt from registration
thereunder, directly or through the Underwriters or
one or more other underwriters or placement agents,
in fixed-price offerings or in negotiated
transactions or otherwise.
Under the Pooling and Servicing Agreement and
pursuant to a Supplement, an Exchange may occur
only upon delivery to the Trustee of the following,
among other things: (i) a Supplement specifying the
Principal Terms of such Series, (ii) an opinion of
counsel to the effect that the issuance of such
Series will not materially adversely affect the
Federal income tax characterization of any
outstanding Series, (iii) if required by the
related Supplement, the form of Enhancement, and an
appropriate Enhancement agreement with respect
thereto, (iv) written confirmation from the 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, (v) the
existing Exchangeable Seller Certificate and, if
the Exchange is an Investor Exchange, the
certificates representing the Series to be
exchanged and (vi) a certificate of the Seller
confirming that the resulting Seller Interest will
be at least equal to the Minimum Seller Interest.
Clearance and Settlement.. Certificateholders may elect to hold their
Certificates through any of DTC (in the United
States) or Cedel Bank, societe anonyme ("Cedel") or
the Euroclear System ("Euroclear") (in Europe). See
"Description of the Certificates--Book-Entry
Registration."
Seller and Servicer....... The Chase Manhattan Bank (USA) ("Chase USA"). The
principal executive offices of Chase USA are
located at 802 Delaware Avenue,
8
<PAGE>
Wilmington, Delaware 19801, telephone number (302)
575-5000. In certain limited circumstances, Chase
USA may resign or be removed as Servicer, in which
event the Trustee or a third party servicer may be
appointed as successor servicer (Chase USA, or any
such successor servicer, is referred to herein as
the "Servicer"). Chase USA is permitted to delegate
certain of its duties as servicer under the Pooling
and Servicing Agreement to The Chase Manhattan
Corporation or any of its affiliates, but any such
delegation will not relieve the Servicer of its
obligations thereunder. The Seller has the right to
sell, transfer or pledge the Exchangeable Seller
Certificate and the Accounts, provided that certain
requirements contained in the Pooling and Servicing
Agreement are satisfied and that the Rating Agency
has notified the Seller and the Trustee that such
sale, transfer or pledge will not result in the
reduction or withdrawal of its then existing rating
of the Certificates.
Collections............... The Servicer will deposit collections of
Receivables in an account established for such
purpose (the "Collection Account"). All amounts
deposited in the Collection Account will be
allocated in the manner provided in the Pooling and
Servicing Agreement, as supplemented by the
Supplement relating to any Series offered hereby,
the previously issued Series and any future Series,
by the Servicer between amounts collected on
Principal Receivables and amounts collected on
Finance Charge Receivables. All such amounts will
then be allocated in accordance with the respective
interests of the Certificateholders and the holder
of any Enhancement Investor Interest, the
certificateholders of any other Series and the
holder of the Exchangeable Seller Certificate. See
"Description of the Certificates--Allocation
Percentages."
Trustee................... Yasuda Bank and Trust Company (U.S.A.)
Interest.................. Interest will accrue on the Investor Interest of
the Certificates of a Series or Class offered
hereby at the per annum rate either specified in or
determined in the manner specified in the related
Prospectus Supplement. Except as otherwise provided
herein or in the related Prospectus Supplement,
collections of Finance Charge Receivables and
certain other amounts allocable to the Investor
Interest of a Series offered hereby will be used to
make interest payments to Certificateholders of
such Series on each Interest Payment Date with
respect thereto; provided that if a Rapid
Amortization Period commences with respect to such
Series, thereafter interest will be distributed to
such Certificateholders monthly on each Special
Payment Date (defined herein). If the Interest
Payment Dates for a Series or Class occur less
frequently than monthly, such collections or other
amounts (or the portion thereof allocable to such
Class) will be deposited in one or more trust
accounts (each, an "Interest Funding Account") and
used to make interest payments to
Certificateholders of such Series or Class on the
following Interest Payment Date with respect
thereto. If a Series has more than one Class of
Certificates, each
9
<PAGE>
such Class may have a separate Interest Funding
Account. See "Description of the Certificates--
Interest."
Principal................. The principal of the Certificates of each Series
offered hereby will be scheduled to be paid either
(a) in full on an expected date specified in the
related Prospectus Supplement (the "Expected Final
Payment Date"), in which case such Series will have
an Accumulation Period as described below under "--
Accumulation Period," or (b) in installments
commencing on a date specified in the related
Prospectus Supplement (the "Principal Commencement
Date"), in which case such Series will have a
Controlled Amortization Period as described below
under "--Controlled Amortization Period." If a
Series has more than one Class of Certificates,
each class may have a different method of paying
principal, Expected Final Payment Date or Principal
Commencement Date. The payment of principal with
respect to the Certificates of a Series or Class
may commence earlier than the applicable Expected
Final Payment Date or Principal Commencement Date,
and the final principal payment with respect to the
Certificates of a Series or Class may be made later
than the applicable Expected Final Payment Date or
other expected date, if a Pay Out Event occurs with
respect to such Series or Class or under certain
other circumstances described herein. See "Risk
Factors--Payments and Maturity" for a description
of factors that may affect the timing of principal
payments on Certificates. See "Description of the
Certificates--Principal."
Revolving Period.......... The Certificates of each Series offered hereby will
have a revolving period (the "Revolving Period")
that will commence on the date of issuance of the
related Series (the "Series Closing Date") and
continue until the earlier of (a) the commencement
of the Rapid Amortization Period with respect to
such Series and (b) the date specified in the
related Prospectus Supplement as the end of the
Revolving Period with respect to such Series. If
the related Prospectus Supplement provides that a
Series is included in Group One, during the
Revolving Period with respect to such Series,
collections of Principal Receivables and certain
other amounts otherwise allocable to the Investor
Interest of such Series will be treated as Shared
Principal Collections and will be distributed to,
or for the benefit of, the Certificateholders of
other Series in Group One or the holder of the
Exchangeable Seller Certificate. See "Description
of the Certificates--Principal," "--Shared
Principal Collections" and "--Pay Out Events" for a
discussion of the events that might lead to the
termination of the Revolving Period with respect to
a Series prior to its scheduled date.
Accumulation Period....... If the related Prospectus Supplement so specifies,
unless a Rapid Amortization Period commences with
respect to a Series offered hereby, the
Certificates of such Series will have an
accumulation period (the "Accumulation Period")
that will commence at the close of business on the
date specified in or determined as specified in
such Prospectus Supplement and continue until the
earliest of (a) the commencement of the Rapid
Amortization Period with respect to such
10
<PAGE>
Series, (b) payment in full of the Investor
Interest of the Certificates of such Series and (c)
the series termination date with respect to such
Series (the "Series Termination Date"). During the
Accumulation Period with respect to a Series,
collections of Principal Receivables and, if so
specified in the related Prospectus Supplement,
certain other amounts allocable to the Investor
Interest of such Series will be deposited on each
Distribution Date in a trust account established
for the benefit of the Certificateholders of such
Series (each, a "Principal Funding Account") and
used to make principal distributions to the
Certificateholders of such Series or any Class
thereof when due. The amount to be deposited in the
Principal Funding Account for any Series offered
hereby on any Distribution Date may, but will not
necessarily, be limited to an amount (the
"Controlled Deposit Amount") equal to an amount
specified in or determined as specified in the
related Prospectus Supplement (the "Controlled
Accumulation Amount") plus any existing 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 and the Accumulation Period
with respect to each Class may commence on
different dates. In addition, the related
Prospectus Supplement may describe certain
priorities among such Classes with respect to
deposits of principal into such Principal Funding
Accounts.
Controlled Amortization If the related Prospectus Supplement so specifies,
Period.................... unless a Rapid Amortization Period commences with
respect to a Series offered hereby, the
Certificates of such Series will have an
amortization period (the "Controlled Amortization
Period") that will commence at the close of
business on the date specified in such Prospectus
Supplement and continue until the earliest of (a)
the commencement of the Rapid Amortization Period
with respect to such Series, (b) payment in full of
the Investor Interest of the Certificates of such
Series and (c) the Series Termination Date with
respect to such Series. During the Controlled
Amortization Period with respect to a Series,
collections of Principal Receivables and certain
other amounts allocable to the Investor Interest of
such Series will be used on each Distribution Date
to make principal distributions to
Certificateholders of such Series or any Class
thereof then scheduled to receive such
distributions. The amount to be distributed to
Certificateholders of any Series offered hereby on
any Distribution Date may, but will not
necessarily, be limited to an amount (the
"Controlled Distribution Amount") equal to an
amount (the "Controlled Amortization Amount")
specified in the related Prospectus Supplement 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 different Controlled Amortization
Amount. In addition, the related Prospectus
Supplement may describe certain priorities among
such Classes with respect to such distributions.
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Rapid Amortization During the period from the day on which a Pay Out
Period.................... Event has occurred with respect to a Series to the
date on which the Investor Interest of the
Certificates of such Series and the Enhancement
Investor Interest, if any, with respect to such
Series have been paid in full or the related Series
Termination Date has occurred (the "Rapid
Amortization Period"), collections of Principal
Receivables and certain other amounts allocable to
the Investor Interest of such Series (including
Shared Principal Collections, if any, allocable to
such Series) will be distributed as principal
payments to the Certificateholders of such Series
monthly on each Distribution Date beginning with
the first Special Payment Date with respect to such
Series. During the Rapid Amortization Period with
respect to a Series, distributions of principal to
Certificateholders will not be subject to any
Controlled Deposit Amount or Controlled
Distribution Amount. In addition, upon the
commencement of the Rapid Amortization Period with
respect to a Series, any funds on deposit in a
Principal Funding Account with respect to such
Series will be paid to the Certificateholders of
the relevant Class or Series on the first Special
Payment Date with respect to such Series. See
"Description of the Certificates--Pay Out Events"
for a discussion of the events that might lead to
the commencement of the Rapid Amortization Period
with respect to a Series.
Groups of Series.......... Any Series may be included as part of a group of
Series (each, a "Group") that share, subject to
certain limits, certain excess Principal
Collections and Excess Finance Charge Collections
allocable to any Series included in such Group. See
"Description of the Certificates--Sharing of Excess
Finance Charge Collections" and "--Shared Principal
Collections." The Series of Certificates designated
as Series 1995-1, Series 1995-2, Series 1996-1 and
Series 1996-2 and any other Series, if so specified
in the related Prospectus Supplement, will be part
of a Group designated as "Group One." No Series
other than Series 1995-1, Series 1995-2, Series
1996-1 and Series 1996-2 issued prior to the date
hereof will be part of any Group.
Shared Principal To the extent that collections of Principal
Collections............... Receivables and certain other amounts that are
allocated to the Investor Interest of any Series in
Group One are not needed to make payments to the
Certificateholders of such Series or required to be
deposited in a Principal Funding Account for such
Series, such collections will be applied to cover
principal payments due to or for the benefit of
Certificateholders of another Series in Group One.
Any such reallocation will not result in a
reduction in the Investor Interest of the Series to
which such collections were initially allocated.
See "Description of the Certificates--Shared
Principal Collections."
Sharing of Excess Finance
Charge Collections.......
Subject to certain limitations described under
"Description of the Certificates--Sharing of Excess
Finance Charge Collections," collections of Finance
Charge Receivables and certain other amounts
allocable to the Investor Interest of any Series
that is included in Group
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One in excess of the amounts necessary to make
required payments with respect to such Series
(including payments to the provider of any related
Enhancement) will be applied to cover amounts
payable from collections of Finance Charge
Receivables allocable to any other Series included
in Group One, in each case pro rata based upon the
Investor Interest of each Series which has not
provided Excess Finance Charge Collections with
respect to the related Monthly Period. See
"Description of the Certificates--Sharing of Excess
Finance Charge Collections."
Excluded Series........... If so specified in the related Prospectus
Supplement, a Series of Certificates may be an
"Excluded Series" for purposes of calculating the
minimum Aggregate Principal Receivables, provided
that the Rating Agency has determined that such
exclusion will not result in a reduction or
withdrawal of the rating of the Rating Agency then
in effect. If a Pay Out Event with respect to an
Excluded Series occurs during an Amortization
Period for another Series of Certificates, such
Amortization Period could be longer than if such
Excluded Series had not been issued.
If so specified in the related Prospectus
Supplement, a Series of Certificates may be an
Excluded Series that is paired (each, a "Paired
Series") with one or more other Series or a portion
of one or more other Series previously issued by
the Trust (each, a "Prior Series"). A Paired Series
may be issued at or after the commencement of an
Accumulation Period or Controlled Amortization
Period for a Prior Series. As the Investor Interest
of the Prior Series having a Paired Series is
reduced, the Investor Interest of the Paired Series
will increase by an equal amount. If a Pay Out
Event occurs with respect to the Prior Series
having a Paired Series or with respect to the
Paired Series when such Prior Series is in a
Controlled Amortization Period or Accumulation
Period, the percentage specified in the applicable
Prospectus Supplement for the allocation of
collections of Principal Receivables to the
Investor Interest of such Prior Series (the
"Principal Allocation Percentage") for the Prior
Series and the Principal Allocation Percentage for
the Paired Series will be reset as specified in the
related Prospectus Supplement and the Amortization
Period for such Prior Series could be lengthened.
Enhancement............... The credit enhancement (the "Enhancement") with
respect to a Series offered hereby may include a
letter of credit, a cash collateral account, a
collateral interest, a surety bond, an insurance
policy or any other form of credit enhancement
described in the related Prospectus Supplement.
Enhancement may also be provided to a Class or
Classes of a Series by subordination provisions
which require that distributions of principal or
interest be made with respect to the Certificates
of such Class or Classes before distributions are
made to one or more other Classes of such Series.
The type, characteristics and amount of the
Enhancement with respect to any Series will be
determined based on several factors, including the
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characteristics of the Receivables and Accounts
underlying or comprising the Trust Assets as of the
Series Closing Date with respect thereto, and will
be established on the basis of requirements of each
applicable Rating Agency. The terms of the
Enhancement with respect to any Series offered
hereby will be described in the related Prospectus
Supplement. See "Description of the Certificates--
Enhancement" and "Risk Factors--Limited Nature of
Rating."
Servicing................. Chase USA, in its capacity as Servicer under the
Pooling and Servicing Agreement, will be the
initial Servicer for the Trust. The Servicer will
be responsible for servicing, managing and making
collections on the Receivables. Subject to certain
exceptions described under "Description of the
Certificates--Allocation of Collections," which
currently permit the Servicer to make deposits on a
monthly basis, the Servicer will deposit any
collections on the Receivables in a Monthly Period
into the Collection Account within two business
days of the Date of Processing to the extent such
collections are allocable to the
Certificateholders' Interest of any Series and are
required to be deposited into an account for the
benefit of, or distributed to, the
Certificateholders of any Series or the issuer of
any Enhancement. The "Distribution Date" is the
15th day of each month (or, if such day is not a
business day, the next business day). On the
earlier of (a) the second business day following
the Date of Processing and (b) the day on which the
Servicer deposits any collections into the
Collection Account, subject to certain exceptions
described herein, the Servicer will pay to the
holder of the Exchangeable Seller Certificate its
allocable portion of any collections then held by
the Servicer. The "Date of Processing" is the
business day on which a record of any transaction
is first recorded pursuant to the Servicer's data
processing procedures. On or about the eighth day
of each calendar month, or if such day is not a
business day, the immediately preceding business
day (each, a "Determination Date"), the Servicer
will calculate the amounts to be allocated to the
Certificateholders of each Class or Series and the
holder of the Exchangeable Seller Certificate as
described herein in respect of collections of
Receivables received with respect to the preceding
Monthly Period.
In certain limited circumstances, Chase USA may
resign or be removed as Servicer, in which event
either the Trustee or, so long as it meets certain
eligibility standards set forth in the Pooling and
Servicing Agreement, a third-party servicer may be
appointed as successor servicer. Chase USA is
permitted to delegate certain of its duties as
Servicer to any of its affiliates or, subject to
certain conditions, to third party service
providers, but any such delegation will not relieve
the Servicer of its liability and responsibility
with respect to such duties under the Pooling and
Servicing Agreement or any Supplement. The Servicer
will receive servicing fees payable with respect to
each Series offered hereby as servicing
compensation from the Trust. See "Description of
the Certificates--Servicing Compensation and
Payment of Expenses."
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Tax Status................ Except to the extent otherwise provided in the
related Prospectus Supplement, special tax counsel
for the Seller and the Trust will deliver its
opinion that, the Certificates of each Series
offered hereby are properly characterized as debt
for federal income tax purposes. Each
Certificateholder, by acceptance of a Certificate
of such a Series, will agree to treat the
Certificates of such Series as debt for federal,
state and local income and franchise tax purposes.
See "Certain Federal Income Tax Consequences--
Characterization of an Investment in Certificates"
for additional information concerning the
application of federal income tax laws.
ERISA Considerations...... Subject to the considerations described below, the
Certificates of any Series offered hereby may be
eligible for purchase by persons investing "plan
assets" of employee benefit plans or other plans
(each, a "Benefit Plan") subject to the Employee
Retirement Income Security Act of 1974, as amended
("ERISA"), or Section 4975 of the Internal Revenue
Code of 1986, as amended (the "Code"). Under a
regulation issued by the Department of Labor (the
"Plan Asset Regulation"), the Trust assets would
not be deemed "plan assets" of a Benefit Plan
holding the Certificates if certain conditions are
met, including that the Certificates must be held,
upon completion of the public offering made under
the applicable Prospectus Supplement, by at least
100 investors who are independent of the Seller and
of one another (each, an "Independent Investor").
Unless otherwise specified in the related
Prospectus Supplement, based on information
provided by the underwriters of a Series, the
Seller will notify the Trustee in writing whether
each Class of Certificates will be expected to be
held by at least 100 separately named persons at
the completion of the offering made thereby.
However, the Seller will not determine whether any
Class of Certificates at that time, in fact, will
(i) be held by at least 100 separately named
persons or (ii) satisfy the 100 Independent
Investor criterion, and no assurance can be given
that the 100 Independent Investor criterion will be
met. Prospective purchasers may obtain a copy of
the above-described notification from the Trustee
at its Corporate Trust Department. The Seller
anticipates that the other conditions of the Plan
Asset Regulation will be met. If the Trust assets
were deemed to be "plan assets" of a Benefit Plan
investor (e.g., if the 100 Independent Investor
criterion is not satisfied), violation of the
"prohibited transaction" rules of ERISA could
result and generate excise tax and other
liabilities under ERISA and Section 4975 of the
Code, unless a statutory, regulatory or
administrative exemption is available. It is
uncertain whether existing class exemptions from
the "prohibited transaction" rules of ERISA would
apply to all transactions involving the Trust
assets in such event. Accordingly, fiduciaries or
other persons contemplating purchasing the
Certificates on behalf or with "plan assets" of any
Benefit Plan should consult their counsel before
making a purchase. See "ERISA Considerations"
herein and in the applicable Prospectus Supplement.
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Certificate Rating........ It will be a condition to the issuance of each
Series of Certificates or Class thereof offered
pursuant to this Prospectus and the related
Prospectus Supplement that they be rated in one of
the four highest applicable rating categories by at
least one nationally recognized statistical rating
organization selected by the Seller (each rating
agency rating any Series, a "Rating Agency"). The
rating or ratings applicable to the Certificates of
each such Series or Class thereof will be set forth
in the related Prospectus Supplement. A security
rating should be evaluated independently of similar
ratings of different types of securities. A rating
is not a recommendation to buy, sell or hold
securities and may be subject to revision or
withdrawal at any time by the assigning Rating
Agency. Each rating should be evaluated
independently of any other rating. See "Risk
Factors--Limited Nature of Rating."
Listing................... If so specified in the Prospectus Supplement
relating to a Series, application will be made to
list the Certificates of such Series, or all or a
portion of any Class thereof, on the Luxembourg
Stock Exchange or any other specified exchange.
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RISK FACTORS
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 until such Certificates are paid in full.
Certain Legal Aspects. While the Seller will transfer interests in the
Receivables to the Trust, a court could treat such transaction as an
assignment of collateral as security for the benefit of holders of
Certificates issued by the Trust. The Seller represents and warrants in the
Pooling and Servicing Agreement that the transfer of the Receivables to the
Trust is either a valid transfer and assignment of the Receivables to the
Trust or the grant to the Trust of a security interest in the Receivables. The
Seller has taken and will take certain actions as are required to perfect the
Trust's security interest in the Receivables and warrants that if the transfer
to the Trust is deemed to be a grant to the Trust of a security interest in
the Receivables, the Trustee will have a first priority perfected security
interest therein. Nevertheless, if the transfer of the Receivables to the
Trust is deemed to create a security interest therein under the Uniform
Commercial Code as in effect in the State of Delaware (the "UCC"), a tax or
government lien or other non-consensual lien on property of the Seller arising
before Receivables come into existence may have priority over the Trust's
interest in such Receivables, and if the FDIC were appointed conservator or
receiver of the Seller, certain administrative expenses of the conservator or
receiver or the Delaware State Bank Commissioner and certain borrowings made
by the conservator or receiver may also have priority over the Trust's
interest in such Receivables. See "Certain Legal Aspects of the Receivables--
Transfer of Receivables."
The Federal Deposit Insurance Act, as amended ("FDIA"), sets forth certain
powers that the FDIC, if it is appointed as conservator or receiver for the
Seller, could exercise. Positions taken by the FDIC staff do not suggest that
the FDIC, if appointed as conservator or receiver for the Seller, would
interfere with the timely transfer to the Trust of payments collected on the
Receivables. To the extent that the Seller has granted a security interest in
the Receivables to the Trust, and that security interest was validly perfected
before the Seller's insolvency and was not taken in contemplation of
insolvency of the Seller, or with the intent to hinder, delay or defraud the
Seller or the creditors of the Seller, the FDIA provides that such security
interest should not be subject to avoidance by the FDIC as conservator or
receiver for the Seller. As a result, payments to the Trust with respect to
the Receivables should not be subject to recovery by the FDIC as conservator
or receiver for the Seller. If, however, the FDIC, as conservator or receiver
for the Seller, were to assert a contrary position, or were to require the
Trustee to establish its right to those payments by submitting to and
completing the administrative claims procedure established under the FDIA, or
the conservator or receiver were to request a stay of proceedings with respect
to the Seller as provided under the FDIA, delays in payments on the
Certificates and possible reductions in the amount of those payments could
occur.
If a conservator or receiver were appointed for the Seller, then a Pay Out
Event would occur with respect to all Series then outstanding and, pursuant to
the Pooling and Servicing Agreement, new Principal Receivables would not be
transferred to the Trust and the Trustee would sell the Receivables (unless
instructions otherwise are received within a specified period from (i) holders
of more than 50% of the Investor Interest of any of the Series 1991-1
Certificates or the Series 1992-1 Certificates, or (ii) holders of more than
50% of the Investor Interest of each other Series issued and outstanding (or
with respect to any Series with two or more Classes, 50% of the Investor
Interest of each Class, which may include an Enhancement Investor Interest)),
thereby causing early termination of the Trust and a loss to
Certificateholders of each Series (including the Certificateholders) if the
proceeds from such early sale allocable to such Series, if any, and the
amounts available under any Enhancement applicable to such Series were
insufficient to pay Certificateholders of such Series in full. Despite any
vote by Certificateholders, a conservator or receiver may also have the power
to cause the early sale of the Receivables and the early retirement of the
Certificates or to prohibit the continued transfer of Principal Receivables to
the Trust. If the only Pay Out Event to occur is either the insolvency of the
Seller or
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the appointment of a conservator or receiver for the Seller, 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, in the event of a Servicer Default relating to the
insolvency of the Servicer, if no Servicer Default other than such insolvency
exists, the conservator or receiver for the Servicer may have the power to
prevent either the Trustee or the certificateholders from appointing a
Successor Servicer. See "Certain Legal Aspects of the Receivables--Certain
Matters Relating to Receivership."
Consumer Protection Laws. The Accounts and the Receivables are subject to
numerous federal and state consumer protection laws which impose requirements
on the making, enforcement and collection of consumer loans. The United States
Congress and the states may enact new laws and amendments to existing laws to
regulate further the credit card industry or to reduce finance charges or
other fees or charges applicable to credit card accounts. 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, annual membership fees and other 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. As a result
of this and other factors, federal or state legislation could be promulgated
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 annual percentage
rates and other charges that may be assessed on credit card balances would be
to reduce the Portfolio Yield on the Accounts. If the Portfolio Yield is
reduced significantly, a Pay Out Event may occur, and the Rapid Amortization
Period would commence. See "Description of the Certificates--Pay Out Events."
Certain jurisdictions may attempt and private parties are attempting to
require out-of-state credit card issuers to comply with such jurisdictions'
consumer protection laws, including laws limiting the charges imposed by such
out-of-state credit card issuers. A successful attempt could have an adverse
impact on the credit card operations of out-of-state credit card issuers
including the Seller. Such a determination could also lead to similar actions
in other states by private parties or governmental agencies and could have an
adverse impact on the Seller's credit card operations or the yield on the
Receivables in the Trust. In October 1991, a United States District Court in
the State of Massachusetts ruled that Greenwood Trust Company (the Delaware
chartered bank that issues the Discover credit card) was prohibited by
Massachusetts law from assessing late charges on credit card accounts of
Massachusetts residents. However, in August 1992 the United States Court of
Appeals for the First Circuit reversed the federal district court on the
grounds that the Massachusetts law was preempted by applicable federal law,
and in January 1993 the United States Supreme Court declined to review the
ruling by the Court of Appeals. In other cases decided recently in other
courts, including a state court in California and a federal court in
Pennsylvania in cases in which the Seller was a defendant, similar rulings
have resulted. One state appellate court in Pennsylvania, however, has ruled
in favor of a challenge to the assessment of late payment and other fees in
several cases, including one case in which the Seller is a defendant, thereby
rejecting the outcome in the Greenwood Trust case. The Seller is appealing
this decision and these other cases may be appealed. Other cases of this kind
remain pending in other courts and still others may be brought in the future.
It is likely that some plaintiffs will continue to press such cases and
appeals, seeking to obtain results in other courts at variance with the First
Circuit's decision in the Greenwood Trust case. The United States Supreme
Court has recently heard such a case in order to resolve the conflict but has
not yet issued a ruling. Such actions, if resolved adversely to bank credit
card issuers and other consumer revolving loan providers, could have the
effect of limiting certain charges, other than periodic finance charges, that
could be assessed on credit card or other consumer revolving credit accounts
of residents of states affected by such litigation and could require credit
card issuers and other consumer revolving loan providers to pay refunds and
civil penalties with respect to charges previously imposed on cardholders in
such states. There can be no assurance that the Seller will not be named as a
defendant in future lawsuits or administrative actions. One potential effect
of any such litigation involving the Seller, if successful, would be to reduce
the Portfolio Yield on the Accounts. If the Portfolio Yield is reduced
significantly, a Pay Out Event may occur with respect to a Series, and the
Rapid Amortization Period with respect to such Series would commence. See
"Description of the Certificates--Pay Out Events."
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Subject to the terms and conditions of the Pooling and Servicing Agreement,
the Seller will covenant to accept reassignment of each Receivable that does
not comply in all material respects with all requirements of applicable law
if, as a result of such noncompliance, the related Account becomes a Defaulted
Account or the Trust's rights in, to or under the Receivable or its proceeds
are impaired or unavailable. The Seller 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 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 Seller will be obligated to
accept reassignment of the Receivables affected thereby, subject to the terms
and conditions of the Pooling and Servicing Agreement. 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. See "Description
of the Certificates--Receivables in Defaulted Accounts; Adjustments and
Fraudulent Charges."
Competition in the Credit Card Industry. The credit card industry is highly
competitive and operates in a legal and regulatory environment increasingly
focused on the cost of services charged for credit card usage. 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. The use of incentive programs (e.g., awards for credit usage) may
affect credit use. In addition, certain credit card issuers assess annual
percentage rates or other fees or charges at rates lower than the rate
currently being assessed on most of the Accounts (and in some cases have not
or may not charge annual membership fees). Chase USA may also solicit certain
of its existing cardholders to open additional revolving credit accounts which
offer certain benefits not available under the Accounts, including lower
annual percentage rates or no annual membership fees. If cardholders choose to
utilize competing sources of credit or other lower cost accounts through Chase
USA, the rate at which new Receivables are generated in the Accounts may be
reduced and certain purchase and payment patterns with respect to the
Receivables may be affected. The Trust will be dependent upon the Seller's
continued ability to generate new Receivables. If the rate at which new
Receivables are generated declines significantly and Chase USA does not add
additional accounts to the Trust, a Pay Out Event with respect to a Series of
Certificates could occur, in which event the Rapid Amortization Period with
respect to such Series would commence. See "Description of Certificates--Pay
Out Events."
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 or
Accumulation Period (either such period or a Rapid Amortization Period being
referred to herein as an "Amortization Period") with respect to a Series will
be dependent upon the continued generation of new Receivables to be conveyed
to the Trust. A significant decline in the amount of Receivables generated
could result in the occurrence of a Pay Out Event for the Certificateholders
of such Series and the commencement of the Rapid Amortization Period with
respect to such Series. Certificateholders should be aware that the Seller's
ability to continue to compete in the current industry environment will affect
the Seller's ability to generate new Receivables to be conveyed to the Trust
and may also affect payment patterns. In addition, changes in periodic finance
charges can alter the monthly payment rates of cardholders. A significant
decrease in the cardholder monthly payment rate could slow the return of
principal during an Amortization Period. See "--Ability to Change Terms of the
Accounts" and "The Credit Card Business of Chase USA--Billing and Payments."
Social, Legal and Economic Factors. Changes in card usage and payment
patterns by cardholders may result from a variety of social, legal and
economic factors. Economic factors include the rate of inflation, unemployment
levels and relative interest rates. Cardholders whose accounts are included in
the Bank Portfolio
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have addresses in all 50 states and the District of Columbia. The Bank
Portfolio is a geographically diverse portfolio. See "The Receivables."
Ability to Change Terms of the Accounts. Pursuant to the Pooling and
Servicing Agreement, the Seller did not transfer to the Trust the Accounts but
only the Receivables arising in the Accounts. As owner of the Accounts, the
Seller will have the right (to the extent provided in the applicable credit
card agreements and the Pooling and Servicing Agreement) to determine the
monthly periodic finance charge 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. A
decrease in the monthly periodic finance charges, annual membership fees or
cash advance fees could decrease the effective yield on the Accounts and could
result in the occurrence of a Pay Out Event for the Certificateholders of any
Series and the commencement of the Rapid Amortization Period with respect to
such Series. Under the Pooling and Servicing Agreement, the Seller has agreed
that, except as otherwise required by law or as is deemed by the Seller 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 Seller will not reduce the annual percentage
rate which determines the monthly periodic finance charges assessed on the
Receivables or other fees on the accounts, if as a result of such reduction,
its reasonable expectation of the Portfolio Yield as of such date would be
less than the weighted average of the Base Rates for all Series; provided,
however, that the Seller shall not, unless required by law, reduce such
periodic finance charge if its reasonable expectation is that the Portfolio
Yield would be less than the highest Certificate Rate for any Series then
issued and outstanding. Such changes may include the reduction or waiver of
annual membership fees in connection with the Seller's marketing effort. The
term "Base Rate" with respect to any Series of Certificates means the
percentage (or formula on the basis of which such rate shall be determined)
stated in the related Supplement. The term "Portfolio Yield" means generally,
with respect to the Certificates and any Monthly Period, the annualized
percentage equal to (a) the sum of the Finance Charge Receivables collected,
in the case of any Monthly Period which ends before the Conversion Date,
during the Billing Cycles which end during such Monthly Period or, in the case
of any Monthly Period which ends on or after the Conversion Date, during such
Monthly Period, and certain Interchange paid or payable to the Seller in
respect of such Monthly Period, in each case allocable to the Certificates
calculated on a cash basis after subtracting the Aggregate Investor Default
Amounts for each Series for such Monthly Period, divided by (b) the sum of the
Investor Interests of each Series then outstanding (the "Aggregate Investor
Interest") as of the last day of the preceding Monthly Period. The Seller has
also agreed not to change the terms of the Accounts unless the change is also
made applicable to the comparable segment of the portfolio of accounts with
similar characteristics owned by it. In servicing the Accounts, the Servicer
is also 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, there are no restrictions on the Seller'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 Seller to take actions which would change
any of the terms of the Accounts.
Master Trust Considerations. The Trust, as a master trust, has previously
issued various Series of Certificates and is expected to issue additional
Series of Certificates. While the Principal Terms of any Series will be
specified in a Supplement, the provisions of a Supplement and, therefore, the
terms of any additional Series, will not be subject to the prior review or
consent of holders of the Certificates of any previously issued Series. Such
Principal Terms may include methods for determining applicable investor
percentages and allocating collections, provisions creating different or
additional security or other Enhancement, provisions subordinating such Series
to another Series (if the Supplement relating to such Series so permits) or
other Series to such Series, and any other amendment or supplement to the
Pooling and Servicing Agreement which is made applicable only to such Series.
It is a condition precedent to the issuance of any additional Series that each
Rating Agency which has rated any outstanding Series deliver written
confirmation to the Trustee that such issuance or an Exchange 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
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from time to time hereafter, might not have an impact on the timing and amount
of payments received by a Certificateholder. See "Description of the
Certificates--Exchanges."
Addition of Trust Assets. The Seller expects, and under certain
circumstances may be obligated, to designate Additional Accounts, the
Receivables in which will be conveyed to the Trust. Such Additional Accounts
may include accounts originated using different criteria than those used to
originate the Accounts. As a result, there can be no assurance that Additional
Accounts will be of the same credit quality as the Accounts. Any designation
of Additional Accounts will be subject to certain conditions described herein
under "Description of the Certificates--Addition of Accounts."
Control. Subject to certain exceptions, the certificateholders of each
Series may take certain actions, or direct certain actions to be taken, under
the Pooling and Servicing Agreement and the related Supplement. Such actions
include requiring the appointment of a successor Servicer following a Servicer
Default, amending the Pooling and Servicing Agreement and blocking a sale of
the Receivables after the insolvency of the Seller. Certificateholders of
other Series may have interests that are in conflict with the interests of the
Certificateholders of a particular Series offered hereby and the
Certificateholders of a particular Class of any Series may have interests that
are in conflict with the Certificateholders of any other Class of such Series.
Limited Nature of Rating. Any rating assigned to the Certificates of a
Series or a Class by a Rating Agency will reflect such Rating Agency's
assessment of the likelihood that Certificateholders of such Series or Class
will receive the payments of interest and principal required to be made under
the Pooling and Servicing Agreement and the related Supplement and will be
based primarily on the value of the Receivables in the Trust and the
availability of any Enhancement with respect to such Series or Class. Any such
rating will therefore generally address credit risk and will not, unless
otherwise specified in the related Prospectus Supplement with respect to any
Class or Series offered hereby, address the likelihood that the principal of,
or interest on, any Certificates of such Class or Series will be prepaid, paid
on a scheduled date or paid on any particular date before the applicable
Series Termination Date. In addition, any such rating will not address the
possibility of the occurrence of a Pay Out Event with respect to such Class or
Series or the possibility of the imposition of United States withholding tax
with respect to non-U.S. Certificateholders. Further, the available amount of
any Enhancement with respect to any such Series or Class will be limited and
will be subject to reduction from time to time as described in the related
Prospectus Supplement. The rating of the Certificates of a Class or Series
will not be a recommendation to purchase, hold or sell such Certificates, 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 TRUST
The Trust was created in accordance with the laws of the State of Delaware.
The Trust was formed for this transaction and similar transactions, as
contemplated by the Pooling and Servicing Agreement, and prior to formation
had no assets or obligations. The Trust will not engage in any business
activity, other than described herein, but rather will only acquire and hold
the Receivables, issue the Exchangeable Seller Certificate and Certificates
representing additional Series and related activities (including, with respect
to any Series, any Enhancement and the Enhancement Pooling and Servicing
Agreement relating thereto) and make payments thereon. As a consequence, the
Trust is not expected to have any need for additional capital resources.
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THE CREDIT CARD BUSINESS OF CHASE USA
GENERAL
The Receivables arising under Accounts currently in the Trust Portfolio have
been or will be generated from transactions made by holders of certain Classic
VISA and VISA Gold credit card accounts and certain standard MasterCard and
Gold MasterCard credit card accounts as well as fees billed to the Accounts.
Such Accounts were generated under the VISA USA Inc. ("VISA") or MasterCard
International, Inc. ("MasterCard") associations of which Chase USA is a
member. The Accounts and the Receivables are serviced by Chase USA and its
affiliates.
The Bank Portfolio, of which the Trust Portfolio is a part, includes premium
accounts (i.e., VISA Gold and Gold MasterCard) and standard accounts (i.e.,
Classic VISA and standard MasterCard). Premium accounts tend to have higher
credit limits because such accounts are generated pursuant to stricter
underwriting criteria, including higher minimum income requirements. Premium
accounts generally have lower finance charges on purchases and usually offer
additional services to the cardholders. Standard and premium accounts in the
Bank Portfolio may or may not have an annual membership fee. For accounts with
an annual membership fee, the annual membership fee for premium accounts is
generally higher than that for standard accounts. Recent standard and premium
account solicitations generally have offered no annual membership fee accounts
to prospective cardholders.
The VISA and MasterCard credit card accounts may be used for four types of
transactions: credit card purchases, cash advances, convenience checks and in
certain cases, for purposes of consolidating outstanding balances of other
credit card accounts. Purchases occur when cardholders use credit cards to buy
goods and/or services. A cash advance is made when a credit card is used to
obtain cash from a financial institution or an automated teller machine.
Cardholders may also use special "convenience checks" issued by Chase USA to
draw against their VISA and MasterCard credit card accounts at any time. These
convenience checks are treated as cash advances. Under a balance consolidation
offering, cardholders and potential cardholders meeting qualification criteria
may transfer the outstanding balance on their credit card accounts to their
Chase USA VISA or MasterCard credit card account. Amounts due with respect to
purchases, cash advances, convenience checks and balance consolidations will
be included in the Receivables.
Each cardholder is subject to an agreement with Chase USA governing the
terms and conditions of the related VISA or MasterCard credit card account.
Pursuant to each such agreement, except as described herein, Chase USA
reserves the right, subject to such notice to the cardholder as may be
required by law, to add to or change the terms of its VISA or MasterCard
credit card accounts at any time, including increasing or decreasing the
periodic finance charges, other charges or the minimum monthly payment
requirements.
The credit evaluation, collection and charge-off policies and servicing
practices of Chase USA, as well as the terms and conditions governing
cardholder agreements in effect as of the date hereof, are under continuous
review and may change at any time in accordance with its business judgment,
applicable law and guidelines established by regulatory authorities.
During the fourth quarter of 1996, it is expected that Chase USA will
commence utilizing a credit card processor, First Data Resources, Inc.
("FDR"), located in Omaha, Nebraska to perform certain data processing and
administrative functions associated with the servicing of the Bank Portfolio.
Transactions creating the Receivables through the use of the credit cards are
also processed through the VISA and MasterCard systems. If FDR were to fail to
perform such functions or become insolvent after commencing such functions for
Chase USA or should either of the VISA or MasterCard systems materially
curtail its activities, or should Chase USA cease to be a member of VISA or
MasterCard, for any reason, a Pay Out Event could occur, and delays in
payments on the Receivables and possible reductions in the amounts thereof
could also occur.
ACCOUNT ORIGINATION
The VISA and MasterCard credit card accounts owned by Chase USA were
principally generated through: (i) direct mail solicitations of individuals
who have been prescreened at credit bureaus on the basis of criteria
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furnished by Chase USA; (ii) direct mail solicitations on a non-prescreened
basis; (iii) applications mailed to customers of Chase USA and its affiliates;
(iv) purchases of accounts from other credit card issuers and origination of
accounts through affinity marketing (including co-branded accounts that
provide a special benefit to accountholders with respect to the goods or
services sold by the merchant that allows its mark or logo to appear on the
card, such as the British Airways/Chase USA card launched in 1993 and the
NYNEX MobilePerks/Chase USA card launched in 1994) and agent bank programs;
(v) applications made available to prospective cardholders at the facilities
of The Chase Manhattan Bank, N.A., an affiliate of Chase USA, or at other
locations; and (vi) individual-initiated requests. During 1989, Chase USA
purchased five credit card portfolios comprising approximately 2.1 million
accounts and approximately $1.9 billion of outstanding receivables as of their
respective acquisition dates (such accounts, "Purchased Accounts"). In
addition, in December 1991, Chase USA acquired substantially all of the credit
card assets of an affiliate, The Chase Lincoln First Bank, N.A. Purchased
Accounts, Affinity Program Accounts and Agent Bank Accounts and accounts
acquired from The Chase Lincoln First Bank, N.A. ("Chase Lincoln Accounts")
were not included in the Trust Portfolio as of the Initial Closing Date.
Additional Accounts may include Purchased Accounts, Chase Lincoln Accounts,
Affinity Program Accounts, Agent Bank Accounts and co-brand accounts. See
"Description of the Certificates--Addition of Accounts."
UNDERWRITING PROCEDURES
In the case of prescreened direct mail solicitations, underwriting criteria
established by Chase USA are used by credit bureaus to generate or screen
lists of qualifying individuals, and credit scores are obtained using credit
scoring models. The information requested in the response forms mailed to
prescreened prospects is less extensive than the information requested in the
applications mailed to individuals who have not been prescreened. Credit
limits are assigned to prescreened prospective cardholders based on a credit
profile that includes past payment patterns on other consumer loans and
certain other criteria. Individuals responding to prescreened direct mail
solicitations are subsequently mailed a credit card after their response forms
have been satisfactorily reviewed by Chase USA.
Non-prescreened applications for credit card accounts are reviewed for
accuracy and creditworthiness based on credit underwriting criteria
established by Chase USA. Chase USA uses credit reports obtained from credit
bureaus to review applications that have not been prescreened, and applies
credit scoring models to obtain credit scores on applicants. As credit card
account applications are approved, an initial credit limit is set. This limit
is based primarily upon applicants' credit scores and incomes.
Chase USA generally uses credit scoring models to evaluate the ability and
willingness of credit card applicants to repay credit obligations. The credit
scoring models currently in use have been developed by an internal credit
policy department of an affiliate of Chase USA that specializes in developing
credit scoring models, or by an independent firm, or developed jointly by such
credit policy department and an independent firm. Through credit scoring,
Chase USA evaluates credit profiles in order to statistically quantify credit
risk. The models use statistics to correlate common characteristics with
credit risk. The credit scoring models used by Chase USA are periodically
reviewed, and if necessary, are updated to reflect current statistical data.
BILLING AND PAYMENTS
For purposes of administrative convenience, the VISA and MasterCard credit
card accounts of Chase USA are currently grouped into ten billing cycles
ending on various days throughout each month (a "Billing Cycle"). Each Billing
Cycle has its own monthly billing date, at which time the activity in the
related accounts during the month ending on such billing date is processed and
billed to cardholders. See "The Receivables." The Accounts include VISA and
MasterCard credit card accounts in Billing Cycles ending at the close of
business on various days throughout each month. Additionally, all monthly
calculations with respect to each Account prior to the Conversion Date will be
computed based on the activity during the applicable Billing Cycle for that
Account. On and after the Conversion Date, monthly calculations with respect
to each Account will generally be computed based on the activity during the
applicable Monthly Period. See "The Receivables."
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Monthly billing statements are sent by an affiliate of Chase USA to
accountholders with either a debit or credit balance of at least one dollar at
the end of the Billing Cycle or when a finance charge has been imposed.
Generally, each month, accountholders must make at least a minimum payment
equal to the sum of (i) a specified portion (as described below) of the
purchases new balance, (ii) a specified portion (as described below) of the
cash advances new balance, (iii) any past due amount, and (iv) at the option
of Chase USA, the excess of the unpaid balance for an account over the
assigned credit limit. Generally, the portion of the purchases new balance
included in the minimum monthly payment is equal to the greater of (i) 1/50 of
the purchases new balance; and (ii) $10, or, if less, the entire purchases new
balance. Generally, the portion of the cash advances new balance included in
the minimum monthly payment is equal to the greater of (i) 1/50 of the cash
advances new balance and (ii) $10, or, if less, the entire cash advances new
balance. Outstanding balances of less than $10 are due in full.
Certain accounts provide the accountholders the option to skip their minimum
monthly payment for one billing cycle, no more than two times in any twelve
month period, provided that two months of minimum payments have been made by
the accountholder between each accountholder's exercise of this option. In
addition, the Seller may, in unusual circumstances, at its option, allow
individual accountholders or groups of accountholders to skip their minimum
monthly payments for one or more months. Monthly periodic finance charges in
connection with such skipped payments continue to accrue, and the amount of
the next minimum monthly payment is determined as described above, based on
the account balance at the end of the next Billing Cycle. The effect of
skipped payments is to increase the amount of Finance Charge Receivables and
to decrease the rate of payments of Principal Receivables during the Billing
Cycles for which the offer applies.
The monthly periodic finance charges assessed on cash advances are
calculated by multiplying the average daily cash advance balance by the
applicable monthly periodic rate. Monthly periodic finance charges are
calculated on cash advances (including unpaid finance charges with respect to
cash advances) from the date of the transaction or the first day of the
Billing Cycle in which the transaction is posted to the account (whichever is
later). The monthly periodic finance charges assessed on purchases are
calculated by multiplying the average daily purchase balance by the applicable
monthly periodic rate. Monthly periodic finance charges are calculated on
purchases (including certain fees and unpaid finance charges with respect to
purchases) from the date of the purchase or the first day of the Billing Cycle
in which the purchase is posted to the account (whichever is later). Monthly
periodic finance charges are not assessed in most circumstances on purchases
if the purchases new balance shown in the billing statement is paid by the
next statement closing date, or if the purchases previous balance is zero. The
next statement closing date is on average 30 days after the billing date. The
annual percentage rates for purchases and cash advances can be either fixed or
variable rates. The annual percentage rate for purchases is generally a
variable rate calculated by adding (or subtracting for purchases) a certain
number of percentage points to (or from) the prime rate as published in The
Wall Street Journal.
Standard and premium accounts that have been established more recently by
Chase USA from more recent solicitations generally carry no annual membership
fee. However, for those accounts with an annual membership fee (from past
solicitations or otherwise), generally the annual membership fee is $20 for
standard accounts and either $45 or $50 for premium accounts. The annual
membership fee in most cases is non-refundable, except that such fee need not
be paid if the customer closes the account within 30 days of the mailing of
the billing statement on which such customer is billed for such fee. Chase USA
may waive the annual membership fee, or a portion thereof. Some of the
accounts may be subject to certain additional fees, including: (i) a late fee,
generally in the amount of $18, with respect to any monthly payment if the
required minimum monthly payment is not received by the payment due date shown
on the monthly billing statement; (ii) a cash advance fee of 2% of the amount
of the advance subject to a minimum fee of $2 per transaction and a maximum of
$20 per transaction; and (iii) a returned check charge, generally in the
amount of $18. Subject to the requirements of applicable laws, Chase USA may
change certain of these fees and rates at any time by written notice to
cardholders. Chase USA may also, subject to the requirements of applicable
laws, change cardholders' standard or premium accounts to accounts with
enhanced benefits (including but not limited to co-brand accounts). Such a
change may result in different fees and rates being assessed with respect to
existing and new account balances. Any change which would result in an
increase in the rate of finance charges, or other fees, or impose a fee not
set forth in the cardholder agreement, generally becomes effective upon
obtaining the cardholder's consent or deemed consent.
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Payments of less than the full debit balance on an Account will be applied
to the outstanding principal balance, periodic finance charges, fees, and any
other charges imposed by Chase USA on such account, in such order as Chase USA
determines from time to time in its sole discretion. There can be no assurance
that periodic finance charges, fees, and other charges imposed by Chase USA
will remain at current levels in the future.
COLLECTION OF DELINQUENT ACCOUNTS
An account is initially considered delinquent if the minimum monthly payment
indicated on the accountholder's statement is not received within 30 days
after the billing date relating to such minimum payment. Collection efforts
begin when an account is considered delinquent and include statement messages,
collection letters and telephoning, each requesting payment of the amount past
due or overlimit, and denial of authorization for new purchases and cash
advances. Collectors may use credit bureau reports and other methods to locate
delinquent accountholders in the event they move without notifying Chase USA.
Throughout the collection process, delinquent accountholders are sent
automated computer generated correspondence regarding the status of their
accounts. Transmissions occur at selected intervals advising of the age, the
amount due, and the collection phase of the account. In accordance with its
current policies, Chase USA may reclassify certain delinquent accounts as
current if the accountholder pays three consecutive minimum monthly payments
(two consecutive minimum monthly payments if the account is between sixty and
eighty-nine days delinquent).
Accountholders who become subject to bankruptcy proceedings are not called
or sent letters. Such accountholders will, however, receive monthly statements
until Chase USA receives confirmation of the case number. In accordance with
current policies, accounts of bankrupt obligors are written-off within 90 days
of notice of bankruptcy or after having been delinquent for 180 days,
whichever comes first.
The current policy of Chase USA is to charge off, as a loan loss, the
principal portion of the receivables balance for both purchases and cash
advances after the 180th day of delinquency. Charge offs may occur earlier in
some circumstances, as in the case of bankrupt accountholders. Although some
recovery efforts are pursued on an in-house basis, most charged off accounts
are placed with, and in some cases, may be sold to, outside collection
agencies.
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 this
Interchange in connection with cardholder charges for merchandise and services
is passed from the banks which clear the transactions for merchants to credit
card issuing banks. Interchange percentages are set by the VISA and MasterCard
associations and may be changed by either of them respectively from time to
time. Chase USA will be required, pursuant to the terms of the Pooling and
Servicing Agreement, to transfer to the Trust, Interchange attributed to
cardholder charges for merchandise and services in the Accounts. Interchange
received by Chase USA will be allocated to the Trust on the basis of the
percentage equivalent of a fraction, the numerator of which is the amount of
cardholder charges for merchandise and services in the Accounts and the
denominator of which is the total amount of cardholder charges for merchandise
and services in all of the VISA and MasterCard credit card accounts owned by
Chase USA. Interchange allocated to the Trust will be treated as collections
of Finance Charge Receivables.
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THE RECEIVABLES
The Receivables will arise in certain Accounts that have been selected from
the Initial Portfolio and from Additional Accounts designated in connection
with the Addition Date of May 1, 1995 (which Additional Accounts relate to
previous securitizations which have fully amortized) and June 1, 1995 (which
Additional Accounts included the balance of the Bank Portfolio other than
certain Purchased Accounts, certain accounts relating to student solicitation
and certain small balance accounts), in each case on the basis of criteria set
forth in the Pooling and Servicing Agreement (the "Trust Portfolio"). The
Initial Portfolio, from which the initial Accounts were selected, consisted of
the Bank Portfolio as of the initial Selection Date, excluding all Purchased
Accounts, the Chase Lincoln Accounts and all then-existing Affinity Program
Accounts and Agent Bank Accounts. An "Agent Bank Account" is an account that
has been originated by Chase USA pursuant to an agreement between Chase USA
and a bank for which Chase USA issued VISA and/or MasterCard credit cards and
acted as sponsor with VISA USA, Inc. and/or MasterCard International
Incorporated. An "Affinity Program Account" is an account that has been
originated by Chase USA through the solicitation of prospective cardholders
from identifiable groups with a common interest or a common cause, with the
assistance of an organization of the members of such group. The Additional
Accounts with an Addition Date of May 1, 1995, which relate to prior
securitizations, were selected from the Bank Portfolio in connection with such
securitizations by similarly excluding all then existing Purchased Accounts,
Affinity Program Accounts and Agent Bank Accounts. An Account in the Bank
Portfolio must be an Eligible Account (as described below) to be selected for
inclusion in the Trust Portfolio.
The Seller will transfer to the Trust all Receivables existing in the
Accounts on the date specified for transfer to the Trust and all Receivables
generated in such Accounts after such date. All monthly calculations with
respect to such Accounts are computed based on activity occurring during a
calendar month (each, a "Monthly Period"). Pursuant to the Pooling and
Servicing Agreement, the Seller has the right (and, under certain
circumstances, the obligation), subject to certain limitations and conditions
set forth therein, to designate from time to time Additional Accounts and to
transfer to the Trust all Receivables of such Additional Accounts, whether
such Receivables are then existing or thereafter created. These Accounts must
be Eligible Additional Accounts as of the date the Seller designates such
accounts as Additional Accounts. The Pooling and Servicing Agreement provides
that the Seller may, but is not obligated to, add as Automatic Additional
Accounts new accounts opened in the ordinary course of its business. Automatic
Additional Accounts may be added if certain requirements are satisfied (the
date of each such addition being an "Automatic Addition Date"). In addition,
the Seller is required to designate Eligible Additional Accounts as Additional
Accounts (x) to maintain the average of the Seller Interest for any 30-day
period such that the Seller Interest equals or exceeds 7% or such higher
percentage as may be specified in any Prospectus Supplement (such percentage,
the "Minimum Seller Interest"), of the average Aggregate Principal Receivables
for such 30 day period and (y) to maintain, for so long as certificates of any
Series, including the Certificates, remain outstanding, Aggregate Principal
Receivables in an amount equal to or greater than the Minimum Aggregate
Principal Receivables. The term "Aggregate Principal Receivables" means in the
case of any date of determination which occurs before the Conversion Date, the
aggregate amount of Principal Receivables as of the end of the Billing Cycles
during the Monthly Period immediately preceding such date of determination or,
in the case of any date of determination which occurs on or after the
Conversion Date the aggregate amount of Principal Receivables as of the end of
the last day of the Monthly Period immediately preceding such date of
determination. The "Minimum Aggregate Principal Receivables" required to be
maintained through the designation by the Seller of Additional Accounts shall
generally be an amount equal to or greater than the initial Investor Interests
for all Series then outstanding, other than certain Series designated as
"Excluded Series" in the applicable Supplement, provided that the Rating
Agency has determined that such exclusion will not result in a reduction or
withdrawal of the ratings of the Rating Agency then in effect, which amount in
either case shall be reduced ratably to reflect the tender and cancellation of
Certificates pursuant to any Investor Exchange. Such amount may be increased
by a Supplement pursuant to which additional Series may be issued. The Seller
will convey the Receivables then existing or thereafter created under such
Additional Accounts to the Trust. See "Description of the Certificates--
Addition of Accounts." Further, pursuant to the Pooling and Servicing
Agreement, the Seller has the right (subject to certain limitations and
conditions discussed
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herein) to remove certain Accounts designated by the Seller whether such
Receivables are then existing or thereafter created. See "Description of the
Certificates--Removal of Accounts." Throughout the term of the Trust, the
Accounts from which the Receivables arise will be the same Accounts designated
by the Seller and conveyed to the Trust on the Initial Closing Date plus any
Additional Accounts and Automatic Additional Accounts and minus any Removed
Accounts. As of the Selection Date, on the date any new Receivables are
created, or the end of the related Billing Cycle immediately preceding the
date that Additional Accounts or Automatic Additional Accounts are added to
the Trust, as applicable, the Seller has represented and warranted, or will
represent and warrant, to the Trust that the Receivables meet the eligibility
requirements specified in the Pooling and Servicing Agreement. See
"Description of the Certificates--Representations and Warranties."
Additional Accounts have included Purchased Accounts, Chase Lincoln
Accounts, Affinity Program Accounts and Agent Bank Accounts, and Additional
Accounts added in the future may in other respects not be accounts of the same
type previously included in the Trust. Therefore there can be no assurance
that such Additional Accounts will be of the same credit quality as the
Accounts initially selected for the Trust Portfolio or the Additional Accounts
the Receivables of which have been conveyed previously to the Trust. Moreover,
Additional Accounts may contain Receivables that consist of fees, charges and
amounts that are different from the fees, charges and amounts described below.
Such Additional Accounts may also be subject to different credit limits,
balances and ages. Consequently, there can be no assurance that the Accounts
will continue to have the characteristics described herein as Additional
Accounts are added. In addition, the inclusion in the Trust of Additional
Accounts with lower periodic finance charges may have the effect of reducing
the Portfolio Yield for a Series. The Seller intends to file with the
Commission, on behalf of the Trust, a Current Report on Form 8-K with respect
to any addition of Accounts that would have a material effect on the
composition of the Trust Portfolio.
The Prospectus Supplement relating to a Series will provide certain
information about the Trust Portfolio as of the date specified. Such
information will include the amount of Principal Receivables, the amount of
Finance Charge Receivables, the range of principal balances of the Accounts
and the average thereof, the range of credit limits of the Accounts and the
average thereof, the range of ages of the Accounts and the average thereof,
the geographic distribution of the Accounts, the types of Accounts and
delinquency statistics relating to the Accounts.
DESCRIPTION OF THE CERTIFICATES
The Certificates of any Series offered hereby will be issued pursuant to the
Pooling and Servicing Agreement, entered into between Chase USA, as Seller of
the Receivables and as Servicer of the Accounts and the Receivables, and
Yasuda Bank and Trust Company (U.S.A.), as Trustee for the Certificateholders.
Pursuant to the Pooling and Servicing Agreement, the Seller may execute
further Supplements thereto between the Seller and the Trustee in order to
issue additional Series. See "--Exchanges." The Trustee will provide a copy of
the Pooling and Servicing Agreement (without exhibits or schedules), including
the applicable Supplement, to Certificateholders of a particular Series
without charge upon written request. The following summary includes a
description of certain material terms of the Pooling and Servicing Agreement
and is qualified in its entirety by reference to the Pooling and Servicing
Agreement.
GENERAL
The Certificates of each Series offered hereby will represent an undivided
interest in certain assets of the Trust, including the right to receive the
collections allocable to the Certificates received with respect to the
Receivables in the Trust. The property of the Trust consists of the
Receivables, all monies due or to become due thereunder, all proceeds of the
Receivables, Recoveries and the right to receive Interchange allocable to the
Trust, all monies on deposit in the Collection Account and the Retention
Account, monies on deposit in any Series Accounts established for the benefit
of Certificateholders of any Series pursuant to the related Supplement and
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any Enhancement with respect to a Series (the drawing on, withdrawal from or
payment on such Enhancement, and the funds on deposit in any Series Account
with respect to any Series, will not be available to Certificateholders of
other Series). The Trust will include the Receivables from Additional Accounts
and Automatic Additional Accounts which may be added from time to time
pursuant to the terms of the Pooling and Servicing Agreement and will not
include the Receivables from any Removed Accounts which may be removed from
the Trust from time to time pursuant to the terms of the Pooling and Servicing
Agreement.
The Certificates of each Series offered hereby will initially be represented
by Certificates registered in the name of Cede, as nominee of DTC (together
with any successor depository selected by the Seller, the "Depositary"),
except as set forth below. Unless a different denomination is specified in the
related Prospectus Supplement, the Certificates will be available for purchase
in a minimum denomination of $1,000 and integral multiples thereof in book-
entry form. No Certificate Owner acquiring an interest in the Certificates
will be entitled to receive a physical certificate representing such person's
interest in the Certificates unless and until Definitive Certificates are
issued under the limited circumstances described herein. Accordingly, until
Definitive Certificates are issued, all references herein to actions by
Certificateholders shall refer to actions taken by DTC upon instructions from
DTC Participants, and all references herein to distributions, notices, reports
and statements to Certificateholders shall refer to distributions, notices,
reports and statements to DTC or Cede, as the registered holder of the
Certificates, as the case may be, for distribution to Certificate Owners in
accordance with DTC procedures. See "--Book-Entry Registration" and "--
Definitive Certificates."
BOOK-ENTRY REGISTRATION
Unless the related Prospectus Supplement specifies that any of the following
book-entry systems are not applicable to a particular Series, Certificate
Owners 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 which are participants in such systems.
Cede, as nominee for DTC, will be the registered holder of the global
Certificates. No Certificate Owner will be entitled to receive a certificate
representing such person's interest in the Certificates. Unless and until
Definitive Certificates are issued under the limited circumstances described
below, all references herein to actions by Certificateholders shall refer to
actions taken by DTC upon instructions from DTC Participants, and all
references herein to distributions, notices, reports and statements to
Certificateholders shall refer to distributions, notices, reports and
statements to Cede, as the registered holder of the Certificates, for
distribution to Certificate Owners in accordance with DTC procedures.
Cedel and Euroclear will hold omnibus positions on behalf of their
participants through customers' securities accounts in Cedel's and Euroclear's
names on the books of their respective Depositaries, which in turn will hold
such positions in customers' securities accounts in the related Depositaries'
name on the books of DTC. The Chase Manhattan Bank (National Association) will
act as depositary for Cedel and Morgan Guaranty Trust Company of New York will
act as depositary for Euroclear (in such capacities, the "Depositaries").
Transfers between DTC Participants will occur the ordinary way in accordance
with DTC rules. Transfers between participants in Cedel ("Cedel Participants")
and participants in Euroclear ("Euroclear Participants") will occur the
ordinary way in accordance with their respective 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 or
Euroclear, on the other, will be effected in DTC, in accordance with DTC rules
on behalf of its European international clearing system, by each person's
Depositary; however, such cross-market transactions will require delivery of
instructions by the counterparty to the relevant European international
clearing system 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
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accordance with normal procedures for same-day funds settlement applicable to
DTC. Cedel Participants and Euroclear Participants may not deliver
instructions directly to their respective Depositaries.
Because of time-zone differences, credits of securities received in Cedel or
Euroclear as a result of a transaction with a DTC Participant will be made
during subsequent securities settlement processing and dated the business day
of Cedel or Euroclear following the DTC settlement date. Such credits or any
transactions in such securities settled during such processing will be
reported to the relevant Cedel Participants or Euroclear Participants on such
business day. Cash received in Cedel or Euroclear as a result of sales of
securities by or through a Cedel Participant or a Euroclear Participant to a
DTC Participant will be received with value on the DTC settlement date but
will be available in the relevant Cedel or Euroclear cash account only as of
the business day following settlement in DTC. For information with respect to
tax documentation procedures relating to Certificates, see "Certain Federal
Income Tax Consequences--Non-U.S. Certificate Owners."
DTC has advised the Seller and the Underwriters that it is a limited-purpose
trust company organized under the laws of the State of New York, a member of
the Federal Reserve System, a "clearing corporation" within the meaning of the
UCC and a "clearing agency" registered pursuant to the provisions of Section
17A of the Exchange Act. DTC was created to hold securities for its
participating organizations ("DTC Participants") and facilitate the clearance
and settlement of securities transactions between DTC Participants through
electronic book-entry changes in accounts of DTC Participants, thereby
eliminating the need for physical movement of certificates. DTC Participants
include securities brokers and dealers, banks, trust companies and clearing
corporations and may include certain other organizations. Indirect access to
the DTC system also is available to others such as banks, brokers, dealers and
trust companies that clear through or maintain a custodial relationship with a
DTC Participant, either directly or indirectly ("Indirect DTC Participants").
Certificate Owners that are not DTC Participants or Indirect DTC
Participants but desire to purchase, sell or otherwise transfer ownership of,
or other interests in, Certificates may do so only through DTC Participants
and Indirect DTC Participants. In addition, Certificate Owners will receive
all distributions of principal and of interest on the Certificates from The
Chase Manhattan Bank (National Association) as paying agent (the "Paying
Agent"), on behalf of the Trustee, through the DTC Participants who in turn
will receive them from DTC. Under a book-entry format, Certificate Owners may
experience some delay in their receipt of payments, since such payments will
be forwarded by the Paying Agent on behalf of the Trustee to Cede, as nominee
for DTC. DTC will forward such payments to DTC Participants which thereafter
will forward them to Indirect DTC Participants or Certificate Owners. It is
anticipated that the only "Certificateholder" (as such term is used in the
Pooling and Servicing Agreement) will be Cede, as nominee of DTC. Certificate
Owners will not be recognized by the Trustee as Certificateholders, as such
term is used in the Pooling and Servicing Agreement, and Certificate Owners
will only be permitted to exercise the rights of Certificateholders indirectly
through the DTC Participants who in turn will exercise the rights of
Certificateholders through DTC.
Under the rules, regulations and procedures creating and affecting DTC and
its operations, DTC is required to make book-entry transfers among DTC
Participants on whose behalf it acts with respect to the Certificates and is
required to receive and transmit distributions of principal and interest on
the Certificates. DTC Participants and Indirect DTC Participants with which
Certificate Owners have accounts with respect to the Certificates similarly
are required to make book-entry transfers and receive and transmit such
payments on behalf of their respective Certificate Owners. Accordingly,
although Certificate Owners will not possess Certificates, Certificate Owners
will receive payments and will be able to transfer their interests.
Because DTC can only act on behalf of DTC Participants, who in turn act on
behalf of Indirect DTC Participants, the ability of a Certificate Owner to
pledge Certificates to persons or entities that do not participate in the DTC
system, or otherwise take actions in respect of such Certificates, may be
limited due to the lack of a physical certificate for such Certificates.
DTC has advised the Seller that it will take any action permitted to be
taken by a Certificateholder under the Pooling and Servicing Agreement only at
the direction of one or more DTC Participants to whose account
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with DTC the Certificates are credited. Additionally, DTC has advised the
Seller that it will take such actions with respect to specified percentages of
the Investor Interest only at the direction of and on behalf of DTC
Participants whose holdings include undivided interests that satisfy such
specified percentages. DTC may take conflicting actions with respect to other
undivided interests to the extent that such actions are taken on behalf of DTC
Participants whose holdings include such undivided interests.
Cedel is incorporated under the laws of Luxembourg as a professional
depository. Cedel holds securities for 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 30 currencies, including United
States dollars. Cedel provides to 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. 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.
Euroclear was created in 1968 to hold securities for 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 29 currencies, including United States dollars. Euroclear
provides 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.
Euroclear is operated by the Brussels, Belgium office of Morgan Guaranty Trust
Company of New York (the "Euroclear Operator"), under contract with Euroclear
Clearance Systems 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 Euroclear 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. Indirect access to Euroclear 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 Euroclear, withdrawals of
securities and cash from Euroclear, and receipts of payments with respect to
securities in Euroclear. All securities in Euroclear are held on a fungible
basis without attribution of specific certificates to specific securities
clearance accounts. The Euroclear Operator acts under the Terms and Conditions
only on behalf of Euroclear Participants, and has no record of or relationship
with persons holding through Euroclear Participants.
Distributions with respect to Certificates held through Cedel or Euroclear
will be credited to the cash accounts of Cedel Participants or Euroclear
Participants in accordance with the relevant system's rules and procedures, to
the extent received by its Depositary. Such distributions will be subject to
tax reporting in accordance with relevant United States tax laws and
regulations. See "Certain Federal Income Tax
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Consequences." Cedel or the Euroclear Operator, as the case may be, will take
any other action permitted to be taken by a Certificateholder under the
Pooling and Servicing Agreement on behalf of a Cedel Participant or a
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
The Certificates will be issued in fully registered, certificated form to
Certificate Owners or their nominees ("Definitive Certificates"), rather than
to DTC or its nominee, only if (i) the Seller advises the Trustee in writing
that DTC is no longer willing or able to properly discharge its
responsibilities as Depository with respect to the Certificates, and the
Trustee or the Seller is unable to locate a qualified successor, (ii) the
Seller, at its option, 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% of the Investor Interest advise DTC through DTC
Participants in writing that the continuation of a book-entry system through
DTC (or a successor thereto) is no longer in the best interests of the
Certificate Owners.
Upon the occurrence of any of the events described in the immediately
preceding paragraph, DTC is required to notify all Participants of the
availability through DTC of Definitive Certificates. Upon surrender by DTC of
the definitive global certificates 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 of the Certificates under the
Pooling and Servicing Agreement ("Holders").
Distribution of principal and interest on the Definitive Certificates will
be made by the Paying Agent, on behalf of the Trustee, directly to Holders of
Definitive Certificates in accordance with the procedures set forth herein and
in the Pooling and Servicing Agreement. During the Revolving Period, interest
payments, and during either Amortization Period, interest and principal
payments in respect of the Certificates, will be made to Certificateholders on
each Distribution Date to the Holders in whose names the Definitive
Certificates were registered at the close of business on the last day of the
calendar month preceding the date of such payment (each a "Record Date").
Distributions will be made by check mailed to the address of such Holder as it
appears on the certificate register. The final payment on any Certificate
(whether Definitive Certificates or the global Certificates registered in the
name of Cede representing the Certificates), however, will be made only upon
presentation and surrender of such Certificate at the office or agency
specified in the notice of final distribution to Certificateholders. The
Trustee will provide such notice to registered Certificateholders not later
than the fifth day of the month of such final distributions.
Definitive Certificates will be transferable and exchangeable at the offices
of the Transfer Agent and Registrar, which shall initially be The Chase
Manhattan Bank (National Association) (the "Bank"). 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, as the case may be, shall not be required to register the
transfer or exchange of Definitive Certificates for a period of 15 days
preceding the due date for any payment with respect to such Definitive
Certificates.
INTEREST
Interest will accrue on the Certificates of a Series or Class offered hereby
at the per annum rate either specified in or determined in the manner
specified in the related Prospectus Supplement. Except as otherwise provided
herein or in the related Prospectus Supplement, collections of Finance Charge
Receivables and certain
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other amounts allocable to the Investor Interest of a Series offered hereby
will be used to make interest payments to Certificateholders of such Series on
each Interest Payment Date specified in the related Prospectus Supplement;
provided that after the commencement of a Rapid Amortization Period with
respect to such Series, interest will be distributed to such
Certificateholders monthly on each Special Payment Date. If the Interest
Payment Dates for a Series or Class occur less frequently than monthly, such
collections or other amounts (or the portion thereof allocable to such Class)
will be deposited in one or more Interest Funding Accounts and used to make
interest payments to Certificateholders of such Series or Class on the
following Interest Payment Date. If a Series has more than one Class of
Certificates, each such Class may have a separate Interest Funding Account.
Funds on deposit in an Interest Funding Account will be invested in Eligible
Investments. Any earnings (net of losses and investment expenses) on funds in
an Interest Funding Account will be paid to, or at the direction of, the
Seller except as otherwise specified in any Series Supplement. Interest with
respect to the Certificates of each Series offered hereby will accrue and be
calculated on the basis described in the related Prospectus Supplement.
PRINCIPAL
The Certificates of each Series will have a Revolving Period during which
collections of certain excess Principal Receivables otherwise allocable to the
Investor Interest of such Series will, if such Series is in Group One, be
treated as Shared Principal Collections and will be distributed to, or for the
benefit of, the Certificateholders of other Series in Group One or, if not
required for such purpose or if such Series is not in Group One, the holder of
the Exchangeable Seller Certificate. Unless a Rapid Amortization Period
commences with respect to a Series, following the Revolving Period with
respect to such Series, such Series will have either an Accumulation Period or
a Controlled Amortization Period.
During the Accumulation Period, if any, with respect to a Series,
collections of Principal Receivables allocable to the Investor Interest of
such Series will be deposited on each Distribution Date in a Principal Funding
Account and used to make principal distributions to the Certificateholders of
such Series or any Class thereof when due. If so specified in the related
Prospectus Supplement, the amount to be deposited in a Principal Funding
Account for any Series offered hereby on any Distribution Date may be limited
to an amount equal to a Controlled Accumulation Amount specified in such
Prospectus Supplement plus any existing 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.
During the Controlled Amortization Period, if any, with respect to a Series,
collections of Principal Receivables allocable to the Investor Interest of
such Series will be used on each Distribution Date to make principal
distributions to any Class of Certificateholders then scheduled to receive
such distributions. If so specified in the related Prospectus Supplement, the
amount to be distributed to Certificateholders of any Series offered hereby on
any Distribution Date may be limited to an amount equal to the Controlled
Amortization Amount specified in such Prospectus Supplement 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.
During the Rapid Amortization Period with respect to a Series, collections
of Principal Receivables and certain other amounts allocable to the Investor
Interest of such Series (including Shared Principal Collections, if any,
allocable to such Series) will be distributed as principal payments to the
applicable Certificateholders monthly on each Distribution Date beginning with
the first Special Payment Date. During the Rapid Amortization Period with
respect to a Series, distributions of principal to Certificateholders of such
Series will not be subject to any Controlled Deposit Amount or Controlled
Distribution Amount. In addition, upon the commencement of the Rapid
Amortization Period, any funds on deposit in a Principal Funding Account with
respect to such Series
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will be paid to the Certificateholders of the relevant Class or Series on the
first Special Payment Date. See "--Pay Out Events" in the related Prospectus
Supplement for a discussion of the events that might lead to the commencement
of the Rapid Amortization Period with respect to a Series.
Funds on deposit in any Principal Funding Account established with respect
to a Class or Series offered hereby will be invested in Eligible Investments
and may be subject to a guarantee or guaranteed investment contract or a
deposit account or other mechanism specified in the related Prospectus
Supplement intended to assure a minimum rate of return on the investment of
such funds. In order to enhance the likelihood of the payment in full of the
principal amount of a Class of Certificates offered hereby at the end of an
Accumulation Period with respect thereto, such Class may be subject to a
maturity liquidity facility or a deposit account or other similar mechanism
specified in the relevant Prospectus Supplement.
CONVEYANCE OF RECEIVABLES
On the date of issuance of the Series 1991-1 Certificates of the Trust (the
"Initial Closing Date"), and on May 1, 1995 and June 1, 1995 in the case of
certain Additional Accounts, the Seller transferred and assigned to the Trust
all of its right, title and interest in and to the Receivables.
In connection with the transfer of the Receivables to the Trust on each such
date, the Seller indicated in its computer files that the Receivables had been
conveyed to the Trust. In addition, the Seller provided to the Trustee a
computer file or a microfiche list containing a true and complete list showing
each Account, identified by account number. The Seller will not deliver to the
Trustee any other records or agreements relating to the Accounts or
Receivables. Except as stated above, the records and agreements relating to
the Accounts and the Receivables maintained by the Seller or the Servicer will
not be segregated by the Seller or the Servicer from other documents and
agreements relating to other credit card accounts and receivables and will not
be stamped or marked to reflect the transfer of the Receivables to the Trust,
but the computer records of the Seller are required to be marked to evidence
such transfer. The Seller filed, in connection with each such transfer, a UCC
financing statement with respect to the Receivables meeting the requirements
of Delaware state law. See "Risk Factors--Certain Legal Aspects" and "Certain
Legal Aspects of the Receivables."
EXCHANGES
The Pooling and Servicing Agreement provides for the 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
Exchangeable Seller Certificate, a certificate which evidences the Seller
Interest, which is initially held by the Seller and is transferable only as
provided in the Pooling and Servicing Agreement. The Pooling and Servicing
Agreement also provides that the holder of the Exchangeable Seller Certificate
may tender such certificate and, to the extent permitted by the related
Supplement, the Certificates evidencing such Series, to the Trustee in
exchange for one or more new Series and a reissued Exchangeable Seller
Certificate. Under the Pooling and Servicing Agreement, the holder of the
Exchangeable Seller Certificate may define, with respect to any newly issued
Series, certain terms, including: (i) its name or designation; (ii) its
initial investor interest (or method for calculating such amount); (iii) its
Certificate rate (or formula for the determination thereof); (iv) the closing
date; (v) the rating agency or agencies, if any, rating the Series; (vi) the
interest payment date or dates (each an "Interest Payment Date") and the date
or dates from which interest shall accrue; (vii) the name of the clearing
agency, if any; (viii) the method for allocating collections of Finance Charge
Receivables and Principal Receivables to Certificateholders of such Series;
(ix) the names of any accounts to be used by such Series and the terms
governing the operation of any such accounts; (x) the percentage used to
calculate monthly servicing fees; (xi) the Minimum Seller Interest; (xii) the
minimum amount of Aggregate Principal Receivables required to be maintained by
the Seller through the designation of Additional Accounts; (xiii) the issuer
and terms of the Enhancement with respect thereto; (xiv) the Base Rate to be
determined for the Pay Out Event applicable to such Series relating to the
sufficiency of the Portfolio Yield to cover such rate; (xv) the terms on which
the Certificates of such Series may be repurchased by the Seller or remarketed
to other investors; (xvi) the Series
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Termination Date; (xvii) any deposit into any account maintained for the
benefit of Certificateholders of such Series; (xviii) the number of Classes of
such Series, and if more than one Class, the rights and priorities of each
such Class; (xix) the extent to which the Certificates of such Series will be
issuable in temporary or permanent global form (and, in such case, the
depositary for such global Certificate or Certificates, the terms and
conditions, if any, upon which such global Certificate may be exchanged, in
whole or in part, for Definitive Certificates, and the manner in which any
interest payable on a temporary or global Certificate will be paid); (xx)
whether the Certificates of such Series may be issued in bearer form and any
limitations imposed thereon; (xxi) whether Interchange or other fees will be
included in funds available to Certificateholders of such Series; (xxii) the
priority of any Series with respect to any other Series; (xxiii) the rights of
the holder of the Exchangeable Seller Certificate that have been transferred
to the Holders of such Series; and (xxiv) any other relevant terms (all such
terms, the "Principal Terms" of such Series). None of the Seller, the
Servicer, the Trustee or the Trust is required or intends to obtain the
consent of any Certificateholder to issue any additional Series. However, as a
condition of an Exchange, the holder of the Exchangeable Seller Certificate
will deliver to the Trustee written confirmation that the Exchange will not
result in the Rating Agency reducing or withdrawing its rating of any
outstanding Series. The Seller may offer any Series to the public under a
Prospectus Supplement or other Disclosure Document in transactions either
registered under the Securities Act of 1933, as amended, or exempt from
registration thereunder directly, through the Underwriters or one or more
other underwriters or placement agents, in fixed-price offerings or in
negotiated transactions or otherwise. Any such Series may be issued in fully
registered or book-entry form in minimum denominations determined by the
Seller. The Seller intends to offer, from time to time, additional Series.
The Pooling and Servicing Agreement provides that the holder of the
Exchangeable Seller Certificate may perform Exchanges and define Principal
Terms such that each Series has a period during which amortization 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 Periods while other
Series are not. Thus, certain Series may not be amortizing, while other Series
are amortizing. Moreover, each Series or Class may have the benefits of an
Enhancement which is available only to such Series or Class. Under the Pooling
and Servicing Agreement, the Trustee shall hold any such Enhancement only on
behalf of the Series with respect to which each relates. Likewise, with
respect to each such Enhancement, the holder of the Exchangeable Seller
Certificate may deliver a different form of Enhancement agreement. The Pooling
and Servicing Agreement also provides that the holder of the Exchangeable
Seller Certificate may specify different coupon rates and monthly servicing
fees with respect to each Series (or a particular Class within such Series).
The holder of the Exchangeable Seller Certificate also has the option under
the Pooling and Servicing Agreement to vary between Series the terms upon
which a Series (or a particular class within such Series) may be repurchased
by the Seller or remarketed to other investors. In addition, a Supplement may
permit an Investor Exchange where the Certificateholders of such Series could
elect to exchange their Certificates for one or more newly issued Series of
Certificates upon the satisfaction of certain conditions specified in the
Pooling and Servicing Agreement and the related Supplement. Additionally,
certain Series may be subordinated to other Series, or Classes within a Series
may have different priorities. There is no limit to the number of Exchanges
that may be performed under the Pooling and Servicing Agreement. The Trust
will terminate only as provided in the Pooling and Servicing Agreement.
Under the Pooling and Servicing Agreement and pursuant to a Supplement, an
Exchange may only occur upon the satisfaction of certain conditions provided
in the Pooling and Servicing Agreement. Under the Pooling and Servicing
Agreement, the holder of the Exchangeable Seller Certificate may perform an
Exchange by notifying the Trustee at least three days in advance of the date
upon which the Exchange is to occur. Such notice must state the designation of
any Series to be issued on the date of the Exchange and, with respect to each
such Series: (a) its initial investor interest (or method for calculating such
amount) which amount may not be greater than the current principal amount of
the Exchangeable Seller Certificate (or in the case of an Investor Exchange,
the sum of the investor interest (as defined in the applicable Supplement, the
"Investor Interest") of the Series of certificates to be exchanged plus the
current principal amount of the Exchangeable Seller Certificate), (b) its
Certificate rate (or method for calculating such rate) and (c) the provider of
the Enhancement, if any, which is
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expected to provide credit support with respect to it. The Pooling and
Servicing Agreement provides 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 Supplement signed by the Seller and specifying the
Principal Terms of such Series, (ii) an opinion of counsel to the effect that,
unless otherwise stated in the related Supplement, the Certificates of such
Series will be treated as debt for Federal income tax purposes and that the
issuance of such Series will not adversely impact the Federal income tax
characterization of any outstanding Series, (iii) the Enhancement, if any, and
an Enhancement agreement pursuant to which the Enhancement provider agrees to
provide such Enhancement, (iv) written confirmation from the Rating Agency
that the Exchange will not result in such Rating Agency reducing or
withdrawing its rating on any outstanding Series, (v) the existing
Exchangeable Seller Certificate and the Certificates of the Series to be
exchanged, if applicable, and (vi) a certificate of an officer of the Seller
that on the date such Exchange occurs, after giving effect to such Exchange,
the Seller Interest will be at least equal to the Minimum Seller Interest.
Upon satisfaction of such conditions, the Trustee will cancel the existing
Exchangeable Seller Certificate and the Certificates of the exchanged Series,
if applicable, and authenticate the new Series and a new Exchangeable Seller
Certificate.
REPRESENTATIONS AND WARRANTIES
The Seller will make, or has made, certain representations and warranties to
the Trust to the effect that, among other things, (a) as of each Closing Date,
the Seller is duly incorporated and in good standing and has the authority to
perform its obligations under the Pooling and Servicing Agreement and issue
the Certificates, and has duly authorized the consummation of the transactions
contemplated by the Pooling and Servicing Agreement and (b) as of the
Selection Date or as of the end of the related Billing Cycle immediately
preceding the Addition Date, as the case may be, each then-existing Account
was an Eligible Account.
In addition, the Seller will make, or has made, representations and
warranties to the Trust relating to the Receivables to the effect, among other
things, that (a) as of the Initial Closing Date or as of the effective date of
the addition of Additional Accounts, as applicable, each of the Receivables
then existing was an Eligible Receivable and (b) as of the date of creation of
any new Receivable, such Receivable is an Eligible Receivable and the
representation and warranty set forth in clause (b) in the immediately
following paragraph is true and correct with respect to such Receivable. In
the event of a breach of any representation and warranty set forth in this
paragraph, if, as a result of such breach, the related Account becomes a
Defaulted Account (in the case of (i) below) or the Receivables in the related
Accounts are charged off as uncollectible (in the case of (ii) below) the
Trust's rights in, to or under such Receivables or their proceeds are impaired
or the proceeds of such Receivables are not available for any reason to the
Trust free and clear of any lien, then the Seller shall accept reassignment of
each Principal Receivable as to which such breach relates (an "Ineligible
Receivable") on the terms and conditions set forth below either (i) within 60
days, or such longer period as may be agreed to by the Trustee, up to 120
days, of the earlier to occur of the discovery of such breach by the Seller or
Servicer or receipt by the Seller of written notice of such breach given by
the Trustee, or (ii) with respect to certain breaches relating to prior liens,
immediately upon the earlier to occur of such discovery or notice; provided,
however, that no such reassignment shall be required to be made with respect
to such Ineligible Receivable pursuant to clause (i) of this sentence 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 Seller 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
Seller Interest; provided, however, that if the exclusion of an Ineligible
Receivable from the calculation of the Seller Interest would cause the Seller
Interest to be a negative number or would otherwise not be permitted by law,
then such Ineligible Receivable shall be removed upon the Seller depositing in
the Collection Account (for allocation as a Principal Receivable) immediately
available funds in an amount equal to the amount by which the Seller 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 Seller
to accept reassignment of any Ineligible Receivable is the sole remedy
available to Certificateholders or the Trustee
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on behalf of Certificateholders respecting any breach of the representations
and warranties set forth in this paragraph with respect to such Receivable.
The Seller has made, and will make, representations and warranties to the
Trust to the effect, among other things, that as of the Initial Closing Date
and as of the date of issuance of each Series after such date (a "Closing
Date"), as applicable, (a) the Pooling and Servicing Agreement constituted a
legal, valid and binding obligation of the Seller and (b) the transfer of
Receivables by it to the Trust under the Pooling and Servicing Agreement
constituted either a valid transfer and assignment to the Trust of all right,
title and interest of the Seller in and to the Receivables (other than
Receivables in Additional Accounts or Automatic Additional Accounts, as the
case may be), or the grant of a first priority perfected security interest in
such Receivables (except for certain tax liens) and the proceeds thereof which
will be enforceable as to each such Receivable and such other properties upon
the creation thereof. The Seller has made, and will make, similar
representations and warranties to the Trust in connection with each assignment
of Receivables in Additional Accounts or Automatic Additional Accounts. In the
event of a breach of any of the representations and warranties described in
the first sentence of this paragraph, either the Trustee or the Holders of
Certificates evidencing undivided interests in the Trust aggregating more than
50% of the sum of the investor interests of all Series issued and outstanding,
by written notice to the Seller (and to the Trustee and the Servicer if given
by the certificateholders), may direct the Seller to accept reassignment of
the Trust Portfolio within 60 days of such notice, or within such longer
period, up to 120 days, specified in such notice. The Seller 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, the
representations and warranties shall then be true and correct in all material
respects. The deposit amount for such reassignment with respect to each Series
of certificates required to be repurchased following such notice, including
the Certificates, will generally be equal to the Investor Interest of each
such Series on the last day of the Monthly Period preceding the Distribution
Date on which the reassignment is scheduled to be made plus an amount equal to
all interest accrued but unpaid on such certificates at the applicable
Certificate rate (less the amounts previously allocated for payment of
interest and principal with respect to each such Series of Certificates)
through the end of the interest accrual periods of each such Series. The
reassignment deposit amount shall equal the sum of the reassignment deposits
with respect to each Series then issued and outstanding which is required to
be repurchased following such notice. The payment of such reassignment deposit
amount into the Collection Account will be considered a prepayment in full of
all Receivables and will be paid in full to the certificateholders of such
Series upon presentation and surrender of their Certificates. In each
Supplement, the Seller has represented and warranted or will represent and
warrant, that, as of the applicable Closing Date, the Pooling and Servicing
Agreement, as supplemented by such Supplement, constitutes a legal, valid and
binding obligation of the Seller. Upon a breach of this representation either
the Trustee or the Holders of Certificates of such Series evidencing aggregate
undivided interests in the Trust aggregating more than 50% of the Investor
Interest of such Series by written notice to the Seller (and to the Trustee
and the Servicer if given by the Certificateholders) may direct the Seller to
repurchase such Certificates (but not the Certificates of any other Series) on
terms and conditions substantially similar to those set forth above. If the
Trustee or the Certificateholders give a notice as provided above, the
obligation of the Seller to make any such deposit or repurchase will
constitute the sole remedy respecting a breach of the representations and
warranties set forth in this paragraph available to the Trustee or the
Certificateholders.
An "Eligible Account" is defined to mean a VISA or MasterCard credit card
account owned by the Seller, as of the Selection Date, (a) which is payable in
United States dollars, (b) the cardholder of which has provided, as his most
recent billing address, an address which is located in the United States or
its territories or possessions or which is a United States military address,
(c) which has not been identified on the computer files of the Seller as
relating to a cardholder who has died or commenced action relating to
bankruptcy or who is the subject of an involuntary bankruptcy action, (d)
which has not been identified on the computer files of the Seller as relating
to a cardholder who has requested a reduction in the periodic finance charges
pursuant to the Soldiers' and Sailors' Civil Relief Act of 1940, (e) which has
not been classified by the Seller as counterfeit, fraudulent, corporate
business card, stolen or lost, (f) which has not been charged off by the
Seller in its customary and usual manner for charging off such Account as of
the Selection Date, (g) which has not been (and no Receivables in such
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Account have been) sold or pledged to any other person, and (h) which is not
an account on which Chase USA or an affiliate of Chase USA is the obligor.
An "Eligible Receivable" is defined to mean each Receivable (a) which has
arisen under an Eligible Account, an Eligible Additional Account (in the case
of Additional Accounts) or an Eligible Automatic Additional Account (in the
case of Automatic Additional Accounts), as the case may be, (b) which was
created in compliance, in all material respects, with all requirements of law
applicable to the Seller, and pursuant to a credit card agreement which
complies in all material respects with all requirements of law applicable to
the Seller, (c) with respect to which all consents or authorizations of, or
registrations with, any governmental authority required to be obtained or
given by the Seller in connection with the creation of such Receivable or the
execution, delivery, creation and performance by the Seller 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 Seller or the Trust had good and marketable
title, free and clear of all liens and security interests arising under or
through the Seller (other than certain tax liens for taxes not then due or
which the Seller is contesting), (e) which is the legal, valid and binding
payment obligation of the cardholder thereof, legally enforceable against such
cardholder in accordance with its terms (with certain bankruptcy-related
exceptions), (f) which constitutes an "account" under and as defined in
Article 9 of the UCC, (g) as to which as of the time of its transfer to the
Trust, the Seller has satisfied all material obligations on its part with
respect to such receivable required to be satisfied (h) which is not, at the
time of its transfer to the Trust subject to any right of recession, setoff,
counterclaim or defense (including the defense of usury), other than certain
bankruptcy-related defenses, and (i) as to which the Seller has done nothing
to impair the rights of the Trust or the Certificateholders.
It is not required or anticipated that the Trustee will make any initial or
periodic general examination of the Receivables or any records relating to the
Receivables for the purpose of establishing the presence or absence of
defects, compliance with the Seller's representations and warranties or for
any other purpose. The Servicer, however, will deliver to the Trustee, on or
before March 31 of each year, 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.
SALE OF ACCOUNTS
The Seller has the right to sell, transfer or pledge the Accounts, provided
that (i) the Rating Agency has advised the Seller and the Trustee that such
sale, transfer or pledge will not result in the reduction or withdrawal of the
then-existing rating of the Certificates of any Series, (ii) the Seller and
the Servicer determine such sale, transfer or pledge will not be adverse to
the interests of the Certificateholders of any Series, (iii) such purchaser,
transferee or pledgee shall expressly assume in a supplemental agreement the
applicable obligations and covenants of the Seller and (iv) certain other
conditions specified in the Pooling and Servicing Agreement are satisfied.
ADDITION OF ACCOUNTS
As described above under "The Receivables," the Seller has the right and, in
some circumstances, is obligated to designate from time to time Additional
Accounts to be included as Accounts. The Seller will be required to add
Additional Accounts (i) if the average of the Seller Interest for any 30-day
period is less than the Minimum Seller Interest of the average Aggregate
Principal Receivables (or such higher amount established pursuant to a
Supplement) for such 30-day period or (ii) if, on any date of determination,
the Aggregate Principal Receivables is less than the Minimum Aggregate
Principal Receivables (both clause (i) and clause (ii) as determined as of the
end of each Billing Cycle ending in the 30-day period immediately preceding
such date of determination). Each such Additional Account must be an Eligible
Additional Account. An "Eligible Additional Account" is as of the date such
account is added to the Trust either (i) a VISA or MasterCard account which
satisfies the criteria set forth in the definition of Eligible Account or (ii)
any other consumer revolving
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credit account, (a) which satisfies the criteria set forth in the definition
of Eligible Account (without regard to the requirement that such account be a
VISA or MasterCard credit card account), (b) which the Rating Agency indicates
will not result in the reduction or withdrawal of its then-existing rating of
any Series of certificates and (c) to which, to the extent provided in any
Supplement, the provider of any Enhancement for the related Series of
certificates, consents, which consent shall not be unreasonably withheld. The
Seller will convey to the Trust its interest in all Receivables of such
Additional Accounts, whether such Receivables are then-existing or thereafter
created, subject to the following conditions, among others: (i) the Seller
shall have given prior written notice of such additions to the Rating Agency,
(ii) unless such addition is required as described above (except if such
addition includes Receivables related to Accounts acquired by the Seller or if
the number of Accounts exceeds certain limits), the Seller shall not have
received notice from the Rating Agency of its intention to reduce or withdraw
its then-existing rating of any Series of certificates, (iii) no selection
procedure believed by the Seller to be materially adverse to the interests of
the holders of any Series of certificates, including the Certificateholders,
was used in selecting the Additional Accounts and (iv) each Account was an
Eligible Additional Account.
On each Automatic Addition Date, the Seller may, but is not obligated to,
add as Automatic Additional Accounts on such Automatic Addition Date, in an
amount not in excess of the Maximum Addition Amount, all Eligible Automatic
Additional Accounts originated by the Seller during the period occurring from
the initial Cut Off Date until a date specified by the Seller (excluding the
Eligible Automatic Additional Accounts, if any, which were included as
Accounts on or prior to such date). An "Eligible Automatic Additional Account"
is, as of the relevant Automatic Addition Date, (a) a VISA or MasterCard
account which satisfies the criteria set forth in the definition of Eligible
Account and has been originated (but not purchased) by the Seller, since the
initial Cut Off Date, during the normal operation of the Seller's credit card
business or (b) any other consumer revolving credit account (i) which
satisfies the criteria set forth in the definition of Eligible Account without
regard to the requirement that such account be a VISA or MasterCard credit
card account, (ii) which the Rating Agency indicates will not result in the
reduction or withdrawal of its then-existing rating of any Series of
Certificates and (iii) to which, to the extent provided in any Supplement, the
provider of any Enhancement for the related Series of certificates, consents,
which consent shall not be unreasonably withheld. The Pooling and Servicing
Agreement provides that, on any date on which Automatic Additional Accounts
are added as Accounts, the number of Eligible Automatic Additional Accounts
cannot exceed the product of 10% and the number of Accounts determined as of
the first day of the twelfth preceding Monthly Period or the Initial Closing
Date, as applicable, minus the number of Eligible Automatic Additional
Accounts (subject to certain conditions contained in the Pooling and Servicing
Agreement) which have been designated as Additional Accounts or Automatic
Additional Accounts since the first day of the twelfth preceding Monthly
Period or the Initial Closing Date, as the case may be (the "Maximum Addition
Amount"). The Seller, at its option, may terminate or suspend the inclusion of
Automatic Additional Accounts at any time. The Seller expects to add
Additional Accounts to the Trust while the Certificates are outstanding. The
last day of the related Billing Cycle ending during the 30-day period
preceding each addition of Accounts is referred to as a "Cut Off Date."
REMOVAL OF ACCOUNTS
Subject to the conditions set forth in the next succeeding sentence, on each
Determination Date on which the Seller Interest for the related Monthly Period
exceeds 10% of Aggregate Principal Receivables at the end of the day
immediately prior to such Determination Date, the Seller may, but shall not be
obligated to, designate Receivables from Accounts for deletion and removal
from the Trust without notice to the Certificateholders (the "Removed
Accounts"). The Seller is permitted to designate and require reassignment of
Receivables from Removed Accounts only upon satisfaction of the following
conditions among other things: (i) the Seller shall have delivered to the
Trustee for execution a written assignment and a computer file or microfiche
list containing a true and complete list of all Removed Accounts identified by
account number and their aggregate amount of Receivables as of the end of the
Billing Cycle immediately preceding the date of removal; (ii) the Seller shall
represent and warrant that no selection procedures believed by the Seller to
be materially adverse to the interests of the Certificateholders were utilized
in selecting the Removed Accounts; (iii) the removal of any Receivables
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of any Removed Accounts shall not, in the reasonable belief of the Seller, (a)
cause a Pay Out Event to occur with respect to any then outstanding Series or
(b) cause the Seller Interest as a percentage of Aggregate Principal
Receivables to be less than 10% on such removal date; (iv) the Rating Agency
shall have delivered prior notice of the removal and the Seller shall have
received notice from the Rating Agency that such removal will not result in
the reduction or withdrawal of its then-existing rating of any Series of
certificates; and (v) the Seller shall have delivered to the Trustee an
officer's certificate confirming the items set forth in clauses (i) through
(iv) above.
COLLECTION AND OTHER SERVICING PROCEDURES
Pursuant to the Pooling and Servicing Agreement, the Servicer will be
responsible for servicing and administering the Receivables in accordance with
the Servicer's customary and usual procedures for servicing credit card
receivables comparable to the Receivables and the Seller's policies and
procedures relating to the operation of its credit card business (the "Credit
Card Guidelines"). The Servicer is required to maintain fidelity bond coverage
insuring against losses through wrongdoing of its officers and employees who
are involved in the servicing of credit card receivables covering such actions
and in such amounts as the Servicer believes to be reasonable from time to
time.
Servicing activities performed by the Servicer include collecting and
recording payments, communicating with cardholders, investigating payment
delinquencies, evaluations in relation to increasing credit limits and in
issuing credit cards, providing billing and tax records to cardholders and
maintaining internal records with respect to each Account. Managerial and
custodial services performed by the Servicer on behalf of the Trust include
providing assistance in any inspections of the documents and records relating
to the Accounts and Receivables by the Trustee pursuant to the Pooling and
Servicing Agreement, maintaining the agreements, documents and files relating
to the Accounts and Receivables as custodian for the Trust and providing
related data processing and reporting services for Certificateholders and on
behalf of the Trustee.
THE COLLECTION ACCOUNT
The Servicer has established and maintains, in the name of the Trust, for
the benefit of certificateholders, a "Collection Account," which will be a
noninterest bearing segregated trust account established with a Qualified
Institution. A "Qualified Institution" is defined as a depository institution
or trust company (which may include the Servicer (unless the Servicer is Chase
USA), the Trustee or an affiliate of the Servicer, but may not include the
Seller), organized under the laws of the United States or any one of the
states thereof, which at all times has a certificate of deposit rating of P-1
by Moody's Investors Service, Inc. ("Moody's") (at least P-2 with respect to
the Bank), A-1+ by Standard & Poor's Ratings Group ("Standard & Poor's") and
F-1+ by Fitch Investors Service, Inc. ("Fitch") or a long term rating of at
least Aa3 by Moody's, AA by Standard & Poor's and AA- by Fitch (Baa3 by
Moody's, BBB- by Standard & Poor's and BBB- by Fitch in the case of the Bank)
and deposit insurance provided by either the Bank Insurance Fund ("BIF") or
the Savings Association Insurance Fund ("SAIF"), each administered by the
FDIC. In addition, the Supplement with respect to any Series may require the
Trustee to establish and maintain a subaccount of the Collection Account for
such Series (such subaccount, a "Collection Subaccount"). Funds in the
Collection Account or, as provided in the related Supplement, any Collection
Subaccount, may be invested to the extent provided in such Supplement, at the
direction of the Servicer, in (i) obligations of or fully guaranteed by the
United States of America, (ii) demand deposits, time deposits or bankers
acceptances of depository institutions or trust companies, the certificates of
deposit of which have ratings from Moody's and Standard & Poor's of P-1 and A-
1+, respectively, and if rated by Fitch, F-1+ in the case of the certificates
of deposit and a rating from Moody's of at least Aa3, from Standard & Poor's
of AAA and if rated by Fitch, AAA in case of the long-term unsecured debt
obligations, (iii) certificates of deposit or commercial paper having, at the
time of the Trust's investment, a rating of P-1 and A-1+, respectively, from
Moody's and Standard & Poor's, and if rated by Fitch, F-1+, (iv) demand
deposits, time deposits and bankers acceptances which are fully insured to the
limits of the insurance provided by law by BIF or SAIF, (v) money market funds
rated AAA-M or AAA-MG by Standard & Poor's or P-1 by Moody's and if rated by
Fitch, in its
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highest rating category or otherwise approved in writing by the Rating Agency
and (vi) certain open end diversified investment companies (collectively,
"Permitted Investments"). Any earnings (net of losses and investment expenses)
on funds in the Collection Account or any Collection Subaccount will be paid
monthly to the Seller. The Servicer will have the revocable power to withdraw
funds from the Collection Account or any Collection Subaccount for the purpose
of carrying out the Servicer's duties under the Pooling and Servicing
Agreement, as supplemented from time to time. In addition, the Servicer will
establish and maintain or cause to be established and maintained with a
Qualified Institution in the name of the Trustee, on behalf of the Trust, a
segregated trust account, a "Retention Account" for the benefit of the
Certificateholders and the holder of the Exchangeable Seller Certificate with
amounts on deposit in such Retention Account being invested in the manner
directed by the holder of the Exchangeable Seller Certificate in Permitted
Investments. The purpose of the Retention Account is to provide funds to
ensure the availability of any amounts in respect of Principal Receivables
allocated to the Certificates not distributed to the holder of the
Exchangeable Seller Certificate because such amounts would exceed the Seller
Interest in Principal Receivables (after giving effect to any new Receivables
transferred to the Trust for the Monthly Period relating to any Determination
Date). The Trustee will be required to establish and maintain with respect to
each Series of certificates, a subaccount of the Retention Account (each, a
"Retention Subaccount"). The Servicer will have the revocable power to
withdraw funds from the Retention Subaccount for the purpose of carrying out
the Servicer's duties under the Pooling and Servicing Agreement.
ALLOCATION PERCENTAGES
Pursuant to the Pooling and Servicing Agreement, the Servicer will allocate
among the Investor Interest of each Series and the Seller Interest all amounts
collected with respect to Finance Charge Receivables and Principal Receivables
and Receivables in Defaulted Accounts with respect to each business day during
any Monthly Period as follows:
(a) collections of Finance Charge Receivables and Receivables in
Defaulted Accounts will at all times be allocated to the Investor Interest
of a Series based on the Floating Allocation Percentage of such Series; and
(b) collections of Principal Receivables will at all times be allocated
to the Investor Interest of such Series based on the Principal Allocation
Percentage of such Series.
The "Floating Allocation Percentage" and the "Principal Allocation
Percentage" with respect to any Series will be determined as set forth in the
related Supplement and, with respect to each Series offered hereby, in the
related Prospectus Supplement. Amounts not allocated to the Investor Interest
of any Series as described above will be allocated to the Seller Interest.
ALLOCATION OF COLLECTIONS
Except as otherwise provided below, the Servicer will deposit into the
Collection Account, no later than the second business day following the date
of processing, any payment collected by the Servicer on the Receivables.
Notwithstanding the foregoing, for as long as Chase USA remains the Servicer
under the Pooling and Servicing Agreement, if Chase USA or any of its
affiliates in which the Collection Account is maintained has and maintains a
certificate of deposit rating of P-1 by Moody's, A-1 by Standard & Poor's and
F-1 by Fitch and deposit insurance provided by either the BIF or SAIF, then
the Servicer need not deposit collections on the day indicated in the
preceding sentence but may use for its own benefit all such collections until
the business day immediately prior to any Distribution Date (a "Transfer
Date") at which time the Servicer will make such deposits in an amount equal
to the net amount of such deposits which would have been made had the
conditions of this proviso not applied. Certain deposits and distributions
shall be made with respect to each Series as described in the applicable
Prospectus Supplement on the fifteenth day of each month (or, if such day is
not a business day, on the next succeeding business day) (each a "Distribution
Date"). The Pooling and Servicing Agreement provides that, before the
Conversion Date, the Servicer will make such deposits and payments based on
the assumption
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that all collections received by the Servicer with respect to the Receivables
in each Billing Cycle are collections of Finance Charge Receivables up to the
amount of Finance Charge Receivables billed with respect to Receivables in
such Billing Cycle (with respect to each Billing Cycle, the "Billed Finance
Charge Receivables") and collections in excess of the Billed Finance Charge
Receivables are collections of Principal Receivables. Subject to the following
sentence, on a day not later than the Determination Date in the Monthly Period
following the Monthly Period in which such Billing Cycle ends (the "Collection
Recomputation Date"), the Servicer will recompute the deposits and allocations
made during such Billing Cycle based upon the actual collections of Finance
Charge Receivables and Principal Receivables, and any adjustments in the
amount payable to the holder of the Exchangeable Seller Certificate
necessitated by such recomputation shall be made by the Servicer or the holder
of the Exchangeable Seller Certificate, as the case may be, no later than the
Transfer Date immediately following the Collection Recomputation Date. There
shall be no need to make such recomputations in the Monthly Period in which
the Conversion Date occurs, or in any Monthly Period thereafter.
Throughout the existence of the Trust, the Servicer shall allocate to the
Seller, as holder of the Exchangeable Seller Certificate, an amount equal to
the Seller Percentage of the aggregate amount of collections allocable to
Principal Receivables and Finance Charge Receivables in respect of each
Monthly Period.
The "Seller Percentage" will, in all cases, be equal to 100% minus the sum
of the Floating Allocation Percentage or the Principal Allocation Percentage,
as applicable, and the applicable investor percentages with respect to all
Series of investor certificates issued and outstanding.
RECEIVABLES IN DEFAULTED ACCOUNTS; ADJUSTMENTS AND FRAUDULENT CHARGES
On each eighth calendar day of the month (or, if such day is not a business
day, the immediately preceding business day) (such date, a "Determination
Date"), the Servicer will calculate the Investor Default Amount for the
preceding Monthly Period. The term "Investor Default Amount" means, for any
Billing Cycle and with respect to any particular Series, the product of the
Floating Allocation Percentage (as defined in the Supplement applicable to
such Series) for the Monthly Period in which such Billing Cycle ends times the
amount of Receivables in Accounts which became Defaulted Accounts during such
Billing Cycle. "Receivables in Defaulted Accounts," for any Billing Cycle, are
Receivables which in such Billing Cycle were written off as uncollectible in
accordance with the Servicer's policies and procedures for servicing credit
card receivables comparable to the Receivables. The term "Aggregate Investor
Default Amount" means, with respect to any Determination Date and with respect
to any particular Series, an amount equal to the sum of (x) the Investor
Default Amounts determined with respect to each Billing Cycle which ended
during the preceding Monthly Period minus (y) the Floating Allocation
Percentage (as defined in the Supplement applicable to such Series) for such
Monthly Period (determined with respect to Receivables in Defaulted Accounts)
of Recoveries with respect to such Monthly Period; provided, however, that the
Aggregate Investor Default Amount with respect to any Monthly Period and with
respect to any particular Series shall not be less than zero. Any Recoveries
in excess of amounts referred to in (x) above will be allocated as though such
amounts were collections of Finance Charge Receivables.
GROUPS OF SERIES
Any Series may be included as part of a group of Series (each, a "Group")
that share, subject to certain limits, certain excess Principal Collections
and Excess Finance Charge Collections allocable to any Series included in such
Group. See "Description of the Certificates--Sharing of Excess Finance Charge
Collections" and "--Shared Principal Collections." The Series of Certificates
designated as Series 1995-1, Series 1995-2, Series 1996-1 and Series 1996-2
and any other Series, if so specified in the related Prospectus Supplement,
will be part of a Group designated as "Group One." No Series other than Series
1995-1, Series 1995-2, Series 1996-1 and Series 1996-2 issued prior to the
date hereof will be part of any Group.
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SHARED PRINCIPAL COLLECTIONS
Collections of Principal Receivables for any Monthly Period allocated to the
Investor Interest of any Series in Group One offered hereby will first be used
to cover certain amounts specified in the applicable Supplement (including any
required deposits into a Principal Funding Account or required distributions
to Certificateholders of such Series) in the case of each Series in Group One
offered hereby. The Servicer will determine the amount of collections of
Principal Receivables for any Monthly Period (plus certain other amounts
described in the related Prospectus Supplement) allocated to such Series
remaining after covering such required deposits and distributions and any
similar amount remaining for any other Series (collectively, "Shared Principal
Collections"). The Servicer will allocate the Shared Principal Collections to
cover any principal distributions to Certificateholders for any Series in
Group One that are either scheduled or permitted and that have not been
covered out of the collections of Principal Receivables allocable to such
Series and certain other amounts for such Series (collectively, "Principal
Shortfalls"). If Principal Shortfalls exceed Shared Principal Collections for
any Monthly Period, Shared Principal Collections will be allocated pro rata
among the applicable Series in Group One based on the respective Principal
Shortfalls of such Series. To the extent that Shared Principal Collections
exceed Principal Shortfalls, the balance will be paid to the holder of the
Exchangeable Seller Certificate on the related transfer date. Any such
reallocation of collections of Principal Receivables will not result in a
reduction in the Investor Interest of the Series to which such collections
were initially allocated. There can be no assurance that there will be any
Shared Principal Collections with respect to Group One for any Monthly Period.
SHARING OF EXCESS FINANCE CHARGE COLLECTIONS
Each Series in Group One will be entitled to share Excess Finance Charge
Collections in the manner, and to the extent, described below with each other
Series, if any, in Group One. Collections of Finance Charge Receivables and
certain other amounts allocable to the Investor Interest of any Series that is
included in Group One in excess of the amounts necessary to make required
payments with respect to such Series (including payments to the provider of
any related Enhancement) that are payable out of collections of Finance Charge
Receivables (any such excess, the "Excess Finance Charge Collections") will be
applied to cover any shortfalls with respect to amounts payable from
collections of Finance Charge Receivables allocable to any other Series
included in such Group, based upon the respective Investor Interest on such
Transfer Date of each Series in such Group having a shortfall; provided,
however, that the sharing of Excess Finance Charge Collections among Series in
any Group will cease if the Seller shall deliver to the Trustee a certificate
of an authorized representative to the effect that, in the reasonable belief
of the Seller, the continued sharing of Excess Finance Charge Collections
among Series in Group One would have adverse regulatory or accounting
implications with respect to the Seller. Following the delivery by the Seller
of any such certificate to the Trustee there will not be any further sharing
of Excess Finance Charge Collections among the Series in Group One. In all
cases, any Excess Finance Charge Collections remaining after covering
shortfalls with respect to all outstanding Series in Group One will be paid to
the holders of the Exchangeable Seller Certificate. While any Series offered
hereby may be included in Group One, there can be no assurance that (a) any
other Series will be included in such Group, (b) there will be any Excess
Finance Charge Collections with respect to such Group for any Monthly Period
or (c) the Seller will not at any time deliver a certificate as described
above. While the Seller believes that, based upon applicable rules and
regulations as currently in effect, the sharing of Excess Finance Charge
Collections among Series in Group One will not have adverse regulatory or
accounting implications for it, there can be no assurance that this will
continue to be true in the future.
EXCLUDED SERIES
If so specified in the related Prospectus Supplement, a Series of
Certificates may be an "Excluded Series" for purposes of calculating the
minimum Aggregate Principal Receivables, provided that the Rating Agency has
determined that such exclusion will not result in a reduction or withdrawal of
the rating of the Rating Agency then in effect. If a Pay Out Event with
respect to an Excluded Series occurs during an Amortization Period for
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another Series of Certificates, such Amortization Period could be longer than
if such Excluded Series had not been issued.
If so provided in the related Prospectus Supplement, a Series may be paired
with an Excluded Series that is a Paired Series issued by the Trust at or
after the commencement of the Controlled Amortization Period or Accumulation
Period for such Prior Series. As the Investor Interest of the Prior Series
having a Paired Series is reduced, the Investor Interest in the Trust of the
Paired Series will increase by an equal amount. If a Pay Out Event occurs with
respect to the Prior Series having a Paired Series or with respect to the
Paired Series when the Prior Series is in a Controlled Amortization Period or
Accumulation Period, the Principal Allocation Percentage for the Prior Series
and the Principal Allocation Percentage for the Paired Series will be reset as
provided in the related Prospectus Supplement and the Amortization Period for
such Prior Series could be lengthened.
ENHANCEMENT
General. For any Series, Enhancement may be provided with respect to one or
more Classes thereof. Enhancement with respect to one or more Classes of a
Series offered hereby may include a letter of credit, a cash collateral
account, a collateral interest, a surety bond, an insurance policy or any
other form of credit enhancement described in the related Prospectus
Supplement, or any combination of the foregoing. Enhancement may also be
provided to a Class or Classes of a Series by subordination provisions that
require distributions of principal or interest be made with respect to the
Certificates of such Class or Classes before distributions are made to one or
more Classes of such Series. If so specified in the related Prospectus
Supplement, any form of Enhancement may be available to more than one Class or
Series to the extent described therein.
The presence of Enhancement with respect to a Class is intended to enhance
the likelihood of receipt by Certificateholders of such Class of the full
amount of principal and interest with respect thereto and to decrease the
likelihood that such Certificateholders will experience losses. However,
unless otherwise specified in the related Prospectus Supplement, the
Enhancement, if any, with respect thereto 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 that exceed
the amount covered by the Enhancement or that are not covered by the
Enhancement, Certificateholders will bear their allocable share of such
losses. In addition, if specific Enhancement is provided for the benefit of
more than one Class or Series, Certificateholders of any such Class or Series
will be subject to the risk that such Enhancement will be exhausted by the
claims of Certificateholders of other Classes or Series.
If Enhancement is provided with respect to a Series offered hereby, the
related Prospectus Supplement will include a description of (a) the amount
payable under such Enhancement, (b) any conditions to payment thereunder not
otherwise described herein, (c) the conditions (if any) under which the amount
payable under such Enhancement may be reduced and under which such Enhancement
may be terminated or replaced and (d) any provisions of any agreement relating
to such Enhancement material to the Certificateholders of such Series.
Additionally, in certain cases, the related Prospectus Supplement may set
forth certain information with respect to the provider of any third-party
Enhancement (the "Credit Enhancer"), including (i) a brief description of its
principal business activities, (ii) its principal place of business, place of
incorporation or the jurisdiction under which it is chartered or licensed to
do business, (iii) if applicable, the identity of regulatory agencies that
exercise primary jurisdiction over the conduct of its business and (iv) its
total assets, and its stockholders' or policyholders' surplus, if applicable,
as of a date specified in the Prospectus Supplement. If so described in the
related Prospectus Supplement, Enhancement with respect to a Series offered
hereby 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 Enhancer will have an interest in certain
cash flows in respect of the Receivables to the extent described in such
Prospectus Supplement (an "Enhancement Investor Interest") and may be entitled
to the benefit of the Trustee's security interest in the Receivables, in each
case subordinated to the interest of the Certificateholders of such Series.
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Subordination. If so specified in the related Prospectus Supplement, one or
more Classes of a Series offered hereby may be subordinated to one or more
other Classes of such Series. If so specified in the related Prospectus
Supplement, the rights of the holders of the subordinated Certificates to
receive distributions of principal or interest on any payment date will be
subordinated to such rights of the holders of the Certificates that are senior
to such subordinated Certificates to the extent set forth in the related
Prospectus Supplement. The related Prospectus Supplement will also set forth
information concerning the amount of subordination of a Class or Classes of
subordinated Certificates in a Series, the circumstances in which such
subordination will be applicable, the manner, if any, in which the amount of
subordination will decrease over time, and the conditions under which amounts
available from payments that would otherwise be made to holders of such
subordinated Certificates will be distributed to holders of Certificates that
are senior to such subordinated Certificates. The amount of subordination will
decrease whenever amounts otherwise payable to the holders of subordinated
Certificates are paid to the holders of the Certificates that are senior to
such subordinated Certificates.
Letter of Credit. If so specified in the related Prospectus Supplement, a
letter of credit with respect to a Series or Class of Certificates offered
hereby may be issued by a bank or financial institution specified in the
related Prospectus Supplement (the "L/C Issuer"). Subject to the terms and
conditions specified in the related Prospectus Supplement, the L/C Issuer will
be obligated to honor drawings under a letter of credit in an aggregate dollar
amount (which may be fixed or may be reduced as described in the related
Prospectus Supplement), net of unreimbursed payments thereunder, equal to the
amount described in the related Prospectus Supplement. The amount available
under a letter of credit will be reduced to the extent of the unreimbursed
payments thereunder.
Cash Collateral Account. If specified in the related Prospectus Supplement,
the Certificates of any Class or Series offered hereby may have the benefit of
a cash collateral account. A cash collateral account with respect to a Class
or Series may be fully or partially funded on the Series Closing Date with
respect thereto and the funds on deposit therein will be invested in Permitted
Investments. The amount available to be withdrawn from a cash collateral
account will be the lesser of 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
such withdrawals will be made from the cash collateral account.
Collateral Interest. If so specified in the related Prospectus Supplement,
support for a Series of Certificates or one or more Classes thereof may be
provided initially by an uncertificated, subordinated interest in the Trust
(the "Collateral Interest") in an amount initially equal to a percentage of
the Certificates of such Series specified in the Prospectus Supplement.
References to Enhancement Investor Interests herein include Collateral
Interests, if any.
Surety Bond or Insurance Policy. If so specified in the related Prospectus
Supplement, insurance with respect to a Series or Class of Certificates
offered hereby may be provided by one or more insurance companies. Such
insurance will guarantee, with respect to one or more Classes of the related
Series, distributions of interest or principal in the manner and amount
specified in the related Prospectus Supplement.
If so specified in the related Prospectus Supplement, a surety bond may be
purchased for the benefit of the holders of any Series or Class of
Certificates offered hereby to assure distributions of interest or principal
with respect to such Series or Class of Certificates in the manner and amount
specified in the related Prospectus Supplement.
Spread Account. If so specified in the related Prospectus Supplement,
support for a Series or one or more Classes of a Series offered hereby may be
provided by the periodic deposit of certain available excess cash flow from
the Trust Assets into a spread account intended to assure the subsequent
distributions of interest and principal on the Certificates of such Class or
Series in the manner specified in the related Prospectus Supplement.
TERMINATION OF TRUST
Unless the Seller instructs the Trustee otherwise, the Trust will only
terminate on the earlier of: (a) the day following the Distribution Date with
respect to any Series following the day on which funds shall have been
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deposited in the Collection Account sufficient to pay in full the Aggregate
Investor Interest of all Series outstanding plus accrued interest thereon at
the applicable Certificate rates through the applicable interest accrual
period or (b) June 30, 2031 (the "Trust Termination Date"). Upon the
termination of the Trust and the surrender of the Exchangeable Seller
Certificate, the Trustee shall convey to the holder of the Exchangeable Seller
Certificate all right, title and interest of the Trust in and to the
Receivables and other funds of the Trust (other than funds on deposit in the
Collection Account) and other similar bank accounts of the Trust with respect
to each Series.
PAY OUT EVENTS
The Revolving Period with respect to a Series will continue through the date
specified in the applicable Prospectus Supplement and the Controlled
Amortization Period or Accumulation Period will begin at such time, unless a
Pay Out Event occurs. The Rapid Amortization Period with respect to such
Series will commence when a Pay Out Event occurs or is deemed to occur. A "Pay
Out Event" with respect to the Certificates of all Series refers to any of the
following events:
(a) certain events of insolvency, conservatorship or receivership
relating to the Seller; or
(b) the Trust becomes subject to regulation as 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 specific Series
upon the occurrence of any other event specified in the related Prospectus
Supplement. Such events may include, but are not required to include nor are
they limited to, (i) the failure by the Seller to make any payment or deposit
required under the Pooling and Servicing Agreement within a specified period
of the date such payment or deposit is required to be made, (ii) the breach of
certain other covenants, representations or warranties contained in the
Pooling and Servicing Agreement, after any applicable notice and cure period
(and, if so specified in the related Prospectus Supplement, only to the extent
such breach has a material adverse effect on the related Certificateholders),
(iii) the failure by the Seller to make a required designation of Additional
Accounts for the Trust within a specified time after the date such addition is
required to be made, (iv) a reduction in the Portfolio Yield below the rates,
and for the period, specified in the related Prospectus Supplement and (v) the
occurrence of a Servicer Default. The Rapid Amortization Period with respect
to a Series will commence on the day on which a Pay Out Event occurs or is
deemed to occur with respect thereto. Monthly distributions of principal to
the Certificateholders of such Series will begin on the Distribution Date in
the Monthly Period following the Monthly Period in which such Pay Out Event
occurs (such Distribution Date and each following Distribution Date with
respect to such Series, a "Special Payment Date"). Any amounts on deposit in a
Principal Funding Account or an Interest Funding Account with respect to such
Series at such time will be distributed on such first Special Payment Date to
the Certificateholders of such Series. If, because of the occurrence of a Pay
Out Event, the Rapid Amortization Period begins earlier than the scheduled
commencement of a Controlled Amortization Period or prior to an Expected Final
Payment Date, Certificateholders will begin receiving distributions of
principal earlier than they otherwise would have and such distributions will
not be subject to the Controlled Deposit Amount or the Controlled Distribution
Amount. As a result, the average life of the Certificates may be reduced or
increased. If a Series has more than one Class of Certificates, each Class may
have different Pay Out Events which, in the case of any Series of Certificates
offered hereby, will be described in the related Prospectus Supplement.
In addition to the consequences of a Pay Out Event discussed above, if the
Seller shall consent to, or a court or agency or supervisory authority shall
have entered an order or decree for, the appointment of a conservator or
receiver or liquidator for the winding-up of its affairs, (an "Insolvency
Event"), immediately on the day of such event the Seller will cease to
transfer Principal Receivables to the Trust and promptly give notice to the
Trustee of such event. Under the terms of the Pooling and Servicing Agreement,
within 15 days, the Trustee will publish a notice of the occurrence of the
Insolvency Event stating that the Trustee intends to sell, dispose of, or
otherwise liquidate the Receivables in a commercially reasonable manner unless
instructions otherwise are received within a specified period from (i) Holders
of more than 50% of the Investor Interest of
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any of the Series 1991-1 Certificates, the Series 1991-2 Certificates or the
Series 1992-1 Certificates, or (ii) Holders of more than 50% of the Investor
Interest of each other Series issued and outstanding (or, with respect to any
Series with two or more Classes, 50% of the Investor Interest of each Class,
which may include an Enhancement Investor Interest) to the effect that such
Certificateholders disapprove of the liquidation of Receivables and wish to
continue having Principal Receivables transferred to the Trust as before such
Insolvency Event. 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 on the Receivables and applied
as provided above and in each Prospectus Supplement.
If the only Pay Out Event to occur with respect to any Series is either the
insolvency of a Seller or the appointment of a conservator or receiver for a
Seller, 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 with respect to such Series. In addition,
despite any vote by Certificateholders to the contrary, 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.
SERVICER COVENANTS
In the Pooling and Servicing Agreement, the Servicer has covenanted with the
Certificateholders and the Trustee, as to each Receivable and related Account,
that: (a) it will duly satisfy all obligations on its part to be fulfilled
under or in connection with the Receivables and the related Accounts, and will
maintain in effect all qualifications required by law in order to properly
service the Receivables and the related Accounts, the failure to comply with
which would have a material adverse effect on the Certificateholders; (b) it
will not permit any rescission or cancellation of the Receivables, except in
accordance with the Credit Card Guidelines or as ordered by a court of
competent jurisdiction or other governmental authority; (c) it will do nothing
to impair the rights of the Certificateholders in the Receivables or the
related Accounts; and (d) it will not reschedule, revise or defer payments due
on the Receivables except in accordance with the Credit Card Guidelines.
Under the terms of the Pooling and Servicing Agreement, all Receivables in
an Account will be assigned and transferred or reassigned and retransferred to
the Servicer and such Account shall no longer be included as an Account if the
Servicer discovers, or receives written notice from the Trustee, that any
covenant of the Servicer set forth above with respect to any Receivable or
Account has not been complied with and such noncompliance has not been cured
within 60 days thereafter (or such longer period, up to 120 days, as the
Trustee may agree), and has a material adverse effect on the
Certificateholders' interest in such Receivable. If the Seller is the
Servicer, such reassignment and retransfer shall be made on or before the end
of the Monthly Period in which such reassignment obligation arises, by the
Servicer deducting the portion of any such Receivable which is a Principal
Receivable from the aggregate amount of Principal Receivables used to
calculate the Seller Interest. In addition, if the Seller Interest would be
reduced below zero, Chase USA, as Servicer, will deposit into the Collection
Account an amount equal to the amount by which the Seller Interest will be
reduced below zero (such reassignment and retransfer to the Servicer to be
effected only upon such deposit by the Servicer in the Collection Account). If
the Seller is not the Servicer, such assignment and transfer will be made when
the Servicer deposits an amount equal to the amount of such Receivable in the
Collection Account no later than the Transfer Date following the Monthly
Period during which such obligation arises. The amount of such deposit shall
be for allocation as collections pursuant to the Pooling and Servicing
Agreement. In either case, this retransfer and reassignment or transfer and
assignment to the Servicer constitutes the sole remedy available to the
Certificateholders if such covenant or warranty of the Servicer is not
satisfied. In either case, the Trust's interest in any such assigned
Receivables shall be automatically assigned to the Servicer.
SERVICING COMPENSATION AND PAYMENT OF EXPENSES
The Servicer's compensation for its servicing activities and reimbursement
for its expenses is a monthly servicing fee (the "Servicing Fee"). The
Servicing Fee will be allocated among the Seller Interest (the "Seller
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Servicing Fee"), and Certificateholders of each Series. The portion of the
Servicing Fee allocable to each Series of Certificates on any Distribution
Date the ("Monthly Servicing Fee") will generally be equal to one-twelfth of
the product of (a) the applicable servicing fee percentage with respect to
such Series and (b) the Investor Interest of such Series with respect to the
related Monthly Period.
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, Paying
Agent, Transfer Agent and Registrar and independent accountants and other fees
which are not expressly stated in the Pooling and Servicing Agreement to be
payable by the Trust or the Certificateholders other than federal, state and
local income and franchise taxes, if any, of the Trust.
CERTAIN MATTERS REGARDING THE SELLER AND THE SERVICER
The Servicer may not resign from its obligations and duties under the
Pooling and Servicing Agreement, except upon determination that performance of
its duties is no longer permissible under applicable law and except as
described below. 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 Pooling and Servicing Agreement. Notwithstanding the
foregoing, Chase USA may transfer its servicing obligations to any other
wholly owned subsidiary of The Chase Manhattan Corporation (provided it meets
certain eligibility standards set forth in the Pooling and Servicing
Agreement) or, subject to certain conditions set forth in the Pooling and
Servicing Agreement, to any other entity as to which the Rating Agency has
advised in writing that such substitution will not result in the reduction or
withdrawal of its then-existing rating of the Certificates and any provider of
Enhancement has given its consent, which consent shall not be unreasonably
withheld, and be relieved of its obligations and duties under the Pooling and
Servicing Agreement. Chase USA, as initial Servicer, intends to delegate some
of its servicing and administrative duties to the Bank, an affiliate thereof,
or to Chase Bankcard Services, Inc.; however, such delegation will not relieve
it of its obligation to perform such duties in accordance with the Pooling and
Servicing Agreement.
The Pooling and Servicing Agreement provides that the Servicer will
indemnify the Trust, for the benefit of the Certificateholders, and the
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 pursuant to the Pooling and Servicing Agreement; provided,
however, that the Servicer shall not indemnify (a) the Trustee for liabilities
imposed by or resulting from reason of fraud, negligence, breach of fiduciary
duty or willful misconduct by the Trustee, (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 Certificateholder in its
capacity as an investor, including without limitation, losses incurred as a
result of Receivables in Defaulted Accounts 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 herewith to any
taxing authority.
The Pooling and Servicing Agreement also provides that neither the Seller
nor the Servicer nor any of their respective directors, officers, employees or
agents will be under any liability to the Trust, the Trustee, the
Certificateholders or any other person for any action taken, or for refraining
from taking any action pursuant to the Pooling and Servicing Agreement, except
for any liability which would otherwise be imposed by reason of willful
misfeasance, bad faith or gross negligence of the Seller, the Servicer or any
such person in the performance of its duties or by reason of reckless
disregard of obligations and duties thereunder. In addition, the Pooling and
Servicing Agreement provides 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 Pooling and Servicing Agreement and which
in its opinion may involve it in any expense or liability.
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The Pooling and Servicing Agreement provides that, in addition to Exchanges,
the Seller may sell, transfer or pledge its interest in all or a portion of
the Exchangeable Seller Certificate, provided that prior to any such transfer
the Trustee receives (a) written notification from the Rating Agency then
rating each Series that such transfer will not result in a lowering of its
then-existing rating of the certificates rated by it; (b) a written opinion of
counsel confirming that such transfer would not adversely effect the treatment
of the certificates of each series as debt for federal income tax purposes;
(c) in the case of the transfer of the Exchangeable Seller Certificate as a
whole, an agreement supplemental to the Pooling and Servicing Agreement in
which the transferee expressly assumes the performance of every covenant and
obligation of the Seller as holder of the Exchangeable Seller Certificate; and
(d) each provider of Enhancement consents.
The Pooling and Servicing Agreement further provides that the Seller may not
consolidate with or merge into another corporation, or convey or transfer its
properties and assets substantially as an entirety to any person, unless the
corporation formed by such consolidation or into which the Seller was merged,
or the person that acquires such properties and assets, is a U.S. federal or
state banking association, and shall expressly assume, by an agreement
supplemental to the Pooling and Servicing Agreement, the performance of every
covenant and obligation of the Seller thereunder, provided that the Seller
shall have delivered to the Trustee a certificate as to compliance with the
requirements stated in this sentence and an opinion of counsel as to the legal
validity of such supplemental agreement. The Seller may effect any sale,
transfer or pledge of the Accounts or effect any merger, consolidation or
assumption which is not in accordance with the provisions of the preceding
sentence so long as (a) the Seller and Servicer determine that such event will
not be adverse to the interests of the Certificateholders of any Series; (b)
the Rating Agency indicates that such event will not adversely affect the
then-existing rating of certificates of any Series outstanding; (c) the
successor entity executes a supplemental agreement whereby such entity agrees
to assume the obligations of the Seller; and (d) each provider of Enhancement
consents.
SERVICER DEFAULT
In the event of any Servicer Default, either the Trustee or holders
representing undivided interests aggregating more than 50% of the sum of the
Aggregate Investor Interests, 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 Pooling and Servicing
Agreement and the Trustee shall appoint a new Servicer (a "Service Transfer"),
which successor Servicer must satisfy certain eligibility criteria contained
in the Pooling and Servicing Agreement. The rights and interest of the Seller
under the Pooling and Servicing Agreement and in the Exchangeable Seller
Interest will not be affected by such termination. If no such Servicer has
been appointed and has accepted such appointment by the time the Servicer
ceases to act as Servicer, the Trustee shall automatically be appointed the
successor Servicer. 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 Seller the right to accept
reassignment of the Receivables at a price generally equal to the higher of
(i) the Aggregate Investor Interest of the certificates plus accrued interest
through the date of reassignment minus collections allocated to such accrued
interest and (ii) the average bid quoted by two recognized dealers for a
similar security rated in the highest rating category by the Rating Agency and
having a remaining maturity of twelve months.
A "Servicer Default" 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 any withdrawal, or payment
under any Enhancement within five business days after the date the Servicer
is required to do so under the Pooling and Servicing 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 which has a
material adverse effect on the Certificateholders of any outstanding Series
(which determination shall be made without regard to whether funds are
available in any
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Enhancement) and which continues unremedied for a period of 60 days after
written notice thereof and continues to have a material adverse effect on
the Certificateholders for such period; or the delegation by the Servicer
of its duties under the Pooling and Servicing Agreement, except as
permitted thereunder;
(c) any representation, warranty or certification made by the Servicer in
the Pooling and Servicing Agreement or any Supplement, or in any
certificate delivered pursuant to the Pooling and Servicing Agreement or
any Supplement, proves to have been incorrect when made, which has a
material adverse effect on the Certificateholders of any outstanding Series
(which determination shall be made without regard to whether funds are
available in any Enhancement), and which continues to be incorrect in any
material respect for a period of 60 days after written notice thereof, or
(d) the occurrence of certain events of bankruptcy, insolvency or
receivership of the Servicer.
In the event of a Servicer Default, if a conservator or receiver is
appointed for the Servicer and no Servicer Default other than such
conservatorship or receivership or the insolvency of the Servicer exists, the
conservator or receiver may have the power to prevent either the Trustee or
the majority of the certificateholders from effecting a Service Transfer.
REPORTS TO CERTIFICATEHOLDERS
On each Distribution Date, the Paying Agent will forward to each
Certificateholder of record with respect to a particular Series a statement
(the "Monthly Servicer Report") prepared by the Servicer setting forth among
other things: (a) the total amount distributed with respect to such Series on
such Distribution Date, (b) the amount of such distribution allocable to the
principal on the Certificates of such Series and each Class thereof, (c) the
amount of such distribution allocable to the interest on the Certificates of
such Series and each Class thereof, (d) the amount of collections of Principal
Receivables processed during the Billing Cycles which ended during the
preceding month and allocated in respect of the Certificates of such Series,
(e) the aggregate amount of Principal Receivables, the Investor Interest with
respect to such Series and the Investor Interest with respect to such Series
as a percentage of Aggregate Principal Receivables as of the end of the last
day of the preceding Monthly Period, (f) the aggregate outstanding balance of
Accounts which are up to 29 days delinquent, 30 to 59 days delinquent, 60 to
89 days delinquent and 90 or more days delinquent in accordance with the
Servicer's then existing credit card guidelines as of the end of the last day
of the applicable Billing Cycle which ended during the preceding Monthly
Period, (g) the Aggregate Investor Default Amount with respect to such Series
for the preceding Monthly Period, (h) the aggregate amount of Investor Charge
Offs with respect to such Series for the preceding Monthly Period and the
aggregate amount of Investor Charge Offs with respect to such Series
reimbursed on the Transfer Date immediately preceding such Distribution Date,
(i) the amount of the Monthly Servicing Fee with respect to such Series for
the preceding Monthly Period, (j) the "Pool Factor" with respect to such
Series as of the end of the preceding Record Date (consisting of an eight-
digit decimal expressing the ratio of Investor Interest with respect to such
Series to initial Investor Interest with respect to such Series), (k) the
Deficit Controlled Amortization Deposit Amount if applicable, (1) the
aggregate amount of collections of Finance Charge Receivables for the
preceding Monthly Period, (m) the required Enhancement as of the close of
business on such Distribution Date and (n) the ratio of the outstanding
Enhancement amount to the Investor Interest of such Certificates as of the
related Record Date.
On or before January 31 of each calendar year, the Paying Agent will
distribute 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 Monthly Servicer
Report, 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
tax returns.
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EVIDENCE AS TO COMPLIANCE
The Pooling and Servicing Agreement provides that on or before March 31 of
each calendar year, the Servicer will cause a firm of independent accountants
to furnish a report to the Trustee to the effect that such firm has made a
study and evaluation of the Servicer's internal accounting controls relative
to the servicing of Accounts under the Pooling and Servicing Agreement, and
that, on the basis of such study and evaluation, such firm is of the opinion
that the system of internal accounting controls in effect on the date set
forth in such report relating to servicing procedures performed by the
Servicer under the Pooling and Servicing Agreement, taken as a whole, was
sufficient for the prevention and detection of errors and irregularities in
amounts that would be material to the financial statements of the Servicer and
that such servicing was conducted in compliance with the applicable sections
of the Pooling and Servicing Agreement, except for such exceptions, errors or
irregularities as such firm shall believe to be immaterial to the financial
statements of the Servicer and such other exceptions, errors or irregularities
as shall be set forth in such report. In addition, on or before March 31 of
each calendar year, a firm of independent accountants will compare the amounts
contained in the Servicer's statements and certificates delivered during such
year with the computer reports of the Servicer and statements of any agents
engaged by the Servicer to perform servicing activities which were the source
of such amounts and deliver a report confirming that such amounts are in
agreement except for such exceptions as it believes to be immaterial to the
financial statements of the Servicer and such other exceptions as shall be set
forth in such report.
The Pooling and Servicing Agreement provides for delivery to the Trustee, on
or before each calendar year, of an annual statement signed by an officer of
the Servicer to the effect that the Servicer has fully performed all its
obligations under the Pooling and Servicing Agreement throughout the preceding
year, or, if there has been a default in the performance of any such
obligation in any material respect, specifying the nature and status of the
default.
AMENDMENTS
The Pooling and Servicing Agreement and any Supplement may be amended by the
Seller, the Servicer and the Trustee, without Certificateholder consent, to
cure any ambiguity, 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 under the Pooling and
Servicing Agreement and any Supplement which are not inconsistent with the
provisions of the Pooling and Servicing Agreement and any Supplement. See "The
Receivables." The Pooling and Servicing Agreement may be amended from time to
time by the Seller, the Servicer and the Trustee, with the consent of the
Trustee and without the consent of the Certificateholders, to (A) provide for
the transfer by the Seller of its interest in and to all or part of the
Accounts in accordance with the provisions of the Pooling and Servicing
Agreement, (B) provide for the purchase of Principal Receivables by the Trust
at a price which is less than 100% of the outstanding balance thereof, and to
provide for the treatment of collections of Principal Receivables, in an
amount up to the aggregate amount by which the purchase price of Principal
Receivables as sold thereafter is less than 100%, as collections of Finance
Charge Receivables, and (C) facilitate the addition of Automatic Additional
Accounts on a daily basis; provided, however, that any such action shall not
adversely affect in any material respect the interests of the
Certificateholders; further provided that the Servicer and the Trustee shall
have received notice from the Rating Agency that any such amendment will not
result in the reduction or withdrawal of its then-existing rating of the
Certificates of any Series. In addition, the Pooling and Servicing Agreement
and any Supplement may be amended from time to time by the Seller, the
Servicer and the Trustee, without Certificateholder consent, to add to or
change any of the provisions of the Pooling and Servicing Agreement to provide
that bearer Certificates issued with respect to any other Series may be
registrable as to principal, to change or eliminate any restrictions on the
payment of principal of or any interest on such bearer Certificates, to permit
such bearer Certificates to be issued in exchange for registered Certificates
or bearer Certificates of other authorized denominations or to permit the
issuance of uncertificated Certificates. Moreover, any Supplement and any
amendments regarding the addition or removal of Receivables from the Trust
will not be considered amendments requiring Certificateholder consent under
the provisions of the Pooling and Servicing Agreement or any Supplement.
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The Pooling and Servicing Agreement may be amended by the Seller, the
Servicer and the Trustee with the consent of the holders of Certificates
evidencing undivided interests aggregating not less than 66 2/3% of the
principal amount of all Series adversely affected, and if provided in the
applicable Supplement, with the consent of the related provider of any
Enhancement as to matters affecting such Series only, which consent shall not
be unreasonably withheld, for the purpose of adding any provisions to,
changing in any manner or eliminating any of the provisions of the Pooling and
Servicing Agreement or any Supplement or of modifying in any manner the rights
of Certificateholders of any Series. No such amendment, however, may (a)
reduce in any manner the amount of, or delay the timing of, distributions
required to be made on such Series, (b) change the definition of or the manner
of calculating the interest of any Certificateholder of such Series or (c)
reduce the aforesaid percentage of undivided interests the Holders of which
are required to consent to any such amendment, in each case without the
consent of all Certificateholders of all Series adversely affected. Promptly
following the execution of any amendment to the Pooling and Servicing
Agreement or any Supplement, the Trustee will furnish written notice of the
substance of such amendment to any related Enhancement provider and the Rating
Agency (or with respect to an amendment of a Supplement, to the applicable
Series).
LIST OF CERTIFICATEHOLDERS
At such time, if any, as Definitive Certificates have been issued, upon
written request of Certificateholders of record of any Series representing
undivided interests in the Trust aggregating not less than 10% of the Investor
Interest of such Series, the Trustee after having been adequately indemnified
by such Certificateholders, for its costs and expenses, 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 Pooling and
Servicing Agreement and give the Servicer notice that such report has been
made. The Pooling and Servicing Agreement generally does not provide for any
annual or other meetings of Certificateholders. See "--Book-Entry
Registration" and "--Definitive Certificates" above.
CERTAIN LEGAL ASPECTS OF THE RECEIVABLES
TRANSFER OF RECEIVABLES
The Seller has represented and warranted, and will represent and warrant, in
the Pooling and Servicing Agreement that the transfer of Receivables to the
Trust constitutes either a valid transfer and assignment to the Trust of all
right, title and interest of the Seller in and to the Receivables to the
Trust, except for the interest of the Seller as holder of the Exchangeable
Seller Certificate, or the grant to the Trust of a security interest in such
property. The Seller has also represented and warranted, and will also
represent and warrant, in the Pooling and Servicing Agreement that, in the
event the transfer of Receivables to the Trust by the Seller to the Trust is
deemed to create a security interest under the UCC, there will exist a valid,
subsisting and enforceable first priority perfected security interest in such
property in existence at the time of the formation of the Trust in favor of
the Trust and a valid, subsisting and enforceable first priority perfected
security interest in such property created thereafter in favor of the Trust on
and after their creation, except for certain tax and governmental or other
non-consensual liens. For a discussion of the Trust's rights arising from a
breach of these warranties, see "Description of the Certificates--
Representations and Warranties."
The Seller has represented, and will represent, that the Receivables are
"accounts" or "general intangibles" for purposes of the UCC. Both the transfer
and assignment of accounts and the transfer of accounts as security for an
obligation are treated under Article 9 of the UCC as creating a security
interest therein and are subject to its provisions, and the filing of an
appropriate financing statement is required to perfect the security interest
of the Trust. If a transfer of general intangibles is deemed to constitute the
creation of a security interest, rather than a sale, Article 9 of the UCC
applies and the filing of an appropriate financing statement is also required
in order to perfect the Trust's security interest. A financing statement
covering the Receivables has been filed with the appropriate governmental
authority in Delaware to protect the interests of the Trust in the
Receivables.
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There are certain limited circumstances under the UCC 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 the Trust's
interest. Under the Pooling and Servicing Agreement, however, the Seller has
represented and warranted, and will represent and warrant, that it has
transferred the Receivables to the Trust free and clear of the lien of any
third party. In addition, the Seller will covenant that it will not sell,
pledge, assign, transfer, grant, create, incur, assume, or suffer to exist any
lien on any Receivable (or any interest therein) other than to the Trust. A
tax or other government hen or other non-consensual liens on property of the
Seller 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 Seller, certain administrative
expenses of the receiver or the Delaware State Bank Commissioner and certain
borrowings made by the receiver may also have priority over the interest of
the Trust in such Receivable.
CERTAIN MATTERS RELATING TO RECEIVERSHIP
The Seller is chartered as a Delaware banking corporation and is subject to
regulation and supervision by the Delaware State Bank Commissioner. If the
Seller becomes insolvent or is in an unsound condition or if certain other
circumstances occur, the Delaware State Bank Commissioner may request the
Attorney General of Delaware to apply to the Delaware Court of Chancery for an
order appointing a receiver for the Seller. Since the Seller is a FDIC-insured
bank, Delaware law would require that the FDIC be appointed receiver.
The FDIA sets forth certain powers that the FDIC in its capacity as
conservator or receiver for the Seller could exercise. Positions taken by the
FDIC do not suggest that the FDIC, if appointed as conservator or receiver for
the Seller, would interfere with the timely transfer to the Trust of payments
collected on the Receivables or interfere with the timely liquidation of
Receivables, as described below. To the extent that the Seller has granted a
security interest in the Receivables to the Trust, and that interest was
validly perfected before the Seller's insolvency and was not taken in
contemplation of the insolvency of the Seller, or with the intent to hinder,
delay or defraud the Seller or the creditors of the Seller, the FDIA provides
that such security interest should not be subject to avoidance by the FDIC as
conservator or receiver. As a result, payments to the Trust with respect to
the Receivables should not be subject to recovery by the FDIC as conservator
or receiver for the Seller. If, however, the FDIC, as conservator or receiver
for the Seller were to assert a contrary position, or were to require the
Trustee to establish its right to those payments by submitting to and
completing the administrative claims procedure established under the FDIA, or
the conservator or receiver were to request a stay of proceedings with respect
to the Seller as provided under the FDIA, delays in payments on the
Certificates and possible reductions in the amount of those payments could
occur.
The Pooling and Servicing Agreement provides that, upon the appointment of a
conservator or receiver or upon a voluntary liquidation with respect to the
Seller, the Seller will promptly give notice thereof to the Trustee and a Pay
Out Event will occur with respect to all Series then outstanding. Pursuant to
the Pooling and Servicing Agreement, newly created Principal Receivables will
not be transferred to the 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 instructions otherwise are received
within a specified period from (i) holders of more than 50% of the Investor
Interest of any of the Series 1991-1 Certificates or the Series 1992-1
Certificates, or (ii) Holders of more than 50% of the Investor Interest of
each other Series issued and outstanding (or, with respect to any Series with
two or more classes, 50% of the Investor Interest of each Class, which may
include an Enhancement Investor Interest). Under the Pooling and Servicing
Agreement, the proceeds from the sale of the Receivables would be treated as
collections of the Receivables and the applicable investor allocation
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 Seller or the appointment of a
conservator or receiver for the Seller, 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 with respect
to each Series. In addition, a conservator or receiver may have the power to
cause the early sale of the Receivables and the early retirement of
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the Certificates or to prohibit the continued transfer of Principal
Receivables to the Trust. See "Description of the Certificates--Pay Out
Events."
CONSUMER PROTECTION LAWS
The relationships of the cardholder and credit card issuer are extensively
regulated by federal and state consumer protection laws. With respect to
credit cards issued by the Seller, the most significant laws include the
federal Truth-in-Lending, Equal Credit Opportunity, Fair Credit Reporting and
Fair Debt Collection Practice Acts, Billing Act, Electronic Funds Transfer Act
and applicable state law. These statutes impose disclosure requirements when a
credit card account is advertised, when it is applied for, when it is opened,
at the end of monthly billing cycles, and at year end. In addition, these
statutes limit cardholder liability for unauthorized use, prohibit certain
discriminatory practices in extending credit, and impose certain limitations
on the type of account-related charges that may be assessed. Federal law
requires credit card issuers to disclose to consumers the interest rates,
cardholder fees, grace periods and balance calculation methods associated with
their credit card accounts. In addition, 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.
Certain laws, including the laws described above, may limit the Seller's
ability to collect amounts owing with respect to the Receivables regardless of
any act or omission on the part of the Seller. For example, under the federal
Fair Credit Billing Act, a credit card issuer is subject to all claims (other
than tort claims) and defenses arising out of certain transactions in which a
credit card is used as a method of payment or extension of credit if the
obligor has made a good faith attempt to obtain satisfactory resolution of a
disagreement or problem relative to the transaction from the person honoring
the credit card and, except in cases where there is a certain relationship
between the person honoring the card and the credit card issuer, the amount of
the initial transaction exceeds $50 and the place where the initial
transaction occurred was in the same state as the cardholder's mailing address
or within 100 miles of that address. These statutes further provide that in
certain cases cardholders cannot be held liable for, or the cardholder's
liability is limited with respect to, charges to the credit card account that
result from unauthorized use of the credit card.
Additional consumer protection laws may be enacted that would impose
requirements on the making, enforcement and collection of consumer credit
loans. Any new laws or rulings that may be adopted, and existing consumer
protection laws, may adversely affect the ability to collect on the
Receivables. In addition, failure of the Servicer to comply with such
requirements could adversely affect the Servicer's ability to enforce the
Receivables.
Certain jurisdictions may attempt and private parties are attempting to
require out-of-state credit card issuers to comply with such jurisdictions'
consumer protection laws (including laws limiting the charges imposed by such
credit card issuers) in connection with their operations in such
jurisdictions. If it were determined that out-of-state credit card issuers
must comply with a jurisdiction's laws limiting the charges imposed by credit
card issuers, such action could have an adverse impact on the operations of
credit card issuers, including the Seller. Application of federal and state
bankruptcy and debtor relief laws (including the Soldiers' and Sailors' Civil
Relief Act of 1940) would affect the interests of the holders of the
Certificates if the protection provided to debtors under such laws result in
any Receivables of the Trust being written off as uncollectible. See
"Description of the Certificates--Receivables in Defaulted Accounts;
Adjustments and Fraudulent Charges."
The Trust may be liable for certain violations of consumer protection laws
that apply to the Receivables transferred to it, either as assignee from a
Seller with respect to violations arising before the transfer or as a party
directly responsible for violations with respect to these obligations 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 Seller will warrant to the Trust in the Pooling and
Servicing Agreement that all Receivables have been and will be created in
compliance with the requirements of such laws. The Servicer has also agreed in
the Pooling and Servicing Agreement to indemnify the Trust, among other
things, for any liability
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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."
CLAIMS AND DEFENSES OF CARDHOLDERS AGAINST THE TRUST
The UCC, the provisions of which would be applicable to the Trust if it were
deemed to have acquired a security interest in the Receivables transferred to
the Trust (see "--Transfer of the Receivables"), provides that (a) unless a
cardholder has made an enforceable agreement not to assert defenses or claims
arising out of a transaction, the rights of the Trust, as assignee, are
subject to all the terms of the cardholder agreement between the Seller and
the cardholder and any defense or claim arising therefrom, to rights of set-
off and to any other defense or claim of the cardholder against the Seller
that accrues before the cardholder receives notification of the assignment and
(b) any cardholder is authorized to continue to pay the Seller until (i) the
cardholder receives notification, reasonably identifying the rights assigned,
that the amount due or to become due has been assigned and that payment is to
be made to the Trustee or successor Servicer and (ii) if requested by the
cardholders the Trustee or successor Servicer has furnished reasonable proof
of assignment. No such agreement not to assert defenses has been entered into
and no notice of the assignment of the Receivables to the Trust will be sent
to the cardholders obligated on the Accounts in connection with the transfer
of the Receivables to the Trust.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
GENERAL
The following is a general discussion of federal income tax consequences
relating to the purchase, ownership and disposition of the Certificates. This
discussion is based on current law, which is subject to changes that could
prospectively or retroactively modify or adversely affect the tax consequences
summarized below. The discussion does not address all of the tax consequences
relevant to a particular Certificate Owner in light of that Certificate
Owner's circumstances, and some Certificate Owners may be subject to special
tax rules and limitations not discussed below. Each prospective Certificate
Owner is urged to consult its own tax adviser in determining the federal,
state, local and foreign income and any other tax consequences of the
purchase, ownership and disposition of a Certificate.
For purposes of this discussion, "U.S. Person" means a citizen or resident
of the United States, a corporation or partnership organized in or under the
laws of the United States or any political subdivision thereof or an estate or
trust the income of which is includable in gross income for U.S. federal
income tax purposes regardless of its source. The term "U.S. Certificate
Owner" means any U.S. Person and any other person to the extent that the
income attributable to a Certificate is effectively connected with that
person's conduct of a U.S. trade or business.
CHARACTERIZATION OF AN INVESTMENT IN CERTIFICATES
Treatment of the Certificates as Debt. The terms of the Pooling and
Servicing Agreement set forth the intention of the Seller and the agreement of
the Certificate Owners to treat the Certificates as debt for federal, state,
local and foreign income and franchise tax purposes. The Pooling and Servicing
Agreement, however, generally refers to the transfer of Receivables as a
"sale," and because different criteria are used in determining the non-tax
accounting treatment of the transaction, the Seller will treat the Pooling and
Servicing Agreement for certain non-tax accounting purposes as causing a
transfer of an ownership interest in the Receivables and not as creating a
debt obligation.
A basic premise of federal income tax law is that the economic substance of
a transaction generally determines 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 Internal Revenue Service (the "IRS") to treat a
transaction in accordance with its economic substance as determined
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under federal income tax law, even though the participants in the transaction
have characterized it differently for non-tax purposes.
The determination of whether the economic substance of a purchase of an
interest in property is instead a loan secured by the transferred property has
been made by the IRS and the courts on the basis of numerous factors designed
to determine whether the 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, Orrick, Herrington & Sutcliffe, special tax counsel to the Seller
("Tax Counsel"), will deliver its opinion generally to the effect that, under
current law as in effect on the Closing Date, although no transaction closely
comparable to that contemplated herein has been the subject of any Treasury
regulation, revenue ruling or judicial decision, for federal income tax
purposes the Certificates will be characterized as debt. Except where
indicated to the contrary, the following discussion assumes that the
Certificates are debt for federal income tax purposes.
Characterization of the Trust. The Pooling and Servicing Agreement permits
the issuance of Certificates and certain other interests (including any
Enhancement Investor Interest) in the Trust, each of which may be treated for
federal income tax purposes either as debt or equity interests in Receivables
or the Trust. If all of the Certificates and other interests (other than the
Exchangeable Seller Certificate) in the Trust were characterized as debt, the
Trust might be characterized as a security arrangement for debt collateralized
by the Receivables and issued directly by the Seller (or the holder of the
Exchangeable Seller Certificate). Under such a view, the Trust would be
disregarded for federal income tax purposes. Alternatively, if some of the
Certificates or other interests in the Trust were characterized as equity, the
Trust might be characterized as a separate entity owning the Receivables,
issuing its own debt, and jointly owned by the Seller (or other holder of the
Exchangeable Seller Certificate) and the other holders of equity interests in
the Trust. In that event, the Trust could be classified for federal income tax
purposes as an association or a publicly traded partnership taxable as a
corporation, or as a partnership. Because Tax Counsel will deliver its opinion
that the Certificates will be characterized as debt for federal income tax
purposes, and because any holder of an Enhancement Investor 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 the Trust were
treated as a partnership or a corporation.
If the Trust were treated in whole or in part as a partnership in which some
of all of the holders of interests in the publicly offered Certificates were
partners, that partnership could be classified as a publicly traded
partnership taxable as a corporation. Further, regulations published by the
Treasury Department on December 4, 1995 (the "Regulations") could cause the
Trust to constitute a publicly traded partnership even if all holders of
interests in the publicly offered Certificates are treated as holding debt.
The Regulations generally apply to taxable years beginning after December 31,
1995, and thus could affect the classification of presently existing entities
and the ongoing tax treatment of already completed transactions. Although the
Regulations provide for a 10-year grandfather period for a partnership
actively engaged in an activity before December 4, 1995, it is not clear
whether the Trust would qualify for this grandfather period. If the Trust were
classified as a publicly traded partnership, whether by reason of the
treatment of publicly offered Certificates as equity or by reason of the
Regulations, it would avoid taxation as a corporation if its income was not
derived in the conduct of a "financial business"; however, whether the income
of the Trust would be so classified is unclear.
Under the Code and the Regulations, a partnership will be classified as a
publicly traded partnership if equity interests therein are traded on an
"established securities market," or are "readily tradable" on a "secondary
market" or its "substantial equivalent." The Seller intends to take measures
designed to reduce the risk that Trust could be classified as a publicly
traded partnership by reason of interests in the Trust other than the publicly
traded Certificates. Although the Seller expects such measures will ultimately
be successful, certain of the actions that may be necessary for avoiding the
treatment of such interests as "readily tradable" on a "secondary market" or
its "substantial equivalent" are not fully within the control of the Seller.
As a result, there can be no assurance that the measures the Seller intends to
take will in all circumstances be sufficient to prevent the Trust from being
classified as a publicly traded partnership under the Regulations.
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If the Trust were treated as an association or publicly traded partnership
taxable as a corporation, it would be subject to federal income tax at
corporate tax rates on its taxable income generated by ownership of the
Receivables. That tax could result in reduced distributions to Certificate
Owners. No distributions from the Trust would be deductible in computing the
taxable income of the corporation, except to the extent that any Certificates
were treated as debt of the corporation and distributions to the related
Certificate Owners were treated as payments of interest thereon. In addition,
distributions to Certificate Owners not treated as holding debt would be
dividend income to the extent of the current and accumulated earnings and
profits of the corporation.
If instead the Trust were treated as a partnership other than a publicly
traded partnership taxable as a corporation, that partnership would not be
subject to federal income tax. Rather, each item of income, gain, loss and
deduction of the partnership generated through the ownership of the
Receivables would be taken into account directly in computing taxable income
of the Seller (or the holder of the Exchangeable Seller Certificate), the
holders of any Enhancement Investor Interest and the Certificate Owners
treated as partners in accordance with their respective partnership interests
therein. The amounts and timing of income reportable by the Certificate Owners
treated as partners would likely differ from that reportable if the
Certificates were characterized as debt. In addition, income derived from such
a partnership by a Certificate Owner treated as a partner that is a pension
fund or other tax-exempt entity could be treated as unrelated business taxable
income. Partnership characterization also may have adverse state and local
income or franchise tax consequences for a Certificate Owner. From time to
time, legislation has been introduced in Congress that would affect the
treatment of any "large partnership", defined as any partnership in which
there are at least 250 partners in a taxable year. Under such legislative
proposals, among other things, the availability of certain deductions to
partners may be limited and certain computations (such as those relating to
the level of allowable miscellaneous itemized deductions and the netting of
capital gains and losses) would be made at the partnership rather than the
partner level. No prediction can be made regarding whether such legislation
will be enacted or, if so, what its effective date will be.
TAXATION OF INTEREST INCOME OF U.S. CERTIFICATE OWNERS
General. Interest on a Certificate will be includable in gross income in
accordance with a U.S. Certificate Owner's method of accounting.
Original Issue Discount. It is anticipated that the Certificates will not
have any original issue discount ("OID") and that accordingly the provisions
of Sections 1271 through 1273 and 1275 of the Internal Revenue Code of 1986,
as amended (the "Code") will not apply to the Certificates. Because, however,
the failure to pay interest currently on the Certificates is not a default and
may not be considered to give rise to any penalty, the IRS could take the
position on the basis of Treasury regulations that all of the interest
payments on the Certificates will be treated as payments of principal and the
Certificates should be treated as having OID.
If the Certificates were treated as having OID, a U.S. Certificate Owner
(including a cash basis holder) generally would be required to include the
interest on a Certificate in income for federal income tax purposes on the
accrual method on a constant yield basis, resulting in the inclusion of
interest in income somewhat in advance of the receipt of cash attributable to
that income. Under Section 1272(a)(6) of the Code, special provisions apply to
debt instruments on which payments may be accelerated due to prepayments of
other obligations securing those debt instruments. However, no regulations
have been issued interpreting those provisions, and the manner in which those
provisions would apply to the Certificates is unclear.
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.
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Market Premium. A U.S. Certificate Owner who purchases a Certificate at a
premium may elect to offset the premium against interest income over the
remaining term of the Certificate in accordance with the provisions of Section
171 of the Code.
SALE OR EXCHANGE OF CERTIFICATES
Upon a 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 includable 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.
NON-U.S. CERTIFICATE OWNERS
In general, a non-U.S. Certificate Owner will not be subject to U.S. federal
income tax on interest (including OID) on a beneficial interest in a
Certificate unless (i) the non-U.S. Certificate Owner actually or
constructively owns 10 percent of more of the total combined voting power of
all classes of stock of the Seller entitled to vote (or of a profits or
capital interest in the Trust if characterized as a partnership), (ii) the
non-U.S. Certificate Owner is a controlled foreign corporation that is related
to the Seller (or the Trust if treated as a partnership) through stock
ownership, (iii) the Certificate Owner is a bank described in section
881(c)(3)(A) of the Code, (iv) such interest is contingent interest described
in section 871(h)(4) of the Code, or (v) the non-U.S. Certificate Owner bears
certain relationships to any holder of the Exchangeable Seller Certificate
other than the Seller or any other interest in the Trust not properly
characterized as debt. To qualify for the exemption from taxation, the last
U.S. Person in the chain of payment prior to payment to a non-U.S. Certificate
Owner (the "Withholding Agent") must have received (in the year in which a
payment of interest or principal occurs or in either of the two preceding
years) a statement that (i) is signed by the non-U.S. Certificate Owner under
penalties of perjury, (ii) certifies that the non-U.S. Certificate Owner is
not a U.S. Person and (iii) provides the name and address of the non-U.S.
Certificate Owner. The statement may be made on a Form W-8 or substantially
similar substitute form, and the non-U.S. Certificate Owner must inform the
Withholding Agent of any change in the information on the statement within 30
days of the change. If a Certificate is held through a securities clearing
organization or certain other financial institutions, the organization or
institution may provide a signed statement to the Withholding Agent. However,
in that case, the signed statement must be accompanied by a Form W-8 or
substitute form provided by the non-U.S. Certificate Owner to the organization
or institution holding the Certificate on behalf of the non-U.S. Certificate
Owner. The U.S. Treasury Department is considering implementation of further
certification requirements aimed at determining whether the issuer of a debt
obligation is related to holders thereof.
Generally, any gain or income realized by a non-U.S. Certificate Owner upon
retirement or disposition of a Certificate will not be subject to U.S. federal
income tax, provided that (i) in the case of a Certificate Owner that is an
individual, such Certificate Owner is not present in the United States for 183
days or more during the taxable year in which such retirement or disposition
occurs and (ii) in the case of gain representing accrued interest, the
conditions described in the preceding paragraph for exemption from withholding
are satisfied. Certain exceptions may be applicable, and an individual non-
U.S. Certificate Owner should consult a tax adviser.
If some or all of the Certificates were treated as stock in a corporation
(by reason of the Trust's classification as either an association or a
publicly traded partnership taxable as a corporation), distributions to a non-
U.S. Certificate Owner, to the extent treated as dividends, generally would be
subject to withholding of tax at the rate of 30%, unless that rate were
reduced by an applicable tax treaty. If the Certificates were treated as an
interest in a partnership, the recharacterization could cause a non-U.S.
Certificate Owner treated as a partner 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
57
<PAGE>
required to file a U.S. federal income tax return and, in general, would be
subject to U.S. federal income tax (including the branch profits tax) on its
net income from the partnership. Further, certain withholding obligations
apply with respect to income allocable or distributions made to a foreign
partner. That withholding may be at a rate as high as 39.6%.
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 Certificate to a U.S. Certificate Owner must be reported to
the IRS, unless the U.S. Certificate Owner is an exempt recipient or otherwise
establishes an exemption. Compliance with the identification procedures
(described in the preceding section) would establish an exemption from backup
withholding for a non-U.S. Certificate Owner who is not an exempt recipient.
In addition, upon the sale of a Certificate to (or through) a "broker", the
broker must withhold 31 percent of the entire purchase price, unless either
(i) the broker determines that the seller is a corporation or other exempt
recipient or (ii) the seller provides certain identifying information in the
required manner, and in the case of a non-U.S. Certificate Owner certifies
that the seller is a non-U.S. Certificate Owner (and certain other conditions
are met). Such a sale must also be reported by the broker to the IRS, unless
either (i) the broker determines that the seller is an exempt recipient or
(ii) the seller certifies its non-U.S. status (and certain other conditions
are met). Certification of the seller'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% 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.
STATE AND LOCAL TAXATION
The discussion above does not address the tax consequences of 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.
ERISA CONSIDERATIONS
Section 406 of ERISA and Section 4975 of the Code prohibit pension, profit
sharing or other employee benefit plans, individual retirement accounts or
annuities, employee annuity plans and Keogh plans subject to the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), or Section 4975
of the Code (each, a "Benefit Plan") from engaging in certain transactions
involving "plan assets" with persons that are "parties in interest" under
ERISA or "disqualified persons" under Section 4975 of the Code with respect to
the Benefit Plan. A violation of these "prohibited transaction" rules may
generate excise tax and other liabilities
58
<PAGE>
under ERISA and Section 4975 of the Code for such persons, unless a statutory,
regulatory or administrative exemption is available. Plans that are
governmental plans (as defined by Section 3(32) of ERISA) and certain church
plans (as defined by Section 3(33) of ERISA) are not subject to ERISA
requirements.
Subject to the considerations described below and except to the extent
otherwise provided in a Prospectus Supplement, the Seller anticipates that
each Class of Certificates of any Series offered hereby will be eligible for
purchase by Benefit Plan investors.
A possible violation of the prohibited transaction rules could occur if any
Series of Certificates were to be purchased with "plan assets" of any Benefit
Plan if the Seller, the Trustee, the Underwriters or any of their affiliates
were a "party in interest" or a "disqualified person" with respect to such
Benefit Plan. The Seller, the Trustee, the underwriters of a Series and their
affiliates are "parties in interest" or "disqualified persons" with respect to
many Benefit Plans. Prior to the purchase of a Certificate, any fiduciary or
other person investing "plan assets" of a Benefit Plan should consider whether
a prohibited transaction might arise by virtue of the relationship between the
Benefit Plan and the Seller, the Trustee, any underwriters of such Series or
any affiliate of any thereof and, if so, should consult counsel regarding the
purchase in light of the considerations described herein. The Department of
Labor (the "DOL") has issued three class exemptions that may apply to
otherwise prohibited transactions arising from the purchase or holding of the
Certificates: 90-1 (Class Exemption for Certain Transactions Involving
Insurance Company Pooled Separate Accounts), 91-38 (Class Exemption for
Certain Transactions Involving Bank Collective Investment Funds) and DOL
Prohibited Transaction Exemption 84-14 (Class Exemption for Plan Asset
Transactions Determined by Independent Qualified Professional Asset Managers).
Other prohibited transactions may arise through the operation of a
regulation (the "Plan Asset Regulation") issued by the DOL. Under certain
circumstances, the Plan Asset Regulation treats the assets of an entity in
which a Benefit Plan has an equity interest as "plan assets" of such Benefit
Plan. Although the Seller and the Certificate Owners will agree to treat each
Series of Certificates as debt instruments, the Certificates may be considered
equity interests in the Trust for purposes of the Plan Asset Regulation. In
such a case, unless one of the two exceptions described below applies, the
Plan Asset Regulation would apply to treat "plan assets" of the Trust as
assets of any Benefit Plan whose "plan assets" are invested in the
Certificates of any Series.
The first exception applies to a "publicly-offered security." A publicly-
offered security is a security that is (a) freely transferable, (b) part of a
class of securities that is owned, immediately subsequent to the initial
offering, by at least 100 investors independent of the issuer and of one
another (each, an "Independent Investor") and (c) either is (i) part of a
class of securities registered under Section 12(b) or 12(g) of the Exchange
Act or (ii) sold to the plan as part of an offering of securities to the
public pursuant to an effective registration statement under the Securities
Act and the class of securities of which such security is a part is registered
under the Exchange Act within 120 days (or such later time as may be allowed
by the Commission) after the end of the fiscal year of the issuer during which
the offering of such securities to the public occurred. For purposes of this
exception, each Class of the Certificates of each Series should be deemed a
"class" of securities that would be tested separately from any other
securities that may be issued by the Trust. Unless otherwise specified in the
related Prospectus Supplement, based on information provided by the
underwriters of a Series, the Seller will notify the Trustee in writing
whether each Class of Certificates will be expected to be held by at least 100
separately named persons at the completion of the offering made thereby.
However, the Seller will not determine whether any Class of Certificates at
that time, in fact, will (i) be held by at least 100 separately named persons
or (ii) satisfy the 100 Independent Investor criterion, and no assurance can
be given that the 100 Independent Investor criterion will be met. Prospective
purchasers may obtain a copy of the above described notification from the
Trustee at its Corporate Trust Department. The Seller anticipates that the
other conditions of the Plan Asset Regulation will be met.
The second exception applies if equity participation in the entity by
"benefit plan investors" (i.e., Benefit Plans and other plans not subject to
ERISA, such as governmental or foreign plans, as well as entities holding
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<PAGE>
assets deemed to be "plan assets") is not "significant." Equity participation
in the Trust by benefit plan investors is not significant on any date on which
any Series of Certificates is issued and outstanding if, immediately after the
most recent acquisition of any equity interest in the entity, less than 25% of
the value of any class of equity interest in the Trust (excluding interests
held by the Seller, the Trustee or their affiliates) is held by benefit plan
investors. No assurance can be given by the Seller or the underwriters of a
Series as to whether the value of each class of beneficial interests in the
Trust held by benefit plan investors will be less than that amount at the
completion of the offering or thereafter, and no monitoring or other measures
will be taken with respect to the satisfaction of the conditions to this
exception.
If the Plan Asset Regulation were to apply so that the Trust is considered
to hold "plan assets" of Benefit Plan investors, transactions involving the
Trust and "parties in interest" or "disqualified persons" with respect to a
Benefit Plan that is a Certificate Owner might be prohibited under Section 406
of ERISA and Section 4975 of the Code unless an exemption is applicable. The
three DOL class exemptions mentioned above may not provide relief for all
transactions involving the Trust's assets even if they would otherwise apply
to the purchase of a Certificate with "plan assets" of a Benefit Plan.
In light of the foregoing, fiduciaries or other persons investing "plan
assets" of any Benefit 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 availability of exemptive relief from the prohibited
transaction rules.
Unless otherwise specified in the related Prospectus Supplement, if the Bank
does not notify the Trustee that a Class of Certificates is expected to be
held by at least 100 separately named persons at the completion of the
offering made thereby, that Class of Certificates may not be acquired by or
with "plan assets" of any Benefit Plan or any entity whose underlying assets
include "plan assets" under the Plan Asset Regulation by reason of any Benefit
Plan's investment in the entity. In that event, by its acceptance of a
Certificate of that Class, each Certificateholder will be deemed to have
represented and warranted that it is not subject to the foregoing limitation.
Finally, fiduciaries or other persons investing "plan assets" of any Benefit
Plan should consider the fiduciary standards under ERISA or other applicable
law in the context of the Benefit Plan's particular circumstances before
authorizing an investment of a portion of a Benefit Plan's assets in
Certificates. Accordingly, among other factors, such fiduciaries should
consider whether the investment (i) satisfies the diversification requirement
of ERISA or other applicable law, (ii) is in accordance with the Benefit
Plan's governing instruments and (iii) is prudent considering the "Risk
Factors" and other factors discussed in this Prospectus and in the applicable
Prospectus Supplement.
PLAN OF DISTRIBUTION
The Seller 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
Seller 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.
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
60
<PAGE>
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 of a Series offered hereby may also be offered and sold, if so
indicated in the related Prospectus Supplement, in connection with a
remarketing upon their purchase, in accordance with a redemption or repayment
pursuant to their terms, by one or more firms ("Remarketing Firms") acting as
principals for their own accounts or as agents for the Seller. Any Remarketing
Firm will be identified and the terms of its agreement, if any, with the
Seller and its compensation will be described in the related Prospectus
Supplement. Remarketing Firms may be deemed to be underwriters in connection
with the Certificates remarketed thereby.
Certificates may also be sold directly by the Seller or through agents
designated by the Seller from time to time. Any agent involved in the offer or
sale of Certificates will be named, and any commissions payable by the Seller
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
Seller to indemnification by the Seller 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 Seller or their
affiliates in the ordinary course of business.
LEGAL MATTERS
Certain legal matters relating to the issuance of the Certificates will be
passed upon for the Seller by Andrew T. Semmelman, a Senior Associate Counsel
of Chase USA. Certain legal matters relating to the federal income tax
consequences of the issuance of the Certificates and certain other matters
relating thereto will be passed upon for the Seller by Orrick, Herrington &
Sutcliffe.
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INDEX OF KEY TERMS
<TABLE>
<CAPTION>
TERM PAGE
- ---- ----
<S> <C>
Accounts................................................................. 4
Accumulation Period...................................................... 10
Additional Accounts...................................................... 7
Affinity Program Account................................................. 26
Agent Bank Account....................................................... 26
Aggregate Investor Default Amount........................................ 41
Aggregate Investor Interest.............................................. 20
Aggregate Principal Receivables.......................................... 26
Amortization Period...................................................... 19
Automatic Addition Date.................................................. 26
Automatic Additional Accounts............................................ 7
Bank..................................................................... 31
Bank Portfolio........................................................... 5
Base Rate................................................................ 20
Benefit Plan............................................................. 15, 58
BIF...................................................................... 39
Billed Finance Charge Receivables........................................ 41
Billing Cycle............................................................ 23
Cede..................................................................... 2
Cedel.................................................................... 8
Cedel Participants....................................................... 28
Certificate Owners....................................................... 2, 4
Certificateholders....................................................... 4
Certificates............................................................. 1
Chase Lincoln Accounts................................................... 23
Chase USA................................................................ 1, 8
Class.................................................................... 1
Closing Date............................................................. 36
Code..................................................................... 15, 56
Collateral Interest...................................................... 44
Collection Account....................................................... 9, 39
Collection Recomputation Date............................................ 41
Collection Subaccount.................................................... 39
Commission............................................................... 2
Controlled Accumulation Amount........................................... 11
Controlled Amortization Amount........................................... 11
Controlled Amortization Period........................................... 11
Controlled Deposit Amount................................................ 11
Controlled Distribution Amount........................................... 11
Conversion Date.......................................................... 6
Cooperative.............................................................. 30
Credit Card Guidelines................................................... 39
Credit Enhancer.......................................................... 43
Cut Off Date............................................................. 38
Date of Processing....................................................... 14
Definitive Certificates.................................................. 31
Depositaries............................................................. 28
Depositary............................................................... 28
Determination Date....................................................... 14, 41
</TABLE>
62
<PAGE>
<TABLE>
<CAPTION>
TERM PAGE
- ---- ----
<S> <C>
Disclosure Document.................................................. 8
Distribution Date.................................................... 14, 40
DOL.................................................................. 59
DTC.................................................................. 2
DTC Participants..................................................... 29
Eligible Account..................................................... 36
Eligible Additional Account.......................................... 37
Eligible Automatic Additional Account................................ 38
Eligible Receivable.................................................. 37
Enhancement.......................................................... 4, 13
Enhancement Investor Interest........................................ 5, 43
ERISA................................................................ 15, 58
Euroclear............................................................ 8
Euroclear Operator................................................... 30
Euroclear Participants............................................... 28
Excess Finance Charge Collections.................................... 42
Exchange............................................................. 8
Exchange Act......................................................... 2
Exchangeable Seller Certificate...................................... 6
Excluded Series...................................................... 13, 26, 42
Expected Final Payment Date.......................................... 10
FDIA................................................................. 17
FDIC................................................................. 1, 6
FDR.................................................................. 22
Finance Charge Receivables........................................... 6
Fitch................................................................ 39
Floating Allocation Percentage....................................... 40
Group................................................................ 12, 41
Group One............................................................ 12, 41
Holders.............................................................. 31
Independent Investor................................................. 15, 59
Indirect DTC Participants............................................ 29
Ineligible Receivable................................................ 35
Initial Closing Date................................................. 33
Initial Portfolio.................................................... 5
Insolvency Event..................................................... 45
Interchange.......................................................... 25
Interest Funding Account............................................. 9
Interest Payment Date................................................ 33
Investor Default Amount.............................................. 41
Investor Exchange.................................................... 8
Investor Interest.................................................... 5, 34
IRS.................................................................. 54
L/C Issuer........................................................... 44
MasterCard........................................................... 22
Maximum Addition Amount.............................................. 38
Minimum Aggregate Principal Receivables.............................. 26
Minimum Seller Interest.............................................. 26
Monthly Period....................................................... 6, 26
Monthly Servicer Report.............................................. 49
Monthly Servicing Fee................................................ 47
</TABLE>
63
<PAGE>
<TABLE>
<CAPTION>
TERM PAGE
- ---- ----
<S> <C>
Moody's.................................................................. 39
OID...................................................................... 56
Paired Series............................................................ 13
Paying Agent............................................................. 29
Pay Out Event............................................................ 45
Permitted Investments.................................................... 40
Plan Asset Regulation.................................................... 15, 59
Pool Factor.............................................................. 49
Pooling and Servicing Agreement.......................................... 4
Portfolio Yield.......................................................... 20
Principal Allocation Percentage.......................................... 13, 40
Principal Commencement Date.............................................. 10
Principal Funding Account................................................ 11
Principal Receivables.................................................... 6
Principal Shortfalls..................................................... 42
Principal Terms.......................................................... 34
Prior Series............................................................. 13
Prospectus Supplement.................................................... 1
Purchased Accounts....................................................... 23
Qualified Institution.................................................... 39
Rapid Amortization Period................................................ 12
Rating Agency............................................................ 16
Receivables.............................................................. 1, 4
Receivables in Defaulted Accounts........................................ 41
Record Date.............................................................. 31
Recoveries............................................................... 6
Regulations.............................................................. 55
Remarketing Firms........................................................ 61
Removed Accounts......................................................... 7, 38
Retention Account........................................................ 40
Retention Subaccount..................................................... 40
Revolving Period......................................................... 10
SAIF..................................................................... 39
Securities Act........................................................... 2
Selection Date........................................................... 5
Seller................................................................... 1, 4
Seller Exchange.......................................................... 8
Seller Interest.......................................................... 5
Seller Percentage........................................................ 41
Seller Servicing Fee..................................................... 46
Series................................................................... 1, 4
Series Accounts.......................................................... 4
Series Closing Date...................................................... 10
Series Termination Date.................................................. 11
Service Transfer......................................................... 48
Servicer................................................................. 9
Servicer Default......................................................... 48
Servicing Fee............................................................ 46
Shared Principal Collections............................................. 42
Special Payment Date..................................................... 45
Standard & Poor's........................................................ 39
</TABLE>
64
<PAGE>
<TABLE>
<CAPTION>
TERM PAGE
- ---- ----
<S> <C>
Supplement................................................................. 8
Tax Counsel................................................................ 55
Terms and Conditions....................................................... 30
Transfer Date.............................................................. 40
Trust...................................................................... 1, 4
Trust Portfolio............................................................ 26
Trust Termination Date..................................................... 45
Trustee.................................................................... 4
U.S. Certificate Owner..................................................... 54
U.S. Person................................................................ 54
UCC........................................................................ 17
VISA....................................................................... 22
Withholding Agent.......................................................... 57
</TABLE>
65
<PAGE>
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- -------------------------------------------------------------------------------
NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS SUPPLEMENT OR THE ACCOMPANYING
PROSPECTUS IN CONNECTION WITH THE OFFER MADE HEREBY AND THEREBY AND, IF GIVEN
OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING
BEEN AUTHORIZED BY THE CHASE MANHATTAN BANK (USA) OR THE UNDERWRITERS. NEITHER
THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS NOR
ANY SALE MADE HEREUNDER AND THEREUNDER SHALL UNDER ANY CIRCUMSTANCE CREATE AN
IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE CHASE
MANHATTAN BANK (USA) OR THE RECEIVABLES OR THE ACCOUNTS SINCE THE DATE HEREOF
OR THEREOF. NEITHER THIS PROSPECTUS SUPPLEMENT NOR THE ACCOMPANYING PROSPECTUS
CONSTITUTES AN OFFER OR SOLICITATION BY ANYONE IN ANY STATE IN WHICH SUCH
OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH
OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANYONE TO WHOM IT IS
UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
---------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PROSPECTUS SUPPLEMENT PAGE
----
<S> <C>
Summary of Series Terms.................................................... S-3
Risk Factors............................................................... S-13
Maturity Assumptions....................................................... S-14
The Bank Portfolio......................................................... S-15
The Receivables............................................................ S-18
Use of Proceeds............................................................ S-22
Chase USA and The Chase Manhattan Corporation............................. S-22
Series Provisions.......................................................... S-22
Underwriting............................................................... S-38
Legal Matters.............................................................. S-39
Index of Key Terms......................................................... S-40
PROSPECTUS
Prospectus Supplement...................................................... 2
Reports to Certificateholders.............................................. 2
Available Information...................................................... 2
Incorporation of Certain Documents by Reference........................... 2
Prospectus Summary......................................................... 4
Risk Factors............................................................... 17
The Trust.................................................................. 21
The Credit Card Business of Chase USA...................................... 22
The Receivables............................................................ 26
Description of the Certificates............................................ 27
Certain Legal Aspects of the Receivables................................... 51
Certain Federal Income Tax Consequences.................................... 54
ERISA Considerations....................................................... 58
Plan of Distribution....................................................... 60
Legal Matters.............................................................. 61
Index of Key Terms......................................................... 62
</TABLE>
---------------
UNTIL , 199 , ALL DEALERS EFFECTING TRANSACTIONS IN THE CERTIFICATES,
WHETHER OR NOT PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER
A PROSPECTUS SUPPLEMENT AND A PROSPECTUS. THIS DELIVERY REQUIREMENT IS IN
ADDITION TO THE OBLIGATION OF DEALERS TO DELIVER A PROSPECTUS SUPPLEMENT AND A
PROSPECTUS WHEN ACTING AS UNDERWRITER AND WITH RESPECT TO THEIR UNSOLD
ALLOTMENTS OR SUBSCRIPTIONS.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
LOGO OF CHASE
$
CHASE MANHATTAN
CREDIT CARD
MASTER TRUST
$ CLASS A FLOATING RATE
ASSET BACKED CERTIFICATES, SERIES 199 -
$ CLASS B FLOATING RATE ASSET BACKED CERTIFICATES, SERIES 199 -
THE CHASE MANHATTAN BANK (USA)
SELLER AND SERVICER
---------------
PROSPECTUS SUPPLEMENT
---------------
UNDERWRITERS OF THE CLASS A CERTIFICATE
CHASE SECURITIES INC.
UNDERWRITER OF THE CLASS B CERTIFICATES
CHASE SECURITIES INC.
, 199
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<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.*
Registration Fee $ 689,656
Printing and Engraving 60,000
Trustee's Fees 20,000
Legal Fees and Expenses 100,000
Blue Sky Fees and Expenses 20,000
Accountants' Fees and Expenses 40,000
Rating Agency Fees 340,000
Miscellaneous Fees 130,344
----------
Total $1,400,000
==========
- ---------------
* Reflects expenses related to this Registration Statement and expenses related
to Registration Statement No. 33-91504 whose unissued Asset-Backed Securities
are being carried forward.
ITEM 15. Indemnification of Directors and Officers
Article TENTH of the Articles of Association of The Chase Manhattan Bank
(USA) (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 of 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 (hereinafter 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
II-1
<PAGE>
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 TENTH or otherwise.
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 TENTH (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 TENTH, 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 TENTH or otherwise shall be on the Bank.
Article TENTH of the Bank's Articles of Association 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
1.1 -Form of Underwriting Agreement.
4.1 -Pooling and Servicing Agreement including certain other related
agreements as Exhibits thereto.*
4.2 -Series 1991-1 Supplement, including form of Asset Backed Certificate.*
4.3 -Series 1991-2 Supplement, including form of Asset Backed Certificate.*
4.4 -Series 1992-1 Supplement, including form of Asset Backed Certificate.*
4.5 -Series 1995-1 Supplement, including form of Asset Backed Certificate.*
4.6 -Series 1995-2 Supplement, including form of Asset Backed Certificate.
4.7 -Series 1996-1 Supplement, including form of Asset Backed Certificate.
4.8 -Series 1996-2 Supplement, including form of Asset Backed Certificate.
5.1 -Opinion of Andrew T. Semmelman, Esq. with respect to legality.
8.1 -Opinion of Orrick, Herrington & Sutcliffe with respect to tax matters.
23.1 -Consent of Andrew T. Semmelman, Esq. (included in his opinion filed as
Exhibit 5.1).
23.2 -Consent of Orrick, Herrington & Sutcliffe (included in its opinion
filed as Exhibit 8.1).
24.1 -Powers of Attorney
__________________
* Incorporated herein by reference to Exhibit to Registrant's Amendment No. 1
to Registration Statement on Form S-1 (No. 33-89058)
(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 Manhattan Credit Card
Trust (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
disclosed in the Registration Statement or any material change to such
information in the Registration Statement; provided, however, that (a)(1)(i) and
(a)(1)(ii) will not apply if the information required to be included in a post-
effective amendment thereby is contained in periodic reports filed pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in this Registration Statement.b
(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 the Registrant's annual report pursuant to Section 13(a)
or 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each
filing of an employee benefit plan's annual report pursuant to Section 15(d) of
the Securities Exchange Act of 1934) that is incorporated by reference in the
Registration
II-3
<PAGE>
Statement shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(e) That insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the provisions described under Item 15
above, or otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities (other than
the payment by the Registrant of expenses incurred or paid by a director,
officer or controlling person of the Registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the Registrant will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of each
issue.
(f) That, for purposes of determining any liability under the Securities
Act of 1933, the information omitted from the form of prospectus filed as part
of this Registration Statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act of 1933 shall be deemed to be part of this
Registration Statement as of the time it was declared effective.
(g) That, for the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(h) The undersigned registrant hereby undertakes to provide to the
underwriter at the closing specified in the underwriting agreements,
certificates in such denominations and registered in such names as required by
the underwriter to permit prompt delivery to each purchaser.
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
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Wilmington, State of Delaware, on June 4, 1996.
The Chase Manhattan Bank (USA),
as originator of the Trust Registrant
By: /s/ Keith Schuck
----------------------------------------
Keith Schuck
Controller
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed on June 4, 1996 by the following persons
in the capacities indicated.
Signature Title Date
- --------- ----- ----
* Chairman of the Board and Director June 4, 1996
- ----------------------
Donald L. Boudreau
* President and Director June 4, 1996
- ----------------------
Michael Barrett
* Director June 4, 1996
- -----------------------
Charles Walsh
* Director June 4, 1996
- -----------------------
Deborah Duncan
Director
- -----------------------
William Hoefling
Director
- -----------------------
Michael Urkowitz
* Director June 4, 1996
- -----------------------
Thomas C. Lynch
/s/ Keith Schuck Chief Financial Officer June 4, 1996
- ----------------------- Controller (Principal
Keith Schuck Accounting Officer)
* The undersigned, by signing his name hereto, does hereby sign this
Registration Statement on behalf of the above-indicated directors and officers
of the Registrant pursuant to powers of attorney signed by such officers and
directors.
By: /s/ Keith Schuck
-----------------------------
Keith Schuck
Attorney-in-Fact
II-5
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibits Page
- -------- ----
<S> <C>
1.1 Form of Underwriting Agreement
4.6 Series 1995-2 Supplement, including form of Asset Backed Certificate
4.7 Series 1996-1 Supplement, including form of Asset Backed Certificate
4.8 Series 1996-2 Supplement, including form of Asset Backed Certificate
5.1 Opinion of Andrew T. Semmelman, Esq. with respect to legality
8.1 Opinion of Orrick, Herrington & Sutcliffe with respect to tax matters
24.1 Powers of Attorney
</TABLE>
<PAGE>
CHASE MANHATTAN CREDIT CARD MASTER TRUST
UNDERWRITING AGREEMENT
----------------------
STANDARD TERMS
(June 3, 1996)
CHASE SECURITIES INC.
270 Park Avenue
New York, New York 10017
Ladies and Gentlemen:
1. Introductory. From time to time The Chase Manhattan Bank (USA) (the
"Seller"), proposes to issue one or more series (each, a "Series") of its Asset
Backed Certificates (the "Certificates") and, with respect to each such series
of Certificates, to enter into a Terms Agreement (each, a "Terms Agreement")
with you, as the representative (the "Representative") of the underwriters named
in Schedule I thereto, and, subject to the terms and conditions stated or
incorporated by reference in such Terms Agreement, to cause the Chase Manhattan
Credit Card Master Trust (the "Trust") to issue and sell such Series of
Certificates to such underwriters. Each such Terms Agreement shall be in the
form of Annex I hereto, with such additions and deletions as the parties thereto
may determine, and shall incorporate by reference therein the provisions of
these Standard Terms. As used herein in connection with any Terms Agreement, the
term "Offered Series" refers only to the Series of Certificates offered pursuant
to such Terms Agreement, and the term "Underwriters" refers only to the
underwriters named in such Terms Agreement.
2. Representations and Warranties of the Seller. The Seller represents
and warrants to Underwriters, as of the date of the related Terms Agreement, as
follows:
(a) a registration statement (the "Initial Registration Statement") on
Form S-3, including a prospectus and such amendments thereto as may have
been required prior to the date of the related Terms Agreement, and, if
applicable, one or more additional registration statements filed pursuant
to Rules 429 and/or 462 under the Act, (each, an "Additional Registration
Statement"), relating to the Certificates and the offering thereof from
time to time in accordance with Rule 415 under the Securities Act of 1933,
as amended (the "Act"), have been filed with the Securities and Exchange
Commission (the "Commission"); such registration statements may have
included one or more preliminary prospectuses and prospectus supplements
(each, a "Preliminary Prospectus") meeting the requirements of Rule 430 of
the Act; such registration statements, as amended, have become effective;
such registration statement(s), as amended, and the prospectus relating to
the sale of the Offered
<PAGE>
Series constituting a part thereof, as from time to time amended or
supplemented with respect to the Offered Series (including any prospectus
filed with the Commission pursuant to Rule 424(b) of the rules and
regulations of the Commission (the "Rules and Regulations") under the Act),
are respectively referred to herein as the "Registration Statements" and
the "Prospectus"; and the conditions to the use of a registration statement
on Form S-3 under the Act, as set forth in the General Instructions to Form
S-3, and the conditions of Rule 415 under the Act, have been satisfied with
respect to the Registration Statements;
(b) as of the date of execution of the related Terms Agreement, each
Registration Statement and the Prospectus, except with respect to any
modification to which you have agreed, shall be in all substantive respects
in the form furnished to you prior to such date or, to the extent not
completed on such date, shall contain only such specific additional
information and other changes (beyond that contained in the latest
Preliminary Prospectus that has previously been furnished to you) as the
Seller has advised you, prior to such time, will be included or made
therein;
(c) each Registration Statement, on its effective date, and the
Prospectus, as of the filing date of the most recent supplement thereto,
complied in all material respects with the applicable requirements of the
Act and the Rules and Regulations, and did not include any untrue statement
of a material fact or, in the case of any Registration Statement, omit to
state any material fact required to be stated therein or necessary to make
the statements therein not misleading or, in the case of the Prospectus,
omit to state any material fact necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading,
and on the date of the related Terms Agreement, each Registration Statement
and the Prospectus will comply in all material respects with the applicable
requirements of the Act and the Rules and Regulations, and neither of such
documents included or will include any untrue statement of a material fact
or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading; provided, however,
that the foregoing does not apply to information contained in or omitted
from any Registration Statement or the Prospectus based upon written
information furnished to the Seller by any Underwriter in connection with
the preparation of any Registration Statement or the Prospectus;
(d) the Seller is a banking corporation duly organized and validly
existing in good standing under the laws of the jurisdiction of its
organization, with full corporate power, authority and legal right to own
its properties and conduct its business as described in the Prospectus, is
duly qualified to do business and is in good standing (or is exempt from
such requirements), and has obtained all necessary licenses and approvals
in each jurisdiction in which failure to so qualify or obtain such licenses
and approvals would have a material adverse effect on the interests of
Certificateholders under the Pooling and Servicing Agreement or under any
Supplement;
(e) the Certificates of the Offered Series, on the date of such Terms
Agreement, will have been duly and validly authorized and, when such
Certificates are duly and validly executed by or on behalf of the Seller,
authenticated by the Trustee and delivered in
2
<PAGE>
accordance with the Pooling and Servicing Agreement and the related
Supplement and delivered and paid for as provided herein, will be validly
issued and outstanding and entitled to the benefits and security afforded
by the Pooling and Servicing Agreement and the related Supplement;
(f) the execution, delivery and performance by the Seller of this
Agreement, the related Terms Agreement, any related agreement to provide
credit enhancement for the Offered Series (an "Enhancement Agreement"), the
Pooling and Servicing Agreement, the related Supplement and the
Certificates of such Series, and the consummation by such Seller of the
transactions provided for herein and therein, have been, or will have been,
duly authorized by the Seller by all necessary corporate action on the part
of the Seller; and neither the execution and delivery by the Seller of such
instruments, nor the performance by the Seller of the transactions herein
or therein contemplated, nor the compliance by the Seller with the
provisions hereof or thereof, will (i) conflict with or result in a breach
of any of the material terms and provisions of, or constitute a material
default under, any of the provisions of the articles of association or by-
laws of the Seller, or (ii) conflict with any of the provisions of any law,
governmental rule, regulation, judgment, decree or order binding on the
Seller or its properties, or (iii) conflict with any of the material
provisions of any indenture, mortgage, contract or other instrument to
which the Seller is a party or by which it is bound, or (iv) result in the
creation or imposition of any lien, charge or encumbrance upon any of its
property pursuant to the terms of any such indenture, mortgage, contract or
other instrument;
(g) when executed and delivered by the parties thereto, the Pooling
and Servicing Agreement and the related Supplement will constitute a legal,
valid and binding obligation of the Seller, enforceable against the Seller
in accordance with its terms, except to the extent that the enforceability
thereof may be subject to bankruptcy, insolvency, reorganization,
conservatorship, moratorium or other similar laws now or hereafter in
effect relating to creditors' rights as such laws would apply in the event
of the insolvency, liquidation or reorganization or other similar
occurrence with respect to the Seller or in the event of any moratorium or
similar occurrence affecting the Seller and to general principles of
equity;
(h) all approvals, authorizations, consents, orders or other actions
of any person, corporation or other organization, or of any court,
governmental agency or body or official (except with respect to the state
securities or "blue sky" laws of various jurisdictions), required in
connection with the valid and proper authorization, issuance and sale of
the Certificates of the Offered Series pursuant to this Agreement, the
related Terms Agreement, the Pooling and Servicing Agreement and the
related Supplement, has been or will be taken or obtained on or prior to
the applicable Delivery Date;
(i) this Agreement has been and, as of the date thereof, the related
Terms Agreement will have been duly executed and delivered by the Seller;
(j) the Seller has delivered to you complete and correct copies of
publicly available portions of the Consolidated Reports of Condition and
Income of the Seller for the
3
<PAGE>
three most recent fiscal years for which such reports have been submitted
to the Comptroller of the Currency; except as set forth in or contemplated
in the Registration Statements and the Prospectus, there has been no
material adverse change in the condition (financial or otherwise) of the
Seller since December 31, 1994; and
(k) any taxes, fees and other governmental charges in connection with
the execution, delivery and performance of this Agreement, the related
Terms Agreement, the Pooling and Servicing Agreement, the related
Supplement and the Certificates of the Offered Series shall have been paid
or will be paid by or on behalf of the Seller at or prior to the applicable
Delivery Date to the extent then due.
3. Purchase, Sale and Delivery of Certificates. Delivery of and payment
for the Certificates of the Offered Series will be made at the offices of The
Chase Manhattan Bank at 270 Park Avenue, New York, New York 10017, at such time
as shall be specified in or pursuant to the related Terms Agreement, or at such
other time and place as you and the Seller shall agree upon, such time being the
"Delivery Date" with respect to the Offered Series. Delivery of such
Certificates shall be made by the Seller to the Underwriters against payment of
the purchase price specified in the related Terms Agreement in same day funds
wired to such bank as may be designated by the Seller, or by such other manner
of payment as may be agreed upon by the Seller and you. Unless otherwise
provided in the related Terms Agreement, payment for the Certificates shall be
made against delivery thereof to The Depository Trust Company ("DTC") for the
respective accounts of the several Underwriters. Unless otherwise provided in
the related Terms Agreement, such Certificates shall be registered in the name
of Cede & Co., as nominee for DTC, and will be made available for inspection and
packaging by you at the office where delivery and payment for such Certificates
is to take place, not later than 1:00 P.M., New York City time, on the Business
Day prior to the Delivery Date.
4. Offering by Underwriters. Unless otherwise specified by the related
Terms Agreement:
(a) Each Underwriter severally agrees that, if it is a foreign
broker or dealer not eligible for membership in the National Association of
Securities Dealers, Inc. (the "NASD"), it will not effect any transaction
in the Certificates within the United States, its territories or
possessions, or with persons who are citizens thereof or residents therein,
or will it induce or attempt to induce the purchase of or sale of the
Certificates within the United States, its territories or possessions, or
with persons who are citizens thereof or residents therein, except that it
shall be permitted to make sales to the other Underwriters or to its United
States affiliates provided that such sales are made in compliance with an
exemption of certain foreign brokers or dealers under Rule 15a-6 under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
conformity with the Rules of Fair Practice of the NASD as such Rules apply
to non-NASD brokers or dealers.
(b) Each Underwriter severally agrees that (i) it has complied
and will comply with all applicable provisions of the Financial Services
Act 1986 and the Public Offers of Securities Regulations 1995 (the
"Regulations") with respect to anything done by it in relation to the
Certificates in, from or otherwise involving the United Kingdom; (ii)
4
<PAGE>
(b) it has only issued or passed on and will only issue or pass
on to any person in the United Kingdom any document received by it in
connection with the issue of the Certificates if that person is of a kind
described in Article 11(3) of the Financial Services Act 1986 (Investment
Advertisements) (Exemptions) Order 1995; and (c) it has not offered or sold
and, during the period of six months from the date hereof, will not offer
or sell any Certificates to persons in the United Kingdom except to persons
whose ordinary activities involve them in acquiring, holding, managing, or
disposing of investments (as principal or agent) for the purposes of their
businesses or otherwise in circumstances which have not resulted and will
not result in an offer to the public in the United Kingdom within the
meaning of the Regulations.
(c) The Underwriters are not requesting that the Seller or Trust
register the Certificates under the "blue sky" laws of any state or
territory of the United States because the Underwriters are relying upon
exemptions from such laws available for sales to certain institutional
investors.
5. Covenants of the Seller. The Seller hereby severally covenants and
agrees with the Underwriters that:
(a) concurrently with the execution of the related Terms Agreement,
the Seller will prepare a Prospectus Supplement setting forth the amount of
Certificates covered thereby and the terms thereof not otherwise specified
in the Prospectus, the price at which such Certificates are to be purchased
by the Underwriters from the Seller, either the initial public offering
price or the method by which the price at which such Certificates are to be
sold will be determined, the selling concessions and allowances, if any,
and such other information as the Seller deems appropriate in connection
with the offering of such Certificates, but the Seller will not file any
amendments to any Registration Statement as in effect with respect to the
Offered Series, or any amendments or supplements to the Prospectus with
respect to the Offered Series, unless it shall first have delivered copies
of such amendments or supplements to you, or if you shall have reasonably
objected thereto promptly after receipt thereof; the Seller will
immediately advise you or your counsel (i) when notice is received from the
Commission that any post-effective amendment to any Registration Statement
with respect to the Offered Series has become or will become effective and
(ii) of any order or communication suspending or preventing, or threatening
to suspend or prevent, the offer and sale of the Certificates of the
Offered Series or of any proceedings or examinations that may lead to such
an order or communication, whether by or of the Commission or any authority
administering any state securities or "blue sky" law, as soon as the Seller
is advised thereof, and will use their reasonable efforts to prevent the
issuance of any such order or communication and to obtain as soon as
possible its lifting, if issued;
(b) if, at any time when a Prospectus relating to the Offered Series
is required to be delivered under the Act, any event occurs as a result of
which the Prospectus as then amended or supplemented would include any
untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading, or if it is necessary at any
time to amend or supplement the Prospectus to comply with the Act or the
Rules and
5
<PAGE>
Regulations, the Seller will promptly prepare and (subject to review and no
reasonable objection by you as described in Section 5(a) hereof) file with
the Commission, an amendment or supplement that will correct such statement
or omission or an amendment that will effect such compliance;
(c) the Seller will make generally available to the holders of the
Certificates (the "Certificateholders") of the Offered Series, in each case
as soon as practicable, a statement which will satisfy the provisions of
Section 11(a) of the Act and Rule 158 of the Commission with respect to the
Offered Series;
(d) the Seller will furnish to each of you copies of each Registration
Statement (at least one copy to be delivered to each of you will be signed
and will include all documents and exhibits thereto or incorporated by
reference therein), the Prospectus, and all amendments and supplements to
such documents, in each case as soon as available and in such quantities as
you reasonably request;
(e) the Seller will assist you in arranging for the qualification of
the Offered Series for sale and the determination of their eligibility for
investment under the laws of such jurisdictions as you designate and will
continue to assist you in maintaining such qualifications in effect so long
as required for the distribution; provided, however, that neither the
Seller nor the Trust shall be required to qualify to do business in any
jurisdiction where it is now not qualified or to take any action which
would subject it to general or unlimited service of process in any
jurisdiction in which it is now not subject to service of process; and
(f) the Seller will pay all expenses incident to the performance of
its obligations under this Agreement and the related Terms Agreement and
will reimburse the Underwriters for any expenses reasonably incurred by
them in connection with qualification of the Offered Series of Certificates
and determination of their eligibility for investment under the laws of
such jurisdictions as you may designate (including reasonable fees and
disbursements of its counsel) and the printing of memoranda relating
thereto, for any fees charged by investment rating agencies for the rating
of such Certificates and, to the extent previously agreed upon with you,
for expenses incurred in distributing the Prospectus (including any
amendments and supplements thereto) to the Underwriters.
6. Conditions to the Obligations of the Underwriters. The obligations of
the several Underwriters named in the related Terms Agreement to purchase and
pay for the Certificates of the Offered Series will be subject to the accuracy
of the representations and warranties on the part of the Seller herein as of the
date of the related Terms Agreement and as of the applicable Delivery Date, to
the accuracy of the statements of the Seller made pursuant to the provisions
thereof, to the performance by each Seller in all material respects of its
obligations hereunder and to the following additional conditions precedent:
(a) you shall have received a letter from Price Waterhouse LLP or
other independent accountants acceptable to you, dated the applicable
Delivery Date, in a form reasonably satisfactory to you;
6
<PAGE>
(b) all actions required to be taken and all filings required to be
made by the Seller under the Act prior to the Delivery Date for the
Certificates of the Offered Series shall have been duly taken or made; and
prior to the applicable Delivery Date, no stop order suspending the
effectiveness of any Registration Statement shall have been issued and no
proceedings for that purpose shall have been instituted or, to the
knowledge of the Seller, threatened by the Commission;
(c) unless otherwise specified in the related Terms Agreement, the
Offered Series shall be rated at the time of issuance in the highest rating
category by Standard & Poor's Ratings Group and Moody's Investors Service,
Inc. and shall not have been placed on any credit watch with a negative
implication for downgrade;
(d) you shall have received an opinion of counsel to the Seller, which
counsel may be Andrew Semmelman, Vice President and Senior Associate
Counsel of the Seller, or counsel otherwise reasonably acceptable to you,
dated the applicable Delivery Date, substantially to the effect that:
(i) the Seller is a banking corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of
its organization, with full corporate power and corporate authority to
own its assets and operate its business as described in the
Prospectus, and had at all relevant times and now has, the power,
authority and legal right to acquire, own and service the Accounts and
the Receivables;
(ii) the Seller has full corporate power and corporate authority
to sign each Registration Statement and to execute and deliver this
Agreement, the related Terms Agreement, any related Enhancement
Agreement, the Pooling and Servicing Agreement and the related
Supplement and to consummate the transactions contemplated herein and
therein;
(iii) the agreements referred to in clause (ii) above have been
authorized by all necessary corporate action on the part of the
Seller, and have been duly executed and delivered by the Seller;
(iv) the Certificates of the Offered Series have been duly
authorized by all necessary corporate action of the Seller;
(v) no consent, approval, authorization or order of, or filing
with, any governmental agency or body or any court is required under
applicable Federal banking law for the consummation of the
transactions contemplated herein, in the related Terms Agreement, the
Pooling and Servicing Agreement, the related Supplement or any related
Enhancement Agreement;
(vi) neither the execution, delivery and performance by the
Seller of its obligations under this Agreement, the related Terms
Agreement, the related
7
<PAGE>
Supplement, the Pooling and Servicing Agreement or any related
Enhancement Agreement, the transfer of the Receivables to the Trust,
the issuance and sale of the Certificates of the Offered Series, nor
the consummation of any other of the transactions contemplated herein,
in the related Terms Agreement, the related Supplement, the Pooling
and Servicing Agreement or any related Enhancement Agreement, will
conflict with, result in a material breach of or violation of any of
the terms of, or constitute a default under, the Articles of
Association or By-laws of the Seller, as amended, or any rule, order,
statute or regulation, to the extent the foregoing relate to Federal
banking law, of any court, regulatory body, administrative agency or
governmental body having jurisdiction over the Seller or the terms of
any material indenture or other material agreement or instrument known
to such counsel to which the Seller is a party or by which it or its
properties are bound; and
(vii) except as otherwise disclosed in the Prospectus and the
Registration Statements, there are no actions, proceedings or
investigations pending or, to the best of such counsel's knowledge,
threatened before any court, administrative agency or other tribunal
(A) asserting the invalidity of this Agreement, the related Terms
Agreement, the related Supplement, the Pooling and Servicing
Agreement, any related Enhancement Agreement or the Certificates of
the Offered Series, (B) seeking to prevent the issuance of the
Certificates or the consummation of any of the transactions
contemplated by this Agreement, the related Terms Agreement, the
related Supplement, the Pooling and Servicing Agreement, any related
Enhancement Agreement or the Certificates, which if adversely
determined would materially and adversely affect the performance by
the Seller of its obligations under, or the validity or enforceability
of, this Agreement, the related Terms Agreement, the related
Supplement, the Pooling and Servicing Agreement, any related
Enhancement Agreement or the Certificates, or (C) seeking adversely to
affect the federal income tax attributes of the Certificates as
described in the Prospectus under the headings "Prospectus Summary --
Tax Status" and "Tax Matters";
(e) you shall have received an opinion of Martin R. Joyce, Vice
President and Senior Associate Counsel of the Seller (or such other counsel
as shall be specified in the related Terms Agreement), dated the applicable
Delivery Date, in form and substance satisfactory to you and your counsel,
to the effect that:
(i) this Agreement and the related Terms Agreement have been duly
authorized, executed and delivered by the Seller;
(ii) any related Enhancement Agreement, the Pooling and Servicing
Agreement and the related Supplement each constitutes the legal, valid
and binding agreement of the Seller, enforceable against the Seller in
accordance with its terms, subject, as to enforcement, to (A) the
effect of bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium, conservatorship, receivership, or other similar laws of
general applicability relating to or affecting creditors' rights
generally or the
8
<PAGE>
rights of creditors of national banking associations, and (B) the
application of general principles of equity (regardless of whether
enforceability is considered in a proceeding in equity or at law);
(iii) each Registration Statement has become effective under the
Act and the Prospectus has been filed with the Commission pursuant to
Rule 424(b) promulgated under the Act; to the best of such counsel's
knowledge, no stop order suspending the effectiveness of any
Registration Statement has been issued and no proceedings for that
purpose have been instituted or threatened under the Act; and each
Registration Statement as of its effective date and the Prospectus as
of its date (in each case, other than the financial and statistical
information therein as to which such counsel express no opinion)
complied as to form in all material respects with the requirements of
the Act and the rules and regulations promulgated thereunder;
(iv) this Agreement, the related Terms Agreement, any related
Enhancement Agreement, the Pooling and Servicing Agreement, the
related Supplement and the Certificates conform in all material
respects to the descriptions thereof contained in the Registration
Statements and the Prospectus; and
(v) the Pooling and Servicing Agreement and the related
Supplement will not be required to be qualified under the Trust
Indenture Act of 1939, as amended, and the Trust is not, and
immediately following the sale of the Offered Series pursuant hereto
will not be, required to be, registered under the 1940 Act;
such counsel also shall state that he has no reason to believe that at the
Effective Date any Registration Statement contained any untrue statement of
a material fact or omitted to state any material fact required to be stated
therein or necessary to make the statements therein not misleading or that
the Prospectus as of its date includes any untrue statement of a material
fact or omits to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading (other than financial and statistical information contained
therein as to which such counsel need express no opinion); in rendering
such opinion counsel may rely on the opinion referred to in paragraph (d)
above;
(f) you shall have received an opinion or opinions of Richards, Layton
& Finger (or such other counsel as shall be specified in the related Terms
Agreement), special counsel for the Seller, dated the Delivery Date, in
form and substance satisfactory to you and your counsel, with respect to
certain matters relating to the transfer of the Receivables and the
assignment of any related Enhancement to the Trust, with respect to the
perfection of the Trust's interest in the Receivables and certain other
matters;
(g) the Representative shall have received an opinion of Orrick,
Herrington & Sutcliffe, special tax counsel to the Seller, to the effect
that the statements in each Registration Statement and the Prospectus under
the headings "Prospectus Summary - Tax Status", "Prospectus Summary-"ERISA
Considerations", "Certain Federal Income Tax Consequences" and "ERISA
Considerations", to the extent that they constitute matters of
9
<PAGE>
law or legal conclusions with respect thereto, have been prepared or
reviewed by such counsel and are correct in all material respects;
(h) you shall have received from Orrick, Herrington & Sutcliffe (or
such other counsel as may be named in the related Terms Agreement), special
counsel for the Underwriters, such opinion or opinions, dated the Delivery
Date, in form and substance satisfactory to you, with respect to the
organization of each Seller, the validity of the Certificates, each
Registration Statement, the Prospectus and other related matters as you may
require, and the Seller shall have furnished to such counsel such documents
as they may reasonably request for the purpose of enabling them to pass
upon such matters;
(i) you shall have received a certificate, dated the Delivery Date, of
a Vice President or more senior officer of the Seller in which such
officer, to the best of his or her knowledge after reasonable
investigation, shall state that (A) the representations and warranties of
the Seller in this Agreement are true and correct in all material respects
on and as of the Delivery Date, (B) the Seller has complied with all
agreements and satisfied all conditions on its part to be performed or
satisfied hereunder and under the related Terms Agreement at or prior to
the applicable Delivery Date, (C) each Registration Statement has become
effective, no stop order suspending the effectiveness of any Registration
Statement has been issued and no proceedings for that purpose have been
instituted or are threatened by the Commission and (D) subsequent to the
date of the Prospectus, there has been no material adverse change in the
condition (financial or otherwise) of the Seller except as set forth in or
contemplated in the Registration Statements and the Prospectus or as
described in such certificate;
(j) you shall have received an opinion of Orrick, Herrington &
Sutcliffe (or such other counsel as may be named in the related Terms
Agreement), counsel to the Trustee, dated the applicable Delivery Date, in
form and substance satisfactory to you and your counsel, to the effect
that:
(i) the Trustee has been duly incorporated and is validly
existing as a banking corporation under the laws of the State of New
York and has the power and authority to enter into and to perform all
actions required of it under the Pooling and Servicing Agreement and
the related Supplement;
(ii) each of the Pooling and Servicing Agreement and the related
Supplement has been duly authorized, executed and delivered by the
Trustee and constitutes a legal, valid and binding obligation of the
Trustee, enforceable against the Trustee in accordance with its terms,
except as such enforceability may be limited by (A) bankruptcy,
insolvency, liquidation, reorganization, moratorium, conservatorship,
receivership or other similar laws now or hereinafter in effect
relating to the enforcement of creditors' rights in general, as such
laws would apply in the event of a bankruptcy, insolvency,
liquidation, reorganization, moratorium, conservatorship, receivership
or similar occurrence affecting the Trustee, and (B) general
principles of equity (regardless of whether such enforceability is
considered
10
<PAGE>
in a proceeding in equity or at law) as well as concepts of
reasonableness, good faith and fair dealing;
(iii) the Certificates of the Offered Series have been duly
authenticated and delivered by the Trustee;
(iv) the execution and delivery of the Pooling and Servicing
Agreement and the related Supplement by the Trustee and the
performance by the Trustee of their respective terms do not conflict
with or result in a violation of (A) any law or regulation of the
United States of America or the State of New York governing the
banking or trust powers of the Trustee, or (B) the Certificate of
Incorporation or By-laws of the Trustee; and
(v) no approval, authorization or other action by, or filing
with, any governmental authority of the United States of America or
the State of New York having jurisdiction over the banking or trust
powers of the Trustee is required in connection with the execution and
delivery by the Trustee of the Pooling and Servicing Agreement and the
related Supplement or the performance by the Trustee thereunder;
(k) there shall not have occurred, at any time on or prior to the
Delivery Date, any of the following events: (i) trading in securities
generally on the New York Stock Exchange shall have been suspended or
materially limited, or there shall have been any setting of minimum prices
for trading on such exchange, (ii) a general moratorium on commercial
banking activities in New York or Delaware shall have been declared by any
of Federal, New York or Delaware authorities, (iii) there shall have
occurred any material outbreak or escalation of hostilities or other
calamity or crisis, the effect of which on the financial markets of the
United States is such as to make it, in your reasonable judgment as
Representative of the Underwriters, impracticable to market the Offered
Series on the terms and in the manner contemplated in the Prospectus or
(iv) any change or any development involving a prospective change,
materially and adversely affecting (A) the Trust Assets taken as a whole or
(B) the business or properties of the Seller, which, in your reasonable
judgment as Representative of the Underwriters, in the case of either (A)
or (B), makes it impracticable to market the Offered Series on the terms
and in the manner contemplated in the Prospectus; and
(l) you shall have received an opinion or opinions of counsel to the
Enhancement Provider, if any, dated the Delivery Date and satisfactory in
form and substance to you and your counsel, to the effect that:
(i) the Enhancement Provider is duly organized and validly
existing under the laws of the jurisdiction of its incorporation, is
duly qualified and/or licensed to do business in all jurisdictions
where the nature of its operations as contemplated in the related
Enhancement Agreement requires such qualification, and has the power
and authority (corporate and other) to enter into the related
11
<PAGE>
Enhancement Agreement and to perform its obligations under the related
Enhancement Agreement; and
(ii) the related Enhancement Agreement has been duly authorized,
executed and delivered by the Enhancement Provider, and constitutes
the legal, valid and binding obligating of the Enhancement Provider,
enforceable in accordance with its terms, except to the extent that
the enforceability thereof may be subject to bankruptcy, insolvency,
reorganization, conservatorship, moratorium or other similar laws now
or hereafter in effect relating to creditors' rights as such laws
would apply in the event of the insolvency, liquidation or
reorganization or other similar occurrence with respect to the
Enhancement Provider or in the event of any moratorium or similar
occurrence affecting the Enhancement Provider.
The Seller will furnish you with such conformed copies of such opinions,
certificates, letters and documents as you reasonably request.
7. Indemnification.
(a) The Seller will indemnify and hold harmless each Underwriter and each
person, if any, who controls any Underwriter within the meaning of the Act or
the Exchange Act and the respective officers, directors and employees of each
such person, against any losses, claims, damages or liabilities, joint or
several, to which such Underwriter or such controlling person may become
subject, under the Act, the Exchange Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue statement of any material
fact contained in any Registration Statement, the Prospectus or any amendment or
supplement thereto relating to the Offered Series, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading;
and will reimburse each Underwriter and each such officer, director, employee or
controlling person for any legal or other expenses reasonably incurred by such
Underwriter and each such officer, director, employee or controlling person in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that (i) the Seller will not be liable
in any such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon any such untrue statement or alleged untrue
statement in or omission or alleged omission made in any such documents in
reliance upon and in conformity with written information furnished to the Seller
by an Underwriter specifically for use therein and (ii) such indemnity with
respect to any untrue statement or omission in any Preliminary Prospectus shall
not inure to the benefit of any Underwriter (or any person controlling such
Underwriter) from whom the person asserting any such loss, claim, damage or
liability purchased the Certificates which are the subject thereof, if such
person was not given or sent a copy of the Prospectus including the related
Prospectus Supplement excluding documents incorporated therein by reference, at
or prior to the confirmation of the sale of such Certificates to such person in
any case where such delivery is required by the Act and the untrue statement or
omission of a material fact contained in any Preliminary Prospectus and forming
the basis for the related cause of action was corrected in the Prospectus or the
related Prospectus Supplement. This indemnity agreement will be in addition to
any liability that either Seller may otherwise have.
12
<PAGE>
(b) Each Underwriter severally, and not jointly, will indemnify and hold
harmless the Seller, each of its directors, each of its officers who have signed
any Registration Statement and each person, if any, who controls the Seller
within the meaning of the Act or the Exchange Act and the respective officers,
directors and employees of each such person against any losses, claims, damages
or liabilities to which the Seller or any such director, officer or controlling
person may become subject, under the Act, the Exchange Act or otherwise, insofar
as such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of any material fact contained in any Registration Statement, the Prospectus, or
any amendment or supplement thereto relating to the Offered Series, or arise out
of or are based upon the omission or the alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or alleged
omission was made in reliance upon and in conformity with written information
furnished to the Seller by such Underwriter specifically for use therein, and
will reimburse any legal or other expenses reasonably incurred by the Seller or
any such director, officer or controlling person in connection with
investigating or defending any such loss, claim, damage, liability or action.
This indemnity agreement will be in addition to any liability that such
Underwriter may otherwise have.
(c) Promptly after receipt by an indemnified party under this Section of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section, notify the indemnifying party of the commencement thereof; but the
omission and/or delay so to notify the indemnifying party will not relieve it
from any liability which it may have to any indemnified party otherwise than in
this Section; in case any such action is brought against any indemnified party,
and it notified the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein, and, to the extent
that it may elect by written notice jointly with any other indemnifying party
similarly notified, to assume the defense thereof, with counsel satisfactory to
such indemnified party, and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party will not be liable to such indemnified party under this
Section for any legal or other expenses subsequently incurred by such
indemnified party in connection with defense thereof other than reasonable costs
of investigation. If the defendants in any action include both the indemnified
party and the indemnifying party and the indemnified party shall have reasonably
concluded that there may be legal defenses available to it and/or other
indemnified parties that are different from or additional to those available to
the indemnifying party, the indemnified party or parties shall have the right to
select separate counsel to assert such legal defenses and to otherwise
participate in the defense of such action on behalf of such indemnified party or
parties. No indemnifying party may avoid its duty to indemnify under this
Section 7 if such indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement or compromise of, or consent to the
entry of any judgment in, any pending or threatened action in respect of which
any indemnified party is or could have been a party and indemnity could have
been sought hereunder by such indemnified party unless such settlement includes
an unconditional release of such indemnified party from all liability on any
claims that are the subject matter of such action. An indemnifying party shall
not be liable for any settlement of any claim effected without its consent.
13
<PAGE>
(d) If recovery is not available under the foregoing indemnification
provisions of this Section for any reason other than as specified therein, the
parties entitled to indemnification by the terms thereof shall be entitled to
contribution to liabilities and expenses, except to the extent that contribution
is not permitted under Section 11(f) of the Act. In determining the amount of
contribution to which the respective parties are entitled, there shall be
considered the relative fault of each party in connection with the statement or
omission that resulted in such liabilities and expenses. The relative fault the
parties shall be determined by reference to, among other things, the parties'
relative knowledge and access to information concerning the matter with respect
to which the claim was asserted, the opportunity to correct and prevent any
statement or omission, and any other equitable considerations appropriate under
the circumstances. The Seller and the Underwriters agree that it would not be
equitable if the amount of such contribution were determined by pro rata or per
capita allocation (even if the Underwriters were treated as one entity for such
purpose).
8. Default of Underwriters. If any Underwriter or Underwriters default
in their obligations to purchase Certificates of the Offered Series hereunder
and under the related Terms Agreement and the aggregate principal amount of such
Certificates which such defaulting Underwriter or Underwriters agreed, but
failed, to purchase does not exceed 10% of the total principal amount of the
Offered Series set forth in such Terms Agreement, you may make arrangements
satisfactory to the Seller for the purchase of such Certificates by other
persons, including any of the Underwriters, but if no such arrangements are made
within a period of 36 hours after the applicable Delivery Date, the non-
defaulting Underwriters shall be obligated severally, in proportion to their
respective total commitments hereunder and under such Terms Agreement, to
purchase the Certificates which such defaulting Underwriters agreed but failed
to purchase. If such Underwriter or Underwriters so default and the aggregate
principal amount of Certificates with respect to which such default or defaults
occur is more than 10% of the total principal amount of the Offered Series set
forth in such Terms Agreement and arrangements satisfactory to you and the
Seller for the purchase of such Certificates by other persons are not made
within 36 hours after such default, such Terms Agreement will terminate without
liability on the part of any non-defaulting Underwriter or the Company, except
as provided in Section 10. As used in this Agreement, the term "Underwriter"
includes any person substituted for an Underwriter under this Section. Nothing
herein will relieve a defaulting Underwriter from liability for its default.
9. Survival of Certain Representations and Obligations. The respective
indemnities, agreements, representations, warranties and other statements by
each Seller or its officers and of the several Underwriters set forth in or made
pursuant to this Agreement will remain in full force and effect, regardless of
any investigation, or statement as to the results thereof, made by or on behalf
of the Underwriters, the Seller or any its officers or directors or any
controlling person, and will survive delivery of and payment of the
Certificates.
If this Agreement is terminated pursuant to Section 8 or if for any reason
the purchase of the Certificates by the Underwriters is not consummated, the
Seller shall remain responsible for the expenses to be paid or reimbursed by
them pursuant to Section 5(g), and the obligations of the Seller and the
Underwriters pursuant to Sections 7 and 8 shall remain in effect.
14
<PAGE>
11. Notices. All communications hereunder will be in writing and, if sent
to the Representative or the Underwriters, will be mailed, delivered or
telegraphed and confirmed to the Representative at: Chase Securities, Inc., 1
Chase Manhattan Plaza, 10th Floor, New York, NY 10081, Attention: David
Daughtrey, or, if sent to the Seller, will be mailed, delivered or telegraphed
and confirmed to: The Chase Manhattan Bank (USA), 802 Delaware Avenue,
Wilmington, Delaware 19801, Attention: President.
12. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the
officers, directors and controlling persons referred to in Section 7 hereof, and
their successors and assigns, and no other person will have any right or
obligation hereunder.
13. Representative of Underwriters. You will act as Representative for
the several Underwriters in connection with this financing, and any action under
this Agreement and any Terms Agreement taken by you as Representative will be
binding upon all the Underwriters identified in such Terms Agreement.
14. Applicable Law. THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
15
<PAGE>
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to us a counterpart hereof, whereupon it will become a
binding agreement among the Seller and the several Underwriters in accordance
with its terms. Alternatively, the execution of this Agreement by each Seller
and its acceptance by or on behalf of the Underwriters may be evidenced by an
exchange of telegraphic or other written communications.
Very truly yours,
THE CHASE MANHATTAN BANK (USA),
as Seller
By ___________________________________
Name:
Title:
The foregoing Agreement is hereby
confirmed and accepted as of
the date first above written.
CHASE SECURITIES, INC.,
as Underwriter
By _______________________________
Name:
Title:
16
<PAGE>
ANNEX I
TERMS AGREEMENT
__________, 19__
Chase Securities, Inc.,
as Representative of the Underwriters
set forth on Schedule I hereto
1 Chase Manhattan Plaza
New York, New York 10081
Ladies and Gentlemen:
We propose to issue and to sell to you and the other underwriters
named on Schedule I hereto $______________ aggregate principal amount of the
Asset Backed Certificates, Series _____ (the "Offered Series") of the Chase
Manhattan Credit Card Master Trust.
All the provisions contained in the Chase Manhattan Credit Card Master
Trust Underwriting Agreement Standard Terms (June 13, 1995) (the "Standard
Terms") are herein incorporated by reference in their entirety and shall be
deemed to be a part of this Agreement to the same extent as if such provisions
had been set forth in full herein. The terms of the Offered Series are set
forth in the Registration Statement or Registration Statements and the
Prospectus referred to in the Standard Terms, as supplemented by a prospectus
supplement dated _________, 19__ (the "Prospectus Supplement"), the form of
which has been supplied by you. Such Prospectus Supplement sets forth the
manner in which we will offer the Offered Series. The Offered Series will be
issued pursuant to the Pooling and Servicing Agreement referred to in such
Prospectus Supplement.
Subject to the terms and conditions set forth herein or incorporated
by reference herein, the Company hereby agrees to sell and we hereby agree to
purchase the Offered Series at _____% of their principal amount plus accrued
interest, if any, from _________, 19__ to the date of payment and delivery.
Payment for such Offered Series will be due upon delivery thereof at
17
<PAGE>
[our offices at the address set forth above] [the offices of _______ at
___________] at 10:00 a.m. (New York time) on ____________, 19__ or at such
other time not later than [five business days thereafter] as shall be designated
by us.
Please confirm your agreement by having an authorized officer sign a
copy of this Agreement in the space set forth below and by returning the signed
copy to us.
Very truly yours,
THE CHASE MANHATTAN BANK (USA),
as Seller
By: ___________________________________
Title:
The foregoing Agreement is hereby
confirmed and accepted as of
the date first above written.
CHASE SECURITIES, INC.,
as Representative of the Underwriters
set forth on Schedule I hereto.
By: ________________________________
Title:
18
<PAGE>
SCHEDULE I
[names of underwriters]
19
<PAGE>
EXHIBIT 4.6
<PAGE>
[EXECUTION COPY]
- --------------------------------------------------------------------------------
THE CHASE MANHATTAN BANK (USA)
Seller and Servicer
and
YASUDA BANK AND TRUST COMPANY (U.S.A.)
Trustee
on behalf of the Series 1995-2 Certificateholders
SERIES 1995-2 SUPPLEMENT
Dated as of June 1, 1995
to
POOLING AND SERVICING AGREEMENT
Dated as of June 1, 1991
----------------------------
CHASE MANHATTAN CREDIT CARD MASTER TRUST
Series 1995-2
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
-----------------
Page
----
SECTION 1. Designation.............................................. 1
SECTION 2. Definitions.............................................. 2
SECTION 3. Minimum Seller Interest, Minimum Aggregate Principal
Receivables and Removal of Accounts...................... 15
SECTION 4. Reassignment and Transfer Terms.......................... 15
SECTION 5. Delivery and Payment for the Class A Certificates and the
Class B Certificates .................................... 15
SECTION 6. Depositary; Form of Delivery of Class A and Class B
Certificates.............................................. 16
SECTION 7. Enhancement.............................................. 16
SECTION 8. Article IV of Agreement.................................. 16
ARTICLE IV
RIGHTS OF CERTIFICATEHOLDERS
AND ALLOCATION AND APPLICATION OF COLLECTIONS
SECTION 4.02A. Rights of Investor Certificateholders.................... 16
SECTION 4.02B. The Series 1995-2 Collection Subaccount.................. 17
SECTION 4.03. Establishment of Series 1995-2 Investor Accounts......... 18
SECTION 4.04. Allocations.............................................. 19
SECTION 4.05. Determination of Monthly Interest........................ 25
SECTION 4.06. Determination of Monthly Principal....................... 26
SECTION 4.07. Required Amount.......................................... 27
SECTION 4.08. Application of Class A Available Funds, Class B
Available Funds, Collateral Available Funds and
Available Principal Collections.......................... 28
SECTION 4.09. Defaulted Amounts; Investor Charge-Offs.................. 30
SECTION 4.10. Excess Spread; Excess Finance Charge Collections......... 31
SECTION 4.11. Reallocated Principal Collections........................ 33
SECTION 4.12. Group One Excess Finance Charge Collections.............. 34
SECTION 4.13. Shared Principal Collections............................. 34
SECTION 4.14. Determination of LIBOR................................... 35
SECTION 4.15. [Reserved]............................................... 35
SECTION 4.16. Time of Deposits and Withdrawals......................... 35
SECTION 4.17. Conversion from Collections during Billing Cycles to
Collections during Monthly Periods....................... 35
i
<PAGE>
Page
----
ARTICLE V
DISTRIBUTIONS AND REPORTS TO INVESTOR
CERTIFICATEHOLDERS
SECTION 5.01. Distributions............................................ 37
SECTION 5.02. Monthly Certificateholders' Statement.................... 37
OTHER SERIES PROVISIONS
SECTION 9. Series 1995-2 Pay Out Events............................. 39
SECTION 10. Series 1995-2 Termination................................ 40
SECTION 11. Ratification and Reaffirmation of Pooling and Servicing
Agreement................................................ 41
SECTION 12. Ratification and Reaffirmation of Representations and
Warranties............................................... 41
SECTION 13. Rights Under Section 9.02................................ 41
SECTION 14. No Subordination......................................... 41
SECTION 15. Repurchase of the Series 1995-2 Certificates............. 42
SECTION 16. Counterparts............................................. 43
SECTION 17. Additional Covenants of the Trustee...................... 43
SECTION 18. Third-Party Beneficiaries................................ 43
SECTION 19. Series 1995-2 Investor Exchange.......................... 43
SECTION 20. Servicing Compensation................................... 43
SECTION 21. Governing Law............................................ 44
SECTION 22. Notices.................................................. 44
EXHIBITS
EXHIBIT A-1 - Form of Class A Certificate
EXHIBIT A-2 - Form of Class B Certificate
EXHIBIT B - Form of Monthly Payment Instructions and
Notification to the Trustee
EXHIBIT C - Form of Monthly Certificateholders' Statement
EXHIBIT D - Form of Servicer's Certificate
ii
<PAGE>
SERIES 1995-2 SUPPLEMENT, dated as of June 1, 1995 (this "Series
------
Supplement") by and between THE CHASE MANHATTAN BANK (USA), a Delaware banking
- ----------
corporation, as Seller and Servicer, and YASUDA BANK AND TRUST COMPANY (U.S.A.),
a New York trust company, as Trustee.
RECITALS:
--------
1. Section 6.09(b) of the Agreement (as defined herein) provides,
among other things, that the Seller and the Trustee may at any time and from
time to time enter into a supplement to the Agreement for the purpose of
authorizing the issuance by the Trustee to the Seller for the execution and
redelivery to the Trustee for authentication of one or more Series of
Certificates.
2. In the event that any term or provision contained herein shall
conflict with or be inconsistent with any provision contained in the Agreement,
the terms and provisions of this Series Supplement shall govern. All
capitalized terms not otherwise defined herein are defined in the Agreement.
All Article, Section or subsection references herein shall mean Article, Section
or subsections of the Agreement except as otherwise provided herein. Each
capitalized term used or defined herein shall relate only to the Series 1995-2
Certificates and no other Series of Certificates issued by the Trust.
SECTION 1. Designation.
-----------
(a) There is hereby created a Series of Investor Certificates to be
issued pursuant to the Agreement and this Series Supplement to be known as the
"Chase Manhattan Credit Card Master Trust, Series 1995-2." Series 1995-2 shall
- --------------------------------------------------------
be issued in three Classes, the first of which shall be known as the "Class A
-------
Floating Rate Asset Backed Certificates, Series 1995-2" and the second of which
- ------------------------------------------------------
shall be known as the "Class B Floating Rate Asset Backed Certificates, Series
-------------------------------------------------------
1995-2." In addition, there is hereby created a third class of uncertificated
- ------
interests in the Trust which shall, except as expressly provided herein, be
deemed to be a "Class" of "Investor Certificates" for all purposes under the
----- ---------------------
Agreement and this Series Supplement and shall be known as the "Collateral
----------
Interest, Series 1995-2".
- -----------------------
(b) The Collateral Interest Holder shall be entitled to the benefits
of a Holder of a Class of Investor Certificates under the Agreement and this
Series Supplement upon payment by the Collateral Interest Holder of amounts
owing on the Closing Date pursuant to the Loan Agreement. Notwithstanding the
foregoing, except as expressly provided herein, the provisions of Article VI and
Article XII of the Agreement relating to the registration, authentication,
delivery, presentation, cancellation and surrender of Registered Certificates
and clause (d) of Section 6.09(b) shall not be applicable to the Collateral
Interest.
(c) Series 1995-2 shall be included in Group One (as defined below).
Series 1995-2 shall not be subordinated to any other Series.
<PAGE>
(d) Notwithstanding any provision in the Agreement or in this
Supplement to the contrary, the first Distribution Date with respect to Series
1995-2 shall be the July 1995 Distribution Date and the first Monthly Period
shall be the Monthly Period ended June 30, 1995.
SECTION 2. Definitions.
-----------
"Additional Interest" shall mean, with respect to any Distribution
-------------------
Date, the Class A Additional Interest, the Class B Additional Interest and the
Collateral Additional Interest for such Distribution Date.
"Agreement" shall mean the Pooling and Servicing Agreement by and
---------
between The Chase Manhattan Bank (USA), a Delaware banking corporation, as
Seller and Servicer, and Yasuda Bank and Trust Company (U.S.A.), a New York
trust company, as Trustee and all amendments and supplements thereto, including
this Series Supplement.
"Amortization Period" shall mean the period following the Revolving
-------------------
Period which shall be either the Controlled Amortization Period or the Rapid
Amortization Period.
"Available Finance Charge Collections" shall mean:
------------------------------------
(a) in the case of any Monthly Period prior to the Conversion Date,
Collections of Finance Charge Receivables processed during each Billing Cycle
which ended during such Monthly Period, which are allocated to the Investor
Interest and deposited in the Finance Charge Account pursuant to Article IV (or
which will be deposited in the Collection Account on the Transfer Date following
such Monthly Period pursuant to the fourth paragraph of the subsection 4.02(a));
(b) in the case of the Conversion Month, Collections of Finance Charge
Receivables processed on any Date of Processing during such Monthly Period on
and after the Conversion Date, which are allocated to the Investor Interest and
deposited in the Finance Charge Account pursuant to Article IV (or which will be
deposited in the Collection Account on the Transfer Date following such Monthly
Period pursuant to the fourth paragraph of subsection 4.02(a)); and
(c) in the case of any Monthly Period following the Conversion Month,
Collections of Finance Charge Receivables processed on any Date of Processing
during such Monthly Period, which are allocated to the Investor Interest and
deposited in the Finance Charge Account pursuant to Article IV (or which will be
deposited in the Collection Account on the Transfer Date following such Monthly
Period pursuant to the fourth paragraph of subsection 4.02(a));
plus, in each case, an amount equal to the product of (i) the amount of
Interchange allocable to the Trust pursuant to subsection 2.05(k) with respect
to such Monthly Period (to the extent deposited in the Collection Account on the
Transfer Date following such Monthly Period) and (ii) the Investor Percentage
with respect to Finance Charge Receivables and such Monthly Period.
2
<PAGE>
"Available Principal Collections" shall mean:
-------------------------------
(a) in the case of any Monthly Period or portion thereof prior to the
Conversion Date, Collections of Principal Receivables processed during each
Billing Cycle which ended during such Monthly Period or portion thereof, which
were allocated to the Investor Interest and were deposited in the Principal
Account pursuant to subsection 4.04(d)(iii) or 4.04(e)(iii) during any such
Billing Cycle (or which will be deposited in the Collection Account on the
Transfer Date following such Monthly Period pursuant to the fourth paragraph of
subsection 4.02(a));
(b) in the case of the Conversion Month, Collections of Principal
Receivables processed on any Date of Processing during such Monthly Period on or
after the Conversion Date, which were allocated to the Investor Interest and
were deposited in the Principal Account pursuant to subsection 4.04(d)(iii) or
4.04(e)(iii) (or which will be deposited in the Collection Account on the
Transfer Date following such Monthly Period pursuant to the fourth paragraph of
subsection 4.02(a)); and
(c) in the case of any Monthly Period following the Conversion Month,
Collections of Principal Receivables processed on any Date of Processing during
such Monthly Period, which were allocated to the Investor Interest and were
deposited in the Principal Account pursuant to subsection 4.04(d)(iii) or
4.04(e)(iii) (or which will be deposited in the Collection Account on the
Transfer Date following such Monthly Period pursuant to the fourth paragraph of
subsection 4.02(a));
plus, in each case, Shared Principal Collections allocated to Series 1995-2
pursuant to Section 4.13 and the Series Supplement of each other Principal
Sharing Series and all amounts which this Series Supplement provides are to be
treated as Available Principal Collections for the related Transfer Date
(including as provided in subsections 4.04(c)(iii), 4.08(a)(iii), and clause
(b), (e), (f), (i) and (j) of Section 4.10).
"Base Rate" shall mean, with respect to any Monthly Period, the
---------
annualized percentage equivalent of a fraction, the numerator of which is equal
to the sum of the Class A Monthly Interest, the Class B Monthly Interest, the
Collateral Monthly Interest and the Monthly Investor Servicing Fee with respect
to the related Distribution Date and the denominator of which is the Investor
Interest as of the last day of the preceding Monthly Period.
"Class A Additional Interest" shall have the meaning assigned in
---------------------------
Section 4.05(a).
"Class A Available Funds" shall mean, with respect to any Monthly
-----------------------
Period, an amount equal to the Class A Floating Percentage of the Available
Finance Charge Collections with respect to such Monthly Period.
"Class A Certificate Rate" shall mean, with respect to the Class A
------------------------
Certificates, for the initial Interest Period, 6.1925% per annum, and for each
Interest Period thereafter, a per annum rate of 0.13% above LIBOR determined on
the related LIBOR Determination Date, calculated on the basis of actual days
elapsed and a 360-day year.
3
<PAGE>
"Class A Certificateholder" shall mean the Person in whose name a
-------------------------
Class A Certificate is registered in the Certificate Register.
"Class A Certificates" shall mean any one of the Certificates executed
--------------------
by the Seller and authenticated by or on behalf of the Trustee, substantially in
the form of Exhibit A-1.
-----------
"Class A Expected Final Payment Date" shall mean the December 1998
-----------------------------------
Distribution Date.
"Class A Floating Percentage" shall mean, with respect to any Monthly
---------------------------
Period, the percentage equivalent (which percentage shall never exceed 100%) of
a fraction, the numerator of which is equal to the Class A Investor Interest as
of the close of business on the last day of the preceding Monthly Period and the
denominator of which is equal to the Investor Interest as of such day; provided,
however, that with respect to the first Monthly Period, the Class A Floating
Percentage shall mean the percentage equivalent of a fraction, the numerator of
which is the Class A Initial Investor Interest and the denominator of which is
the Initial Investor Interest.
"Class A Initial Investor Interest" shall mean $1,282,500,000.
---------------------------------
"Class A Interest Shortfall" shall have the meaning specified in
--------------------------
Section 4.05(a).
"Class A Investor Charge-Offs" shall have the meaning specified in
----------------------------
Section 4.09(a).
"Class A Investor Default Amount" shall mean, with respect to each
-------------------------------
Transfer Date, an amount equal to the product of (i) the Series 1995-2 Aggregate
Investor Default Amount for the related Monthly Period and (ii) the Class A
Floating Percentage for such Monthly Period.
"Class A Investor Interest" shall mean, on any date of determination,
-------------------------
an amount (not less than zero) equal to (a) the Class A Initial Investor
Interest, minus (b) the aggregate amount of principal payments made to the Class
-----
A Certificateholders on or prior to such date, minus (c) the excess, if any, of
-----
the aggregate amount of Class A Investor Charge-Offs for all prior Transfer
Dates over Class A Investor Charge-Offs reimbursed pursuant to Section 4.09(a)
----
prior to such date and, minus (d) the principal amount of Class A Certificates
-----
previously tendered and exchanged pursuant to a Series 1995-2 Investor Exchange.
"Class A Monthly Interest" shall have the meaning specified in Section
------------------------
4.05(a).
"Class A Monthly Principal" shall have the meaning specified in
-------------------------
Section 4.06(a).
"Class A Required Amount" shall have the meaning specified in Section
-----------------------
4.07(a).
"Class A Servicing Fee" shall have the meaning specified in Section 20
---------------------
of this Series Supplement.
4
<PAGE>
"Class B Additional Interest" shall have the meaning specified in
---------------------------
Section 4.05(b).
"Class B Available Funds" shall mean, with respect to any Monthly
-----------------------
Period, an amount equal to the Class B Floating Percentage of Available Finance
Charge Collections with respect to such Monthly Period.
"Class B Certificate Rate" shall mean, with respect to the Class B
------------------------
Certificates, for the initial Interest Period, 6.3125% per annum, and for each
Interest Period thereafter, a per annum rate of 0.25% above LIBOR determined on
the related LIBOR Determination Date, calculated on the basis of actual days
elapsed and a 360-day year.
"Class B Certificateholder" shall mean the Person in whose name a
-------------------------
Class B Certificate is registered in the Certificate Register.
"Class B Certificates" shall mean any one of the Certificates executed
--------------------
by the Seller and authenticated by or on behalf of the Trustee, substantially in
the form of Exhibit A-2.
-----------
"Class B Expected Final Payment Date" shall mean the January 1999
-----------------------------------
Distribution Date.
"Class B Floating Percentage" shall mean, with respect to any Monthly
---------------------------
Period, the percentage equivalent (which percentage shall never exceed 100%) of
a fraction, the numerator of which is equal to the Class B Investor Interest as
of the close of business on the last day of the preceding Monthly Period and the
denominator of which is equal to the Investor Interest as of the close of
business on such day; provided, however, that with respect to the first Monthly
Period, the Class B Floating Percentage shall mean the percentage equivalent of
a fraction, the numerator of which is the Class B Initial Investor Interest and
the denominator of which is the Initial Investor Interest.
"Class B Initial Investor Interest" shall mean $82,500,000.
---------------------------------
"Class B Interest Shortfall" shall have the meaning specified in
--------------------------
Section 4.05(b).
"Class B Investor Charge-Offs" shall have the meaning specified in
----------------------------
Section 4.09(b).
"Class B Investor Default Amount" shall mean, with respect to each
-------------------------------
Transfer Date, an amount equal to the product of (i) the Series 1995-2 Aggregate
Investor Default Amount for the related Monthly Period and (ii) the Class B
Floating Percentage for such Monthly Period.
"Class B Investor Interest" shall mean, on any date of determination,
-------------------------
an amount (not less than zero) equal to (a) the Class B Initial Investor
Interest, minus (b) the aggregate amount of principal payments made to the Class
-----
B Certificateholders on or prior to such date, minus (c) the aggregate amount of
-----
Class B Investor Charge-Offs for all prior Transfer Dates, minus (d) the amount
-----
of Reallocated Class B Principal Collections allocated on all prior Transfer
5
<PAGE>
Dates pursuant to Section 4.11(a), minus (e) an amount equal to the amount by
-----
which the Class B Investor Interest has been reduced on all prior Transfer Dates
pursuant to Section 4.09(a) and plus (f) the amount of Excess Spread and Excess
----
Finance Charge Collections allocated and available on all prior Transfer Dates
pursuant to Section 4.10(f) for the purpose of reimbursing amounts deducted
pursuant to the foregoing clauses (c), (d) and (e) and, minus (g) the principal
-----
amount of Class B Certificates previously tendered and exchanged pursuant to a
Series 1995-2 Investor Exchange.
"Class B Monthly Interest" shall have the meaning specified in Section
------------------------
4.05(b).
"Class B Monthly Principal" shall have the meaning specified in
-------------------------
Section 4.06(b).
"Class B Principal Commencement Date" shall mean the Distribution Date
-----------------------------------
on which the Class A Investor Interest is paid in full or, if the Class A
Investor Interest is paid in full on the Class A Expected Final Payment Date and
the Rapid Amortization Period has not commenced, the Distribution Date following
the Class A Expected Final Payment Date.
"Class B Principal Percentage" shall mean, with respect to any Monthly
----------------------------
Period (i) during the Revolving Period, the percentage equivalent (which
percentage shall never exceed 100%) of a fraction, the numerator of which is the
Class B Investor Interest as of the last day of the immediately preceding
Monthly Period and the denominator of which is the Investor Interest as of such
day and (ii) during the Amortization Period or the Rapid Amortization Period,
the percentage equivalent (which percentage shall never exceed 100%) of a
fraction, the numerator of which is the Class B Investor Interest as of the end
of the Revolving Period, and the denominator of which is the Investor Interest
as of the end of the Revolving Period; provided, however, that with respect to
the first Monthly Period, the Class B Principal Percentage shall mean the
percentage equivalent of a fraction, the numerator of which is the Class B
Initial Investor Interest and the denominator of which is the Initial Investor
Interest.
"Class B Required Amount" shall have the meaning specified in Section
-----------------------
4.07(b).
"Class B Servicing Fee" shall have the meaning specified in Section 20
---------------------
of this Series Supplement.
"Closing Date" shall mean June 20, 1995.
------------
"Collateral Additional Interest" shall have the meaning specified in
------------------------------
subsection 4.05(c).
"Collateral Available Funds" shall mean, with respect to any Monthly
--------------------------
Period, an amount equal to the Collateral Floating Percentage of the Available
Finance Charge Collections with respect to such Monthly Period.
"Collateral Charge-Offs" shall have the meaning specified in
----------------------
subsection 4.09(c).
6
<PAGE>
"Collateral Default Amount" shall mean, with respect to any
-------------------------
Distribution Date, an amount equal to the product of (a) the Series 1995-2
Aggregate Investor Default Amount for the related Monthly Period and (b) the
Collateral Floating Percentage applicable for the related Monthly Period.
"Collateral Floating Percentage" shall mean, with respect to any
------------------------------
Monthly Period, the percentage (rounded to the nearest ten thousandth of one
percent) equivalent (which percentage shall never exceed 100%) of a fraction,
the numerator of which is the Collateral Interest as of the close of business on
the last day of the preceding Monthly Period and the denominator of which is
equal to the Investor Interest as of the close of business on such day;
provided, however, that, with respect to the first Monthly Period, the
Collateral Floating Percentage shall mean the percentage equivalent of a
fraction, the numerator of which is the Collateral Initial Interest and the
denominator of which is the Initial Investor Interest.
"Collateral Initial Interest" shall mean $135,000,000.
---------------------------
"Collateral Interest" shall mean, on any date of determination, an
-------------------
amount equal to (a) the Collateral Initial Interest, minus (b) the aggregate
-----
amount of principal payments made to the Collateral Interest Holder prior to
such date, minus (c) the aggregate amount of Collateral Charge-Offs for all
-----
prior Transfer Dates pursuant to subsection 4.09(c), minus (d) the amount of
-----
Reallocated Principal Collections allocated pursuant to Section 4.11 on all
prior Transfer Dates, minus (e) an amount equal to the amount by which the
-----
Collateral Interest has been reduced on all prior Transfer Dates pursuant to
subsections 4.09(a) and (b), plus (f) the aggregate amount of Excess Spread and
----
Excess Finance Charge Collections allocated and available on all prior Transfer
Dates pursuant to subsection 4.10, for the purpose of reimbursing amounts
deducted pursuant to the foregoing clauses (c), (d) and (e) and, minus (g) the
-----
principal amount of the Collateral Interest previously tendered and exchanged
pursuant to a Series 1995-2 Investor Exchange; and, provided, however, that the
Collateral Interest may not be reduced below zero.
"Collateral Interest Holder" shall mean the entity so designated in
--------------------------
the Loan Agreement.
"Collateral Interest Payment Shortfall" shall have the meaning
-------------------------------------
specified in subsection 4.05(c).
"Collateral Interest Servicing Fee" shall have the meaning specified
---------------------------------
in Section 20 of this Series Supplement.
"Collateral Monthly Interest" shall mean the monthly interest
---------------------------
distributable in respect of the Collateral Interest as calculated in accordance
with subsection 4.05(c).
"Collateral Monthly Principal" shall mean the monthly principal
----------------------------
distributable in respect of the Collateral Interest as calculated in accordance
with subsection 4.06(c).
7
<PAGE>
"Collateral Percentage" shall mean for any Monthly Period, (a) with
---------------------
respect to Defaulted Amounts and Finance Charge Receivables at any time or
Principal Receivables during the Revolving Period, the Collateral Floating
Percentage, and (b) with respect to Principal Receivables during the Controlled
Amortization Period or Rapid Amortization Period, the Collateral Principal
Percentage.
"Collateral Principal Percentage" shall mean for any Monthly Period
-------------------------------
following the end of the Revolving Period, the percentage equivalent (which
percentage shall never exceed 100%) of a fraction, the numerator of which is the
Collateral Interest as of the close of business on the last day of the Revolving
Period and the denominator of which is equal to the Investor Interest as of the
close of business on the last day of the Revolving Period.
"Collateral Rate" shall mean, for any Interest Period, the rate
---------------
specified in the Loan Agreement.
"Collection Recomputation Date" shall mean, with respect to the
-----------------------------
Collections received during any Billing Cycle, the date on which the Servicer
performs the recomputations provided for in Section 4.04(a), which date shall
not be later than the Determination Date in the Monthly Period following the
Monthly Period in which such Billing Cycle ends.
"Controlled Amortization Amount" shall mean (a) for any Distribution
------------------------------
Date beginning with the January 1998 Distribution Date and ending with the
December 1998 Distribution Date, an amount equal to one-twelfth of the Class A
Investor Interest as of the last day of the Revolving Period; and (b) for the
January 1999 Distribution Date, an amount equal to the Class B Investor Interest
as of such last day.
"Controlled Amortization Period" shall mean, unless a Pay Out Event
------------------------------
shall have occurred prior thereto, the period commencing on the close of
business on November 30, 1997 and ending on the first to occur of (a) the
commencement of the Rapid Amortization Period, (b) the payment in full to the
Series 1995-2 Certificateholders of the Investor Interest or (c) the Series
1995-2 Termination Date.
"Controlled Distribution Amount" shall have the meaning specified in
------------------------------
subsection 4.04(d)(iii).
"Controlled Excess Amount" shall have the meaning specified in
------------------------
subsection 4.04(d)(iii).
"Conversion Date" shall have the meaning specified in Section 4.17.
---------------
"Conversion Month" shall mean the Monthly Period in which the
----------------
Conversion Date occurs.
"Deficit Controlled Amortization Amount" shall initially mean zero and
--------------------------------------
shall change as provided in subsection 4.04(d)(iii).
8
<PAGE>
"Definitive Certificates" shall have the meaning specified in Section
-----------------------
6.11.
"Distribution Account" shall have the meaning specified in subsection
--------------------
4.03(b).
"Distribution Date" shall mean the fifteenth day of each calendar
-----------------
month, or, if such fifteenth day is not a Business Day, the next succeeding
Business Day, commencing July 17, 1995; provided, however, that no Distribution
Date shall occur after the earlier to occur of (x) the Distribution Date on
which the Investor Interest has been paid in full or (y) the Series 1995-2
Termination Date.
"Enhancement" shall mean the Collateral Interest.
-----------
"Enhancement Provider" shall mean the Collateral Interest Holder.
--------------------
"Excess Amount" shall have the meaning specified in subsection
-------------
4.04(c)(iii).
"Excess Finance Charge Collections" shall mean amounts available for
---------------------------------
allocation to other Series in Group One pursuant to Section 4.10(m) and amounts
available for allocation to Series 1995-2 which have been designated as "Excess
Finance Charge Collections" in the Series Supplements for other Series in Group
One.
"Excess Spread" shall mean, with respect to any Distribution Date, the
-------------
sum of the amounts, if any, specified pursuant to Sections 4.08(a)(iv),
4.08(b)(iii) and 4.08(c)(ii) with respect to such Distribution Date.
"Excluded Series" shall mean any Series designated as an "Excluded
---------------
Series" in the applicable Series Supplement (but only if the Rating Agency
Condition is satisfied with respect to such exclusion) and thereby excluded from
the computation of Minimum Aggregate Principal Receivables pursuant to Section 3
of this Series Supplement.
"Finance Charge Account" shall have the meaning specified in Section
----------------------
4.03.
"Floating Allocation Percentage" shall mean, with respect to any
------------------------------
particular Monthly Period, the percentage equivalent (which percentage shall
never exceed 100%) of a fraction, the numerator of which is the Investor
Interest as of the last day of the preceding Monthly Period (or in the case of
the Monthly Period in which the Closing Date occurs, the Initial Investor
Interest) and the denominator of which is the greater of (x) the Aggregate
Principal Receivables in the Trust as of the first day of such particular
Monthly Period and (y) the sum of the numerators used to calculate the floating
allocation percentages for all Series then outstanding.
"Group One" shall mean Series 1995-2 and each other Series specified
---------
in the related Series Supplement to be included in Group One.
"Initial Investor Interest" shall mean $1,500,000,000.
-------------------------
9
<PAGE>
"Interest Period" shall mean, with respect to any Distribution Date,
---------------
the period from and including the Distribution Date immediately preceding such
Distribution Date (or, in the case of the first Distribution Date, from and
including the Closing Date) to but excluding such Distribution Date.
"Investor Charge Offs" shall mean Class A Investor Charge Offs, Class
--------------------
B Investor Charge Offs and Collateral Charge Offs.
"Investor Default Amount" shall mean, for any Billing Cycle, the
-----------------------
product of the Floating Allocating Percentage for the Monthly Period in which
such Billing Cycle ends times the amount of Receivables in Defaulted Accounts
which in such Billing Cycle are charged off as uncollectible on the Servicer's
computer master file of VISA(R) and Master Card(R) accounts.
"Investor Interest" shall mean, on any date of determination, an
-----------------
amount equal to the sum of (a) the Class A Investor Interest as of such date,
(b) the Class B Investor Interest as of such date and (c) the Collateral
Interest of such date.
"Investor Percentage" shall mean, on any date of determination:
-------------------
(a) when used with respect to any Principal Receivable on any date of
determination during the Revolving Period, the Floating Allocation
Percentage;
(b) when used with respect to Principal Receivables on any date of
determination during the Controlled Amortization period or the Rapid
Amortization Period, the Principal Allocation Percentage; and
(c) when used with respect to any Finance Charge Receivable and any
Receivable in a Defaulted Account on any date of determination, the
Floating Allocation Percentage;
provided, that in no event shall the Investor Percentage be greater than 100%.
"LIBOR" shall mean, for any Interest Period, the London interbank
-----
offered rate for one-month United States dollar deposits determined by the
Trustee for each Interest Period in accordance with the provisions of Section
4.14.
"LIBOR Determination Date" shall mean the second London Business Day
------------------------
prior to the commencement of each Interest Period.
"Loan Agreement" shall mean the agreement among the Seller, the
--------------
Servicer, the Trustee, and the Collateral Interest Holder, dated as of June 20,
1995, as amended or modified from time to time.
"London Business Day" shall mean any Business Day on which dealings in
-------------------
deposits in United States dollars are transacted in the London interbank market.
10
<PAGE>
"Minimum Aggregate Principal Receivables" shall have the meaning
---------------------------------------
specified in Section 3 hereof.
"Minimum Seller Interest" shall have the meaning specified in Section
-----------------------
3 hereof.
"Monthly Interest" means, with respect to any Distribution Date, the
----------------
sum of the Class A Monthly Interest, the Class B Monthly Interest and the
Collateral Monthly Interest for such Distribution Date.
"Monthly Investor Servicing Fee" shall mean, with respect to each
------------------------------
Monthly Period, an amount equal to 1/12th of the product of the Series Servicing
Fee Percentage and the Investor Interest as of the last day of the preceding
Monthly Period; provided, however, that the Monthly Investor Servicing Fee for
the first Monthly Period shall be $2,687,500.
"Pay Out Commencement Date" shall mean, with respect to the Series
-------------------------
1995-2 Certificates, the date on which a Trust Pay Out Event is deemed to occur
pursuant to Section 9.01 of the Agreement or a Series 1995-2 Pay Out Event is
deemed to occur pursuant to Section 9 hereof.
"Percentage Allocation" shall have the meaning specified in subsection
---------------------
4.04(d)(iii).
"Pool Amount" shall mean, with respect to any date of determination on
-----------
or after the Implementation Date, an amount equal to the sum of (i) the product
of (x) a fraction, the numerator of which is the Investor Interest on such date
of determination, and the denominator of which is the Aggregate Investor
Interest on such date of determination and (y) the aggregate amount of
Receivables determined at the end of the day immediately prior to such date of
determination, (ii) the amount on deposit in the Series 1995-2 Retention
Subaccount at the end of the day immediately prior to such date of
determination, and (iii) the amount of Excess Amounts and Controlled Excess
Amounts at the end of the day immediately prior to such date of determination.
"Portfolio Yield" shall mean, with respect to Series 1995-2 and with
---------------
respect to any Monthly Period, the annualized percentage equivalent of a
fraction the numerator of which is an amount equal to the sum of (i) the
Available Finance Charge Collections for such Monthly Period and (ii) any Excess
Finance Charge Collections (exclusive of any amounts included in (i)) that are
allocated to Series 1995-2 with respect to such Monthly Period to the extent
deposited in the Finance Charge Account on the Transfer Date following such
Monthly Period, such sum to be calculated on a cash basis after subtracting an
amount equal to the Series 1995-2 Aggregate Investor Default Amount with respect
to such Monthly Period, and the denominator of which is the Investor Interest as
of the last day of the preceding Monthly Period.
"Principal Account" shall have the meaning specified in subsection
-----------------
4.03(a).
"Principal Allocation Percentage" shall mean, with respect to any day
-------------------------------
during a particular Monthly Period, the percentage (rounded to the nearest ten
thousandth of one percent)
11
<PAGE>
equivalent (which percentage shall never exceed 100%) of a fraction, the
numerator of which is (a) during the Revolving Period, the Investor Interest as
of the last day of the immediately preceding Monthly Period and (b) during the
Controlled Amortization Period or the Rapid Amortization Period, the Investor
Interest as of the last day of the Revolving Period and the denominator of which
is the greater of (x) the Aggregate Principal Receivables in the Trust as of the
first day of such particular Monthly Period and (y) the sum of the numerators
used to calculate the principal allocation percentages for all Series
outstanding with respect to such Monthly Period.
"Principal Sharing Series" shall mean Series 1995-2 and any other
------------------------
Series in Group One which does not provide that such Series is not a Principal
Sharing Series in the applicable Series Supplement.
"Principal Shortfall" shall have the meaning specified in Section
-------------------
4.10.
"Qualified Trust Institution" shall have the same meaning as
---------------------------
"Qualified Institution."
"Rapid Amortization Period" shall mean an amortization period
-------------------------
commencing on the Pay Out Commencement Date and ending on the earlier to occur
of (i) the date of termination of the Trust pursuant to Section 12.01 or (ii)
the Series 1995-2 Termination Date.
"Rating Agency" shall mean, with respect to the Series 1995-2
-------------
Certificates, each of Moody's and Standard & Poor's.
"Rating Agency Condition" shall mean, with respect to any action, that
-----------------------
the Rating Agency shall have notified the Seller, the Servicer and the Trustee
in writing that such action will not result in the reduction or withdrawal of
the rating of any outstanding Class by the Rating Agency.
"Reallocated Class B Principal Collections" shall mean, with respect
-----------------------------------------
to any Transfer Date, an amount of Collections of Principal Receivables with
respect to the prior Monthly Period, equal to the least of (i) the amount
specified in subsection 4.11(a), (ii) an amount equal to the product of (a) the
Class B Principal Percentage with respect to the Monthly Period relating to such
Transfer Date and (b) the Principal Allocation Percentage with respect to the
Monthly Period relating to such Transfer Date and (c) the amount of Collections
of Principal Receivables with respect to the Monthly Period relating to such
Transfer Date and (iii) the Class B Investor Interest after giving effect to any
Class B Investor Charge-Offs for such Transfer Date.
"Reallocated Collateral Principal Collections" shall mean, with
--------------------------------------------
respect to any Transfer Date, an amount of Collections of Principal Receivables
with respect to the prior Monthly Period, equal to the least of (i) the sum of
the amounts specified in subsections 4.11(a) (net of Reallocated Class B
Principal Collections) and 4.11(b), (ii) an amount not to exceed the product of
(a) the Collateral Percentage with respect to the Monthly Period relating to
such Transfer Date and (b) the Principal Allocation Percentage with respect to
the Monthly Period
12
<PAGE>
relating to such Transfer Date and (c) the amount of Collections of Principal
Receivables with respect to the Monthly Period relating to such Transfer Date
and (iii) the Collateral Interest after giving effect to any Collateral Charge-
Offs for such Transfer Date.
"Reallocated Principal Collections" shall mean the sum of Reallocated
---------------------------------
Collateral Principal Collections and Reallocated Class B Principal Collections.
"Reference Banks" means four major banks in the London interbank
---------------
market selected by the Servicer.
"Required Collateral Interest" shall mean (a) initially, $135,000,000
----------------------------
and (b) on any Transfer Date thereafter, 9% of the Investor Interest on the
related Distribution Date (determined after taking into account the payments to
be made on such related Distribution Date), but not less than $45,000,000;
provided, however, that (1) if either (i) there is a reduction in the Collateral
Interest pursuant to clause (c), (d) or (e) of the definition of such term or
(ii) a Pay Out Event with respect to the Investor Certificates has occurred, the
Required Collateral Interest for any Transfer Date shall equal the Required
Collateral Interest for the Transfer Date immediately preceding such reduction
or Pay Out Event, (2) in no event shall the Required Collateral Interest exceed
the sum of the outstanding principal balance of (i) the Class A Certificates and
(ii) the Class B Certificates, each as of the related Distribution Date after
taking into account the payments to be made on such Distribution Date and (3)
the Required Collateral Interest may be reduced at any time to a lesser amount
if the Rating Agency delivers to each of the Seller, the Servicer, the
Collateral Interest Holder and the Trustee written confirmation that after such
reduction the Rating Agency Condition has been satisfied.
"Required Retention Percentage", shall mean (i)3% on any date of
-----------------------------
determination on or after the Implementation Date during the Revolving Period,
(ii) 5% on any date of determination on or after the Implementation Date during
an Amortization Period and (iii) 0% on any other date of determination.
"Retention Percentage" shall mean (i) with respect to any date of
--------------------
determination on or after the Implementation Date, the numerical equivalent of a
fraction, the numerator of which is equal to the Pool Amount for such date of
determination less the Investor Interest on such date of determination and the
denominator of which is the Pool Amount for such date of determination and (ii)
0% on any other date of determination.
"Revolving Period" shall mean the period from and including June 1,
----------------
1995 to, but not including, the earlier of December 1, 1997 or the Pay Out
Commencement Date.
"Scheduled Series 1995-2 Termination Date" shall mean the August 2000
----------------------------------------
Distribution Date.
"Series 1995-2" shall mean the Series issued pursuant to this Series
-------------
Supplement.
13
<PAGE>
"Series 1995-2 Aggregate Investor Default Amount" shall mean the
-----------------------------------------------
Aggregate Investor Default Amount with respect to Series 1995-2 and such Monthly
Period determined by the Servicer pursuant to subsection 4.02(c)(iii) of the
Agreement.
"Series 1995-2 Certificates" shall mean the Class A Certificates, the
--------------------------
Class B Certificates and the Collateral Interest.
"Series 1995-2 Certificateholder" shall mean the holder of record of
-------------------------------
any Series 1995-2 Certificate.
"Series 1995-2 Collection Subaccount" shall have the meaning specified
-----------------------------------
in Section 4.02B.
"Series 1995-2 Final Termination Date" shall mean the August 2001
------------------------------------
Distribution Date.
"Series 1995-2 Investor Accounts" or "Investor Accounts" shall mean
------------------------------- -----------------
the accounts established pursuant to Section 4.03 hereof.
"Series 1995-2 Investor Exchange" shall mean an Investor Exchange
-------------------------------
pursuant to Section 6.09(b) of the Agreement and Section 19 of this Series
Supplement.
"Series 1995-2 Pay Out Event" shall have the meaning specified in
---------------------------
Section 9 hereof.
"Series 1995-2 Retention Subaccount" shall have the meaning specified
----------------------------------
in Section 4.02A.
"Series 1995-2 Termination Date" shall mean the earlier to occur of
------------------------------
(i) the day after the Distribution Date on which the Series 1995-2 Certificates
and the Collateral Interest are paid in full; (ii) the Scheduled Series 1995-2
Termination Date (unless extended pursuant to Section 10 of this Series
Supplement); or (iii) the Series 1995-2 Final Termination Date.
"Series Servicing Fee Percentage" shall mean 2.15%.
-------------------------------
"Shared Principal Collections" shall mean amounts retained in the
----------------------------
Collection Account as Shared Principal Collections pursuant to subsections
4.04(c)(iii), 4.04(d)(iii) or 4.04(e)(iii) and any amounts designated as Shared
Principal Collections in the Series Supplement for any Principal Sharing Series.
"Telerate Page 3750" shall mean the display page currently so
------------------
designated on the Dow Jones Telerate Service (or such other page as may replace
that page on that service for the purpose of displaying comparable rates or
prices).
14
<PAGE>
SECTION 3. Minimum Seller Interest, Minimum Aggregate Principal
----------------------------------------------------
Receivables and Removal of Accounts.
- -----------------------------------
(a) The Minimum Seller Interest applicable to the Series 1995-2
Certificates shall be 7%. The Minimum Aggregate Principal Receivables shall be
the greater of (i) $1,500,000,000 less the portion of such amount represented by
----
Series 1995-2 Certificates tendered and canceled pursuant to any Series 1995-2
Investor Exchange and (ii) the sum of the Initial Investor Interests (as defined
in each applicable Supplement) of all Series then outstanding (other than
Excluded Series) less the portion of the Initial Investor Interest of any Series
----
tendered for an Exchange pursuant to Section 6.09(b) of the Agreement and as
provided in the related Supplement or, if any Series (other than Excluded
Series) calculates the investor percentage with respect to Principal Receivables
by means of a numerator based other than on the Initial Investor Interest of
such Series, then at least equal to the sum of the Initial Investor Interest of
each Series (other than Excluded Series) then outstanding which calculates such
investor percentage on the basis of Initial Investor Interest plus, for each
----
other Series (other than Excluded Series) then outstanding, the then current
numerator used to calculate the investor percentage with respect to Principal
Receivables for such Series. Upon final payment of the Series 1995-2
Certificates, the Minimum Aggregate Principal Receivables shall be computed in a
manner consistent with the Agreement or any future Supplement, as appropriate.
(b) In addition to the requirements contained in Section 2.07(a) and
(b) with respect to the removal of Accounts, pursuant to subsection
2.07(b)(iii)(c), the removal of any Receivables of any Removed Accounts on any
Removal Date shall not, in the reasonable belief of the Seller, result in the
failure to make a Controlled Distribution Amount payment.
SECTION 4. Reassignment and Transfer Terms. The Series 1995-2
-------------------------------
Certificates shall be subject to retransfer to the Seller at its option, in
accordance with the terms specified in subsection 12.02(a) of the Agreement, on
any Distribution Date on or after the Distribution Date on which the Investor
Interest is reduced to an amount less than or equal to 5% of the Initial
Investor Interest. The deposit required in connection with any such repurchase
shall be equal to the sum of (a) the aggregate outstanding principal balance of
the Class A Certificates, the Class B Certificates and the Collateral Interest,
all as of the last day of the Monthly Period preceding the Distribution Date on
which the purchase price will be distributed, plus (b) accrued and unpaid
----
interest thereon to, but not including, the Distribution Date on which the
repurchase occurs, less (c) the amount on deposit in the Finance Charge Account
----
which will be transferred to the Distribution Account pursuant to Section 4.08
or Section 4.10 on the related Transfer Date, less (d) the amount on deposit in
----
the Principal Account which will be transferred to the Distribution Account
pursuant to subsection 4.08(e) on the related Transfer Date.
SECTION 5. Delivery and Payment for the Class A Certificates and the
---------------------------------------------------------
Class B Certificates. The Trustee shall deliver the Class A Certificates and
- --------------------
the Class B Certificates when authenticated in accordance with Section 6.02 of
the Agreement.
15
<PAGE>
SECTION 6. Depositary; Form of Delivery of Class A and Class B
---------------------------------------------------
Certificates.
- ------------
(a) The Class A Certificates and the Class B Certificates shall be
delivered as Book-Entry Certificates as provided in Sections 6.01, 6.02 and 6.09
of the Agreement.
(b) The Depositary for Series 1995-2 shall be The Depository Trust
Company, and the Class A Certificates and the Class B Certificates shall be
initially registered in the name of CEDE & Co., its nominee.
(c) For purposes of any provision of this Agreement requiring or
permitting actions with the consent of, or at the direction of, Holders of
Series 1995-2 Certificates having Undivided Interests aggregating a specified
percentage, such direction or consent may be given by the Certificate Owners of
the Class A Certificates and the Class B Certificates having interests in the
requisite percentage of Series 1995-2 Certificates, acting through the Clearing
Agency and the Clearing Agency Participants.
SECTION 7. Enhancement. Enhancement for the Series 1995-2
-----------
Certificates shall consist of the Collateral Interest.
SECTION 8. Article IV of Agreement. Any provision of Article IV of
-----------------------
the Agreement which distributes Collections to the Holder of the Exchangeable
Seller Certificate on the basis of the Seller Percentage shall continue to apply
irrespective of the issuance of the Series 1995-2 Certificates. Sections 4.01
and 4.02 of the Agreement shall be read in their entirety as provided in the
Agreement. Article IV of the Agreement (except for Sections 4.01 and 4.02
thereof) shall read in its entirety as follows and shall be applicable to the
Series 1995-2 Certificates:
ARTICLE IV
RIGHTS OF CERTIFICATEHOLDERS
AND ALLOCATION AND APPLICATION OF COLLECTIONS
SECTION 4.02A. Rights of Investor Certificateholders. The Series
-------------------------------------
1995-2 Certificates shall represent fractional Undivided Interests in the Trust,
consisting of the right to receive, to the extent necessary to make the required
payments with respect to such Series 1995-2 Certificates at the times and in the
amounts specified in this Agreement, (a) the related Investor Percentage of
Collections received with respect to the Receivables and (b) other funds, if
any, allocable to the Series 1995-2 Certificates on deposit in the Collection
Account, the Finance Charge Account, the Principal Account, the Distribution
Account, the Series 1995-2 Collection Subaccount and the Retention Subaccount
(the "Series 1995-2 Retention Subaccount") with respect to the Series 1995-2
----------------------------------
Certificates (the "Series 1995-2 Interest"). The Exchangeable Seller
----------------------
Certificate shall represent the ownership interest in the Trust Assets not
allocated to Series 1995-2 or any other Series outstanding; provided, however,
the ownership interest represented by the Exchangeable Seller Certificate and
any other Series outstanding at any time shall not
16
<PAGE>
represent any interest in the Series 1995-2 Collection Subaccount or in the
Enhancement, except as specifically provided in this Article IV.
SECTION 4.02B. The Series 1995-2 Collection Subaccount. Pursuant to
---------------------------------------
Section 4.01 of the Agreement, the Servicer, on behalf of the Trustee, shall
establish and maintain with a Qualified Trust Institution a subaccount of the
Collection Account, for the benefit of the Series 1995-2 Certificateholders,
bearing a designation clearly indicating that the funds therein are held in
trust for the benefit of the Series 1995-2 Certificateholders. The Servicer, on
behalf of the Trustee, at all times shall maintain accurate records reflecting
each transaction in the Series 1995-2 Collection Subaccount and that funds held
therein shall at all times be held in trust for the benefit of the Series 1995-2
Certificateholders. Pursuant to the authority granted to it pursuant to
subsection 3.01(b), the Servicer shall have the power, revocable by the Trustee,
to withdraw funds, and to instruct the Trustee to withdraw funds, from the
Series 1995-2 Collection Subaccount for the purpose of carrying out its duties
hereunder. All such instructions from the Servicer to the Trustee shall be in
writing; provided, however, that the Servicer is entitled to give instructions
to the Trustee by facsimile. Funds on deposit in the Series 1995-2 Collection
Subaccount that are not required to be deposited in the Finance Charge Account,
the Principal Account or the Series 1995-2 Retention Subaccount 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 third
Business Day following the day on which such funds were so deposited, provided,
that such funds shall be available for withdrawal on the Transfer Date following
the Record Date occurring in the Monthly Period in which such funds were
processed for collection. All interest and earnings (net of losses and
investment expenses) on funds on deposit in the Series 1995-2 Collection
Subaccount shall be deposited by the Servicer upon written notice to the Trustee
by the Seller in a separate deposit account with a Qualified Trust Institution
in the name of Servicer, which shall not constitute a part of the Trust, or
shall otherwise be turned over to the Servicer, not less frequently than
monthly; provided, however, that following the failure of the Servicer to make a
payment or deposit, which failure results in the occurrence of a Servicer
Default with respect to the Series 1995-2 Certificates, such interest and
earnings shall not be paid to the Servicer during the period such Servicer
Default is continuing, but shall be retained in, or deposited into, the Finance
Charge Account and shall be treated as Collections of Finance Charge Receivables
allocable to the Series 1995-2 Certificateholders. The Qualified Institution
shall maintain for the benefit of the Series 1995-2 Certificateholders and the
Servicer (as its interest appears herein), possession of any negotiable
instrument or security evidencing the Permitted Investments described in clause
(a) of the definition thereof relating to the Collection Account from the time
of purchase thereof until the time of maturity. Subject to the restrictions set
forth above, the Servicer, or a Person designated in writing by the Servicer,
shall instruct the applicable Qualified Institution in writing with respect to
the investment of funds on deposit in the Series 1995-2 Collection Subaccount.
For purposes of determining the availability of funds or the balances in the
Series 1995-2 Collection Subaccount for any reason under this Agreement, all
investment earnings on such funds (net of losses and expenses) shall be deemed
not to be available or on deposit.
17
<PAGE>
SECTION 4.03. Establishment of Series 1995-2 Investor Accounts.
------------------------------------------------
(a) The Finance Charge Account and Principal Account. The Servicer,
------------------------------------------------
for the benefit of the Series 1995-2 Certificateholders shall establish and
maintain with a Qualified Trust Institution in the name of the Trustee, on
behalf of the Trust, two segregated trust accounts maintained in the corporate
trust department of such Qualified Trust Institution, and held in trust by such
Qualified Trust Institution (the "Finance Charge Account" and the "Principal
---------------------- ---------
Account," respectively), bearing a designation clearly indicating that the funds
- -------
therein are held in trust for the benefit of the Series 1995-2
Certificateholders. The Servicer, on behalf of 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 Series 1995-2 Certificateholders. Pursuant
to the authority granted to it pursuant to subsection 3.01(b), the Servicer
shall have the power, revocable by the Trustee, to withdraw funds, and to
instruct the Trustee to withdraw funds, from the Finance Charge Account and
Principal Account for the purpose of carrying out its duties hereunder. All
such instructions from the Servicer to the Trustee shall be in writing;
provided, however, that the Servicer is entitled to give instructions to the
Trustee by facsimile.
(b) The Distribution Account. The Servicer, for the benefit of the
------------------------
Series 1995-2 Certificateholders, shall cause to be established and maintained
in the name of the Trustee, with an office or branch of a Qualified Trust
Institution (other than the Seller), a non-interest bearing segregated demand
deposit account maintained in the corporate trust department of such Qualified
Trust Institution, and held in trust by such Qualified Trust Institution (the
"Distribution Account") bearing a designation clearly indicating that the funds
- ---------------------
deposited therein are held in trust for the benefit of the Series 1995-2
Certificateholders. The Paying Agent shall have the revocable authority to make
withdrawals from the Distribution Account.
(c) Administration of the Finance Charge Account and Principal
------------------------------------------------ ---------
Account. Funds on deposit in the Principal Account and the Finance Charge
- -------
Account shall at all times be invested in Permitted Investments. Any such
investment shall mature and such funds shall be available for withdrawal on or
prior to the Transfer Date following the Record Date occurring in the Monthly
Period in which such funds were processed for collection. The Qualified Trust
Institution which holds the Principal Account and the Finance Charge Account
shall maintain for the benefit of the Series 1995-2 Certificateholders and the
Servicer, as their respective interests appear herein, possession of any
negotiable instrument or security evidencing the Permitted Investments relating
to the Principal Account or the Finance Charge Account, as the case may be,
described in clause (a) of the definition thereof from the time of purchase
thereof until the time of maturity. 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
Servicer upon written notice to the Trustee in a separate deposit account with a
Qualified Trust Institution in the name of the Servicer, which shall not
constitute a part of the Trust, or shall otherwise be turned over by the
Servicer not less frequently than monthly. Subject to the restrictions set
forth above, the Servicer, or a Person designated in writing by the Servicer,
shall instruct the Qualified Trust Institution which holds the Principal Account
and the Finance Charge Account in writing with respect to the investment of
funds on deposit in the Principal Account and the Finance Charge Account. For
purposes of
18
<PAGE>
determining the availability of funds or the balances in the Finance Charge
Account and the Principal Account for any reason under this Agreement, all
investment earnings on such funds (net of losses and expenses) shall be deemed
not to be available or on deposit.
(d) No Qualified Trust Institution shall be eligible to be the
depository for any of the accounts established pursuant to this Section 4.03
unless it has agreed that, if it ceases to be a "Qualified Trust Institution",
then (i) such entity shall provide the Trustee, the Enhancement Provider, and
the Servicer with prompt written notice that it is no longer a "Qualified Trust
Institution" and (ii) transfer the funds deposited in each of the accounts in
the manner directed by the Servicer within 10 Business Days of the day on which
such entity ceased to be a "Qualified Trust Institution".
SECTION 4.04. Allocations.
-----------
(a) Allocation Adjustment. Unless the Servicer is depositing
---------------------
Collections monthly pursuant to Section 4.02(a) of the Agreement, on each
Collection Recomputation Date to and including the Collection Recomputation Date
after the Collection Recomputation Date referred to in clause (ii) below, the
Servicer shall recompute the allocations to the Series 1995-2 Certificates
previously made pursuant to subsections 4.01(d), 4.02(a), 4.02(b), 4.04(c),
4.04(d) and 4.04(e):
(i) in the case of a Collection Recomputation Date which occurs
prior to the Conversion Date, during each Billing Cycle which ended during
the preceding Monthly Period; and
(ii) in the case of the Collection Recomputation Date which occurs
in the Monthly Period in which the Conversion Date occurs, during each
Billing Cycle which ended during the preceding Monthly Period and on any
other Date of Processing during such Monthly Period;
(such allocations with respect to any such period, the "Estimated Allocations")
---------------------
based on the Collected Finance Charge Receivables and the Collected Principal
Receivables (such allocations with respect to any such period, the "Actual
------
Allocations"), and based on the Actual Allocations of Finance Charge Receivables
- -----------
and Principal Receivables not later than 11:00 a.m. New York City time on the
Transfer Date following such Collection Recomputation Date:
(A) make any necessary deposits or withdrawals with respect to the
Finance Charge Account, the Principal Account and the Series 1995-2
Retention Subaccount such that the amount on deposit in such Finance Charge
Account and such Principal Account with respect to such Monthly Period is
equal to the Actual Allocation of Finance Charge Receivables and the Actual
Allocation of Principal Receivables, respectively;
(B) pay to the Holder of the Exchangeable Seller Certificate any
underpayment with respect to allocations of Principal Receivables or
Finance Charge Receivables with respect to such Monthly Period;
19
<PAGE>
(C) notify the Holder of the Exchangeable Seller Certificate of the
amount of any overpayment to such Holder and the Holder of the Exchangeable
Seller Certificate shall deposit into the Finance Charge Account, the
Principal Account or the Series 1995-2 Retention Subaccount, as the case
may be, as provided in the notice from the Servicer, the amount of any
overpayment to such Holder which such recomputation discloses; and
(D) for the purposes of administrative convenience, payments to be
made to the Holder of the Exchangeable Seller Certificate and deposits to
be made by the Holder of the Exchangeable Seller Certificate pursuant to
Section 4.04(a) may be netted against each other.
(b) It is the intention of the parties hereto that Section 4.04(a)
be construed so that the reallocation provided for therein shall result in the
Series 1995-2 Certificateholders and the Collateral Interest Holder on the one
hand and the Holder of the Exchangeable Seller Certificate on the other hand
being in the same position they would have been in if the Estimated Allocations
had been based upon actual Collections of Finance Charge Receivables and actual
Collections of Principal Receivables.
(c) Allocations During the Revolving Period. During the Revolving
---------------------------------------
Period, the Servicer shall, prior to the close of business on the day any
Collections are deposited in the Collection Account, pay from the Collection
Account (or, if applicable, the Principal Account) the following amounts as set
forth below:
(i) Deposit in the Finance Charge Account an amount equal to the
product of (A) the applicable Investor Percentage on the Date of Processing
of such Collections (or as determined on the applicable Determination Date
with respect to the preceding Monthly Period if the Servicer is depositing
Collections monthly pursuant to Section 4.02(a) of the Agreement) and (B)
the aggregate amount of Collections processed in respect of Finance Charge
Receivables on such Date of Processing (or during such Monthly Period, as
applicable).
(ii) Deposit in the Series 1995-2 Collection Subaccount for
application, to the extent required by Section 4.11, as Reallocated
Principal Collections on the related Transfer Date, an amount equal to the
product of (A) the sum of the Class B Principal Percentage and the
Collateral Floating Percentage on the Date of Processing of such
Collections (or as determined on the applicable Determination Date with
respect to the previous Monthly Period if the Servicer is depositing
Collections monthly pursuant to Section 4.02(a) of the Agreement), (B) the
applicable Investor Percentage on the Date of Processing of such
Collections (or as determined on the applicable Determination Date with
respect to the preceding Monthly Period if the Servicer is depositing
Collections monthly pursuant to Section 4.02(a) of the Agreement) and (C)
the aggregate amount of such Collections processed in respect of Principal
Receivables on such Date of Processing (or during such Monthly Period, as
applicable), and if on the related Determination Date such amounts are
determined to exceed Reallocated Principal Collections for the related
Transfer Date, the excess shall be applied on or before such Transfer Date
in accordance with clause (iii) below.
20
<PAGE>
(iii) If any other Principal Sharing Series is outstanding and in its
Amortization Period, retain in the Collection Account for application, to
the extent of any Principal Shortfall with respect to such other Principal
Sharing Series, as Shared Principal Collections on the related Transfer
Date, and otherwise pay to the Holder of the Exchangeable Seller
Certificate, an amount equal to (A) the product of (1) the applicable
Investor Percentage on the Date of Processing of such Collections (or as
determined on the applicable Determination Date with respect to the
preceding Monthly Period if the Servicer is depositing Collections monthly
pursuant to Section 4.02(a) of the Agreement) and (2) the aggregate amount
of such Collections processed in respect of Principal Receivables on such
Date of Processing (or during such Monthly Period, as applicable) less (B)
the amount of Collections applied pursuant to clause (ii) above; provided,
however, that in the event that the amount to be paid to the Holder of the
Exchangeable Seller Certificate pursuant to this subsection 4.04(c)(iii)
with respect to any Date of Processing (or during such Monthly Period, as
applicable) exceeds (such excess hereinafter referred to as the "Excess
------
Amount") the Seller Interest (determined without regard to any amounts on
------
deposit in the Retention Account, "Excess Amounts", "Controlled Excess
Amounts" or such other amounts specified in the Supplement with respect to
any Series) on such Date of Processing (or at the close of business on the
last Business Day of such Monthly Period, as applicable) after giving
effect to the inclusion in the Trust of all Receivables created on or prior
to such date and the application of payments referred to in subsection
4.01(d), the Excess Amount shall be deposited into the Principal Account to
be treated, during any Amortization Period, as Available Principal
Collections for the first Monthly Period thereof unless otherwise provided
in this Section 4.04; further, provided, however, that in the event that,
on any Date of Processing (or at the close of business on the last Business
day of such Monthly Period, as applicable) on or after the Implementation
Date, the Retention Percentage is less than the Required Retention
Percentage, the Servicer shall, after giving effect to the transfer of the
Excess Amount required by the preceding proviso, deposit in the Series
1995-2 Retention Subaccount an amount equal to the amount otherwise
payable to the Holder of the Exchangeable Seller Certificate pursuant to
this clause 4.04(c)(iii). If, after the Implementation Date, on any
Determination Date with respect to an Amortization Period, the Seller's
Interest (as determined above) is less than zero, an amount equal to the
Principal Allocation Percentage of such deficiency (less amounts previously
deposited in the Principal Account with respect to such deficiency pursuant
to this subsection 4.04(c)(iii) and subsection 4.04(d)(iii)) shall be
transferred from the Series 1995-2 Retention Account to the Principal
Account to be applied as Available Principal Collections on the related
Transfer Date.
(iv) If, on any Business Day, (x) Excess Amounts are on deposit in the
Principal Account, and (y) after application of the Collections deposited
on such Business Day in accordance with subsections 4.01(d), 4.04(c)(iii)
and 4.04(d)(iii), the Seller Interest (determined without regard to any
amounts on deposit in the Retention Account, "Excess Amounts", "Controlled
Excess Amounts" or such other amounts specified in the Supplement with
respect to any Series) exceeds zero, (A) the Servicer shall, if such
Business Day occurs before the Implementation Date, withdraw, or instruct
the Trustee to withdraw, and in such case the Trustee shall withdraw, from
the Principal Account
21
<PAGE>
funds in an amount equal to the lesser of (1) the Seller Interest (as
determined above) on such Business Day and (2) the Excess Amounts then on
deposit in the Principal Account and pay such funds to the Holder of the
Exchangeable Seller Certificate, and (B) if such Business Day occurs on or
after the Implementation Date and the Retention Percentage is greater than
the Required Retention Percentage, the Servicer shall withdraw, or instruct
the Trustee to withdraw, and in such case the Trustee shall withdraw, from
the Principal Account and pay to the Holder of the Exchangeable Seller
Certificate, funds in an amount equal to the lesser of (i) the Excess
Amounts then on deposit in the Principal Account and (ii) the product of
(x) the Pool Amount on such date of determination and (y) the amount by
which the Retention Percentage on such date of determination exceeds the
Required Retention Percentage on such date of determination.
(d) Allocations During the Controlled Amortization Period. During the
-----------------------------------------------------
Controlled Amortization Period, the Servicer shall, prior to the close of
business on the day any Collections are deposited in the Collection Account, pay
from the Collection Account (or, if applicable, the Principal Account) the
following amounts as set forth below:
(i) Deposit in the Finance Charge Account an amount equal to the
product of (A) the applicable Investor Percentage on the Date of Processing
of such Collections (or as determined on the applicable Determination date
with respect to the preceding Monthly Period if the Servicer is depositing
Collections monthly pursuant to Section 4.02(a) of the Agreement) and (B)
the aggregate amount of Collections processed in respect of Finance Charge
Receivables on such Date of Processing (or during such Monthly Period, as
applicable);
(ii) Deposit in the Series 1995-2 Collection Subaccount for
application, to the extent required by Section 4.11, as Reallocated
Principal Collections on the related Transfer Date an amount equal to the
product of (A) the sum of the Class B Principal Percentage and the
Collateral Principal Percentage on the Date of Processing of such
Collections (or as determined on the applicable Determination Date with
respect to the previous Monthly Period if the Servicer is depositing
Collections monthly pursuant to Section 4.02(a) of the Agreement), (B) the
applicable Investor Percentage on the Date of Processing of such
Collections (or as determined on the applicable Determination Date with
respect to the preceding Monthly Period if the Servicer is depositing
Collections monthly pursuant to Section 4.02(a) of the Agreement) and (C)
the aggregate amount of such Collections processed in respect of Principal
Receivables on such Date of Processing (or during such Monthly Period, as
applicable), and if on the related Determination Date such amounts are
determined to exceed Reallocated Principal Collections for the related
Transfer Date, the excess shall be applied on or before such Transfer Date
in accordance with clause (iii) below.
(iii) Deposit in the Principal Account an amount, if any, equal to
(A) the product of (1) the applicable Investor Percentage on the Date of
Processing of such Collections (or as determined on the applicable
Determination Date with respect to the preceding Monthly Period if the
Servicer is depositing Collections monthly pursuant to Section 4.02(a) of
the Agreement) and (2) the aggregate amount of such Collections
22
<PAGE>
processed in respect of Principal Receivables on such Date of Processing
(or during such Monthly Period, as applicable) (for any such Date of
Processing, a "Percentage Allocation") less (B) the amount of Collections
---------------------
applied pursuant to clause (ii) above; provided, however, that if the sum
of such Percentage Allocation and all preceding Percentage Allocations with
respect to the same Monthly Period (the "Monthly Total Percentage
------------------------
Allocation") exceeds the sum of the Controlled Amortization Amount and the
----------
Deficit Controlled Amortization Amount for such Monthly Period (the
"Controlled Distribution Amount"), then such excess (the "Controlled Excess
------------------------------- -----------------
Amount") shall not be treated as a Percentage Allocation and shall, if any
------
other Principal Sharing Series is outstanding and in its Amortization
Period, be retained in the Collection Account for application, to the
extent of any Principal Shortfall with respect to such Principal Sharing
Series, as Shared Principal Collections on the related Transfer Date, and
otherwise be paid to the Holder of the Exchangeable Seller Certificate up
to the Seller Interest (determined without regard to any amounts on deposit
in the Retention Account, "Excess Amounts", "Controlled Excess Amounts" or
such other amounts specified in the Supplement with respect to any Series)
and thereafter shall be applied in the manner described in the two
immediately following sentences; provided further, that if on the last day
of the Monthly Period the Monthly Total Percentage Allocation is less than
the Controlled Distribution Amount, then such deficit shall be the "Deficit
Controlled Amortization Amount" for the next succeeding Monthly Period and
the Monthly Total Percentage Allocation shall be deposited to the Principal
Account; further, provided, however, that the Deficit Controlled
Amortization Amount for the next succeeding Monthly Period shall be
recomputed following the latest Collection Recomputation Date related to
such Monthly Period, based on the adjustments, if any, made pursuant to
subsection 4.04(a). In the event that, on any Date of Processing on which
a Controlled Excess Amount exists, the Controlled Excess Amount exceeds the
Seller Interest (as determined above) after giving effect to the inclusion
in the Trust of all Receivables created on or prior to such Date of
Processing, the Controlled Excess Amount shall be deposited into the
Principal Account. In the event that, on any Date of Processing on or
after the Implementation Date in which a Controlled Excess Amount is on
deposit in the Principal Account, and the Retention Percentage is equal to
or less than the Required Retention Percentage, the Servicer shall, after
giving effect to the transfer of the Controlled Excess Amount referred to
in the preceding sentence, withdraw, or instruct the Trustee to withdraw,
and in such case the Trustee shall withdraw, from the Principal Account and
deposit in the Series 1995-2 Retention Subaccount an amount equal to the
amount otherwise payable to the Holder of the Exchangeable Seller
Certificate pursuant to this clause 4.04(d)(iii).
(iv) If, on any Business Day, (x) Controlled Excess Amounts are on
deposit in the Principal Account and (y) after application of the
Collections deposited on such Business Day in accordance with subsections
4.01(d), 4.04(c)(iii) and 4.04(d)(iii), the Seller Interest (determined
without regard to any amounts on deposit in the Retention Account, "Excess
Amounts", "Controlled Excess Amounts" or such other amounts specified in
the Supplement with respect to any Series) exceeds zero, (A) the Servicer
shall, if such Business Day occurs before the Implementation Date,
withdraw, or instruct the Trustee to withdraw, and in such case the Trustee
shall withdraw, from the Principal
23
<PAGE>
Account funds in an amount equal to the lesser of (1) the Seller Interest
(as determined above) on such Business Day and (2) the Controlled Excess
Amounts then on deposit in the Principal Account, and pay such funds to the
Holder of the Exchangeable Seller Certificate, and (B) if such Business Day
occurs on or after the Implementation Date and the Retention Percentage is
equal to or greater than the Required Retention Percentage, the Servicer
shall withdraw, or instruct the Trustee to withdraw, and in such case the
Trustee shall withdraw, from the Principal Account and pay to the Holder of
the Exchangeable Seller Certificate, funds in an amount equal to the lesser
of (i) the Controlled Excess Amounts then on deposit in the Principal
Account and (ii) the product of (x) the Pool Amount on such date of
determination and (y) the amount by which the Retention Percentage on such
date of determination exceeds the Required Retention Percentage on such
date of determination.
(e) Allocations During the Rapid Amortization Period. During the
------------------------------------------------
Rapid Amortization Period, the Servicer shall, prior to the close of business on
the day any Collections are deposited in the Collection Account, pay from the
Collection Account the following amounts as set forth below:
(i) Deposit in the Finance Charge Account an amount equal to the
product of (A) the applicable Investor Percentage on the Date of Processing
of such Collections (or as determined on the applicable Determination Date
with respect to the preceding Monthly Period if the Servicer is depositing
Collections monthly pursuant to Section 4.02(a) of the Agreement) and (B)
the aggregate amount of such Collections processed in respect of Finance
Charge Receivables on such Date of Processing (or during such Monthly
Period, as applicable).
(ii) Deposit in the Series 1995-2 Collection Subaccount for
application, to the extent required by Section 4.11, as Reallocated
Principal Collections on the related Transfer Date an amount equal to the
product of (A) the sum of the Class B Principal Percentage and the
Collateral Principal Percentage on the Date of Processing of such
Collections (or as determined on the applicable Determination Date with
respect to the previous Monthly Period if the Servicer is depositing
Collections monthly pursuant to Section 4.02(a) of the Agreement), (B) the
applicable Investor Percentage on the Date of Processing of such
Collections (or as determined on the applicable Distribution Date with
respect to the preceding Monthly Period if the Servicer is depositing
Collections monthly pursuant to Section 4.02(a) of the Agreement) and (C)
the aggregate amount of such Collections processed in respect of Principal
Receivables on such Date of Processing (or during such Monthly Period, as
applicable), and if on the related Determination Date such amounts are
determined to exceed Reallocated Principal Collections for the related
Transfer Date, the excess shall be applied on or before such Transfer Date
in accordance with clause (ii) below.
(iii) Deposit in the Principal Account an amount equal to (A) the
product of (1) the applicable Investor Percentage on the Date of Processing
of such Collections (or as determined on the applicable Determination Date
with respect to the preceding Monthly Period if the Servicer is depositing
Collections monthly pursuant to Section
24
<PAGE>
4.02(a) of the Agreement) and (2) the aggregate amount of such Collections
processed in respect of Principal Receivables on such Date of Processing
(or during such Monthly Period, as applicable) less (B) the amount of
Collections applied pursuant to clause (ii) above; provided, however, that
after the date on which the Investor Interest has been reduced to zero, the
amount determined in accordance with this subparagraph (iii) shall, if any
other Principal Sharing Series is outstanding and in its Amortization
Period, be retained in the Collection Account for application, to the
extent necessary, as Shared Principal Collections on the related Transfer
Date, and otherwise be paid to the Holder of the Exchangeable Seller
Certificate up to the Seller Interest, and the excess if any, will be
allocated as a Principal Receivable in the manner provided in Article IV
excluding any allocations to Series 1995-2.
SECTION 4.05. Determination of Monthly Interest.
---------------------------------
(a) The amount of monthly interest ("Class A Monthly Interest")
------------------------
distributable from the Distribution Account with respect to the Class A
Certificates on any Distribution Date shall be an amount equal to the product of
(i) (A) a fraction, the numerator of which is the actual number of days in the
related Interest Period and the denominator of which is 360, times (B) the Class
A Certificate Rate and (ii) the outstanding principal amount of the Class A
Certificates as of the close of business on the last day of the preceding
Monthly Period.
On the Determination Date preceding each Distribution Date, the
Servicer shall determine the excess, if any (the "Class A Interest Shortfall"),
--------------------------
of (x) the Class A Monthly Interest for such Distribution Date over (y) the
aggregate amount of funds allocated and available to pay such Class A Monthly
Interest on such Distribution Date. If the Class A Interest Shortfall with
respect to any Distribution Date is greater than zero, an additional amount
("Class A Additional Interest") equal to the product of (i) (A) a fraction, the
- -----------------------------
numerator of which is the actual number of days in the related Interest Period
and the denominator of which is 360, times (B) the Class A Certificate Rate and
(ii) such Class A Interest Shortfall (or the portion thereof which has not been
paid to the Class A Certificateholders) shall be payable as provided herein with
respect to the Class A Certificates on each Distribution Date following such
Distribution Date to and including the Distribution Date on which such Class A
Interest Shortfall is paid to the Class A Certificateholders. Notwithstanding
anything to the contrary herein, Class A Additional Interest shall be payable or
distributed to the Class A Certificateholders only to the extent permitted by
applicable law.
(b) The amount of monthly interest ("Class B Monthly Interest")
------------------------
distributable from the Distribution Account with respect to the Class B
Certificates on any Distribution Date shall be an amount equal to the product of
(i) (A) a fraction, the numerator of which is the actual number of days in the
related Interest Period and the denominator of which is 360, times (B) the Class
B Certificate Rate and (ii) the outstanding principal amount of the Class B
Certificates as of the close of business on the last day of the preceding
Monthly Period.
On the Determination Date preceding each Distribution Date, the
Servicer shall determine the excess, if any (the "Class B Interest Shortfall"),
--------------------------
of (x) the Class B Monthly Interest for such Distribution Date over (y) the
aggregate amount of funds allocated and available
25
<PAGE>
to pay such Class B Monthly Interest on such Distribution Date. If the Class B
Interest Shortfall with respect to any Distribution Date is greater than zero,
an additional amount ("Class B Additional Interest") equal to the product of (i)
---------------------------
(A) a fraction, the numerator of which is the actual number of days in the
related Interest Period and the denominator of which is 360, times (B) the Class
B Certificate Rate and (ii) such Class B Interest Shortfall (or the portion
thereof which has not been paid to the Class B Certificateholders) shall be
payable as provided herein with respect to the Class B Certificates on each
Distribution Date following such Distribution Date to and including the
Distribution Date on which such Class B Interest Shortfall is paid to the Class
B Certificateholders. Notwithstanding anything to the contrary herein, Class B
Additional Interest shall be payable or distributed to the Class B
Certificateholders only to the extent permitted by applicable law.
(c) The amount of monthly interest distributable from the Distribution
Account to the Collateral Interest Holder, which shall be an amount equal to the
product of (i)(A) a fraction, the numerator of which is the actual number of
days in the related Interest Period and the denominator of which is 360, times
-----
(B) the Collateral Rate in effect with respect to the related Interest Period,
times (ii) the Collateral Interest as of the close of business on the last day
- -----
of the preceding Monthly Period (the "Collateral Monthly Interest").
---------------------------
On the Determination Date preceding each Distribution Date, the
Servicer shall determine the excess, if any (the "Collateral Interest Payment
---------------------------
Shortfall"), of (x) the Collateral Monthly Interest for such Distribution Date
- ---------
over (y) the aggregate amount of funds allocated and available to pay such
Collateral Monthly Interest on such Distribution Date. If the Collateral
Interest Payment Shortfall with respect to any Distribution Date is greater than
zero, an additional amount ("Collateral Additional Interest") equal to the
------------------------------
product of (i) (A) a fraction, the numerator of which is the actual number of
days in the related Interest Period and the denominator of which is 360, times
(B) the Collateral Rate and (ii) such Collateral Interest Payment Shortfall (or
the portion thereof which has not been paid to the Collateral Interest Holder)
shall be payable as provided herein with respect to the Collateral Interest on
each Distribution Date following such Distribution Date to and including the
Distribution Date on which such Collateral Interest Payment Shortfall is paid to
the Collateral Interest Holder. Notwithstanding anything to the contrary
herein, Collateral Additional Interest shall be payable or distributed to the
Collateral Interest Holder only to the extent permitted by applicable law.
SECTION 4.06. Determination of Monthly Principal.
----------------------------------
(a) The amount of monthly principal ("Class A Monthly Principal") to
-------------------------
be transferred from the Principal Account to the Distribution Account with
respect to the Class A Certificates on each Transfer Date, beginning with the
first to occur of (i) the first Transfer Date with respect to a Rapid
Amortization Period, if any, and (ii) the first Transfer Date with respect to
the Class A Controlled Amortization Period, shall be equal to the least of (x)
the Available Principal Collections on deposit in the Principal Account with
respect to such Transfer Date, (y) for each Transfer Date with respect to the
Class A Controlled Amortization Period, the Controlled Distribution Amount for
the related Distribution Date and (z) the Class A Investor Interest on such
Transfer Date.
26
<PAGE>
(b) The amount of monthly principal ("Class B Monthly Principal") to
-------------------------
be transferred from the Principal Account to the Distribution Account with
respect to the Class B Certificates on each Transfer Date, beginning with the
Transfer Date with respect to Class B Principal Commencement Date, shall be
equal to the least of (x) the Available Principal Collections on deposit in the
Principal Account with respect to such Transfer Date (minus the portion of such
-----
Available Principal Collections to be applied to Class A Monthly Principal on
the related Distribution Date), (y) for each Transfer Date with respect to the
Class B Controlled Amortization Period, the Controlled Distribution Amount for
the related Distribution Date and (z) the Class B Investor Interest on such
Transfer Date.
(c) The amount of monthly principal (the "Collateral Monthly
------------------
Principal") to be distributed from the Principal Account to the Collateral
Interest Holder with respect to the Collateral Interest on each Transfer Date
shall be (A) during the Revolving Period following any reduction of the Required
Collateral Interest pursuant to clause (3) of the proviso in the definition
thereof an amount equal to the lesser of (1) the excess, if any, of the
Collateral Interest (after taking into account any adjustments to be made on
such Transfer Date pursuant to Sections 4.09 and 4.11) over the Required
Collateral Interest on such Transfer Date, or (2) the Available Principal
Collections on such Transfer Date or (B) during the Controlled Amortization
Period or Rapid Amortization Period an amount equal to the lesser of (1) the
excess, if any, of the Collateral Interest (after taking into account any
adjustments to be made on such Transfer Date pursuant to Sections 4.09 and 4.11)
over the Required Collateral Interest on such Transfer Date, or (2) the excess,
if any, of (i) the Available Principal Collections on such Transfer Date over
(ii) the sum of the Class A Monthly Principal and the Class B Monthly Principal
for such Transfer Date.
SECTION 4.07. Required Amount.
---------------
(a) With respect to each Transfer Date, on the related Determination
Date, the Servicer shall determine the amount (the "Class A Required Amount"),
-----------------------
if any, by which (a) the sum of (i) Class A Monthly Interest for the related
Distribution Date, (ii) any Class A Monthly Interest previously due but not paid
to the Class A Certificateholders on a prior Distribution Date, (iii) any Class
A Additional Interest for the related Distribution Date and any Class A
Additional Interest previously due but not paid to the Class A
Certificateholders on a prior Distribution Date, (iv) the Class A Servicing Fee
for such Transfer Date, (v) any Class A Servicing Fee previously due but not
paid to the Servicer, and (vi) the Class A Investor Default Amount, if any, for
such Transfer Date exceeds (b) the Class A Available Funds. In the event that
the Class A Required Amount for such Transfer Date is greater than zero, the
Servicer shall give written notice to the Trustee of such positive Class A
Required Amount on the date of computation.
(b) With respect to each Transfer Date, on the related Determination
Date, the Servicer shall determine the amount (the "Class B Required Amount"),
-----------------------
if any, by which (a) the sum of (i) Class B Monthly Interest for the related
Distribution Date, (ii) any Class B Monthly Interest previously due but not paid
to the Class B Certificateholders on a prior Distribution Date, (iii) any Class
B Additional Interest for the related Distribution Date and any Class A
Additional Interest previously due but not paid to the Class B
Certificateholders on a prior
27
<PAGE>
Distribution Date, (iv) the Class B Servicing Fee for such Transfer Date, (v)
any Class B Servicing Fee previously due but not paid to the Servicer, and (vi)
the Class B Investor Default Amount, if any, for such Transfer Date exceeds (b)
the Class B Available Funds. In the event that the Class B Required Amount for
such Transfer Date is greater than zero, the Servicer shall give written notice
to the Trustee of such positive Class B Required Amount on the date of
computation.
SECTION 4.08. Application of Class A Available Funds, Class B
-----------------------------------------------
Available Funds, Collateral Available Funds and Available Principal Collections.
- -------------------------------------------------------------------------------
The Servicer shall apply, or shall cause the Trustee to apply, on each Transfer
Date, Class A Available Funds, Class B Available Funds, Collateral Available
Funds on deposit in the Finance Charge Account and Available Principal
Collections on deposit in the Principal Account, in each case with respect to
such Transfer Date, to make the following distributions:
(a) On each Transfer Date, an amount equal to the Class A Available
Funds with respect to such Transfer Date will be distributed in the
following priority:
(i) an amount equal to Class A Monthly Interest for the
related Distribution Date, plus the amount of any Class A Monthly
----
Interest previously due but not distributed to Class A
Certificateholders on a prior Distribution Date, plus the amount of
----
any Class A Additional Interest for such Distribution Date and any
Class A Additional Interest previously due but not distributed to
Class A Certificateholders on a prior Distribution Date, shall be
transferred to the Distribution Account for payment to the Class A
Certificateholders;
(ii) an amount equal to the Class A Servicing Fee for such
Transfer Date, plus the amount of any Class A Servicing Fee previously
----
due but not distributed to the Servicer on a prior Transfer Date,
shall be distributed to the Servicer (unless such amount has been
netted against deposits to the Collection Account in accordance with
Section 4.02 of the Agreement);
(iii) an amount equal to the Class A Investor Default Amount
for such Transfer Date shall be treated as a portion of Available
Principal Collections for such Transfer Date and deposited into the
Principal Account; and
(iv) the balance, if any, shall constitute Excess Spread and
shall be allocated and distributed as set forth in Section 4.10.
(b) On each Transfer Date, an amount equal to the Class B Available
Funds with respect to such Transfer Date will be distributed in the
following priority:
(i) an amount equal to Class B Monthly Interest for the
related Distribution Date, plus the amount of any Class B Monthly
----
Interest previously due but not distributed to Class B
Certificateholders on a prior Distribution Date, plus the amount of
----
any Class B Additional Interest for such Distribution Date and any
Class B Additional Interest previously due but not distributed to
Class B
28
<PAGE>
Certificateholders on a prior Distribution Date, shall be transferred
to the Distribution Account for payment to the Class B
Certificateholders;
(ii) an amount equal to the Class B Servicing Fee for such
Transfer Date, plus the amount of any Class B Servicing Fee previously
----
due but not distributed to the Servicer on a prior Transfer Date,
shall be distributed to the Servicer (unless such amount has been
netted against deposits to the Collection Account in accordance with
Section 4.02 of the Agreement); and
(iii) the balance, if any, shall constitute Excess Spread and
shall be allocated and distributed as set forth in Section 4.10.
(c) On each Transfer Date an amount equal to the Collateral Available
Funds with respect to the Distribution Date will be distributed in the
following priority:
(i) during any period in which neither Chase USA nor an
affiliate thereof is Servicer, an amount equal to the Collateral
Interest Servicing Fee for such Transfer Date plus the amount of any
Collateral Interest Servicing Fee due but not paid to the Servicer on
any prior Transfer Date shall be distributed to the Servicer (unless
such amount has been netted against deposits to the Collection Account
in accordance with Section 4.02 of the Agreement); and
(ii) the balance, if any, shall constitute Excess Spread and
shall be allocated and distributed as set forth in Section 4.10.
(d) On each Transfer Date with respect to the Revolving Period, an
amount equal to the Available Principal Collections deposited in the
Principal Account for the related Monthly Period up to an amount equal to
Collateral Monthly Principal for such Transfer Date will be distributed to
the Collateral Interest Holder in accordance with the Loan Agreement and
the remainder of such Collections shall be treated as Shared Principal
Collections and applied in accordance with Section 4.13.
(e) On each Transfer Date with respect to the Controlled Amortization
Period or a Rapid Amortization Period, an amount equal to the Available
Principal Collections deposited in the Principal Account for the related
Monthly Period will be applied in the following priority:
(i) an amount equal to Class A Monthly Principal for the
related Distribution Date, up to the Class A Investor Interest on such
Transfer Date, shall be transferred to the Distribution Account for
payment to the Class A Certificateholders;
(ii) for each Transfer Date beginning on the Class B Principal
Commencement Date, an amount equal to Class B Monthly Principal for
the related Distribution Date, up to the Class B Investor Interest on
such Transfer
29
<PAGE>
Date, shall be transferred to the Distribution Account for payment to
the Class B Certificateholders; and
(iii) for each Transfer Date, after giving effect to
paragraphs (i) and (ii) above, an amount equal to the balance, if any,
of such Available Principal Collections then on deposit in the
Collection Account up to an amount equal to Collateral Monthly
Principal for such Distribution Date shall be distributed to the
Collateral Interest Holder in accordance with the Loan Agreement and
the remainder of such Collections shall be treated as Shared Principal
Collections and applied in accordance with Section 4.13 hereof.
SECTION 4.09. Defaulted Amounts; Investor Charge-Offs.
---------------------------------------
(a) On each Determination Date, the Servicer shall calculate the Class
A Investor Default Amount, if any, for the related Transfer Date. If, on any
Transfer Date, the Class A Required Amount for the related Monthly Period
exceeds the sum of (x) the sum of Reallocated Class B Principal Collections and
Reallocated Collateral Principal Collections with respect to such Monthly Period
and (y) the amount of Excess Spread and the Excess Finance Charge Collections
allocable to Series 1995-2 with respect to such Monthly Period, the Collateral
Interest (after giving effect to reductions for any Collateral Charge-Offs and
any Reallocated Principal Collections on such Distribution Date) will be reduced
by the amount of such excess, but not by more than the lesser of the Class A
Investor Default Amount and the Collateral Interest (after giving effect to
reductions for any Collateral Charge-Offs and any Reallocated Collateral
Principal Collections on such Distribution Date) for such Transfer Date. In the
event that such reduction would cause the Collateral Interest to be a negative
number, the Collateral Interest shall be reduced to zero and the Class B
Investor Interest (after giving effect to reductions for any Class B Investor
Charge-Offs and any Reallocated Class B Principal Collections on such
Distribution Date) will be reduced, as of the related Distribution Date, by the
amount by which the Collateral Interest would have been reduced below zero. In
the event that such reduction would cause the Class B Investor Interest to be a
negative number, the Class B Investor Interest shall be reduced to zero and the
Class A Investor Interest shall be reduced by the amount by which the Class B
Investor Interest would have been reduced below zero, but not by more than the
excess, if any, of the Class A Investor Default Amount for such Transfer Date
over the aggregate amount of the reductions, if any, of the Collateral Interest
and the Class B Investor Interest for such Distribution Date (a "Class A
-------
Investor Charge-Off"). Class A Investor Charge-Offs shall thereafter be
- -------------------
reimbursed and the Class A Investor Interest increased (but not by an amount in
excess of the aggregate unreimbursed Class A Investor Charge-Offs) on any
Distribution Date by the amount of Excess Spread and Excess Finance Charge
Collections allocated and available on the related Transfer Date for that
purpose pursuant to Section 4.10(b). References to "negative numbers" above
shall be determined without regard to the requirement that the Invested Amount
of a Class shall not be reduced below zero.
(b) On each Determination Date, the Servicer shall calculate the Class
B Investor Default Amount, if any, for the related Transfer Date. If, on any
Transfer Date, the Class B Investor Default Amount for such Distribution Date
exceeds the Excess Spread and Excess Finance Charge Collections with respect to
the related Monthly Period which are
30
<PAGE>
allocated and available to pay such amount pursuant to Section 4.10(e) and not
required to be applied pursuant to clause (a) above, the Collateral Interest
(after giving effect to reductions for any Collateral Charge-Offs and any
Reallocated Principal Collections on such Transfer Date and any adjustments with
respect thereto as described in subsection 4.09(a) above) will be reduced, as of
the related Distribution Date, by the amount of such excess but not by more than
the lesser of the Class B Investor Default Amount and the Collateral Interest
(after giving effect to reductions for any Collateral Charge-Offs and any
Reallocated Principal Collections on such Transfer Date and any adjustments with
respect thereto as described in subsection 4.09(a) above) for such Transfer
Date. In the event that such reduction would cause the Collateral Interest to
be a negative number, the Collateral Interest shall be reduced to zero and then
the Class B Investor Interest shall be reduced by the amount of the excess, but
not by more than the excess of the Class B Investor Default Amount over the
aggregate amount of reductions, if any, of the Collateral Interest (other than
reductions pursuant to clause (a) above) for such Distribution Date (a "Class B
-------
Investor Charge-Off"). Class B Investor Charge-Offs shall thereafter be
- -------------------
reimbursed and the Class B Investor Interest increased as of the related
Distribution Date (but not by an amount in excess of the aggregate unreimbursed
Class B Investor Charge-Offs) on any Transfer Date by the amount of Excess
Spread and Excess Finance Charge Collections allocated and available for that
purpose pursuant to Section 4.10(f). References to "negative numbers" above
shall be determined without regard to the requirement that the Invested Amount
of a Class shall not be reduced below zero.
(c) On or before each Transfer Date, the Servicer shall calculate the
Collateral Default Amount. If on any Transfer Date, the Collateral Default
Amount for the prior Monthly Period exceeds the amount of Excess Spread and
Excess Finance Charge Collections which are allocated and available to fund such
amount pursuant to subsection 4.10(i), the Collateral Interest will be reduced
by the amount of such excess but not by more than the lesser of the Collateral
Default Amount and the Collateral Interest for such Distribution Date (a
"Collateral Charge-Off"). The Collateral Interest will after any reduction
- ----------------------
pursuant to this Section 4.09 be reimbursed on any Distribution Date by the
amount of the Excess Spread allocated and available on the related Transfer Date
for that purpose as described under subsection 4.10(j).
SECTION 4.10. Excess Spread; Excess Finance Charge Collections. The
------------------------------------------------
Servicer shall apply, or shall cause the Trustee to apply, on each Transfer
Date, Excess Spread and Excess Finance Charge Collections allocated to Series
1995-2 with respect to the related Monthly Period, to make the following
distributions in the following order of priority:
(a) an amount equal to the Class A Required Amount, if any, with
respect to such Transfer Date shall be transferred by the Trustee to fund
any deficiency pursuant to Sections 4.08(a)(i), (ii) and (iii); provided,
however, that in the event the Class A Required Amount for such Transfer
Date exceeds the amount of Excess Spread and Excess Finance Charge
Collections allocated to Series 1995-2, such Excess Spread and Excess
Finance Charge Collections shall be applied first to pay amounts due with
respect to such Transfer Date pursuant to Section 4.08(a)(i), second, to
pay the Class A Servicing Fee pursuant to Section 4.08(a)(ii) and third to
pay the Class A Investor Default Amount for such Transfer Date pursuant to
Section 4.08(a)(iii);
31
<PAGE>
(b) an amount equal to the aggregate amount of Class A Investor
Charge-Offs which have not been previously reimbursed as provided in
Section 4.09(a) (after giving effect to the allocation on such Transfer
Date of any amount for that purpose pursuant to Section 4.09(a)) shall be
deposited in the Principal Account and treated as a portion of Available
Principal Collections for such Transfer Date;
(c) an amount equal to the sum of (i) any Class B Monthly Interest to
become due on the related Distribution Date but not funded from amounts
transferred to the Distribution Account on such Transfer Date and any Class
B Monthly Interest not distributed to the Class B Certificateholders on a
prior Distribution Date and (ii) the amount of any Class B Additional
Interest previously due but not funded from amounts transferred to the
Distribution Account on such Transfer Date and any Class B Additional
Interest not distributed to the Class B Certificateholders on a prior
Distribution Date, after giving effect to the allocation in Section
4.08(b)(i), shall be transferred to the Distribution Account for payment to
the Class B Certificateholders;
(d) an amount equal to any Class B Servicing Fees due but not paid to
the Servicer either on such Transfer Date or a prior Transfer Date shall be
paid to the Servicer;
(e) an amount equal to the Class B Investor Default Amount for such
Transfer Date shall be deposited in the Principal Account and treated as a
portion of Available Principal Collections for such Transfer Date;
(f) an amount equal to the aggregate amount by which the Class B
Investor Interest has been reduced pursuant to clauses (c), (d) and (e) of
the definition of "Class B Investor Interest" in this Series Supplement
(but not in excess of the aggregate amount of such reductions which have
not been previously reimbursed) shall be deposited in the Principal Account
and treated as a portion of Available Principal Collections for such
Transfer Date;
(g) an amount equal to the Collateral Monthly Interest for the related
Distribution Date, plus the amount of any Collateral Monthly Interest
----
previously due but not distributed to the Collateral Interest Holder on a
prior Distribution Date, plus the amount of any Collateral Additional
----
Interest for such Distribution Date and any Collateral Additional Interest
previously due but not distributed to the Collateral Interest Holder on a
prior Distribution Date shall be deposited in the Distribution Account for
payment to the Collateral Interest Holder in accordance with the Loan
Agreement;
(h) an amount equal to any Monthly Investor Servicing Fees due but not
paid to the Servicer either on such Transfer Date or on a prior Transfer
Date shall be paid to the Servicer;
(i) an amount equal to the Collateral Default Amount, if any, for the
prior Monthly Period shall be deposited in the Principal Account and
treated as a portion of Available Principal Collections for such Transfer
Date;
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<PAGE>
(j) an amount equal to the aggregate amount by which the Collateral
Interest has been reduced below the Required Collateral Interest for
reasons other than the payment of principal to the Collateral Interest
Holder (but not in excess of the aggregate amount of such reductions which
have not been previously reimbursed) shall be deposited into the Principal
Account and treated as a portion of Available Principal Collections for
such Transfer Date;
(k) an amount equal to the aggregate of any other amounts then payable
(including any such amounts payable only when funds are available
therefor), other than any such amounts that may be payable to the Seller,
pursuant to the Loan Agreement (to the extent such amounts are payable
pursuant to the Loan Agreement out of Excess Finance Charge Collections and
Excess Spread) shall be distributed to the Collateral Interest Holder for
application in accordance with the Loan Agreement; and
(l) [Reserved]
(m) the balance, if any, will constitute a portion of Excess Finance
Charge Collections for such Distribution Date and will be available for
allocation to other Series in Group One or to the Holder of the Seller
Certificate as described in Section 4.12.
SECTION 4.11. Reallocated Principal Collections. On or before each
---------------------------------
Transfer Date, the Servicer shall instruct the Trustee in writing (which writing
shall be substantially in the form of Exhibit B hereto) to withdraw from the
---------
Series 1995-2 Collection Subaccount and apply the Reallocated Principal
Collections for such Transfer Date to make the following distributions on each
Distribution Date in the following priority:
(a) an amount equal to the excess, if any, of (i) the Class A Required
Amount, if any, with respect to such Transfer Date over (ii) the amount of
Excess Spread and Excess Finance Charge Collections with respect to the
related Monthly Period shall be applied pursuant to subsections 4.08(a)(i),
(ii) and (iii); and
(b) an amount equal to the excess, if any, of (i) the Class B Required
Amount, if any, with respect to such Transfer Date over (ii) the amount of
Excess Spread and Excess Finance Charge Collections allocated and available
to the Class B Certificates pursuant to subsections 4.10(c), (d) and (e) on
such Transfer Date shall be applied pursuant to subsections 4.08(b)(i),
(ii) and 4.10(e).
On each Distribution Date, the Collateral Interest shall be reduced by
the amount of Reallocated Principal Collections for the Transfer Date preceding
such Distribution Date. In the event that such reduction would cause the
Collateral Interest (after giving effect to any Collateral Charge-Offs for such
Distribution Date) to be a negative number, the Collateral Interest (after
giving effect to any Collateral Charge-Offs for such Distribution Date) shall be
reduced to zero and the Class B Investor Interest shall be reduced by the amount
by which the Collateral Interest would have been reduced below zero. In the
event that the reallocation of Reallocated Principal Collections would cause the
Class B Investor Interest (after giving effect to any Class B Investor Charge-
Offs for such Distribution Date) to be a negative number on any
33
<PAGE>
Distribution Date, Reallocated Principal Collections shall be reallocated on the
related Transfer Date in an aggregate amount not to exceed the amount which
would cause the Class B Investor Interest (after giving effect to any Class B
Investor Charge-Offs for such Distribution Date) to be reduced to zero.
References to "negative numbers" above shall be determined without regard to the
requirement that the Invested Amount of a Class not be reduced below zero.
SECTION 4.12. Group One Excess Finance Charge Collections. Series
-------------------------------------------
1995-2 shall be included in Group One. Excess Finance Charge Collections with
respect to all Series in Group One for any Transfer Date will be allocated to
Series 1995-2 in the event that Series 1995-2 has not produced Excess Finance
Charge Collections with respect to such Transfer Date in an amount equal to the
product of (x) the aggregate amount of Excess Finance Charge Collections with
respect to all the Series in Group One for such Transfer Date and (y) a
fraction, the numerator of which is the Investor Interest for Series 1995-2 for
such Transfer Date and the denominator of which is the aggregate amount of
Investor Interests (as defined in each Supplement) for all Series which have not
produced Excess Finance Charge Collections with respect to such Transfer Date.
Any Excess Finance Charge Collections allocated to a Series in Group One which,
when applied under this Section and the applicable Series Supplement, would
produce Excess Finance Charge Collections with respect to such Series for such
Transfer Date shall, to the extent of such latter excess, be paid to the Holder
of the Seller Certificate. The sharing of Excess Finance Charge Collections
among Series in Group One will cease if the Seller shall deliver to the Trustee
an Officer's Certificate to the affect that, in the reasonable belief of the
Seller, the continued sharing of Excess Finance Charge Collections among Series
in Group One would have adverse regulatory implications with respect to the
Seller.
SECTION 4.13. Shared Principal Collections. Shared Principal
----------------------------
Collections for any Transfer Date will be allocated to Series 1995-2 in an
amount equal to the product of (x) the aggregate amount of Shared Principal
Collections with respect to all Principal Sharing Series for such Transfer Date
and (y) a fraction, the numerator of which is the Principal Shortfall for Series
1995-2 for such Transfer Date and the denominator of which is the aggregate
amount of Principal Shortfalls for all the Series which are Principal Sharing
Series for such Transfer Date. The "Principal Shortfall" for Series 1995-2 will
be equal to (a) for any Distribution Date with respect to the Revolving Period,
zero, (b) for any Transfer Date with respect to the Controlled Amortization
Period, the excess, if any, of, prior to the date on which the Series 1995-2
Certificates are paid in full, the Controlled Distribution Amount with respect
to such Distribution Date and, thereafter, the Collateral Interest, over, in
either case, the amount of Available Principal Collections for such Distribution
Date (excluding any portion thereof attributable to Shared Principal
Collections) and (c) for any Distribution Date with respect to a Rapid
Amortization Period, the excess, if any, of the Investor Interest over the
amount of Available Principal Collections for such Transfer Date (excluding any
portion thereof attributable to Shared Principal Collections). "Principal
---------
Shortfall" for other Series in Group One shall have the meaning set forth in the
- ---------
related Series Supplement.
34
<PAGE>
SECTION 4.14. Determination of LIBOR.
----------------------
(a) On each LIBOR Determination Date, the Trustee, or the Paying Agent
on behalf of the Trustee, will determine LIBOR on the basis of the rate for one-
month United States dollar deposits that appears on Telerate Page 3750 as of
11:00 a.m., London time, on such date. If such rate does not appear on Telerate
Page 3750, the rate for that date will be determined on the basis of the rates
at which one-month United States dollars are offered by the Reference Banks at
approximately 11:00 a.m., London time, on that day to prime banks in the London
interbank market. The Trustee, or the Paying Agent on behalf of the Trustee,
will request the principal London office of each of the Reference Banks to
provide a quotation of its rate. If at least two such quotations are provided,
the rate for that date will be the arithmetic mean of the quotations. If fewer
than two quotations are provided as requested, the rate for that date will be
the arithmetic mean of the rates quoted by major banks in New York City,
selected by the Servicer, at approximately 11:00 a.m., New York City time, on
that day for one-month loans in United States dollars to leading European banks.
If on the LIBOR Determination Date, the banks selected by the Trustee are not
quoting as described above, LIBOR for such Interest Period will be LIBOR as
determined on the previous LIBOR Determination Date (or 6.0625% in the case of
the first LIBOR Determination Date).
(b) On each LIBOR Determination Date, the Trustee, or the Paying Agent
on behalf of the Trustee, shall send to the Servicer by facsimile notification
of LIBOR for the following Interest Period.
SECTION 4.15. [Reserved]
SECTION 4.16. Time of Deposits and Withdrawals. Any deposit,
--------------------------------
withdrawal, transfer or other payment required to be made to or from the
Collection Account, Finance Charge Account, Principal Account, Distribution
Account or Series 1995-2 Retention Subaccount shall be deemed to occur when the
instructions with respect to such deposit, withdrawal, transfer or other payment
have been transmitted over the applicable automated payment system.
SECTION 4.17. Conversion from Collections during Billing Cycles to
----------------------------------------------------
Collections during Monthly Periods.
- ----------------------------------
(a) The Servicer may deliver to the Trustee and the Rating Agency a
notice that it has changed the software that it uses to service the Accounts and
that, effective as of a certain date specified in such notice (the "Notice
------
Date"), and on each day thereafter, the Servicer is able to calculate the
aggregate amount of Receivables, Finance Charge Receivables and Principal
Receivables effective as of any date of determination, and is not limited to
calculating such amounts by reference to the amount thereof as of the end of
each Billing Cycle. The "Conversion Date" shall occur on the later of:
---------------
(i) the first day of any Monthly Period specified in such notice;
(ii) the first day of any Monthly Period following the amendment of
the Agreement such that:
35
<PAGE>
(A) the Aggregate Receivables, Aggregate Finance Charge
Receivables and Aggregate Principal Receivables on any date of
determination shall equal the aggregate amount hereof as of the close
of business on the last day of the Monthly Period preceding such date
of determination;
(B) Collections which are available for distribution on any
Transfer Date shall be based on Collections received during the
preceding Monthly Period, not on Collections received during Billing
Cycles which ended during the preceding Monthly Period;
(C) the Agreement no longer refers to Collections received or
allocated during Billing Cycles;
(D) the Portfolio Yield for the Monthly Period in which the
Conversion Date occurs shall be adjusted, if necessary, to compensate
for any distortion in the Portfolio Yield resulting from such
conversion; and
(E) such other matters as may be required by the Trustee, the
Rating Agency or the Servicer to accomplish the intent of the
foregoing;
provided, however, that the Rating Agency shall have confirmed in writing that
such amendment will not result in the Rating Agency's reducing or withdrawing
its rating on any then outstanding Series rated by it.
(b) Notwithstanding anything contained in the Agreement to the
contrary, the Agreement may be amended pursuant to Section 13.01(a)(i) from time
to time by the Seller, the Servicer and the Trustee and without the consent of
the Certificateholders, (i) to amend the reallocation provisions of Section
4.02(b) and Section 4.04 to accomplish the intention expressed in Section
4.04(b), and (ii) to accomplish the intention expressed in Section 4.17(a).
Such amendment may also amend the provisions of the Agreement regarding the
Retention Account in order to continue the operation of such Account, modify the
provisions regarding deposits into or withdrawals from such Account (provided
that only amounts which would otherwise be payable to the Holder of the
Exchangeable Seller Certificate may be used to fund such Account) and provided
that funds therein may be treated as Principal Receivables for purposes of
satisfying the Minimum Seller Interest and Minimum Aggregate Principal
Receivables requirements of Section 2.06(a) and 6.09(b).
(c) On the Determination Date related to the Conversion Month, the
Servicer shall withdraw, or instruct the Trustee to withdraw, and the Trustee,
acting in accordance with such instructions shall, withdraw and pay to the
Holder of the Exchangeable Seller Certificate on the succeeding Transfer Date,
an amount equal to the amount by which (i) the Collections of Finance Charge
Receivables processed during each Billing Cycle which ended during the
Conversion Month and Collections of Finance Charge Receivables processed on any
other Date of Processing during the Conversion Month, in each case which are
allocated to the Investor Interest and deposited in the Finance Charge Account
pursuant to Article IV, exceeds (ii) the Available Finance Charge Collections
for the Conversion Month.
36
<PAGE>
ARTICLE V
DISTRIBUTIONS AND REPORTS TO INVESTOR
CERTIFICATEHOLDERS
(THE FOLLOWING PORTION OF THIS
ARTICLE IS APPLICABLE ONLY TO SERIES 1995-2.)
SECTION 5.01. Distributions. On each Distribution Date, the Paying
-------------
Agent shall distribute (in accordance with the certificate delivered by the
Servicer to the Trustee pursuant to Section 3.04(b)) to each Series 1995-2
Certificateholder of record on the immediately preceding Record Date and the
Collateral Interest Holder (other than as provided in Section 2.04(e) or Section
12.03 hereof respecting a final distribution) such Certificateholder's pro rata
--- ----
share (based on the aggregate Undivided Interests represented by Series 1995-2
Certificates held by such Certificateholder and the Collateral Interest Holder)
of amounts on deposit in the Distribution Account as are payable to the Series
1995-2 Certificateholders of such Class pursuant to Sections 4.08 and 4.10
hereof by check mailed to each Certificateholder except that (i) with respect to
Certificates registered in the name of the nominee of a Clearing Agency, such
distribution shall be made in immediately available funds and (ii) with respect
to the Collateral Interest, such distribution shall be made in accordance with
the Loan Agreement.
SECTION 5.02. Monthly Certificateholders' Statement.
-------------------------------------
(a) On or before each Distribution Date, the Paying Agent shall
forward to each Series 1995-2 Certificateholder, the Rating Agency and any
Series 1995-2 Certificate Owner, upon the written request of such Series 1995-2
Certificate Owner, a statement substantially in the form of Exhibit C hereto
prepared by the Servicer setting forth among other things the following
information (which, in the case of subclauses (i), (ii) and (iii) below, shall
be stated on the basis of an original principal amount of $1,000 per Certificate
and, in the case of subclauses (viii) and (ix) shall be stated on an aggregate
basis and on the basis of an original principal amount of $1,000 per
Certificate):
(i) the total amount distributed on such Distribution Date;
(ii) the amount of such distribution, if any, allocable to Certificate
Principal of each Class;
(iii) the amount of such distribution allocable to Certificate
Interest of each Class;
(iv) the amount of Collections of Principal Receivables processed
during (A) the Billing Cycles which ended during the preceding Monthly
Period, (B) the Billing Cycles which ended during the preceding Monthly
Period and on any other Date of Processing during such Monthly Period or
(C) the preceding Monthly Period, as appropriate, and allocated in respect
of the Series 1995-2 Certificates;
37
<PAGE>
(v) the aggregate amount of Principal Receivables, the Investor
Interest, the Class A Investor Interest, the Class B Investor Interest, the
Collateral Interest as a percentage of the aggregate amount of Principal
Receivables in the Trust as of the end of the day on the last day of the
preceding Monthly Period, the Class A Floating Percentage, the Class B
Floating Percentage, the Class B Principal Percentage, the Collateral
Floating Percentage and the Collateral Principal Percentage;
(vi) the aggregate outstanding balance of Accounts which are up to 29,
30-59, 60-89 and 90 or more days delinquent in accordance with the
Servicer's then existing Account Guidelines as of the end of the day on the
last day of,the related Billing Cycle which ended during the preceding
Monthly Period;
(vii) the Aggregate Investor Default Amount, the Class A Investor
Default Amount, the Class B Investor Default Amount and the Collateral
Default Amount, in each case for the preceding Monthly Period;
(viii) the Investor Charge Offs, Class A Charge Offs, Class B Charge
Offs and Collateral Charge Offs for the preceding Monthly Period;
(ix) the Investor Charge Offs, Class A Charge Offs, Class B Charge
Offs and Collateral Charge Offs reimbursed on the Transfer Date immediately
preceding such Distribution Date;
(x) the Investor Monthly Servicing Fee, Class A Monthly Servicing Fee,
Class B Monthly Servicing Fee and Collateral Monthly Servicing Fee for the
preceding Monthly Period;
(xi) the Available Collateral Interest and the Required Collateral
Interest, each as of the close of business on such Distribution Date;
(xii) the aggregate amount of Collections of Finance Charge
Receivables during (A) the Billing Cycles which ended during the preceding
Monthly Period, (B) the Billing Cycles which ended during the preceding
Monthly Period and on any other Date of Processing during such Monthly
Period or (C) the preceding Monthly Period, as appropriate, and allocated
in respect of the Series 1995-2 Certificates;
(xiii) the Deficit Controlled Amortization Amount; and
(xiv) the Pool Factor as of the preceding Record Date.
The Monthly Certificateholders' Statement, the Monthly Payment
Instructions and Notification to the Trustee and the Servicer's Certificate
shall be substantially in the form of Exhibits C, B and D, respectively, hereto,
------------- -
with such changes as the Servicer may determine to be necessary or desirable;
provided, however, that no such change shall serve to exclude information
required by this subsection 5.02(a). The Servicer shall, upon making such
determination, deliver to the Trustee and the Rating Agency an Officer's
Certificate to which
38
<PAGE>
shall be annexed the form of such Exhibit, as so changed. Upon the delivery of
such Officer's Certificate to the Trustee, such Exhibit, as so changed, shall
for all purposes of this Agreement constitute such Exhibit. The Trustee may
conclusively rely upon such Officer's Certificate as to such change conforming
to the requirements of this Agreement.
(b) Annual Certificateholders' Tax Statement. On or before January 31
----------------------------------------
of each calendar year, beginning with calendar year 1996, the Servicer shall
furnish to the Paying Agent, who shall distribute to each Person who at any time
during the preceding calendar year was a Series 1995-2 Certificateholder, a
statement prepared by the Servicer containing the information required to be
contained in the regular monthly report to Series 1995-2 Certificateholders, as
set forth in subclauses (i), (ii) and (iii) above, aggregated for such calendar
year or the applicable portion thereof during which such Person was a Series
1995-2 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 Series 1995-2
Certificateholders to prepare their tax returns. Such obligations of the Paying
Agent shall be deemed to have been satisfied to the extent that substantially
comparable information shall be provided by the Paying Agent pursuant to any
requirements of the Internal Revenue Code as from time to time in effect.
SECTION 9. Series 1995-2 Pay Out Events. If any one of the following
----------------------------
events shall occur during the Revolving Period or the Controlled Amortization
Period with respect to the Series 1995-2 Certificates:
(a) failure on the part of the Seller or the Holder of the
Exchangeable Seller Certificate (i) to make any payment or deposit required
by the terms of (A) the Agreement relating to the Series 1995-2
Certificates, or (B) this Series Supplement, on or before the date
occurring five days after the date such payment or deposit is required to
be made herein or (ii) duly to observe or perform in any material respect
any covenants or agreements of the Seller set forth in the Agreement, which
failure has a material adverse effect on the Series 1995-2
Certificateholders 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 Seller by the Trustee, or to
the Seller and the Trustee by the Enhancement Provider or the Holders of
Series 1995-2 Certificates evidencing Undivided Interests aggregating not
less than 50% of the Investor Interest of this Series 1995-2, and continues
to affect materially and adversely the interests of the Series 1995-2
Certificateholders for such period;
(b) any representation or warranty made by the Seller in the
Agreement, including this Series Supplement, or any information contained
in a computer file or microfiche list required to be delivered by the
Seller pursuant to Section 2.01, 2.06 or 3.04(c), (i) shall prove to have
been incorrect in any material respect when made or when delivered, which
continues to be incorrect in any material respect for a period of 60 days,
after the date on which written notice of such failure, requiring the same
to be remedied, shall have been given to the Seller by the Trustee, or to
the Seller and the Trustee by the Enhancement Provider or the Holders of
the Series 1995-2 Certificates evidencing Undivided Interests aggregating
not less than 50% of the Investor Interest of
39
<PAGE>
this Series 1995-2, and (ii) as a result of which the interests of the
Series 1995-2 Certificateholders are materially and adversely affected and
continue to be materially and adversely affected for such period; provided,
however, that a Series 1995-2 Pay Out Event pursuant to this subsection
9.01(b) shall not be deemed to have occurred hereunder if the Seller has
accepted reassignment of the related Receivable, or all of such
Receivables, if applicable, during such period in accordance with the
provisions hereof;
(c) the Portfolio Yield averaged for any three consecutive Monthly
Periods is reduced to a rate which is less than the Base Rate averaged over
the same three Monthly Periods;
(d) the Seller shall fail to convey Receivables arising under
Additional Accounts to the Trust, as required by subsection 2.06(a) of the
Agreement; or
(e) any Servicer Default shall occur which would have a material
adverse effect on the Holders of the Series 1995-2 Certificates;
then, in the case of any event described in subparagraph (a), (b) or (e), after
the applicable grace period set forth in such subparagraphs, either the Trustee
or the Holders of Series 1995-2 Certificates evidencing Undivided Interests
aggregating more than 50% of the Investor Interest of this Series by notice then
given in writing to the Seller and the Servicer (and to the Trustee if given by
the Certificateholders) may declare that a pay out event (a "Series 1995-2 Pay
-----------------
Out Event") has occurred and shall be deemed to have occurred as of the date of
- ---------
such notice, and in the case of any event described in subparagraphs (c) or (d),
a Series 1995-2 Pay Out Event shall occur without any notice or other action on
the part of the Trustee, the Enhancement Provider or the Series 1995-2
Certificateholders immediately upon the occurrence of such event.
SECTION 10. Series 1995-2 Termination.
-------------------------
In the event that the final distribution of principal and interest to
the Series 1995-2 Certificateholders has not occurred before the Distribution
Date occurring in the second month preceding the month in which the Scheduled
Series 1995-2 Termination Date occurs (the "Extension Date"), the right of
--------------
Series 1995-2 Certificateholders to receive payments from the Trust may, by vote
of the Holders of Series 1995-2 Certificates evidencing Undivided Interests
aggregating not less than 66 2/3% of the Investor Interest of any Class of this
Series prior to the Transfer Date in the month immediately preceding the month
in which the Scheduled Series 1995-2 Termination Date occurs, be extended until
the earlier of (i) the day which is one year after the Scheduled Series 1995-2
Termination Date or (ii) the day after the Distribution Date following the date
on which funds shall have been deposited in the Distribution Account sufficient
to pay the Investor Interest plus Series 1995-2 Certificate interest accrued
through and including the last day of the month preceding the month in which
such Distribution Date occurs (the "Series 1995-2 Final Termination Date"). The
------------------------------------
Trustee shall notify the Series 1995-2 Certificateholders, by notice given by
first-class mail to such Series 1995-2 Certificateholders at their addresses as
they appear on the Certificate Register, no later than the Extension Date, that:
(i) unless the requisite percentage of Holders of Series 1995-2 Certificates as
of the Record Date immediately succeeding the Extension Date vote to extend the
right of the Series 1995-2
40
<PAGE>
Certificateholders to receive payments from the Trust until the Final Series
1995-2 Termination Date prior to the Transfer Date in the month immediately
preceding the month in which the Scheduled Series 1995-2 Termination Date
occurs, the right of the Series 1995-2 Certificateholders from the Trust will
terminate on the Scheduled Series 1995-2 Termination Date; and (ii) (unless the
Rating Agency notifies the Trustee to the contrary prior to such Record Date)
that the ratings assigned to the Series 1995-2 Certificates by the Rating Agency
will be withdrawn on the Scheduled Series 1995-2 Termination Date. In the event
that the Series 1995-2 Certificateholders of any Class vote to extend the right
of the Series 1995-2 Certificateholders to receive payments from the Trust, the
Servicer shall continue to collect payments on the Receivables and apply such
Collections as provided in Article IV, and the Series 1995-2 Certificates of
each Class shall be treated as a single Class of Class A Certificates for all
purposes of this Series Supplement except that the interest rate for each Class
shall continue to be the respective rate provided herein for such Class.
SECTION 11. Ratification and Reaffirmation of Pooling and Servicing
-------------------------------------------------------
Agreement. As supplemented by this Series Supplement, the Agreement is in all
- ---------
respects ratified and confirmed and the Agreement as so supplemented by this
Series Supplement shall be read, taken, and construed as one and the same
instrument.
SECTION 12. Ratification and Reaffirmation of Representations and
-----------------------------------------------------
Warranties. Except as otherwise provided in the Agreement, each of the Seller,
- ----------
the Servicer and the Trustee hereby ratify and reaffirm its representations and
warranties contained in the Agreement as follows: (a) with respect to the
Seller, the representations and warranties contained in (i) Section 2.03, (ii)
Section 2.04(a) (with respect to the Agreement as supplemented by this Series
Supplement) and (iii) Section 2.04(b), (b) with respect to the Servicer, the
representations and warranties contained in Section 3.03 of the Agreement and
(c) with respect to the Trustee, the representations and warranties contained in
Section 11.15 of the Agreement, as though such representations and warranties
were made by such party at and as of the Closing Date.
SECTION 13. Rights Under Section 9.02. With respect to Series 1995-2
-------------------------
and any subsequently issued Series and the reference in Section 9.02(a) of the
Agreement to "instructions of Holders of Investor Certificates evidencing more
than 50% of the investor interest of any Series (or, with respect to any Series
with two or more Classes, 50% of any Class)", neither the Series 1995-2
Certificateholders nor any Class thereof shall be deemed to have given such
instructions unless Holders of not less than 50% of the Investor Interest of
Series 1995-2 and each Class thereof together with Holders of not less than 50%
of the investor interest of each other Series issued subsequent to January 1,
1995 and each Class thereof give such instructions.
SECTION 14. No Subordination. Notwithstanding the provisions
----------------
contained in Section 13.01 to the contrary, the Agreement may also be amended
from time to time by the Servicer, the Seller and the Trustee with the consent
of (a) the Holders of Series 1995-2 Certificates evidencing Undivided Interests
aggregating not less than 100% of the Class A Investor Interest and the Class B
Investor Interest and (b) the Collateral Interest Holder, for the purpose of (i)
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Series Supplement or (ii) modifying in any manner the rights
of the Investor
41
<PAGE>
Certificateholders which would, in either case, result in the subordination of
the rights of the Series 1995-2 Certificateholders or the Collateral Interest
Holder to the rights of the Holders of any other Series.
SECTION 15. Repurchase of the Series 1995-2 Certificates. In the
--------------------------------------------
event of a breach of any of the representations and warranties set forth in
Section 12(a)(ii) of this Series Supplement, either the Trustee, or the Holders
of Series 1995-2 Certificates evidencing Undivided Interests aggregating more
than 50% of the Investor Interest, by notice then given in writing to the Seller
(and to the Trustee and the Servicer, if given by the Series 1995-2
Certificateholders), may direct the Seller to repurchase the Series 1995-2
Certificates within 60 days of such notice, or within such longer period as may
be specified in such notice, which period shall not exceed 120 days), and the
Seller shall be obligated to repurchase on a Distribution Date specified by the
Seller (such Distribution Date, the "Repurchase Date") occurring within such
---------------
applicable period on the terms and conditions set forth below; provided,
however, that no such repurchase shall be required to be made if, at any time
during such applicable period, the representations and warranties contained in
Section 12(a)(ii) hereof, shall then be true and correct in all material
respects. The Seller shall deposit on the Transfer Date (in New York Clearing
House, next day funds) immediately preceding such Repurchase Date, an amount
equal to the reassignment deposit amount for such Certificates in the
Distribution Account, for distribution to the Series 1995-2 Certificateholders
pursuant to Article XII of the Agreement and Section 10 hereof. The
reassignment deposit amount for such reassignment shall be equal to (i) the
Investor Interest at the end of the day on the last day of the Monthly Period
preceding the Repurchase Date, less the amount on deposit in the Principal
Account which will be transferred to the Distribution Account on the related
Transfer Date, (ii) an amount equal to all interest accrued but unpaid on the
Series 1995-2 Certificates at the applicable rates through the end of the
Interest Period in which such Transfer Date occurs and all other amounts then
owing to the Collateral Interest Holder, less the amount on deposit in the
Finance Charge Account which will be transferred to the Distribution Account on
the related Transfer Date, and (iii) any amounts owing by Chase USA pursuant to
the Loan Agreement. Payment of the portion of the reassignment deposit amount
and the deposit of the amounts referred to in the second portion of clause (i)
and in clause (ii) of the preceding sentence into the Distribution Account,
shall be considered a prepayment in full of the Series 1995-2 Certificates. The
Series 1995-2 Termination Date shall be deemed to have occurred on the
Repurchase Date as long as such amount was deposited in full into the
Distribution Account on such Transfer Date; provided, however, that any amounts
owing by Chase USA pursuant to the Loan Agreement shall not be deposited into
the Distribution Account, and shall be paid to the Collateral Interest Holder
for application in accordance with the terms of the Loan Agreement. If the
Trustee or the Series 1995-2 Certificateholders give notice directing the Seller
to repurchase the Series 1995-2 Certificates as provided above, the obligation
of the Seller to repurchase the Series 1995-2 Certificates and to pay the
repurchase deposit amount pursuant to this Section 15 shall constitute the sole
remedy respecting a breach of the representations and warranties contained in
Section 12(a)(ii) available to the Series 1995-2 Certificateholders or the
Trustee on behalf of the Series 1995-2 Certificateholders.
42
<PAGE>
SECTION 16. Counterparts. This Series Supplement may be executed in
------------
any number of counterparts, each of which so executed shall be deemed to be an
original, but all of such counterparts shall together constitute but one and the
same instrument.
SECTION 17. Additional Covenants of the Trustee. The Trustee hereby
-----------------------------------
covenants that it will not execute any amendment to the Loan Agreement which
relates to (i) any right or obligation of the Trust or the Trustee under the
Loan Agreement, (ii) any provision of the Loan Agreement relating to the
nonrecourse nature of the Loan Agreement, or (iii) any provision of the Loan
Agreement which constitutes an agreement by the Agent or a Collateral Interest
Holder not to institute bankruptcy or similar proceedings against the Trust or
(iv) any provision of the Loan Agreement which requires the consent of the
Trustee to any amendment or waiver of the terms thereof, unless it has received
a notice from Standard & Poor's and Moody's that such amendment will not result
in the reduction or withdrawal of their respective then existing ratings of the
Series 1995-2 Certificates.
SECTION 18. Third-Party Beneficiaries. The Agreement and this Series
-------------------------
Supplement will inure to the benefit of the Collateral Interest Holder. Without
limiting the generality of the foregoing, all covenants and agreements in the
Agreement which expressly confer rights upon the Collateral Interest Holder
shall be for the benefit of and run directly to the Collateral Interest Holder,
and the Collateral Interest Holder shall be entitled to rely on and enforce such
covenants to the same extent as if it were a party to the Agreement hereto.
SECTION 19. Series 1995-2 Investor Exchange. Pursuant to subsection
-------------------------------
6.09(b), the Series 1995-2 Certificateholders may tender their Series 1995-2
Certificates, and the Holder of the Exchangeable Seller Certificate may tender
the Exchangeable Seller Certificate, in exchange for (i) one or more newly
issued Series of Investor Certificates and (ii) a reissued Exchangeable Seller
Certificate in accordance with the terms and conditions contained in a notice of
exchange delivered to the Series 1995-2 Certificateholders. Such notice of
exchange will specify, among other things: (a) the amount of Series 1995-2
Certificates of each Class that may be tendered, (b) the Certificate Rate or
Rates with respect to the new Series, (c) the term of the Series and the terms
and amount of each Class, if any, (d) the method of computing the investor
percentage, (e) the manner of Enhancement, if any, with respect to such Series
and (f) the time and the manner in which the tender and cancellation of the
Series 1995-2 Certificates and the issuance of the new Series of Certificates
will be effectuated. Upon satisfaction of the conditions contained in
subsections 6.09(b) and 6.09(c), and the receipt by the Trustee of the exchange
notice and the related Supplement, the Trustee shall cancel the existing
Exchangeable Seller Certificate and the applicable Series 1995-2 Certificates,
and shall issue such Series of Investor Certificates and a new Exchangeable
Seller Certificate, each dated the Exchange Date.
SECTION 20. Servicing Compensation. The Monthly Investor Servicing
----------------------
Fee shall be determined by the Servicer on each Determination Date and allocated
pro rata by the Servicer on each such date to the Class A Certificates, the
- --- ----
Class B Certificates and the Collateral Interest based upon the Class A Floating
Percentage (the "Class A Servicing Fee"), the Class B Floating Percentage (the
---------------------
"Class B Servicing Fee") and the Collateral Floating Percentage (the "Collateral
- ---------------------- ----------
Interest Servicing Fee"), respectively.
- ----------------------
43
<PAGE>
SECTION 21. Governing Law. THIS SERIES SUPPLEMENT SHALL BE CONSTRUED
-------------
IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 22. Notices. Notices which are required to be given
-------
hereunder to the Collateral Interest Holder be given in the manner specified in
Section 13.05 of the Agreement to the Agent at its address specified in the Loan
Agreement, or at such other address as the Agent may direct in writing.
44
<PAGE>
IN WITNESS WHEREOF, the Seller the Servicer and the Trustee have
caused this Series Supplement to be duly executed by their respective officers
as of the day and year first above written.
THE CHASE MANHATTAN BANK (USA),
Seller and Servicer
By: /s/ Keith Schuck
-------------------------------------
Name: Keith Schuck
Title: Vice President
YASUDA BANK AND TRUST COMPANY (U.S.A.),
Trustee
By: /s/ Anthony A. Bocchino
----------------------------------------
Name: Anthony A. Bocchino
Title: Vice President
45
<PAGE>
EXHIBIT A-1
-----------
FORM OF CLASS A CERTIFICATE
---------------------------
No. R-A-[__] $[___________]
CUSIP No. 161 612 AF3
Chase Manhattan Credit Card Master Trust
Class A Floating Rate Asset Backed Certificate, Series 1995-2
Each $1,000 minimum denomination represents
-------------------------------------------
1/1,282,500 of the Class A Investor Interest
--------------------------------------------
Evidencing an undivided interest in certain assets of a trust, the corpus of
which consists of a portfolio of selected VISA* and MasterCard* credit card
receivables generated or to be generated by The Chase Manhattan Bank (USA).
(Not an interest in or obligation of
The Chase Manhattan Bank (USA)
or any Affiliate thereof.)
UNLESS THIS CLASS A CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE CHASE
MANHATTAN BANK (USA) OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY CLASS A CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE &
CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND
ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC) ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
This certifies that CEDE & CO. (the "Class A Certificateholder") is
the registered owner of an undivided interest in certain assets of a trust (the
"Trust"), the corpus of which consists of a portfolio of receivables (the
"Receivables") now existing or hereafter created under selected VISA and
MasterCard credit card accounts (the "Accounts") of The Chase Manhattan Bank
(USA), a banking corporation organized under the laws of the State of Delaware,
all monies due or to become due in payment of the Receivables and certain other
assets and interests included in the Trust pursuant to a Pooling and Servicing
Agreement dated as of June 1, 1991 and the Series 1995-2 Supplement thereto
dated as of June 1, 1995 (collectively, the "Agreement"), by and between The
Chase Manhattan Bank (USA), as Seller and Servicer, and Yasuda Bank and Trust
Company (U.S.A.), as Trustee (the "Trustee").
- -------------------------
*VISA and MasterCard are registered trademarks of VISA USA, Inc., and
MasterCard International Incorporated, respectively.
<PAGE>
The Seller has structured the Agreement and the Series 1995-2
Certificates with the intention that the Series 1995-2 Certificates will qualify
under applicable tax law as indebtedness. Each Series 1995-2 Certificateholder
(or Series 1995-2 Certificate Owner) by acceptance of its Certificate (or, in
the case of a Series 1995-2 Certificate Owner, by virtue of such Series 1995-2
Certificate Owner's acquisition of a beneficial interest therein), agrees to
treat the Series 1995-2 Certificates consistently with, and to take no action
inconsistent with, the treatment of the Series 1995-2 Certificates (or
beneficial interest therein) for purposes of federal, state, local and foreign
income or franchise taxes and any other tax imposed on or measured by income, as
indebtedness.
To the extent not defined herein, capitalized terms used herein have
the meanings assigned in the Agreement. This Class A Certificate is issued
under and is subject to the terms, provisions and conditions of the Agreement,
to which Agreement, as amended from time to time, the Class A Certificateholder
by virtue of the acceptance hereof assents and by which the Class A
Certificateholder is bound.
THE AGREEMENT AND THE CLASS A CERTIFICATES CREATED THEREUNDER SHALL BE
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE 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.
The assets of the Trust in which this Class A Certificate represents
an interest consist of (i)(a) the Receivables now existing and hereafter created
and arising in connection with the Accounts, (b) all monies due or to become due
with respect thereto (including all Finance Charge Receivables), (c) all
proceeds (as defined in Section 9-306 of the UCC as in effect in the State of
Delaware) of such Receivables and Insurance Proceeds relating thereto, (d)
Recoveries relating thereto and (e) Interchange allocable to the Trust pursuant
to Section 2.05(k) of the Agreement, and (ii) such funds as from time to time
are deposited in the Collection Account, the Investor Accounts and the Principal
Account. This Class A Certificate is one of a series of Certificates entitled
"Chase Manhattan Credit Card Master Trust Class A Floating Rate Asset Backed
Certificates, Series 1995-2" (the "Class A Certificates"), each of which
represents an undivided interest in certain assets of the Trust, including the
right to receive Collections allocable to the Class A Certificates and other
amounts at the times and in the amounts specified in the Agreement to be
deposited in the Finance Charge Account, the Principal Account and the
Distribution Account.
Also issued under the Agreement are the "Chase Manhattan Credit Card
Master Trust Class B Floating Rate Asset-Backed Certificates, Series 1995-2"
(the "Class B Certificates"), which represent an undivided interest in the Trust
subordinate to the Class A Certificates, and the "Chase Manhattan Credit Card
Master Trust Collateral Interest, Series 1995-2" (the "Collateral Interest" and,
collectively with the Class A Certificates and the Class B Certificates, the
"Series 1995-2 Investor Certificates"), which represents an undivided interest
in the Trust that is subordinate to the Class A Certificates and Class B
Certificates. The aggregate interest represented by the Class A Certificates
and the Class B Certificates at any time in the Principal Receivables in the
Trust shall not exceed an amount equal to the Class A
A-1-2
<PAGE>
Investor Interest and Class B Investor Interest, respectively, at such time.
The initial Class A Investor Interest is $1,282,500,000 as of June 20, 1995 (the
"Closing Date"). The Initial Class B Investor Interest is $82,500,000 as of the
Closing Date. The Collateral Initial Interest is $135,000,000 as of the Closing
Date. The Class A Investor Interest on any date of determination will be an
amount (not less than zero) equal to (a) the Initial Class A Investor Interest,
minus (b) the aggregate amount of principal payments made to the Class A
- -----
Certificateholders on or prior to such date, minus (c) the excess, if any, of
-----
the aggregate amount of Class A Investor Charge-Offs for all prior Distribution
Dates over Class A Investor Charge-Offs reimbursed prior to such date of
----
determination minus (d) the principal amount of Class A Certificates previously
-----
tendered and exchanged pursuant to an Investor Exchange.
In addition to the Certificates, an Exchangeable Seller Certificate
will be issued to the Seller pursuant to the Agreement, and other Series of
Certificates may from time to time be issued by the Trust, which will represent
an undivided interest in the Trust. The Exchangeable Seller Certificate will
represent the interest in the Principal Receivables not represented by the
Series 1995-2 Certificates or any other Series of Certificates.
Interest will accrue on the Class A Certificate from the Closing Date
through July 6, 1995 at the rate of 6.1925% per annum, and with respect to each
Interest Period thereafter, at the rate of 0.13% per annum above LIBOR, as more
specifically set forth in the Agreement (the "Class A Certificate Rate"), and
will be distributed on July 17, 1995 and on the 15th day of each calendar month
thereafter (or, if such day is not a Business Day, on the next Business Day)
(each, a "Distribution Date"), to the Class A Certificateholders of record as of
the last day of the month preceding the related Distribution Date (the "Record
Date").
In general, as set forth in the Agreement, payments of principal with
respect to the Class A Certificates will be limited to the Class A Investor
Interest, which may be less than the unpaid principal balance of the Class A
Certificates. The final principal payment with respect to the Class A
Certificates is scheduled to be made on the December 1998 Distribution Date, but
the final principal payment may be made earlier or later under certain
circumstances set forth in the Agreement.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF, OR AN INTEREST
IN, THE SELLER 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 AGREEMENT.
As provided in the Agreement, withdrawals from the Investor Accounts
may be made upon the instructions of the Servicer from time to time for purposes
other than distributions to Certificateholders.
The Agreement permits, with certain exceptions, the amendment thereof
and the modification of the rights and obligations of the Servicer and the
rights of the Investor
A-1-3
<PAGE>
Certificateholders under the Agreement at any time by the Servicer, the Seller
and the Trustee in certain cases with the consent of the holders of record of
Investor Certificates evidencing undivided interests aggregating not less than
66 2/3% of the Investor Interest of each outstanding Series adversely affected
by such amendment; provided, however, that no such amendment shall (a) reduce in
any manner the amount of, or delay the timing of, distributions which are
required to be made on any Investor Certificate, (b) change the definition of or
the manner of calculating the Investor Interest, the Investor Percentage, or the
Investor Default Amount or (c) reduce the aforesaid percentage required to
consent to any such amendment, without the consent of each Investor
Certificateholder then of record. Any such amendment and any such consent by
the holder of record of this Certificate shall be conclusive and binding on such
Certificateholder and on any Certificate issued in exchange hereof or in lieu
hereof whether or not notation thereof is made upon this Certificate.
The transfer of this Certificate shall be registered in the
Certificate Register upon surrender of this Certificate for registration of
transfer at any office or agency maintained by the Transfer Agent and Registrar
accompanied by a written instrument of transfer in a form satisfactory to the
Trustee and the Transfer Agent and Registrar duly executed by the
Certificateholder or such Certificateholder's attorney-in-fact duly authorized
in writing, and thereupon one or more new Certificates of authorized
denominations and for the same aggregate Undivided Interests will be issued to
the designated transferee or transferees.
As provided in the Agreement and subject to certain limitations
therein set forth, Certificates are exchangeable for new Certificates evidencing
like aggregate Fractional Undivided Interests, as requested by the
Certificateholder surrendering such Certificates. No service charge may be
imposed for any such exchange but the Servicer or Transfer Agent and Registrar
may require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection therewith.
The Servicer, the Trustee, the Paying Agent and the Transfer Agent and
Registrar, and any agent of any of them, may treat the person in whose name this
Certificate is registered as the owner hereof for all purposes, and neither the
Servicer, the Trustee, the Paying Agent, the Transfer Agent and Registrar, nor
any agent of any of them or of any such agent shall be affected by notice to the
contrary except in certain circumstances described in the Agreement.
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 Agreement, or be valid for any purpose.
A-1-4
<PAGE>
IN WITNESS WHEREOF, The Chase Manhattan Bank (USA) has caused this
Certificate to be executed by its duly authorized officer.
THE CHASE MANHATTAN BANK (USA)
By:
---------------------------------
Frank DeGenova,
as Authorized Signatory
Dated: June 20, 1995
A-1-5
<PAGE>
Form of Trustee's Certificate of Authentication
-----------------------------------------------
This is one of the Class A Certificates referred to in the within-
mentioned Agreement.
Yasuda Bank and Trust Company (U.S.A.),
as Trustee
By:
-------------------------------------------
Authorized Officer
A-1-6
<PAGE>
EXHIBIT A-2
-----------
FORM OF CLASS B CERTIFICATE
---------------------------
No. R-B-[__] $[___________]
CUSIP No. 161 612 AG1
Chase Manhattan Credit Card Master Trust
Class B Floating Rate Asset Backed Certificate, Series 1995-2
Each $1,000 minimum denomination represents
-------------------------------------------
1/82,500 of the Class B Investor Interest
-----------------------------------------
Evidencing an undivided interest in certain assets of a trust, the corpus of
which consists of a portfolio of selected VISA* and MasterCard* credit card
receivables generated or to be generated by The Chase Manhattan Bank (USA).
(Not an interest in or obligation of
The Chase Manhattan Bank (USA)
or any Affiliate thereof.)
THIS CLASS B CERTIFICATE IS SUBORDINATED IN CERTAIN RIGHTS OF PAYMENT TO THE
CLASS A CERTIFICATES AS DESCRIBED IN THE AGREEMENT REFERRED TO HEREIN.
UNLESS THIS CLASS B CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE CHASE
MANHATTAN BANK (USA) OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY CLASS B CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE &
CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND
ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC) ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
This certifies that CEDE & CO. (the "Class B Certificateholder") is
the registered owner of an undivided interest in certain assets of a trust (the
"Trust"), the corpus of which consists of a portfolio of receivables (the
"Receivables") now existing or hereafter created under
- --------------------------
*VISA and MasterCard are registered trademarks of VISA USA, Inc., and
MasterCard International Incorporated, respectively.
<PAGE>
selected VISA and MasterCard credit card accounts (the "Accounts") of The Chase
Manhattan Bank (USA), a banking corporation organized under the laws of the
State of Delaware, all monies due or to become due in payment of the
Receivables, and certain other assets and interests included in the Trust
pursuant to a Pooling and Servicing Agreement dated as of June 1, 1991 and the
Series 1995-2 Supplement thereto dated as of June 1, 1995 (collectively, the
"Agreement"), by and between The Chase Manhattan Bank (USA), as Seller and
Servicer, and Yasuda Bank and Trust Company (U.S.A.), as Trustee (the
"Trustee").
The Seller has structured the Agreement and the Series 1995-2
Certificates with the intention that the Series 1995-2 Certificates will qualify
under applicable tax law as indebtedness. Each Series 1995-2 Certificateholder
(or Series 1995-2 Certificate Owner) by acceptance of its Certificate (or, in
the case of a Series 1995-2 Certificate Owner, by virtue of such Series 1995-2
Certificate Owner's acquisition of a beneficial interest therein), agrees to
treat the Series 1995-2 Certificates consistently with, and to take no action
inconsistent with, the treatment of the Series 1995-2 Certificates (or
beneficial interest therein) for purposes of federal, state, local and foreign
income or franchise taxes and any other tax imposed on or measured by income, as
indebtedness.
To the extent not defined herein, capitalized terms used herein have
the meanings assigned in the Agreement. This Class B Certificate is issued
under and is subject to the terms, provisions and conditions of the Agreement,
to which Agreement, as amended from time to time, the Class B Certificateholder
by virtue of the acceptance hereof assents and by which the Class B
Certificateholder is bound.
THE AGREEMENT AND THE CLASS B CERTIFICATES CREATED THEREUNDER SHALL BE
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE 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.
The assets of the Trust in which this Class B Certificate represents
an interest consist of (i)(a) the Receivables now existing and hereafter created
and arising in connection with the Accounts, (b) all monies due or to become due
with respect thereto (including all Finance Charge Receivables), (c) all
proceeds (as defined in Section 9-306 of the UCC as in effect in the State of
Delaware) of such Receivables and Insurance Proceeds relating thereto, (d)
Recoveries relating thereto and (e) Interchange allocable to the Trust pursuant
to Section 2.05(k) of the Agreement, and (ii) such funds as from time to time
are deposited in the Collection Account, the Investor Accounts and the Principal
Account. This Class B Certificate is one of a series of Certificates entitled
"Chase Manhattan Credit Card Master Trust Class B Floating Rate Asset Backed
Certificates, Series 1995-2" (the "Class B Certificates"), each of which
represents an undivided interest in certain assets of the Trust, including the
right to receive Collections allocable to the Class B Certificates and other
amounts at the times and in the amounts specified in the Agreement to be
deposited in the Finance Charge Account, the Principal Account and the
Distribution Account.
A-2-2
<PAGE>
Also issued under the Agreement are the "Chase Manhattan Credit Card
Class A Floating Rate Asset-Backed Certificates, Series 1995-2" (the "Class A
Certificates"), which represent an undivided interest in the Trust senior to the
Class B Certificates, and the "Chase Manhattan Credit Card Master Trust
Collateral Interest, Series 1995-2" (the "Collateral Interest" and, collectively
with the Class A Certificates and the Class B Certificates, the "Series 1995-2
Investor Certificates"), which represents an undivided interest in the Trust
subordinate to the Class A Certificates and Class B Certificates. The aggregate
interest represented by the Class A Certificates and the Class B Certificates at
any time in the Principal Receivables in the Trust shall not exceed an amount
equal to the Class A Investor Interest and Class B Investor Interest,
respectively, at such time. The Initial Class A Investor Interest is
$1,282,500,000 as of June 20, 1995 (the "Closing Date"). The Initial Class B
Investor Interest is $82,500,000 as of the Closing Date. The Collateral Initial
Interest is $135,000,000 as of the Closing Date. The Class B Investor Interest
on any date of determination will be an amount (not less than zero) equal to (a)
the Initial Class B Investor Interest, minus (b) the aggregate amount of
-----
principal payments made to the Class B Certificateholders prior to such date,
minus (c) the aggregate amount of Class B Investor Charge-Offs for all prior
- -----
Transfer Dates, minus (d) the amount of Reallocated Class B Principal
-----
Collections allocated on all prior Transfer Dates, minus (e) an amount equal to
-----
the amount by which the Class B Investor Interest has been reduced to cover the
Class A Investor Default Amount on all prior Transfer Dates, plus (f) the amount
----
of Excess Spread and Excess Finance Charge Collections allocated and available
on all prior Transfer Dates for the purpose of reimbursing amounts deducted
pursuant to the forgoing clauses (c), (d) and (e), minus (g) the principal
-----
amount of Class B Certificates previously tendered and exchanged pursuant to an
Investor Exchange.
In addition to the Certificates, an Exchangeable Seller Certificate
will be issued to the Seller pursuant to the Agreement, and other Series of
certificates may from time to time be issued by the Trust, which will represent
an undivided interest in the Trust. The Exchangeable Seller Certificate will
represent the interest in the Principal Receivables not represented by the
Series 1995-2 Certificates or any other Series of certificates.
Interest will accrue on the Class B Certificates from the Closing Date
through July 16, 1995 at the rate of 6.3125% per annum, and with respect to each
Interest Period thereafter, at the rate of 0.25% per annum above LIBOR, as more
specifically set forth in the Agreement (the "Class B Certificate Rate"), and
will be distributed on July 17, 1995 and on the 15th day of each calendar month
thereafter (or, if such day is not a Business Day, on the next Business Day)
(each, a "Distribution Date"), to the Class B Certificateholders of record as of
the last day of the month preceding the related Distribution Date (the "Record
Date").
In general, as set forth in the Agreement, payments of principal with
respect to the Class B Certificates will be limited to the Class B Investor
Interest, which may be less than the unpaid principal balance of the Class B
Certificates. The final principal payment with respect to the Class B
Certificates is scheduled to be made on the January 1999 Distribution Date, but
the final principal payment may be made earlier or later under certain
circumstances set forth in the Agreement.
A-2-3
<PAGE>
The Class B Certificates will be subordinated to the Class A
Certificates as to priority of payment and otherwise, to the extent provided in
the Agreement. In certain circumstances, funds otherwise payable to Class B
Certificateholders could be reallocated to make payments on the Class A
Certificates and charge-offs otherwise allocable to the Class A Certificates
could be reallocated to the Class B Certificates, resulting in a reduced Class B
Investor Interest.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF, OR AN INTEREST
IN, THE SELLER 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 AGREEMENT.
As provided in the Agreement, withdrawals from the Investor Accounts
may be made upon the instructions of the Servicer from time to time for purposes
other than distributions to Certificateholders.
The Agreement permits, with certain exceptions, the amendment thereof
and the modification of the rights and obligations of the Servicer and the
rights of the Investor Certificateholders under the Agreement at any time by the
Servicer, the Seller and the Trustee in certain cases with the consent of the
holders of record of Investor Certificates evidencing undivided interests
aggregating not less than 66 2/3% of the Investor Interest of each outstanding
Series adversely affected by such amendment; provided, however, that no such
amendment shall (a) reduce in any manner the amount of, or delay the timing of,
distributions which are required to be made on any Investor Certificate, (b)
change the definition of or the manner of calculating the Investor Interest, the
Investor Percentage, or the Investor Default Amount or (c) reduce the aforesaid
percentage required to consent to any such amendment, without the consent of
each Investor Certificateholder then of record. Any such amendment and any such
consent by the holder of record of this Certificate shall be conclusive and
binding on such Certificateholder and on any Certificate issued in exchange
hereof or in lieu hereof whether or not notation thereof is made upon this
Certificate.
The transfer of this Certificate shall be registered in the
Certificate Register upon surrender of this Certificate for registration of
transfer at any office or agency maintained by the Transfer Agent and Registrar
accompanied by a written instrument of transfer in a form satisfactory to the
Trustee and the Transfer Agent and Registrar duly executed by the
Certificateholder or such Certificateholder's attorney-in-fact duly authorized
in writing, and thereupon one or more new Certificates of authorized
denominations and for the same aggregate Undivided Interests will be issued to
the designated transferee or transferees.
As provided in the Agreement and subject to certain limitations
therein set forth, Certificates are exchangeable for new Certificates evidencing
like aggregate Fractional Undivided Interests, as requested by the
Certificateholder surrendering such Certificates. No service charge may be
imposed for any such exchange but the Servicer or Transfer Agent and Registrar
may
A-2-4
<PAGE>
require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection therewith.
The Servicer, the Trustee, the Paying Agent and the Transfer Agent and
Registrar, and any agent of any of them, may treat the person in whose name this
Certificate is registered as the owner hereof for all purposes, and neither the
Servicer, the Trustee, the Paying Agent, the Transfer Agent and Registrar, nor
any agent of any of them or of any such agent shall be affected by notice to the
contrary except in certain circumstances described in the Agreement.
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 Agreement, or be valid for any purpose.
A-2-5
<PAGE>
IN WITNESS WHEREOF, The Chase Manhattan Bank (USA) has caused this
Certificate to be executed by its duly authorized officer.
THE CHASE MANHATTAN BANK (USA)
By:
-----------------------------
Frank DeGenova,
as Authorized Signatory
Dated: June 20, 1995
A-2-6
<PAGE>
Form of Trustee's Certificate of Authentication
-----------------------------------------------
This is one of the Class B Certificates referred to in the within-
mentioned Agreement.
Yasuda Bank and Trust Company (U.S.A.),
as Trustee
By:
-----------------------------------------
Authorized Officer
A-2-7
<PAGE>
EXHIBIT B
---------
FORM OF MONTHLY PAYMENT INSTRUCTIONS
AND NOTIFICATION TO THE TRUSTEE
___________________________________
THE CHASE MANHATTAN BANK (USA)
___________________________________
Chase Manhattan Credit Card Master Trust
Series 1995-2
____________________________________
Capitalized terms used in this Certificate have their respective
meanings set forth in the Pooling and Servicing Agreement, dated as of June 1,
1991, and the Series 1995-2 Supplement, dated as of June 1, 1995 (together, the
"Agreement"), by and between The Chase Manhattan Bank (USA) ("Chase"), as
Servicer, and Yasuda Bank and Trust Company (U.S.A.), as trustee (the
"Trustee"); provided, that the "preceding Monthly Period" shall mean the Monthly
Period immediately preceding the calendar month in which this Certificate is
delivered. References herein to certain sections and subsections are references
to the respective sections and subsections of the Agreement. This Certificate
is delivered pursuant to the terms of the Agreement.
The undersigned, a duly authorized representative of the Servicer does
hereby certify as follows:
1) Chase is the Servicer under the Agreement.
2) The undersigned is a Servicing Officer.
3) The date of this notice is __________, _____, which is a
Determination Date under the Agreement.
I. INSTRUCTION TO MAKE A WITHDRAWAL
--------------------------------
Pursuant to Section 4.08, the Servicer does hereby instruct the
Trustee to apply, on __________, ____, which date is a Transfer Date under the
Agreement, Class A Available Funds, Class B Available Funds, Collateral
Available Funds from the Finance Charge Account and Available Principal Funds
from the Principal Account, to make the following distributions:
B-1
<PAGE>
A) To the Distribution Account for payment to the Class A
------------------------------------------------------
Certificateholders, Pursuant to Subsection 4.08(a)(i):
-----------------------------------------------------
(1) Class A Monthly Interest for the related Distribution
Date....................................................... $_______
(2) Class A Monthly Interest accrued but not paid.............. $_______
(3) Class A Additional Interest................................ $_______
(4) Class A Additional Interest accrued but not paid........... $_______
B) To the Servicer, Pursuant to Subsection 4.08(a)(ii). If neither
----------------------------------------------------
Chase USA, nor any Affiliate thereof, is the Servicer:
(1) The Class A Servicing Fee for the preceding Monthly
Period..................................................... $_______
(2) Class A Servicing Fees previously due but not distributed.. $_______
C) To the Principal Account, Pursuant to Subsection 4.08(a)(iii):
(1) Class A Investor Default Amount for the preceding
Monthly Period (to be treated as a portion of
Available Principal Collections)........................... $_______
D) Pursuant to Subsection 4.08(a)(iv):
(1) Portion of Excess Spread from Class A Available Funds
to be allocated and distributed as provided in Part II
hereof..................................................... $_______
E) To the Distribution Account for payment to the Class B
------------------------------------------------------
Certificateholders, Pursuant to Subsection 4.08(b)(i): $_______
----------------------------------------------------
(1) Class B Monthly Interest for the related Distribution
Date....................................................... $_______
(2) Class B Monthly Interest accrued but not paid.............. $_______
(3) Class B Additional Interest................................ $_______
(4) Class B Additional Interest accrued but not paid........... $_______
B-2
<PAGE>
F) To the Servicer, Pursuant to Subsection 4.08(b)(ii). If neither
---------------------------------------------------
Chase USA, nor any Affiliate thereof, is the Servicer:
(1) The Class B Servicing Fee for the preceding Monthly
Period..................................................... $_______
(2) Class B Investor Servicing Fees previously due but not
distributed................................................ $_______
G) Pursuant to Subsection 4.08(b)(iii):
-----------------------------------
(1) Portion of Excess Spread from Class B Available Funds
to be allocated and distributed as provided in Part II
hereof..................................................... $_______
H) To the Servicer, Pursuant to Subsection 4.08(c)(i). If neither
--------------------------------------------------
Chase USA, nor any Affiliate thereof, is the Servicer:
(1) The Collateral Interest Servicing Fee for the preceding
Monthly Period............................................. $_______
(2) Collateral Interest Servicing Fee previously due but not
distributed................................................ $_______
I) Pursuant to Subsection 4.08(c)(ii):
---------------------------------
(1) Portion of Excess Spread from Collateral Available
Funds to be allocated and distributed as provided in Part
II hereof.................................................. $_______
J) Pursuant to Section 4.08(d):
---------------------------
(1) To the Collateral Interest Holder, Available Principal
Collections, if any, applied in accordance with the Loan
Agreement.................................................. $_______
(2) Available Principal Collections, if any, to be treated as
Shared Principal Collections and distributed as provided
in Section 4.13............................................ $_______
K) To the Distribution Account for payment to the appropriate
----------------------------------------------------------
parties, Pursuant to Section 4.08(e):
------------------------------------
(1) The amount of Class A Monthly Principal.................... $_______
(2) The amount of Class B Monthly Principal.................... $_______
B-3
<PAGE>
(3) The amount of Collateral Monthly Principal................ $_______
(4) Amounts remaining, if any, to be treated as Shared
Principal Collections and applied in accordance with
Section 4.13.............................................. $_______
II. APPLICATION OF EXCESS SPREAD AND EXCESS FINANCE CHARGE COLLECTIONS
------------------------------------------------------------------
Pursuant to Section 4.10, the Servicer does hereby instruct the
Trustee to apply on _________, ____, which date is a Transfer Date under the
Agreement, Excess Spread and Excess Finance Charge Collections allocated to
Series 1995-2 as set forth below:
A) Pursuant to Section 4.10(a):
---------------------------
(1) The amount equal to the Class A Required Amount, if
any, to fund any deficiency under Section 4.08(a), to be
applied in accordance with, and in the priority set forth
in, subsection 4.10(a)................................. $_______
B) To the Principal Account, Pursuant to Section 4.10(b):
----------------------------------------------------
(1) Aggregate amount of Class A Investor Charge-Offs not
previously reimbursed pursuant to Section 4.09(a) (to be
treated as Available Principal Collections)............ $_______
C) To the Distribution Account for payment to the Class B
------------------------------------------------------
Certificateholders, Pursuant to Section 4.10(c):
-----------------------------------------------
(1) Class B Monthly Interest that is due and unpaid or
overdue and unpaid Class B Monthly Interest, but not
available from Class B Available Funds................. $_______
(2) Class B Additional Interest that is overdue and unpaid,
but not available from Class B Available Funds......... $_______
D) To the Servicer, Pursuant to Section 4.10(d). If neither
-------------------------------------------
Chase USA nor any Affiliate thereof is the Servicer:
(1) The amount of Class B Servicing Fee for such monthly
period and overdue and unpaid Class B Servicing Fee not
available from Class B Available Funds................. $_______
B-4
<PAGE>
E) Pursuant to Section 4.10(e):
--------------------------
(1) The Class B Investor Default Amount for such Transfer
Date (to be treated as a portion of Available Principal
Collections)........................................... $_______
F) Pursuant to Section 4.10(f):
---------------------------
(1) The amount by which Class B Investor Interest has been
reduced pursuant to clauses (c), (d) and (e) of the
definition thereof (to be treated as a portion of Available
Principal Collections)................................. $_______
G) To the Distribution Account for payment to the Collateral
---------------------------------------------------------
Interest Holder, Pursuant to Section 4.10(g):
--------------------------------------------
(1) Collateral Monthly Interest and any overdue and unpaid
Collateral Monthly Interest not available from Collateral
Available Funds....................................... $_______
(2) Collateral Additional Interest overdue and unpaid not
available from Collateral Available Funds............. $_______
H) Pursuant to Section 4.10(h):
----------------------------
(1) Monthly Investor Servicing Fees that are due on such
Transfer Date and unpaid and any overdue and unpaid
Monthly Investor Servicing Fees....................... $_______
I) Pursuant to Section 4.10(i):
---------------------------
(1) The Collateral Default Amount for the prior Monthly
Period (to be treated as a portion of Available Principal
Collections).......................................... $_______
J) To the Principal Account, Pursuant to Section 4.10(j):
-----------------------------------------------------
(1) The aggregate amount by which the Collateral Interest
has been reduced below the Required Collateral Interest
(to be treated as Available Principal Collections)..... $_______
B-5
<PAGE>
K) To the Collateral Interest Holder for application, Pursuant to the
------------------------------------------------------------------
Loan Agreement Pursuant to Section 4.10(k):
------------------------------------------
(1) All other amounts payable under the Loan Agreement out
of Excess Spread and Excess Finance Change Collections. $_______
L) Pursuant to Section 4.10(m):
--------------------------
(1) The balance, if any, to be treated as Shared Excess
Finance Charge Collections and allocated to other Series
in Group I or the Holder of the Seller Certificate
pursuant to Section 4.12................................ $_______
III. REALLOCATED PRINCIPAL COLLECTIONS
---------------------------------
Pursuant to Section 4.11, the Servicer does hereby instruct the
Trustee to apply from the Series 1995-2 Collection Subaccount on ________, ____,
which is a Transfer Date under the Agreement, to apply Reallocated Principal
Collections to fund any deficiencies in the Class A Required Amount and the
Class B Required Amount in the following priority.
A) Pursuant to Section 4.11(a):
----------------------------
(1) The Class A Required Amount after applying Excess
Spread and Excess Finance Charge Receivables pursuant
to Section 4.10, to be applied pursuant to subsections
4.08(a)(i), (ii) and (iii)............................. $_______
B) Pursuant to Section 4.11(b):
---------------------------
(1) The Class B Required Amount after applying Excess
Spread and Excess Finance Charge Receivables pursuant
to Section 4.10, to be applied pursuant to subsections
4.08(b)(i) and (ii).................................... $_______
IV. ACCRUED AND UNPAID AMOUNTS
--------------------------
After giving effect to the withdrawals and transfers to be made in
accordance with this notice, the following amounts will be accrued and unpaid
with respect to all Monthly Periods preceding the current calendar month:
A) The aggregate amount of the Class A Interest Shortfall...... $_______
B) The aggregate amount of the Class B Interest Shortfall...... $_______
B-6
<PAGE>
C) The aggregate amount of the Collateral Interest Payment
Shortfall................................................... $_______
D) The aggregate amount of all accrued and unpaid Monthly
Investor Servicing Fees..................................... $_______
E) Pursuant to Section 4.10:
------------------------
The aggregate amount of all unreimbursed Investor
Charge Offs........................................... $_______
IN WITNESS WHEREOF, the undersigned has duly executed this certificate
this ____ day of __________, ____.
THE CHASE MANHATTAN BANK (USA),
Servicer
By:_______________________________
Name:
Title:
B-7
<PAGE>
EXHIBIT C
---------
FORM OF MONTHLY CERTIFICATEHOLDERS' STATEMENT
___________________________________
THE CHASE MANHATTAN BANK (USA)
___________________________________
Chase Manhattan Credit Card Master Trust Series 1995-2
___________________________________
For the ____________________ Distribution Date
For ____________________ Monthly Period
___________________________________
Under Section 5.02 of the Pooling and Servicing Agreement dated as of
June 1, 1991 and the Series 1995-2 Supplement dated as of June 1, 1995
(together, the "Agreement") by and between The Chase Manhattan Bank (USA)
("Chase") and Yasuda Bank and Trust Company (U.S.A.), as trustee (the
"Trustee"), Chase, as Servicer, is required to prepare certain information each
month regarding current distributions to Series 1995-2 Certificateholders and
the performance of the Chase Manhattan Credit Card Master Trust (the "Trust")
and the Series 1995-2 Class A Certificates and Series 1995-2 Class B
Certificates during the previous month. The information which is required to be
prepared with respect to the _____________, ____ Distribution Date, the
"Distribution Date") and with respect to the performance of the Trust during the
month of __________, ____ (the "Preceding Monthly Period") is set forth below.
Certain of the information is presented on the basis of an original principal
amount of $1,000 per Series 1995-2 Investor Certificate (a "Certificate").
Certain other information is presented based on the aggregate amounts for the
Trust as a whole. Capitalized terms used in this Certificate have their
respective meanings set forth in the Agreement.
I. INFORMATION REGARDING THE CURRENT MONTHLY DISTRIBUTION
TO THE CLASS A AND CLASS B CERTIFICATEHOLDERS (STATED ON THE BASIS OF
------------
$1,000 ORIGINAL CERTIFICATE PRINCIPAL AMOUNT)
---------------------------------------------
A) The total amount of the distribution to Series 1995-2
Certificateholders on the Distribution Date per $1,000
original certificate principal amount
(1) Class A Certificateholders............................. $_______
(2) Class B Certificateholders............................. $_______
C-1
<PAGE>
B) The amount of the distribution set forth in paragraph 1 above
in respect of principal of the 1995-2 Certificates, per $1,000
original certificate principal amount
(1) Class A Certificateholders............................. $_______
(2) Class B Certificateholders............................. $_______
C) The amount of the distribution set forth in paragraph 1 above
in respect of interest on the 1995-2 Certificates, per $1,000
original certificate principal amount
(1) Class A Certificates................................... $_______
(2) Class B Certificates................................... $_______
II. INFORMATION REGARDING THE PERFORMANCE OF THE TRUST
--------------------------------------------------
A) Collections
-----------
(1) The aggregate amount of Collections processed with
respect to Billing Cycles ending during the preceding
Monthly Period and allocated to the Series 1995-2
Certificates was equal to............................. $_______
(2) The Payment Rate with respect to the preceding Monthly
Period was equal to................................... _______%
For the 2nd Monthly Period (the preceding
Monthly Period), the monthly payment rate was
equal to........................................ _______%
For the 3rd Monthly Period (the 2nd preceding
Monthly Period), the monthly payment rate was
equal to......................................... _______%
(3) The aggregate amount of Collections of Principal
Receivables processed with respect to Billing Cycles
ending during the preceding Monthly Period which were
allocated in respect of the Series 1995-2 Certificates.. $_______
(4) The aggregate amount of Collections of Finance
Charge Receivables processed with respect to
Billing Cycles ending during the preceding Monthly
Period which were allocated in respect of the Series 1995-2
Certificates.......................................... $_______
B) Deficit Controlled Amortization Amount..................... $_______
--------------------------------------
C-2
<PAGE>
C) Principal Receivables in the Trust and Allocation Percentages
------------------------------------------------------------
(1) The aggregate amount of Principal Receivables in the
Trust as of the end of each Billing Cycle ending in the
preceding Monthly Period (which reflects the Principal
Receivables represented by the Seller Interest, by the
Investor Interest of Series 1995-2, and by the Investor
Interest of all other outstanding Series).............. $_______
(2) The Investor Interest as of the last day of the preceding
Monthly Period
(a) Investor Interest................................. $_______
(b) Class A Investor Interest......................... $_______
(c) Class B Investor Interest......................... $_______
(d) Collateral Interest............................... $_______
(3) The Investor Interest set forth in paragraph C(2)(a) above
as a percentage of the aggregate amount of Principal
Receivables set forth in paragraph C(1) above.......... $_______
(4) The Class A Investor Interest set forth in paragraph
C(2)(b) above as a percentage of the aggregate amount of
Principal Receivables set forth in paragraph C(1)
above.................................................. _______%
(5) The Class B Investor Interest set forth in paragraph
C(2)(c) above as a percentage of the aggregate amount of
Principal Receivables set forth in paragraph C(1)
above.................................................. _______%
(6) The Collateral Interest set forth in paragraph C(2)(d)
above as a percentage of the aggregate amount of
Principal Receivables set forth in paragraph C(1)
above.................................................. _______%
(7) The Class A Floating Percentage........................ _______%
(8) The Class B Floating Percentage........................ _______%
(9) The Class B Principal Percentage....................... _______%
(10) The Collateral Floating Percentage..................... _______%
(11) The Collateral Principal Percentage.................... _______%
(12) The Floating Allocation Percentage..................... _______%
(13) The Principal Allocation Percentage.................... _______%
C-3
<PAGE>
D) Portfolio Yield and Base Rate
-----------------------------
(1) The annualized Portfolio Yield for the preceding Monthly
Period was equal to.................................... _______%
For the 2nd preceding Monthly Period, the
annualized portfolio yield was equal to.......... _______%
For the 3rd preceding Monthly Period, the
annualized portfolio yield was equal to.......... _______%
The three month average Portfolio Yield was
equal to......................................... _______%
(2) Base Rate for the preceding Monthly Period
was equal to.......................................... _______%
For the 2nd preceding Monthly Period, the Base
Rate was equal to................................ _______%
For the 3rd preceding Monthly
Period, the Base Rate was equal to............... _______%
E) Delinquent Balances
-------------------
The aggregate amount of outstanding balances in the Accounts which
were delinquent, as of the end of the last day of the related Billing
Cycle which ended during the current Monthly Period by:
<TABLE>
<CAPTION>
Aggregate As a Percentage
Account of Aggregate
Balance Receivables
<S> <C> <C>
(1) up to 29 days: $__________ _________%
(2) 30 - 59 days: $__________ _________%
(3) 60 - 89 days: $__________ _________%
(4) 90 or more days: $__________ _________%
Total: $ %
=========== ==========
</TABLE>
C-4
<PAGE>
F) Investor Default Amount
-----------------------
(1) The aggregate amount of all defaulted Principal
Receivables written off as uncollectible with respect to
Billing Cycles ending during the preceding Monthly
Period allocable to the Investor Interest less Recoveries
allocable to the Investor Interest (the "Series 1995-2
Aggregate Investor Default Amount")................... $_______
(2) The portion of the Series 1995-2 Aggregate Investor
Default Amount allocable to the Class A Investor
Interest (the "Class A Investor Default Amount")...... $_______
(3) The portion of the Series 1995-2 Aggregate Investor
Default Amount allocable to the Class B Investor
Interest (the "Class B Investor Default Amount")...... $_______
(4) The portion of the Series 1995-2 Aggregate Investor
Default Amount allocable to the Collateral Investor
Interest (the "Collateral Investor Default Amount").... $_______
(5) The annualized investor default percentage ((Series
1995-2 Aggregate Investor Default Amount/Investor
Interest) x 12) for the preceding Monthly Period was
equal to............................................... _______%
For the 2nd preceding Monthly Period, the
annualized investor default percentage was
equal to......................................... _______%
For the 3rd preceding Monthly Period, the
annualized investor default percentage was
equal to......................................... _______%
G) Investor Charge Offs
-------------------
(1) The aggregate amount of Class A Investor Charge-Offs
for the preceding Monthly Period....................... $_______
(2) The aggregate amount of Class A Investor Charge-Offs
reimbursed on the Transfer Date immediately
preceding the preceding Distribution Date.............. $_______
(3) The amount of the reimbursed Investor Charge-Offs set
forth in paragraph G(2) above, per $1,000
original Class A Certificate principal amount.......... $_______
C-5
<PAGE>
(4) The aggregate amount of Class B Investor Charge-Offs for
such Monthly Period.................................... $_______
(5) The aggregate amount of Class B Investor Charge-Offs
reimbursed on the Transfer Date immediately
preceding such Distribution Date....................... $_______
(6) The amount of the reimbursed Investor Charge-Offs set forth in
paragraph G(3) above, per $1,000 original Class B Certificate
principal amount....................................... $_______
(7) The aggregate amount of Investor Charge-Offs........... $_______
(8) The aggregate amount of reimbursed Investor
Charge-Offs............................................ $_______
H) Shared Excess Finance Charge Collection
---------------------------------------
The aggregate amount of Shard Excess Finance Charge
Collection during the preceding Monthly Period which was
allocated to the Series 1995-2 Certificates................. $_______
I) Shared Principal Collections
----------------------------
The aggregate amount of Shared Prinicipal Collections during the
preceding Monthly Period which were allocated to the Series
1995-2 Certificates......................................... $_______
J) Reallocated Principal Collections
---------------------------------
(1) Collections of Principal Receivables allocable to Class B
Certificates paid with respect to Class A Certificates
to make up deficiencies in Class A Required Amount
for any Monthly Period................................ $_______
C-6
<PAGE>
(2) Collections of Principal Receivables allocable to
Collateral Interest paid with respect to Class B
Certificates to make up deficiencies in Class B Required
Amount................................................ $_______
K) Monthly Investor Servicing Fee
------------------------------
(1) The amount of the Monthly Investor Monthly Servicing
Fee payable by the Trust to the Servicer for the
preceding Monthly Period............................... $_______
(2) The amount of the Class A Monthly Servicing Fee
payable by the Trust to the Servicer for the preceding
Monthly Period......................................... $_______
(3) The amount of the Class B Monthly Servicing Fee
payable by the Trust to the Servicer for the
preceding Monthly Period............................... $_______
(4) The amount of the Collateral Monthly Servicing Fee
payable by the Trust to the Servicer for the preceding
Monthly Period......................................... $_______
L) Collateral Interest
-------------------
(1) The Available Collateral Interest, as of the close of
Transfer Date for the preceding Monthly Period was
equal to.............................................. $_______
M) Required Collateral Interest
----------------------------
(1) The Required Collateral Interest as of the Transfer Date
for the preceding Monthly Period was equal to.......... $_______
III. THE POOL FACTOR
---------------
A) The Pool Factor for the Record Date for the distribution
to be made on the Distribution Date (which represents
the ratio of the amount of the 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 Initial
Investor Interest). The amount of a Certificateholder's
pro rata share of the Investor Interest can be determined
by multiplying the original denomination of the ________
Certificateholder's Certificate by the Pool Factor.........
C-7
<PAGE>
THE CHASE MANHATTAN BANK (USA),
Servicer
By:________________________________
Name:
Title:
C-8
<PAGE>
EXHIBIT D
---------
Schedule 1995-2 to
Monthly Servicer's Certificate
------------------------------
FORM OF SCHEDULE TO MONTHLY SERVICER'S CERTIFICATE
___________________________________
THE CHASE MANHATTAN BANK (USA)
___________________________________
Chase Manhattan Credit Card Master Trust, Series 1995-2
___________________________________
For the ____________________ Determination Date
For the ____________________ Monthly Period
1. The aggregate amount of Collections processed during the
Billing Cycles which ended during such Monthly Period (equal to
1(a) plus 1(b)) was equal to.......................................
$_______
(a) The aggregate amount of Collections of Finance Charge
Receivables collected during the Billing Cycles which ended during
such Monthly Period (the "Collections of Finance Charge Receivables")
allocated to Series 1995-2 was equal to............................ $_______
(b) The aggregate amount of Collections of Principal
Receivables collected during the Billing Cycles which ended during
such Monthly Period (the "Collections of Principal Receivables")
allocated to Series 1995-2 was equal to............................ $_______
(c) The aggregate amount of Collections deemed to be
Collections of Finance Charge Receivables pursuant to subsection
4.02(b)(i) during the Billing Cycles which ended during such Monthly
Period relating to Series 1995-2 (the "Estimated Collections of Billed
Finance Charge Receivables") was equal to.......................... $_______
D-1
<PAGE>
(d) The aggregate amount of Collections deemed to be
Principal Receivables pursuant to subsection 4.02(b)(i) during the
Billing Cycles which ended during such Monthly Period relating to
Series 1995-2 (the "Estimated Collections of Billed Principal
Receivables") was equal to........................................ $_______
2. The aggregate amount of funds on deposit in the Finance Charge
Account with respect to Collections processed [during the Billing Cycles
which ended during such Monthly Period] [during such Monthly Period],
and allocated to Series 1995-2, as of the end of the last day of such
Monthly Period was equal to.......................................... $_______
3. (a) The excess of (i) Collections of Finance Charge Receivables
allocated to Series 1995-2 over (ii) Estimated Collections of Billed
Finance Charge Receivables (1(a)-1(c)), if any, was equal to $__________
[[of which $__________] [none of which] will be withdrawn from the
Finance Charge Account and deposited to the Principal
Account/1/].
(b) The excess of (i) Estimated Collections of Billed Finance Charge
Receivables over (ii) Collections of Finance Charge Receivables allocated
to Series 1995-2 (1(c)-1(a)), if any, was equal to $__________ [(of which
$__________] [none of which] will be withdrawn from the Principal Account
and deposited to the Finance Charge Account/1/].
The aggregate amount of funds which will be on deposit in the Finance
Charge Account on the Transfer Date relating to Series 1995-2 following this
Determination Date, after giving effect to the payments and transfers in
Items 3(a) and 3(b), will be $__________
4. The aggregate amount of funds on deposit in the Principal Account with
respect to Collections processed during the Billing Cycles which ended during
such Monthly Period and allocated to Series 1995-2, as of the end of the last
day of such Monthly Period was equal to............................. $_______
The aggregate amount of funds which will be on deposit in the
Principal Account on the Transfer Date following this Determination
Date, after giving effect to the payments and transfers in Items
3(a) and 3(b), will be$__________.
5. The aggregate amount of funds on deposit in the Series 1995-2
Collection Subaccount as of the end of the last day of such Monthly
Period was equal to................................................... $_______
D-2
<PAGE>
6. The aggregate amount of funds on deposit in the Retention Subaccount
relating to Series 1995-2 as of the end of the last day of such Monthly
Period was equal to.................................................. $_______
7. (a) The aggregate amount of Interchange to be deposited to
the Collection Account and allocated to Series 1995-2 on the next
succeeding Transfer Date is equal to.............................. $_______
(b) The amount of earnings (net of losses and investment
expenses) on funds on deposit in the Principal Account to be
transferred from the Retention Account to the Finance Charge
Account on the next succeeding Transfer Date is equal to.......... $_______
8. The aggregate amount of [withdrawals] [payments] required
to be made [from] [to] the [Collection Subaccount relating to the
Series 1995-2 Certificates] [the Retention subaccount relating to
the Series 1995-2 Certificates] is equal to.......................... $_______
9. The sum of all amounts payable to the Investor
Certificateholders of Series 1995-2 on the Distribution Date in the
current Monthly Period is equal to:.................................. $_______
Payable in respect of principal of the Class A Certificates.... $_______
Payable in respect of interest on the Class A Certificates..... $_______
Payable in respect of principal of the Class B Certificates.... $_______
Payable in respect of interest on the Class B Certificates..... $_______
Payable in respect of principal of the Collateral Interest..... $_______
Payable in respect of interest on the Collateral Interest...... $_______
Total.......................................................... $_______
10. [No Series 1995-2 Pay Out Event or Trust Pay Out Event has
occurred.] [The following [Series 1995-2 Pay Out Event] [Trust Pay Out
Event] has occurred: ______________________________.]
D-3
<PAGE>
END NOTES
- ---------
1. Applicable to the Monthly Period in which the Conversion Date occurs, and
any Monthly Period thereafter.
D-4
<PAGE>
EXHIBIT 4.7
<PAGE>
- --------------------------------------------------------------------------------
THE CHASE MANHATTAN BANK (USA)
Seller and Servicer
and
YASUDA BANK AND TRUST COMPANY (U.S.A.)
Trustee
on behalf of the Series 1996-1 Certificateholders
-----------------------
SERIES 1996-1 SUPPLEMENT
Dated as of February 1, 1996
to
POOLING AND SERVICING AGREEMENT
Dated as of June 1, 1991
-----------------------
CHASE MANHATTAN CREDIT CARD MASTER TRUST
Series 1996-1
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
-----------------
Page
----
SECTION 1. Designation................................................. 1
SECTION 2. Definitions................................................. 2
SECTION 3. Minimum Seller Interest, Minimum Aggregate Principal
Receivables and Removal of Accounts......................... 15
SECTION 4. Reassignment and Transfer Terms............................. 15
SECTION 5. Delivery and Payment for the Class A Certificates and the
Class B Certificates........................................ 15
SECTION 6. Depositary; Form of Delivery of Class A and Class B
Certificates................................................ 16
SECTION 7. Enhancement................................................. 16
SECTION 8. Article IV of Agreement..................................... 16
ARTICLE IV
RIGHTS OF CERTIFICATEHOLDERS
AND ALLOCATION AND APPLICATION OF COLLECTIONS
SECTION 4.02A Rights of Investor Certificateholders....................... 16
SECTION 4.02B. The Series 1996-1 Collection Subaccount..................... 17
SECTION 4.03. Establishment of Series 1996-1 Investor Accounts............ 18
SECTION 4.04. Allocations................................................. 19
SECTION 4.05. Determination of Monthly Interest........................... 25
SECTION 4.06. Determination of Monthly Principal.......................... 26
SECTION 4.07. Required Amount............................................. 27
SECTION 4.08. Application of Class A Available Funds, Class B
Available Funds, Collateral Available Funds and
Available Principal Collections............................. 28
SECTION 4.09. Defaulted Amounts; Investor Charge-Offs..................... 30
SECTION 4.10. Excess Spread; Excess Finance Charge Collections............ 31
SECTION 4.11. Reallocated Principal Collections........................... 33
SECTION 4.12. Group One Excess Finance Charge Collections................. 34
SECTION 4.13. Shared Principal Collections................................ 34
SECTION 4.14. Determination of LIBOR...................................... 35
SECTION 4.15. [Reserved].................................................. 35
SECTION 4.16. Time of Deposits and Withdrawals............................ 35
SECTION 4.17. Conversion from Collections during Billing Cycles to
Collections during Monthly Periods.......................... 35
i
<PAGE>
ARTICLE V
DISTRIBUTIONS AND REPORTS TO INVESTOR
CERTIFICATEHOLDERS
SECTION 5.01. Distributions........................................... 37
SECTION 5.02. Monthly Certificateholders' Statement................... 37
OTHER SERIES PROVISIONS
SECTION 9. Series 1996-1 Pay Out Events............................ 39
SECTION 10. Series 1996-1 Termination............................... 40
SECTION 11. Ratification and Reaffirmation of Pooling and Servicing
Agreement............................................... 41
SECTION 12. Ratification and Reaffirmation of Representations and
Warranties.............................................. 41
SECTION 13. Rights Under Section 9.02............................... 41
SECTION 14. No Subordination........................................ 41
SECTION 15. Repurchase of the Series 1996-1 Certificates............ 42
SECTION 16. Counterparts............................................ 43
SECTION 17. Additional Covenants of the Trustee..................... 43
SECTION 18. Third-Party Beneficiaries............................... 43
SECTION 19. Series 1996-1 Investor Exchange......................... 43
SECTION 20. Servicing Compensation.................................. 43
SECTION 21. Governing Law........................................... 44
SECTION 22. Notices................................................. 44
EXHIBITS
EXHIBIT A-1 - Form of Class A Certificate
EXHIBIT A-2 - Form of Class B Certificate
EXHIBIT B - Form of Monthly Payment Instructions and
- Notification to the Trustee
EXHIBIT C - Form of Monthly Certificateholders' Statement
EXHIBIT D - Form of Servicer's Certificate
ii
<PAGE>
SERIES 1996-1 SUPPLEMENT, dated as of February 1, 1996 (this "Series
------
Supplement") by and between THE CHASE MANHATTAN BANK (USA), a Delaware banking
- ----------
corporation, as Seller and Servicer, and YASUDA BANK AND TRUST COMPANY (U.S.A.),
a New York trust company, as Trustee.
RECITALS:
--------
1. Section 6.09(b) of the Agreement (as defined herein) provides,
among other things, that the Seller and the Trustee may at any time and from
time to time enter into a supplement to the Agreement for the purpose of
authorizing the issuance by the Trustee to the Seller for the execution and
redelivery to the Trustee for authentication of one or more Series of
Certificates.
2. In the event that any term or provision contained herein shall
conflict with or be inconsistent with any provision contained in the Agreement,
the terms and provisions of this Series Supplement shall govern. All
capitalized terms not otherwise defined herein are defined in the Agreement.
All Article, Section or subsection references herein shall mean Article, Section
or subsections of the Agreement except as otherwise provided herein. Each
capitalized term used or defined herein shall relate only to the Series 1996-1
Certificates and no other Series of Certificates issued by the Trust.
SECTION 1. Designation.
-----------
(a) There is hereby created a Series of Investor Certificates to be
issued pursuant to the Agreement and this Series Supplement to be known as the
"Chase Manhattan Credit Card Master Trust, Series 1996-1." Series 1996-1 shall
- --------------------------------------------------------
be issued in three Classes, the first of which shall be known as the "Class A
-------
Floating Rate Asset Backed Certificates, Series 1996-1" and the second of which
- ------------------------------------------------------
shall be known as the "Class B Floating Rate Asset Backed Certificates, Series
-------------------------------------------------------
1996-1." In addition, there is hereby created a third class of uncertificated
- ------
interests in the Trust which shall, except as expressly provided herein, be
deemed to be a "Class" of "Investor Certificates" for all purposes under the
----- ---------------------
Agreement and this Series Supplement and shall be known as the "Collateral
----------
Interest, Series 1996-1".
- -----------------------
(b) The Collateral Interest Holder shall be entitled to the benefits
of a Holder of a Class of Investor Certificates under the Agreement and this
Series Supplement upon payment by the Collateral Interest Holder of amounts
owing on the Closing Date pursuant to the Loan Agreement. Notwithstanding the
foregoing, except as expressly provided herein, the provisions of Article VI and
Article XII of the Agreement relating to the registration, authentication,
delivery, presentation, cancellation and surrender of Registered Certificates
and clause (d) of Section 6.09(b) shall not be applicable to the Collateral
Interest.
(c) Series 1996-1 shall be included in Group One (as defined below).
Series 1996-1 shall not be subordinated to any other Series.
(d) Notwithstanding any provision in the Agreement or in this
Supplement to the contrary, the first Distribution Date with respect to Series
1996-1 shall be the March 1996
<PAGE>
Distribution Date and the first Monthly Period shall be the Monthly Period ended
February 29, 1996.
SECTION 2. Definitions.
-----------
"Additional Interest" shall mean, with respect to any Distribution
-------------------
Date, the Class A Additional Interest, the Class B Additional Interest and the
Collateral Additional Interest for such Distribution Date.
"Agreement" shall mean the Pooling and Servicing Agreement by and
---------
between The Chase Manhattan Bank (USA), a Delaware banking corporation, as
Seller and Servicer, and Yasuda Bank and Trust Company (U.S.A.), a New York
trust company, as Trustee and all amendments and supplements thereto, including
this Series Supplement.
"Amortization Period" shall mean the period following the Revolving
-------------------
Period which shall be either the Controlled Amortization Period or the Rapid
Amortization Period.
"Available Finance Charge Collections" shall mean:
------------------------------------
(a) in the case of any Monthly Period prior to the Conversion Date,
Collections of Finance Charge Receivables processed during each Billing Cycle
which ended during such Monthly Period, which are allocated to the Investor
Interest and deposited in the Finance Charge Account pursuant to Article IV (or
which will be deposited in the Collection Account on the Transfer Date following
such Monthly Period pursuant to the fourth paragraph of the subsection 4.02(a));
(b) in the case of the Conversion Month, Collections of Finance
Charge Receivables processed on any Date of Processing during such Monthly
Period on and after the Conversion Date, which are allocated to the Investor
Interest and deposited in the Finance Charge Account pursuant to Article IV (or
which will be deposited in the Collection Account on the Transfer Date following
such Monthly Period pursuant to the fourth paragraph of subsection 4.02(a)); and
(c) in the case of any Monthly Period following the Conversion Month,
Collections of Finance Charge Receivables processed on any Date of Processing
during such Monthly Period, which are allocated to the Investor Interest and
deposited in the Finance Charge Account pursuant to Article IV (or which will be
deposited in the Collection Account on the Transfer Date following such Monthly
Period pursuant to the fourth paragraph of subsection 4.02(a));
plus, in each case, an amount equal to the product of (i) the amount of
Interchange allocable to the Trust pursuant to subsection 2.05(k) with respect
to such Monthly Period (to the extent deposited in the Collection Account on the
Transfer Date following such Monthly Period) and (ii) the Investor Percentage
with respect to Finance Charge Receivables and such Monthly Period.
2
<PAGE>
"Available Principal Collections" shall mean:
-------------------------------
(a) in the case of any Monthly Period or portion thereof prior to the
Conversion Date, Collections of Principal Receivables processed during each
Billing Cycle which ended during such Monthly Period or portion thereof, which
were allocated to the Investor Interest and were deposited in the Principal
Account pursuant to subsection 4.04(d)(iii) or 4.04(e)(iii) during any such
Billing Cycle (or which will be deposited in the Collection Account on the
Transfer Date following such Monthly Period pursuant to the fourth paragraph of
subsection 4.02(a));
(b) in the case of the Conversion Month, Collections of Principal
Receivables processed on any Date of Processing during such Monthly Period on or
after the Conversion Date, which were allocated to the Investor Interest and
were deposited in the Principal Account pursuant to subsection 4.04(d)(iii) or
4.04(e)(iii) (or which will be deposited in the Collection Account on the
Transfer Date following such Monthly Period pursuant to the fourth paragraph of
subsection 4.02(a)); and
(c) in the case of any Monthly Period following the Conversion Month,
Collections of Principal Receivables processed on any Date of Processing during
such Monthly Period, which were allocated to the Investor Interest and were
deposited in the Principal Account pursuant to subsection 4.04(d)(iii) or
4.04(e)(iii) (or which will be deposited in the Collection Account on the
Transfer Date following such Monthly Period pursuant to the fourth paragraph of
subsection 4.02(a));
plus, in each case, Shared Principal Collections allocated to Series 1996-1
pursuant to Section 4.13 and the Series Supplement of each other Principal
Sharing Series and all amounts which this Series Supplement provides are to be
treated as Available Principal Collections for the related Transfer Date
(including as provided in subsections 4.04(c)(iii), 4.08(a)(iii), and clause
(b), (e), (f), (i) and (j) of Section 4.10).
"Base Rate" shall mean, with respect to any Monthly Period, the
---------
annualized percentage equivalent of a fraction, the numerator of which is equal
to the sum of the Class A Monthly Interest, the Class B Monthly Interest, the
Collateral Monthly Interest and the Monthly Investor Servicing Fee with respect
to the related Distribution Date and the denominator of which is the Investor
Interest as of the last day of the preceding Monthly Period.
"Class A Additional Interest" shall have the meaning assigned in
---------------------------
Section 4.05(a).
"Class A Available Funds" shall mean, with respect to any Monthly
-----------------------
Period, an amount equal to the Class A Floating Percentage of the Available
Finance Charge Collections with respect to such Monthly Period.
"Class A Certificate Rate" shall mean, with respect to the Class A
------------------------
Certificates for each Interest Period, a per annum rate of 0.11% above LIBOR
determined on the related LIBOR Determination Date, calculated on the basis of
actual days elapsed and a 360-day year.
3
<PAGE>
"Class A Certificateholder" shall mean the Person in whose name a
-------------------------
Class A Certificate is registered in the Certificate Register.
"Class A Certificates" shall mean any one of the Certificates executed
--------------------
by the Seller and authenticated by or on behalf of the Trustee, substantially in
the form of Exhibit A-1.
-----------
"Class A Expected Final Payment Date" shall mean the August 1999
-----------------------------------
Distribution Date.
"Class A Floating Percentage" shall mean, with respect to any Monthly
---------------------------
Period, the percentage equivalent (which percentage shall never exceed 100%) of
a fraction, the numerator of which is equal to the Class A Investor Interest as
of the close of business on the last day of the preceding Monthly Period and the
denominator of which is equal to the Investor Interest as of such day; provided,
however, that with respect to the first Monthly Period, the Class A Floating
Percentage shall mean the percentage equivalent of a fraction, the numerator of
which is the Class A Initial Investor Interest and the denominator of which is
the Initial Investor Interest.
"Class A Initial Investor Interest" shall mean $1,282,500,000.
---------------------------------
"Class A Interest Shortfall" shall have the meaning specified in
--------------------------
Section 4.05(a).
"Class A Investor Charge-Offs" shall have the meaning specified in
----------------------------
Section 4.09(a).
"Class A Investor Default Amount" shall mean, with respect to each
-------------------------------
Transfer Date, an amount equal to the product of (i) the Series 1996-1 Aggregate
Investor Default Amount for the related Monthly Period and (ii) the Class A
Floating Percentage for such Monthly Period.
"Class A Investor Interest" shall mean, on any date of determination,
-------------------------
an amount (not less than zero) equal to (a) the Class A Initial Investor
Interest, minus (b) the aggregate amount of principal payments made to the Class
-----
A Certificateholders on or prior to such date, minus (c) the excess, if any, of
-----
the aggregate amount of Class A Investor Charge-Offs for all prior Transfer
Dates over Class A Investor Charge-Offs reimbursed pursuant to Section 4.09(a)
----
prior to such date and, minus (d) the principal amount of Class A Certificates
-----
previously tendered and exchanged pursuant to a Series 1996-1 Investor Exchange.
"Class A Monthly Interest" shall have the meaning specified in Section
------------------------
4.05(a).
"Class A Monthly Principal" shall have the meaning specified in
-------------------------
Section 4.06(a).
"Class A Required Amount" shall have the meaning specified in Section
-----------------------
4.07(a).
"Class A Servicing Fee" shall have the meaning specified in Section 20
---------------------
of this Series Supplement.
4
<PAGE>
"Class B Additional Interest" shall have the meaning specified in
---------------------------
Section 4.05(b).
"Class B Available Funds" shall mean, with respect to any Monthly
-----------------------
Period, an amount equal to the Class B Floating Percentage of Available Finance
Charge Collections with respect to such Monthly Period.
"Class B Certificate Rate" shall mean, with respect to the Class B
------------------------
Certificates and for each Interest Period, a per annum rate of 0.24% above LIBOR
determined on the related LIBOR Determination Date, calculated on the basis of
actual days elapsed and a 360-day year.
"Class B Certificateholder" shall mean the Person in whose name a
-------------------------
Class B Certificate is registered in the Certificate Register.
"Class B Certificates" shall mean any one of the Certificates executed
--------------------
by the Seller and authenticated by or on behalf of the Trustee, substantially in
the form of Exhibit A-2.
-----------
"Class B Expected Final Payment Date" shall mean the September 1999
-----------------------------------
Distribution Date.
"Class B Floating Percentage" shall mean, with respect to any Monthly
---------------------------
Period, the percentage equivalent (which percentage shall never exceed 100%) of
a fraction, the numerator of which is equal to the Class B Investor Interest as
of the close of business on the last day of the preceding Monthly Period and the
denominator of which is equal to the Investor Interest as of the close of
business on such day; provided, however, that with respect to the first Monthly
Period, the Class B Floating Percentage shall mean the percentage equivalent of
a fraction, the numerator of which is the Class B Initial Investor Interest and
the denominator of which is the Initial Investor Interest.
"Class B Initial Investor Interest" shall mean $82,500,000.
---------------------------------
"Class B Interest Shortfall" shall have the meaning specified in
--------------------------
Section 4.05(b).
"Class B Investor Charge-Offs" shall have the meaning specified in
----------------------------
Section 4.09(b).
"Class B Investor Default Amount" shall mean, with respect to each
-------------------------------
Transfer Date, an amount equal to the product of (i) the Series 1996-1 Aggregate
Investor Default Amount for the related Monthly Period and (ii) the Class B
Floating Percentage for such Monthly Period.
"Class B Investor Interest" shall mean, on any date of determination,
-------------------------
an amount (not less than zero) equal to (a) the Class B Initial Investor
Interest, minus (b) the aggregate amount of principal payments made to the Class
-----
B Certificateholders on or prior to such date, minus (c) the aggregate amount of
-----
Class B Investor Charge-Offs for all prior Transfer Dates, minus (d) the amount
-----
of Reallocated Class B Principal Collections allocated on all prior Transfer
5
<PAGE>
Dates pursuant to Section 4.11(a), minus (e) an amount equal to the amount by
-----
which the Class B Investor Interest has been reduced on all prior Transfer Dates
pursuant to Section 4.09(a) and plus (f) the amount of Excess Spread and Excess
----
Finance Charge Collections allocated and available on all prior Transfer Dates
pursuant to Section 4.10(f) for the purpose of reimbursing amounts deducted
pursuant to the foregoing clauses (c), (d) and (e) and, minus (g) the principal
-----
amount of Class B Certificates previously tendered and exchanged pursuant to a
Series 1996-1 Investor Exchange.
"Class B Monthly Interest" shall have the meaning specified in Section
------------------------
4.05(b).
"Class B Monthly Principal" shall have the meaning specified in
-------------------------
Section 4.06(b).
"Class B Principal Commencement Date" shall mean the Distribution Date
-----------------------------------
on which the Class A Investor Interest is paid in full or, if the Class A
Investor Interest is paid in full on the Class A Expected Final Payment Date and
the Rapid Amortization Period has not commenced, the Distribution Date following
the Class A Expected Final Payment Date.
"Class B Principal Percentage" shall mean, with respect to any Monthly
----------------------------
Period (i) during the Revolving Period, the percentage equivalent (which
percentage shall never exceed 100%) of a fraction, the numerator of which is the
Class B Investor Interest as of the last day of the immediately preceding
Monthly Period and the denominator of which is the Investor Interest as of such
day and (ii) during the Amortization Period or the Rapid Amortization Period,
the percentage equivalent (which percentage shall never exceed 100%) of a
fraction, the numerator of which is the Class B Investor Interest as of the end
of the Revolving Period, and the denominator of which is the Investor Interest
as of the end of the Revolving Period; provided, however, that with respect to
the first Monthly Period, the Class B Principal Percentage shall mean the
percentage equivalent of a fraction, the numerator of which is the Class B
Initial Investor Interest and the denominator of which is the Initial Investor
Interest.
"Class B Required Amount" shall have the meaning specified in Section
-----------------------
4.07(b).
"Class B Servicing Fee" shall have the meaning specified in Section 20
---------------------
of this Series Supplement.
"Closing Date" shall mean February 22, 1996.
------------
"Collateral Additional Interest" shall have the meaning specified in
------------------------------
subsection 4.05(c).
"Collateral Available Funds" shall mean, with respect to any Monthly
--------------------------
Period, an amount equal to the Collateral Floating Percentage of the Available
Finance Charge Collections with respect to such Monthly Period.
"Collateral Charge-Offs" shall have the meaning specified in
----------------------
subsection 4.09(c).
6
<PAGE>
"Collateral Default Amount" shall mean, with respect to any
-------------------------
Distribution Date, an amount equal to the product of (a) the Series 1996-1
Aggregate Investor Default Amount for the related Monthly Period and (b) the
Collateral Floating Percentage applicable for the related Monthly Period.
"Collateral Floating Percentage" shall mean, with respect to any
------------------------------
Monthly Period, the percentage (rounded to the nearest ten thousandth of one
percent) equivalent (which percentage shall never exceed 100%) of a fraction,
the numerator of which is the Collateral Interest as of the close of business on
the last day of the preceding Monthly Period and the denominator of which is
equal to the Investor Interest as of the close of business on such day;
provided, however, that, with respect to the first Monthly Period, the
Collateral Floating Percentage shall mean the percentage equivalent of a
fraction, the numerator of which is the Collateral Initial Interest and the
denominator of which is the Initial Investor Interest.
"Collateral Initial Interest" shall mean $135,000,000.
---------------------------
"Collateral Interest" shall mean, on any date of determination, an
-------------------
amount equal to (a) the Collateral Initial Interest, minus (b) the aggregate
-----
amount of principal payments made to the Collateral Interest Holder prior to
such date, minus (c) the aggregate amount of Collateral Charge-Offs for all
-----
prior Transfer Dates pursuant to subsection 4.09(c), minus (d) the amount of
-----
Reallocated Principal Collections allocated pursuant to Section 4.11 on all
prior Transfer Dates, minus (e) an amount equal to the amount by which the
-----
Collateral Interest has been reduced on all prior Transfer Dates pursuant to
subsections 4.09(a) and (b), plus (f) the aggregate amount of Excess Spread and
----
Excess Finance Charge Collections allocated and available on all prior Transfer
Dates pursuant to subsection 4.10, for the purpose of reimbursing amounts
deducted pursuant to the foregoing clauses (c), (d) and (e) and, minus (g) the
-----
principal amount of the Collateral Interest previously tendered and exchanged
pursuant to a Series 1996-1 Investor Exchange; and, provided, however, that the
Collateral Interest may not be reduced below zero.
"Collateral Interest Holder" shall mean the entity so designated in
--------------------------
the Loan Agreement.
"Collateral Interest Payment Shortfall" shall have the meaning
-------------------------------------
specified in subsection 4.05(c).
"Collateral Interest Servicing Fee" shall have the meaning specified
---------------------------------
in Section 20 of this Series Supplement.
"Collateral Monthly Interest" shall mean the monthly interest
---------------------------
distributable in respect of the Collateral Interest as calculated in accordance
with subsection 4.05(c).
"Collateral Monthly Principal" shall mean the monthly principal
----------------------------
distributable in respect of the Collateral Interest as calculated in accordance
with subsection 4.06(c).
7
<PAGE>
"Collateral Percentage" shall mean for any Monthly Period, (a) with
---------------------
respect to Defaulted Amounts and Finance Charge Receivables at any time or
Principal Receivables during the Revolving Period, the Collateral Floating
Percentage, and (b) with respect to Principal Receivables during the Controlled
Amortization Period or Rapid Amortization Period, the Collateral Principal
Percentage.
"Collateral Principal Percentage" shall mean for any Monthly Period
-------------------------------
following the end of the Revolving Period, the percentage equivalent (which
percentage shall never exceed 100%) of a fraction, the numerator of which is the
Collateral Interest as of the close of business on the last day of the Revolving
Period and the denominator of which is equal to the Investor Interest as of the
close of business on the last day of the Revolving Period.
"Collateral Rate" shall mean, for any Interest Period, the rate
---------------
specified in the Loan Agreement.
"Collection Recomputation Date" shall mean, with respect to the
-----------------------------
Collections received during any Billing Cycle, the date on which the Servicer
performs the recomputations provided for in Section 4.04(a), which date shall
not be later than the Determination Date in the Monthly Period following the
Monthly Period in which such Billing Cycle ends.
"Controlled Amortization Amount" shall mean (a) for any Distribution
------------------------------
Date beginning with the September 1998 Distribution Date and ending with the
August 1999 Distribution Date, an amount equal to one-twelfth of the Class A
Investor Interest as of the last day of the Revolving Period; and (b) for the
September 1999 Distribution Date, an amount equal to the Class B Investor
Interest as of such last day.
"Controlled Amortization Period" shall mean, unless a Pay Out Event
------------------------------
shall have occurred prior thereto, the period commencing on the close of
business on July 31, 1998 and ending on the first to occur of (a) the
commencement of the Rapid Amortization Period, (b) the payment in full to the
Series 1996-1 Certificateholders of the Investor Interest or (c) the Series
1996-1 Termination Date.
"Controlled Distribution Amount" shall have the meaning specified in
------------------------------
subsection 4.04(d)(iii).
"Controlled Excess Amount" shall have the meaning specified in
------------------------
subsection 4.04(d)(iii).
"Conversion Date" shall have the meaning specified in Section 4.17.
---------------
"Conversion Month" shall mean the Monthly Period in which the
----------------
Conversion Date occurs.
"Deficit Controlled Amortization Amount" shall initially mean zero and
--------------------------------------
shall change as provided in subsection 4.04(d)(iii).
8
<PAGE>
"Definitive Certificates" shall have the meaning specified in Section
-----------------------
6.11.
"Distribution Account" shall have the meaning specified in subsection
--------------------
4.03(b).
"Distribution Date" shall mean the fifteenth day of each calendar
-----------------
month, or, if such fifteenth day is not a Business Day, the next succeeding
Business Day, commencing March 15, 1996; provided, however, that no Distribution
Date shall occur after the earlier to occur of (x) the Distribution Date on
which the Investor Interest has been paid in full or (y) the Series 1996-1
Termination Date.
"Enhancement" shall mean the Collateral Interest.
-----------
"Enhancement Provider" shall mean the Collateral Interest Holder.
--------------------
"Excess Amount" shall have the meaning specified in subsection
-------------
4.04(c)(iii).
"Excess Finance Charge Collections" shall mean amounts available for
---------------------------------
allocation to other Series in Group One pursuant to Section 4.10(m) and amounts
available for allocation to Series 1996-1 which have been designated as "Excess
Finance Charge Collections" in the Series Supplements for other Series in Group
One.
"Excess Spread" shall mean, with respect to any Distribution Date, the
-------------
sum of the amounts, if any, specified pursuant to Sections 4.08(a)(iv),
4.08(b)(iii) and 4.08(c)(ii) with respect to such Distribution Date.
"Excluded Series" shall mean any Series designated as an "Excluded
---------------
Series" in the applicable Series Supplement (but only if the Rating Agency
Condition is satisfied with respect to such exclusion) and thereby excluded from
the computation of Minimum Aggregate Principal Receivables pursuant to Section 3
of this Series Supplement.
"Finance Charge Account" shall have the meaning specified in Section
----------------------
4.03.
"Floating Allocation Percentage" shall mean, with respect to any
------------------------------
particular Monthly Period, the percentage equivalent (which percentage shall
never exceed 100%) of a fraction, the numerator of which is the Investor
Interest as of the last day of the preceding Monthly Period (or in the case of
the Monthly Period in which the Closing Date occurs, the Initial Investor
Interest) and the denominator of which is the greater of (x) the Aggregate
Principal Receivables in the Trust as of the first day of such particular
Monthly Period and (y) the sum of the numerators used to calculate the floating
allocation percentages for all Series then outstanding.
"Group One" shall mean Series 1996-1 and each other Series specified
---------
in the related Series Supplement to be included in Group One.
"Initial Investor Interest" shall mean $1,500,000,000.
-------------------------
9
<PAGE>
"Interest Period" shall mean, with respect to any Distribution Date,
---------------
the period from and including the Distribution Date immediately preceding such
Distribution Date (or, in the case of the first Distribution Date, from and
including the Closing Date) to but excluding such Distribution Date.
"Investor Charge Offs" shall mean Class A Investor Charge Offs, Class
--------------------
B Investor Charge Offs and Collateral Charge Offs.
"Investor Default Amount" shall mean, for any Billing Cycle, the
-----------------------
product of the Floating Allocating Percentage for the Monthly Period in which
such Billing Cycle ends times the amount of Receivables in Defaulted Accounts
which in such Billing Cycle are charged off as uncollectible on the Servicer's
computer master file of VISA(R) and Master Card(R) accounts.
"Investor Interest" shall mean, on any date of determination, an
-----------------
amount equal to the sum of (a) the Class A Investor Interest as of such date,
(b) the Class B Investor Interest as of such date and (c) the Collateral
Interest of such date.
"Investor Percentage" shall mean, on any date of determination:
-------------------
(a) when used with respect to any Principal Receivable on any date of
determination during the Revolving Period, the Floating Allocation
Percentage;
(b) when used with respect to Principal Receivables on any date of
determination during the Controlled Amortization period or the Rapid
Amortization Period, the Principal Allocation Percentage; and
(c) when used with respect to any Finance Charge Receivable and any
Receivable in a Defaulted Account on any date of determination, the
Floating Allocation Percentage;
provided, that in no event shall the Investor Percentage be greater than 100%.
"LIBOR" shall mean, for any Interest Period, the London interbank
-----
offered rate for one-month United States dollar deposits determined by the
Trustee for each Interest Period in accordance with the provisions of Section
4.14.
"LIBOR Determination Date" shall mean the second London Business Day
------------------------
prior to the commencement of each Interest Period.
"Loan Agreement" shall mean the agreement among the Seller, the
--------------
Servicer, the Trustee, and the Collateral Interest Holder, dated as of February
22, 1996, as amended or modified from time to time.
"London Business Day" shall mean any Business Day on which dealings in
-------------------
deposits in United States dollars are transacted in the London interbank market.
10
<PAGE>
"Minimum Aggregate Principal Receivables" shall have the meaning
---------------------------------------
specified in Section 3 hereof.
"Minimum Seller Interest" shall have the meaning specified in Section
-----------------------
3 hereof.
"Monthly Interest" means, with respect to any Distribution Date, the
----------------
sum of the Class A Monthly Interest, the Class B Monthly Interest and the
Collateral Monthly Interest for such Distribution Date.
"Monthly Investor Servicing Fee" shall mean, with respect to each
------------------------------
Monthly Period, an amount equal to 1/12th of the product of the Series Servicing
Fee Percentage and the Investor Interest as of the last day of the preceding
Monthly Period; provided, however, that the Monthly Investor Servicing Fee for
the first Monthly Period shall be $2,687,500.
"Pay Out Commencement Date" shall mean, with respect to the Series
-------------------------
1996-1 Certificates, the date on which a Trust Pay Out Event is deemed to occur
pursuant to Section 9.01 of the Agreement or a Series 1996-1 Pay Out Event is
deemed to occur pursuant to Section 9 hereof.
"Percentage Allocation" shall have the meaning specified in subsection
---------------------
4.04(d)(iii).
"Pool Amount" shall mean, with respect to any date of determination on
-----------
or after the Implementation Date, an amount equal to the sum of (i) the product
of (x) a fraction, the numerator of which is the Investor Interest on such date
of determination, and the denominator of which is the Aggregate Investor
Interest on such date of determination and (y) the aggregate amount of
Receivables determined at the end of the day immediately prior to such date of
determination, (ii) the amount on deposit in the Series 1996-1 Retention
Subaccount at the end of the day immediately prior to such date of
determination, and (iii) the amount of Excess Amounts and Controlled Excess
Amounts at the end of the day immediately prior to such date of determination.
"Portfolio Yield" shall mean, with respect to Series 1996-1 and with
---------------
respect to any Monthly Period, the annualized percentage equivalent of a
fraction the numerator of which is an amount equal to the sum of (i) the
Available Finance Charge Collections for such Monthly Period and (ii) any Excess
Finance Charge Collections (exclusive of any amounts included in (i)) that are
allocated to Series 1996-1 with respect to such Monthly Period to the extent
deposited in the Finance Charge Account on the Transfer Date following such
Monthly Period, such sum to be calculated on a cash basis after subtracting an
amount equal to the Series 1996-1 Aggregate Investor Default Amount with respect
to such Monthly Period, and the denominator of which is the Investor Interest as
of the last day of the preceding Monthly Period.
"Principal Account" shall have the meaning specified in subsection
-----------------
4.03(a).
"Principal Allocation Percentage" shall mean, with respect to any day
-------------------------------
during a particular Monthly Period, the percentage (rounded to the nearest ten
thousandth of one percent)
11
<PAGE>
equivalent (which percentage shall never exceed 100%) of a fraction, the
numerator of which is (a) during the Revolving Period, the Investor Interest as
of the last day of the immediately preceding Monthly Period and (b) during the
Controlled Amortization Period or the Rapid Amortization Period, the Investor
Interest as of the last day of the Revolving Period and the denominator of which
is the greater of (x) the Aggregate Principal Receivables in the Trust as of the
first day of such particular Monthly Period and (y) the sum of the numerators
used to calculate the principal allocation percentages for all Series
outstanding with respect to such Monthly Period.
"Principal Sharing Series" shall mean Series 1996-1 and any other
------------------------
Series in Group One which does not provide that such Series is not a Principal
Sharing Series in the applicable Series Supplement.
"Principal Shortfall" shall have the meaning specified in Section
-------------------
4.10.
"Qualified Trust Institution" shall have the same meaning as
---------------------------
"Qualified Institution."
"Rapid Amortization Period" shall mean an amortization period
-------------------------
commencing on the Pay Out Commencement Date and ending on the earlier to occur
of (i) the date of termination of the Trust pursuant to Section 12.01 or (ii)
the Series 1996-1 Termination Date.
"Rating Agency" shall mean, with respect to the Series 1996-1
-------------
Certificates, each of Moody's and Standard & Poor's.
"Rating Agency Condition" shall mean, with respect to any action, that
-----------------------
the Rating Agency shall have notified the Seller, the Servicer and the Trustee
in writing that such action will not result in the reduction or withdrawal of
the rating of any outstanding Class by the Rating Agency.
"Reallocated Class B Principal Collections" shall mean, with respect
-----------------------------------------
to any Transfer Date, an amount of Collections of Principal Receivables with
respect to the prior Monthly Period, equal to the least of (i) the amount
specified in subsection 4.11(a), (ii) an amount equal to the product of (a) the
Class B Principal Percentage with respect to the Monthly Period relating to such
Transfer Date and (b) the Principal Allocation Percentage with respect to the
Monthly Period relating to such Transfer Date and (c) the amount of Collections
of Principal Receivables with respect to the Monthly Period relating to such
Transfer Date and (iii) the Class B Investor Interest after giving effect to any
Class B Investor Charge-Offs for such Transfer Date.
"Reallocated Collateral Principal Collections" shall mean, with
--------------------------------------------
respect to any Transfer Date, an amount of Collections of Principal Receivables
with respect to the prior Monthly Period, equal to the least of (i) the sum of
the amounts specified in subsections 4.11(a) (net of Reallocated Class B
Principal Collections) and 4.11(b), (ii) an amount not to exceed the product of
(a) the Collateral Percentage with respect to the Monthly Period relating to
such Transfer Date and (b) the Principal Allocation Percentage with respect to
the Monthly Period
12
<PAGE>
relating to such Transfer Date and (c) the amount of Collections of Principal
Receivables with respect to the Monthly Period relating to such Transfer Date
and (iii) the Collateral Interest after giving effect to any Collateral Charge-
Offs for such Transfer Date.
"Reallocated Principal Collections" shall mean the sum of Reallocated
---------------------------------
Collateral Principal Collections and Reallocated Class B Principal Collections.
"Reference Banks" means four major banks in the London interbank
---------------
market selected by the Servicer.
"Required Collateral Interest" shall mean (a) initially, $135,000,000
----------------------------
and (b) on any Transfer Date thereafter, 9% of the Investor Interest on the
related Distribution Date (determined after taking into account the payments to
be made on such related Distribution Date), but not less than $45,000,000;
provided, however, that (1) if either (i) there is a reduction in the Collateral
Interest pursuant to clause (c), (d) or (e) of the definition of such term or
(ii) a Pay Out Event with respect to the Investor Certificates has occurred, the
Required Collateral Interest for any Transfer Date shall equal the Required
Collateral Interest for the Transfer Date immediately preceding such reduction
or Pay Out Event, (2) in no event shall the Required Collateral Interest exceed
the sum of the outstanding principal balance of (i) the Class A Certificates and
(ii) the Class B Certificates, each as of the related Distribution Date after
taking into account the payments to be made on such Distribution Date and (3)
the Required Collateral Interest may be reduced at any time to a lesser amount
if the Rating Agency delivers to each of the Seller, the Servicer, the
Collateral Interest Holder and the Trustee written confirmation that after such
reduction the Rating Agency Condition has been satisfied.
"Required Retention Percentage", shall mean (i) 3% on any date of
-----------------------------
determination on or after the Implementation Date during the Revolving Period,
(ii) 3% on any date of determination on or after the Implementation Date during
an Amortization Period and (iii) 3% on any other date of determination.
"Retention Percentage" shall mean (i) with respect to any date of
--------------------
determination on or after the Implementation Date, the numerical equivalent of a
fraction, the numerator of which is equal to the Pool Amount for such date of
determination less the Investor Interest on such date of determination and the
denominator of which is the Pool Amount for such date of determination and (ii)
0% on any other date of determination.
"Revolving Period" shall mean the period from and including February
----------------
1, 1996 to, but not including, the earlier of August 1, 1998 or the Pay Out
Commencement Date.
"Scheduled Series 1996-1 Termination Date" shall mean the April 2001
----------------------------------------
Distribution Date.
"Series 1996-1" shall mean the Series issued pursuant to this Series
-------------
Supplement.
13
<PAGE>
"Series 1996-1 Aggregate Investor Default Amount" shall mean the
-----------------------------------------------
Aggregate Investor Default Amount with respect to Series 1996-1 and such Monthly
Period determined by the Servicer pursuant to subsection 4.02(c)(iii) of the
Agreement.
"Series 1996-1 Certificates" shall mean the Class A Certificates, the
--------------------------
Class B Certificates and the Collateral Interest.
"Series 1996-1 Certificateholder" shall mean the holder of record of
-------------------------------
any Series 1996-1 Certificate.
"Series 1996-1 Collection Subaccount" shall have the meaning specified
-----------------------------------
in Section 4.02B.
"Series 1996-1 Final Termination Date" shall have the meaning set
------------------------------------
forth in Section 10.
"Series 1996-1 Investor Accounts" or "Investor Accounts" shall mean
------------------------------- -----------------
the accounts established pursuant to Section 4.03 hereof.
"Series 1996-1 Investor Exchange" shall mean an Investor Exchange
-------------------------------
pursuant to Section 6.09(b) of the Agreement and Section 19 of this Series
Supplement.
"Series 1996-1 Pay Out Event" shall have the meaning specified in
---------------------------
Section 9 hereof.
"Series 1996-1 Retention Subaccount" shall have the meaning specified
----------------------------------
in Section 4.02A.
"Series 1996-1 Termination Date" shall mean the earlier to occur of
------------------------------
(i) the day after the Distribution Date on which the Series 1996-1 Certificates
and the Collateral Interest are paid in full; (ii) the Scheduled Series 1996-1
Termination Date (unless extended pursuant to Section 10 of this Series
Supplement); or (iii) the Series 1996-1 Final Termination Date.
"Series Servicing Fee Percentage" shall mean 2.15%.
-------------------------------
"Shared Principal Collections" shall mean amounts retained in the
----------------------------
Collection Account as Shared Principal Collections pursuant to subsections
4.04(c)(iii), 4.04(d)(iii) or 4.04(e)(iii) and any amounts designated as Shared
Principal Collections in the Series Supplement for any Principal Sharing Series.
"Telerate Page 3750" shall mean the display page currently so
------------------
designated on the Dow Jones Telerate Service (or such other page as may replace
that page on that service for the purpose of displaying comparable rates or
prices).
14
<PAGE>
SECTION 3. Minimum Seller Interest, Minimum Aggregate Principal
----------------------------------------------------
Receivables and Removal of Accounts.
- -----------------------------------
(a) The Minimum Seller Interest applicable to the Series 1996-1
Certificates shall be 7%. The Minimum Aggregate Principal Receivables shall be
the greater of (i) $1,500,000,000 less the portion of such amount represented by
----
Series 1996-1 Certificates tendered and canceled pursuant to any Series 1996-1
Investor Exchange and (ii) the sum of the Initial Investor Interests (as defined
in each applicable Supplement) of all Series then outstanding (other than
Excluded Series) less the portion of the Initial Investor Interest of any Series
----
tendered for an Exchange pursuant to Section 6.09(b) of the Agreement and as
provided in the related Supplement or, if any Series (other than Excluded
Series) calculates the investor percentage with respect to Principal Receivables
by means of a numerator based other than on the Initial Investor Interest of
such Series, then at least equal to the sum of the Initial Investor Interest of
each Series (other than Excluded Series) then outstanding which calculates such
investor percentage on the basis of Initial Investor Interest plus, for each
----
other Series (other than Excluded Series) then outstanding, the then current
numerator used to calculate the investor percentage with respect to Principal
Receivables for such Series. Upon final payment of the Series 1996-1
Certificates, the Minimum Aggregate Principal Receivables shall be computed in a
manner consistent with the Agreement or any future Supplement, as appropriate.
(b) In addition to the requirements contained in Section 2.07(a) and
(b) with respect to the removal of Accounts, pursuant to subsection
2.07(b)(iii)(c), the removal of any Receivables of any Removed Accounts on any
Removal Date shall not, in the reasonable belief of the Seller, result in the
failure to make a Controlled Distribution Amount payment.
SECTION 4. Reassignment and Transfer Terms. The Series 1996-1
-------------------------------
Certificates shall be subject to retransfer to the Seller at its option, in
accordance with the terms specified in subsection 12.02(a) of the Agreement, on
any Distribution Date on or after the Distribution Date on which the Investor
Interest is reduced to an amount less than or equal to 5% of the Initial
Investor Interest. The deposit required in connection with any such repurchase
shall be equal to the sum of (a) the aggregate outstanding principal balance of
the Class A Certificates, the Class B Certificates and the Collateral Interest,
all as of the last day of the Monthly Period preceding the Distribution Date on
which the purchase price will be distributed, plus (b) accrued and unpaid
----
interest thereon to, but not including, the Distribution Date on which the
repurchase occurs, less (c) the amount on deposit in the Finance Charge Account
----
which will be transferred to the Distribution Account pursuant to Section 4.08
or Section 4.10 on the related Transfer Date, less (d) the amount on deposit in
----
the Principal Account which will be transferred to the Distribution Account
pursuant to subsection 4.08(e) on the related Transfer Date.
SECTION 5. Delivery and Payment for the Class A Certificates and the
---------------------------------------------------------
Class B Certificates. The Trustee shall deliver the Class A Certificates and
- --------------------
the Class B Certificates when authenticated in accordance with Section 6.02 of
the Agreement.
15
<PAGE>
SECTION 6. Depositary; Form of Delivery of Class A and Class B
---------------------------------------------------
Certificates.
- ------------
(a) The Class A Certificates and the Class B Certificates shall be
delivered as Book-Entry Certificates as provided in Sections 6.01, 6.02 and 6.09
of the Agreement.
(b) The Depositary for Series 1996-1 shall be The Depository Trust
Company, and the Class A Certificates and the Class B Certificates shall be
initially registered in the name of CEDE & Co., its nominee.
(c) For purposes of any provision of this Agreement requiring or
permitting actions with the consent of, or at the direction of, Holders of
Series 1996-1 Certificates having Undivided Interests aggregating a specified
percentage, such direction or consent may be given by the Certificate Owners of
the Class A Certificates and the Class B Certificates having interests in the
requisite percentage of Series 1996-1 Certificates, acting through the Clearing
Agency and the Clearing Agency Participants.
SECTION 7. Enhancement. Enhancement for the Series 1996-1
-----------
Certificates shall consist of the Collateral Interest.
SECTION 8. Article IV of Agreement. Any provision of Article IV of
-----------------------
the Agreement which distributes Collections to the Holder of the Exchangeable
Seller Certificate on the basis of the Seller Percentage shall continue to apply
irrespective of the issuance of the Series 1996-1 Certificates. Sections 4.01
and 4.02 of the Agreement shall be read in their entirety as provided in the
Agreement. Article IV of the Agreement (except for Sections 4.01 and 4.02
thereof) shall read in its entirety as follows and shall be applicable to the
Series 1996-1 Certificates:
ARTICLE IV
RIGHTS OF CERTIFICATEHOLDERS
AND ALLOCATION AND APPLICATION OF COLLECTIONS
SECTION 4.02A. Rights of Investor Certificateholders. The Series
-------------------------------------
1996-1 Certificates shall represent fractional Undivided Interests in the Trust,
consisting of the right to receive, to the extent necessary to make the required
payments with respect to such Series 1996-1 Certificates at the times and in the
amounts specified in this Agreement, (a) the related Investor Percentage of
Collections received with respect to the Receivables and (b) other funds, if
any, allocable to the Series 1996-1 Certificates on deposit in the Collection
Account, the Finance Charge Account, the Principal Account, the Distribution
Account, the Series 1996-1 Collection Subaccount and the Retention Subaccount
(the "Series 1996-1 Retention Subaccount") with respect to the Series 1996-1
----------------------------------
Certificates (the "Series 1996-1 Interest"). The Exchangeable Seller
----------------------
Certificate shall represent the ownership interest in the Trust Assets not
allocated to Series 1996-1 or any other Series outstanding; provided, however,
the ownership interest represented by the Exchangeable Seller Certificate and
any other Series outstanding at any time shall not
16
<PAGE>
represent any interest in the Series 1996-1 Collection Subaccount or in the
Enhancement, except as specifically provided in this Article IV.
SECTION 4.02B. The Series 1996-1 Collection Subaccount. Pursuant to
---------------------------------------
Section 4.01 of the Agreement, the Servicer, on behalf of the Trustee, shall
establish and maintain with a Qualified Trust Institution a subaccount of the
Collection Account, for the benefit of the Series 1996-1 Certificateholders,
bearing a designation clearly indicating that the funds therein are held in
trust for the benefit of the Series 1996-1 Certificateholders. The Servicer, on
behalf of the Trustee, at all times shall maintain accurate records reflecting
each transaction in the Series 1996-1 Collection Subaccount and that funds held
therein shall at all times be held in trust for the benefit of the Series 1996-1
Certificateholders. Pursuant to the authority granted to it pursuant to
subsection 3.01(b), the Servicer shall have the power, revocable by the Trustee,
to withdraw funds, and to instruct the Trustee to withdraw funds, from the
Series 1996-1 Collection Subaccount for the purpose of carrying out its duties
hereunder. All such instructions from the Servicer to the Trustee shall be in
writing; provided, however, that the Servicer is entitled to give instructions
to the Trustee by facsimile. Funds on deposit in the Series 1996-1 Collection
Subaccount that are not required to be deposited in the Finance Charge Account,
the Principal Account or the Series 1996-1 Retention Subaccount 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 third
Business Day following the day on which such funds were so deposited, provided,
that such funds shall be available for withdrawal on the Transfer Date following
the Record Date occurring in the Monthly Period in which such funds were
processed for collection. All interest and earnings (net of losses and
investment expenses) on funds on deposit in the Series 1996-1 Collection
Subaccount shall be deposited by the Servicer upon written notice to the Trustee
by the Seller in a separate deposit account with a Qualified Trust Institution
in the name of Servicer, which shall not constitute a part of the Trust, or
shall otherwise be turned over to the Servicer, not less frequently than
monthly; provided, however, that following the failure of the Servicer to make a
payment or deposit, which failure results in the occurrence of a Servicer
Default with respect to the Series 1996-1 Certificates, such interest and
earnings shall not be paid to the Servicer during the period such Servicer
Default is continuing, but shall be retained in, or deposited into, the Finance
Charge Account and shall be treated as Collections of Finance Charge Receivables
allocable to the Series 1996-1 Certificateholders. The Qualified Institution
shall maintain for the benefit of the Series 1996-1 Certificateholders and the
Servicer (as its interest appears herein), possession of any negotiable
instrument or security evidencing the Permitted Investments described in clause
(a) of the definition thereof relating to the Collection Account from the time
of purchase thereof until the time of maturity. Subject to the restrictions set
forth above, the Servicer, or a Person designated in writing by the Servicer,
shall instruct the applicable Qualified Institution in writing with respect to
the investment of funds on deposit in the Series 1996-1 Collection Subaccount.
For purposes of determining the availability of funds or the balances in the
Series 1996-1 Collection Subaccount for any reason under this Agreement, all
investment earnings on such funds (net of losses and expenses) shall be deemed
not to be available or on deposit.
17
<PAGE>
SECTION 4.03. Establishment of Series 1996-1 Investor Accounts.
------------------------------------------------
(a) The Finance Charge Account and Principal Account. The Servicer,
------------------------------------------------
for the benefit of the Series 1996-1 Certificateholders shall establish and
maintain with a Qualified Trust Institution in the name of the Trustee, on
behalf of the Trust, two segregated trust accounts maintained in the corporate
trust department of such Qualified Trust Institution, and held in trust by such
Qualified Trust Institution (the "Finance Charge Account" and the "Principal
---------------------- ---------
Account," respectively), bearing a designation clearly indicating that the funds
- -------
therein are held in trust for the benefit of the Series 1996-1
Certificateholders. The Servicer, on behalf of 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 Series 1996-1 Certificateholders. Pursuant
to the authority granted to it pursuant to subsection 3.01(b), the Servicer
shall have the power, revocable by the Trustee, to withdraw funds, and to
instruct the Trustee to withdraw funds, from the Finance Charge Account and
Principal Account for the purpose of carrying out its duties hereunder. All
such instructions from the Servicer to the Trustee shall be in writing;
provided, however, that the Servicer is entitled to give instructions to the
Trustee by facsimile.
(b) The Distribution Account. The Servicer, for the benefit of the
------------------------
Series 1996-1 Certificateholders, shall cause to be established and maintained
in the name of the Trustee, with an office or branch of a Qualified Trust
Institution (other than the Seller), a non-interest bearing segregated demand
deposit account maintained in the corporate trust department of such Qualified
Trust Institution, and held in trust by such Qualified Trust Institution (the
"Distribution Account") bearing a designation clearly indicating that the funds
- ---------------------
deposited therein are held in trust for the benefit of the Series 1996-1
Certificateholders. The Paying Agent shall have the revocable authority to make
withdrawals from the Distribution Account.
(c) Administration of the Finance Charge Account and Principal
------------------------------------------------ ---------
Account. Funds on deposit in the Principal Account and the Finance Charge
Account shall at all times be invested in Permitted Investments. Any such
investment shall mature and such funds shall be available for withdrawal on or
prior to the Transfer Date following the Record Date occurring in the Monthly
Period in which such funds were processed for collection. The Qualified Trust
Institution which holds the Principal Account and the Finance Charge Account
shall maintain for the benefit of the Series 1996-1 Certificateholders and the
Servicer, as their respective interests appear herein, possession of any
negotiable instrument or security evidencing the Permitted Investments relating
to the Principal Account or the Finance Charge Account, as the case may be,
described in clause (a) of the definition thereof from the time of purchase
thereof until the time of maturity. 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
Servicer upon written notice to the Trustee in a separate deposit account with a
Qualified Trust Institution in the name of the Servicer, which shall not
constitute a part of the Trust, or shall otherwise be turned over by the
Servicer not less frequently than monthly. Subject to the restrictions set
forth above, the Servicer, or a Person designated in writing by the Servicer,
shall instruct the Qualified Trust Institution which holds the Principal Account
and the Finance Charge Account in writing with respect to the investment of
funds on deposit in the Principal Account and the Finance Charge Account. For
purposes of
18
<PAGE>
determining the availability of funds or the balances in the Finance Charge
Account and the Principal Account for any reason under this Agreement, all
investment earnings on such funds (net of losses and expenses) shall be deemed
not to be available or on deposit.
(d) No Qualified Trust Institution shall be eligible to be the
depository for any of the accounts established pursuant to this Section 4.03
unless it has agreed that, if it ceases to be a "Qualified Trust Institution",
then (i) such entity shall provide the Trustee, the Enhancement Provider, and
the Servicer with prompt written notice that it is no longer a "Qualified Trust
Institution" and (ii) transfer the funds deposited in each of the accounts in
the manner directed by the Servicer within 10 Business Days of the day on which
such entity ceased to be a "Qualified Trust Institution".
SECTION 4.04. Allocations.
-----------
(a) Allocation Adjustment. Unless the Servicer is depositing
---------------------
Collections monthly pursuant to Section 4.02(a) of the Agreement, on each
Collection Recomputation Date to and including the Collection Recomputation Date
after the Collection Recomputation Date referred to in clause (ii) below, the
Servicer shall recompute the allocations to the Series 1996-1 Certificates
previously made pursuant to subsections 4.01(d), 4.02(a), 4.02(b), 4.04(c),
4.04(d) and 4.04(e):
(i) in the case of a Collection Recomputation Date which occurs
prior to the Conversion Date, during each Billing Cycle which ended during
the preceding Monthly Period; and
(ii) in the case of the Collection Recomputation Date which occurs
in the Monthly Period in which the Conversion Date occurs, during each
Billing Cycle which ended during the preceding Monthly Period and on any
other Date of Processing during such Monthly Period;
(such allocations with respect to any such period, the "Estimated Allocations")
---------------------
based on the Collected Finance Charge Receivables and the Collected Principal
Receivables (such allocations with respect to any such period, the "Actual
------
Allocations"), and based on the Actual Allocations of Finance Charge Receivables
- -----------
and Principal Receivables not later than 11:00 a.m. New York City time on the
Transfer Date following such Collection Recomputation Date:
(A) make any necessary deposits or withdrawals with respect to the
Finance Charge Account, the Principal Account and the Series 1996-1
Retention Subaccount such that the amount on deposit in such Finance Charge
Account and such Principal Account with respect to such Monthly Period is
equal to the Actual Allocation of Finance Charge Receivables and the Actual
Allocation of Principal Receivables, respectively;
(B) pay to the Holder of the Exchangeable Seller Certificate any
underpayment with respect to allocations of Principal Receivables or
Finance Charge Receivables with respect to such Monthly Period;
19
<PAGE>
(C) notify the Holder of the Exchangeable Seller Certificate of the
amount of any overpayment to such Holder and the Holder of the Exchangeable
Seller Certificate shall deposit into the Finance Charge Account, the
Principal Account or the Series 1996-1 Retention Subaccount, as the case
may be, as provided in the notice from the Servicer, the amount of any
overpayment to such Holder which such recomputation discloses; and
(D) for the purposes of administrative convenience, payments to be
made to the Holder of the Exchangeable Seller Certificate and deposits to
be made by the Holder of the Exchangeable Seller Certificate pursuant to
Section 4.04(a) may be netted against each other.
(b) It is the intention of the parties hereto that Section 4.04(a) be
construed so that the reallocation provided for therein shall result in the
Series 1996-1 Certificateholders and the Collateral Interest Holder on the one
hand and the Holder of the Exchangeable Seller Certificate on the other hand
being in the same position they would have been in if the Estimated Allocations
had been based upon actual Collections of Finance Charge Receivables and actual
Collections of Principal Receivables.
(c) Allocations During the Revolving Period. During the Revolving
---------------------------------------
Period, the Servicer shall, prior to the close of business on the day any
Collections are deposited in the Collection Account, pay from the Collection
Account (or, if applicable, the Principal Account) the following amounts as set
forth below:
(i) Deposit in the Finance Charge Account an amount equal to the
product of (A) the applicable Investor Percentage on the Date of Processing
of such Collections (or as determined on the applicable Determination Date
with respect to the preceding Monthly Period if the Servicer is depositing
Collections monthly pursuant to Section 4.02(a) of the Agreement) and (B)
the aggregate amount of Collections processed in respect of Finance Charge
Receivables on such Date of Processing (or during such Monthly Period, as
applicable).
(ii) Deposit in the Series 1996-1 Collection Subaccount for
application, to the extent required by Section 4.11, as Reallocated
Principal Collections on the related Transfer Date, an amount equal to the
product of (A) the sum of the Class B Principal Percentage and the
Collateral Floating Percentage on the Date of Processing of such
Collections (or as determined on the applicable Determination Date with
respect to the previous Monthly Period if the Servicer is depositing
Collections monthly pursuant to Section 4.02(a) of the Agreement), (B) the
applicable Investor Percentage on the Date of Processing of such
Collections (or as determined on the applicable Determination Date with
respect to the preceding Monthly Period if the Servicer is depositing
Collections monthly pursuant to Section 4.02(a) of the Agreement) and (C)
the aggregate amount of such Collections processed in respect of Principal
Receivables on such Date of Processing (or during such Monthly Period, as
applicable), and if on the related Determination Date such amounts are
determined to exceed Reallocated Principal Collections for the related
Transfer Date, the excess shall be applied on or before such Transfer Date
in accordance with clause (iii) below.
20
<PAGE>
(iii) If any other Principal Sharing Series is outstanding and in its
Amortization Period, retain in the Collection Account for application, to
the extent of any Principal Shortfall with respect to such other Principal
Sharing Series, as Shared Principal Collections on the related Transfer
Date, and otherwise pay to the Holder of the Exchangeable Seller
Certificate, an amount equal to (A) the product of (1) the applicable
Investor Percentage on the Date of Processing of such Collections (or as
determined on the applicable Determination Date with respect to the
preceding Monthly Period if the Servicer is depositing Collections monthly
pursuant to Section 4.02(a) of the Agreement) and (2) the aggregate amount
of such Collections processed in respect of Principal Receivables on such
Date of Processing (or during such Monthly Period, as applicable) less (B)
the amount of Collections applied pursuant to clause (ii) above; provided,
however, that in the event that the amount to be paid to the Holder of the
Exchangeable Seller Certificate pursuant to this subsection 4.04(c)(iii)
with respect to any Date of Processing (or during such Monthly Period, as
applicable) exceeds (such excess hereinafter referred to as the "Excess
------
Amount") the Seller Interest (determined without regard to any amounts on
------
deposit in the Retention Account, "Excess Amounts", "Controlled Excess
Amounts" or such other amounts specified in the Supplement with respect to
any Series) on such Date of Processing (or at the close of business on the
last Business Day of such Monthly Period, as applicable) after giving
effect to the inclusion in the Trust of all Receivables created on or prior
to such date and the application of payments referred to in subsection
4.01(d), the Excess Amount shall be deposited into the Principal Account to
be treated, during any Amortization Period, as Available Principal
Collections for the first Monthly Period thereof unless otherwise provided
in this Section 4.04; further, provided, however, that in the event that,
on any Date of Processing (or at the close of business on the last Business
day of such Monthly Period, as applicable) on or after the Implementation
Date, the Retention Percentage is less than the Required Retention
Percentage, the Servicer shall, after giving effect to the transfer of the
Excess Amount required by the preceding proviso, deposit in the Series
1996-1 Retention Subaccount an amount equal to the amount otherwise payable
to the Holder of the Exchangeable Seller Certificate pursuant to this
clause 4.04(c)(iii). If, after the Implementation Date, on any
Determination Date with respect to an Amortization Period, the Seller's
Interest (as determined above) is less than zero, an amount equal to the
Principal Allocation Percentage of such deficiency (less amounts previously
deposited in the Principal Account with respect to such deficiency pursuant
to this subsection 4.04(c)(iii) and subsection 4.04(d)(iii)) shall be
transferred from the Series 1996-1 Retention Account to the Principal
Account to be applied as Available Principal Collections on the related
Transfer Date.
(iv) If, on any Business Day, (x) Excess Amounts are on deposit in the
Principal Account, and (y) after application of the Collections deposited
on such Business Day in accordance with subsections 4.01(d), 4.04(c)(iii)
and 4.04(d)(iii), the Seller Interest (determined without regard to any
amounts on deposit in the Retention Account, "Excess Amounts", "Controlled
Excess Amounts" or such other amounts specified in the Supplement with
respect to any Series) exceeds zero, (A) the Servicer shall, if such
Business Day occurs before the Implementation Date, withdraw, or instruct
the Trustee to withdraw, and in such case the Trustee shall withdraw, from
the Principal Account
21
<PAGE>
funds in an amount equal to the lesser of (1) the Seller Interest (as
determined above) on such Business Day and (2) the Excess Amounts then on
deposit in the Principal Account and pay such funds to the Holder of the
Exchangeable Seller Certificate, and (B) if such Business Day occurs on or
after the Implementation Date and the Retention Percentage is greater than
the Required Retention Percentage, the Servicer shall withdraw, or instruct
the Trustee to withdraw, and in such case the Trustee shall withdraw, from
the Principal Account and pay to the Holder of the Exchangeable Seller
Certificate, funds in an amount equal to the lesser of (i) the Excess
Amounts then on deposit in the Principal Account and (ii) the product of
(x) the Pool Amount on such date of determination and (y) the amount by
which the Retention Percentage on such date of determination exceeds the
Required Retention Percentage on such date of determination.
(d) Allocations During the Controlled Amortization Period. During the
-----------------------------------------------------
Controlled Amortization Period, the Servicer shall, prior to the close of
business on the day any Collections are deposited in the Collection Account, pay
from the Collection Account (or, if applicable, the Principal Account) the
following amounts as set forth below:
(i) Deposit in the Finance Charge Account an amount equal to the
product of (A) the applicable Investor Percentage on the Date of Processing
of such Collections (or as determined on the applicable Determination date
with respect to the preceding Monthly Period if the Servicer is depositing
Collections monthly pursuant to Section 4.02(a) of the Agreement) and (B)
the aggregate amount of Collections processed in respect of Finance Charge
Receivables on such Date of Processing (or during such Monthly Period, as
applicable);
(ii) Deposit in the Series 1996-1 Collection Subaccount for
application, to the extent required by Section 4.11, as Reallocated
Principal Collections on the related Transfer Date an amount equal to the
product of (A) the sum of the Class B Principal Percentage and the
Collateral Principal Percentage on the Date of Processing of such
Collections (or as determined on the applicable Determination Date with
respect to the previous Monthly Period if the Servicer is depositing
Collections monthly pursuant to Section 4.02(a) of the Agreement), (B) the
applicable Investor Percentage on the Date of Processing of such
Collections (or as determined on the applicable Determination Date with
respect to the preceding Monthly Period if the Servicer is depositing
Collections monthly pursuant to Section 4.02(a) of the Agreement) and (C)
the aggregate amount of such Collections processed in respect of Principal
Receivables on such Date of Processing (or during such Monthly Period, as
applicable), and if on the related Determination Date such amounts are
determined to exceed Reallocated Principal Collections for the related
Transfer Date, the excess shall be applied on or before such Transfer Date
in accordance with clause (iii) below.
(iii) Deposit in the Principal Account an amount, if any, equal to
(A) the product of (1) the applicable Investor Percentage on the Date of
Processing of such Collections (or as determined on the applicable
Determination Date with respect to the preceding Monthly Period if the
Servicer is depositing Collections monthly pursuant to Section 4.02(a) of
the Agreement) and (2) the aggregate amount of such Collections
22
<PAGE>
processed in respect of Principal Receivables on such Date of Processing
(or during such Monthly Period, as applicable) (for any such Date of
Processing, a "Percentage Allocation") less (B) the amount of Collections
---------------------
applied pursuant to clause (ii) above; provided, however, that if the sum
of such Percentage Allocation and all preceding Percentage Allocations with
respect to the same Monthly Period (the "Monthly Total Percentage
------------------------
Allocation") exceeds the sum of the Controlled Amortization Amount and the
----------
Deficit Controlled Amortization Amount for such Monthly Period (the
"Controlled Distribution Amount"), then such excess (the "Controlled Excess
------------------------------- -----------------
Amount") shall not be treated as a Percentage Allocation and shall, if any
------
other Principal Sharing Series is outstanding and in its Amortization
Period, be retained in the Collection Account for application, to the
extent of any Principal Shortfall with respect to such Principal Sharing
Series, as Shared Principal Collections on the related Transfer Date, and
otherwise be paid to the Holder of the Exchangeable Seller Certificate up
to the Seller Interest (determined without regard to any amounts on deposit
in the Retention Account, "Excess Amounts", "Controlled Excess Amounts" or
such other amounts specified in the Supplement with respect to any Series)
and thereafter shall be applied in the manner described in the two
immediately following sentences; provided further, that if on the last day
of the Monthly Period the Monthly Total Percentage Allocation is less than
the Controlled Distribution Amount, then such deficit shall be the "Deficit
Controlled Amortization Amount" for the next succeeding Monthly Period and
the Monthly Total Percentage Allocation shall be deposited to the Principal
Account; further, provided, however, that the Deficit Controlled
Amortization Amount for the next succeeding Monthly Period shall be
recomputed following the latest Collection Recomputation Date related to
such Monthly Period, based on the adjustments, if any, made pursuant to
subsection 4.04(a). In the event that, on any Date of Processing on which
a Controlled Excess Amount exists, the Controlled Excess Amount exceeds the
Seller Interest (as determined above) after giving effect to the inclusion
in the Trust of all Receivables created on or prior to such Date of
Processing, the Controlled Excess Amount shall be deposited into the
Principal Account. In the event that, on any Date of Processing on or
after the Implementation Date in which a Controlled Excess Amount is on
deposit in the Principal Account, and the Retention Percentage is equal to
or less than the Required Retention Percentage, the Servicer shall, after
giving effect to the transfer of the Controlled Excess Amount referred to
in the preceding sentence, withdraw, or instruct the Trustee to withdraw,
and in such case the Trustee shall withdraw, from the Principal Account and
deposit in the Series 1996-1 Retention Subaccount an amount equal to the
amount otherwise payable to the Holder of the Exchangeable Seller
Certificate pursuant to this clause 4.04(d)(iii).
(iv) If, on any Business Day, (x) Controlled Excess Amounts are on
deposit in the Principal Account and (y) after application of the
Collections deposited on such Business Day in accordance with subsections
4.01(d), 4.04(c)(iii) and 4.04(d)(iii), the Seller Interest (determined
without regard to any amounts on deposit in the Retention Account, "Excess
Amounts", "Controlled Excess Amounts" or such other amounts specified in
the Supplement with respect to any Series) exceeds zero, (A) the Servicer
shall, if such Business Day occurs before the Implementation Date,
withdraw, or instruct the Trustee to withdraw, and in such case the Trustee
shall withdraw, from the Principal
23
<PAGE>
Account funds in an amount equal to the lesser of (1) the Seller Interest
(as determined above) on such Business Day and (2) the Controlled Excess
Amounts then on deposit in the Principal Account, and pay such funds to the
Holder of the Exchangeable Seller Certificate, and (B) if such Business Day
occurs on or after the Implementation Date and the Retention Percentage is
equal to or greater than the Required Retention Percentage, the Servicer
shall withdraw, or instruct the Trustee to withdraw, and in such case the
Trustee shall withdraw, from the Principal Account and pay to the Holder of
the Exchangeable Seller Certificate, funds in an amount equal to the lesser
of (i) the Controlled Excess Amounts then on deposit in the Principal
Account and (ii) the product of (x) the Pool Amount on such date of
determination and (y) the amount by which the Retention Percentage on such
date of determination exceeds the Required Retention Percentage on such
date of determination.
(e) Allocations During the Rapid Amortization Period. During the
------------------------------------------------
Rapid Amortization Period, the Servicer shall, prior to the close of business on
the day any Collections are deposited in the Collection Account, pay from the
Collection Account the following amounts as set forth below:
(i) Deposit in the Finance Charge Account an amount equal to the
product of (A) the applicable Investor Percentage on the Date of Processing
of such Collections (or as determined on the applicable Determination Date
with respect to the preceding Monthly Period if the Servicer is depositing
Collections monthly pursuant to Section 4.02(a) of the Agreement) and (B)
the aggregate amount of such Collections processed in respect of Finance
Charge Receivables on such Date of Processing (or during such Monthly
Period, as applicable).
(ii) Deposit in the Series 1996-1 Collection Subaccount for
application, to the extent required by Section 4.11, as Reallocated
Principal Collections on the related Transfer Date an amount equal to the
product of (A) the sum of the Class B Principal Percentage and the
Collateral Principal Percentage on the Date of Processing of such
Collections (or as determined on the applicable Determination Date with
respect to the previous Monthly Period if the Servicer is depositing
Collections monthly pursuant to Section 4.02(a) of the Agreement), (B) the
applicable Investor Percentage on the Date of Processing of such
Collections (or as determined on the applicable Distribution Date with
respect to the preceding Monthly Period if the Servicer is depositing
Collections monthly pursuant to Section 4.02(a) of the Agreement) and (C)
the aggregate amount of such Collections processed in respect of Principal
Receivables on such Date of Processing (or during such Monthly Period, as
applicable), and if on the related Determination Date such amounts are
determined to exceed Reallocated Principal Collections for the related
Transfer Date, the excess shall be applied on or before such Transfer Date
in accordance with clause (ii) below.
(iii) Deposit in the Principal Account an amount equal to (A) the
product of (1) the applicable Investor Percentage on the Date of Processing
of such Collections (or as determined on the applicable Determination Date
with respect to the preceding Monthly Period if the Servicer is depositing
Collections monthly pursuant to Section
24
<PAGE>
4.02(a) of the Agreement) and (2) the aggregate amount of such Collections
processed in respect of Principal Receivables on such Date of Processing
(or during such Monthly Period, as applicable) less (B) the amount of
Collections applied pursuant to clause (ii) above; provided, however, that
after the date on which the Investor Interest has been reduced to zero, the
amount determined in accordance with this subparagraph (iii) shall, if any
other Principal Sharing Series is outstanding and in its Amortization
Period, be retained in the Collection Account for application, to the
extent necessary, as Shared Principal Collections on the related Transfer
Date, and otherwise be paid to the Holder of the Exchangeable Seller
Certificate up to the Seller Interest, and the excess if any, will be
allocated as a Principal Receivable in the manner provided in Article IV
excluding any allocations to Series 1996-1.
SECTION 4.05. Determination of Monthly Interest.
---------------------------------
(a) The amount of monthly interest ("Class A Monthly Interest")
------------------------
distributable from the Distribution Account with respect to the Class A
Certificates on any Distribution Date shall be an amount equal to the product of
(i) (A) a fraction, the numerator of which is the actual number of days in the
related Interest Period and the denominator of which is 360, times (B) the Class
A Certificate Rate and (ii) the outstanding principal amount of the Class A
Certificates as of the close of business on the last day of the preceding
Monthly Period.
On the Determination Date preceding each Distribution Date, the
Servicer shall determine the excess, if any (the "Class A Interest Shortfall"),
--------------------------
of (x) the Class A Monthly Interest for such Distribution Date over (y) the
aggregate amount of funds allocated and available to pay such Class A Monthly
Interest on such Distribution Date. If the Class A Interest Shortfall with
respect to any Distribution Date is greater than zero, an additional amount
("Class A Additional Interest") equal to the product of (i) (A) a fraction, the
- -----------------------------
numerator of which is the actual number of days in the related Interest Period
and the denominator of which is 360, times (B) the Class A Certificate Rate and
(ii) such Class A Interest Shortfall (or the portion thereof which has not been
paid to the Class A Certificateholders) shall be payable as provided herein with
respect to the Class A Certificates on each Distribution Date following such
Distribution Date to and including the Distribution Date on which such Class A
Interest Shortfall is paid to the Class A Certificateholders. Notwithstanding
anything to the contrary herein, Class A Additional Interest shall be payable or
distributed to the Class A Certificateholders only to the extent permitted by
applicable law.
(b) The amount of monthly interest ("Class B Monthly Interest")
------------------------
distributable from the Distribution Account with respect to the Class B
Certificates on any Distribution Date shall be an amount equal to the product of
(i) (A) a fraction, the numerator of which is the actual number of days in the
related Interest Period and the denominator of which is 360, times (B) the Class
B Certificate Rate and (ii) the outstanding principal amount of the Class B
Certificates as of the close of business on the last day of the preceding
Monthly Period.
On the Determination Date preceding each Distribution Date, the
Servicer shall determine the excess, if any (the "Class B Interest Shortfall"),
--------------------------
of (x) the Class B Monthly Interest for such Distribution Date over (y) the
aggregate amount of funds allocated and available
25
<PAGE>
to pay such Class B Monthly Interest on such Distribution Date. If the Class B
Interest Shortfall with respect to any Distribution Date is greater than zero,
an additional amount ("Class B Additional Interest") equal to the product of (i)
---------------------------
(A) a fraction, the numerator of which is the actual number of days in the
related Interest Period and the denominator of which is 360, times (B) the Class
B Certificate Rate and (ii) such Class B Interest Shortfall (or the portion
thereof which has not been paid to the Class B Certificateholders) shall be
payable as provided herein with respect to the Class B Certificates on each
Distribution Date following such Distribution Date to and including the
Distribution Date on which such Class B Interest Shortfall is paid to the Class
B Certificateholders. Notwithstanding anything to the contrary herein, Class B
Additional Interest shall be payable or distributed to the Class B
Certificateholders only to the extent permitted by applicable law.
(c) The amount of monthly interest distributable from the Distribution
Account to the Collateral Interest Holder, which shall be an amount equal to the
product of (i)(A) a fraction, the numerator of which is the actual number of
days in the related Interest Period and the denominator of which is 360, times
-----
(B) the Collateral Rate in effect with respect to the related Interest Period,
times (ii) the Collateral Interest as of the close of business on the last day
- -----
of the preceding Monthly Period (the "Collateral Monthly Interest").
---------------------------
On the Determination Date preceding each Distribution Date, the
Servicer shall determine the excess, if any (the "Collateral Interest Payment
---------------------------
Shortfall"), of (x) the Collateral Monthly Interest for such Distribution Date
- ---------
over (y) the aggregate amount of funds allocated and available to pay such
Collateral Monthly Interest on such Distribution Date. If the Collateral
Interest Payment Shortfall with respect to any Distribution Date is greater than
zero, an additional amount ("Collateral Additional Interest") equal to the
------------------------------
product of (i) (A) a fraction, the numerator of which is the actual number of
days in the related Interest Period and the denominator of which is 360, times
(B) the Collateral Rate and (ii) such Collateral Interest Payment Shortfall (or
the portion thereof which has not been paid to the Collateral Interest Holder)
shall be payable as provided herein with respect to the Collateral Interest on
each Distribution Date following such Distribution Date to and including the
Distribution Date on which such Collateral Interest Payment Shortfall is paid to
the Collateral Interest Holder. Notwithstanding anything to the contrary
herein, Collateral Additional Interest shall be payable or distributed to the
Collateral Interest Holder only to the extent permitted by applicable law.
SECTION 4.06. Determination of Monthly Principal.
----------------------------------
(a) The amount of monthly principal ("Class A Monthly Principal") to
-------------------------
be transferred from the Principal Account to the Distribution Account with
respect to the Class A Certificates on each Transfer Date, beginning with the
first to occur of (i) the first Transfer Date with respect to a Rapid
Amortization Period, if any, and (ii) the first Transfer Date with respect to
the Class A Controlled Amortization Period, shall be equal to the least of (x)
the Available Principal Collections on deposit in the Principal Account with
respect to such Transfer Date, (y) for each Transfer Date with respect to the
Class A Controlled Amortization Period, the Controlled Distribution Amount for
the related Distribution Date and (z) the Class A Investor Interest on such
Transfer Date.
26
<PAGE>
(b) The amount of monthly principal ("Class B Monthly Principal") to
-------------------------
be transferred from the Principal Account to the Distribution Account with
respect to the Class B Certificates on each Transfer Date, beginning with the
Transfer Date with respect to Class B Principal Commencement Date, shall be
equal to the least of (x) the Available Principal Collections on deposit in the
Principal Account with respect to such Transfer Date (minus the portion of such
-----
Available Principal Collections to be applied to Class A Monthly Principal on
the related Distribution Date), (y) for each Transfer Date with respect to the
Class B Controlled Amortization Period, the Controlled Distribution Amount for
the related Distribution Date and (z) the Class B Investor Interest on such
Transfer Date.
(c) The amount of monthly principal (the "Collateral Monthly
------------------
Principal") to be distributed from the Principal Account to the Collateral
Interest Holder with respect to the Collateral Interest on each Transfer Date
shall be (A) during the Revolving Period following any reduction of the Required
Collateral Interest pursuant to clause (3) of the proviso in the definition
thereof an amount equal to the lesser of (1) the excess, if any, of the
Collateral Interest (after taking into account any adjustments to be made on
such Transfer Date pursuant to Sections 4.09 and 4.11) over the Required
Collateral Interest on such Transfer Date, or (2) the Available Principal
Collections on such Transfer Date or (B) during the Controlled Amortization
Period or Rapid Amortization Period an amount equal to the lesser of (1) the
excess, if any, of the Collateral Interest (after taking into account any
adjustments to be made on such Transfer Date pursuant to Sections 4.09 and 4.11)
over the Required Collateral Interest on such Transfer Date, or (2) the excess,
if any, of (i) the Available Principal Collections on such Transfer Date over
(ii) the sum of the Class A Monthly Principal and the Class B Monthly Principal
for such Transfer Date.
SECTION 4.07. Required Amount.
---------------
(a) With respect to each Transfer Date, on the related Determination
Date, the Servicer shall determine the amount (the "Class A Required Amount"),
-----------------------
if any, by which (a) the sum of (i) Class A Monthly Interest for the related
Distribution Date, (ii) any Class A Monthly Interest previously due but not paid
to the Class A Certificateholders on a prior Distribution Date, (iii) any Class
A Additional Interest for the related Distribution Date and any Class A
Additional Interest previously due but not paid to the Class A
Certificateholders on a prior Distribution Date, (iv) the Class A Servicing Fee
for such Transfer Date, (v) any Class A Servicing Fee previously due but not
paid to the Servicer, and (vi) the Class A Investor Default Amount, if any, for
such Transfer Date exceeds (b) the Class A Available Funds. In the event that
the Class A Required Amount for such Transfer Date is greater than zero, the
Servicer shall give written notice to the Trustee of such positive Class A
Required Amount on the date of computation.
(b) With respect to each Transfer Date, on the related Determination
Date, the Servicer shall determine the amount (the "Class B Required Amount"),
-----------------------
if any, by which (a) the sum of (i) Class B Monthly Interest for the related
Distribution Date, (ii) any Class B Monthly Interest previously due but not paid
to the Class B Certificateholders on a prior Distribution Date, (iii) any Class
B Additional Interest for the related Distribution Date and any Class A
Additional Interest previously due but not paid to the Class B
Certificateholders on a prior
27
<PAGE>
Distribution Date, (iv) the Class B Servicing Fee for such Transfer Date, (v)
any Class B Servicing Fee previously due but not paid to the Servicer, and (vi)
the Class B Investor Default Amount, if any, for such Transfer Date exceeds (b)
the Class B Available Funds. In the event that the Class B Required Amount for
such Transfer Date is greater than zero, the Servicer shall give written notice
to the Trustee of such positive Class B Required Amount on the date of
computation.
SECTION 4.08. Application of Class A Available Funds, Class B
-----------------------------------------------
Available Funds, Collateral Available Funds and Available Principal Collections.
- -------------------------------------------------------------------------------
The Servicer shall apply, or shall cause the Trustee to apply, on each Transfer
Date, Class A Available Funds, Class B Available Funds, Collateral Available
Funds on deposit in the Finance Charge Account and Available Principal
Collections on deposit in the Principal Account, in each case with respect to
such Transfer Date, to make the following distributions:
(a) On each Transfer Date, an amount equal to the Class A Available
Funds with respect to such Transfer Date will be distributed in the
following priority:
(i) an amount equal to Class A Monthly Interest for the
related Distribution Date, plus the amount of any Class A Monthly
----
Interest previously due but not distributed to Class A
Certificateholders on a prior Distribution Date, plus the amount of
----
any Class A Additional Interest for such Distribution Date and any
Class A Additional Interest previously due but not distributed to
Class A Certificateholders on a prior Distribution Date, shall be
transferred to the Distribution Account for payment to the Class A
Certificateholders;
(ii) an amount equal to the Class A Servicing Fee for such
Transfer Date, plus the amount of any Class A Servicing Fee previously
----
due but not distributed to the Servicer on a prior Transfer Date,
shall be distributed to the Servicer (unless such amount has been
netted against deposits to the Collection Account in accordance with
Section 4.02 of the Agreement);
(iii) an amount equal to the Class A Investor Default Amount
for such Transfer Date shall be treated as a portion of Available
Principal Collections for such Transfer Date and deposited into the
Principal Account; and
(iv) the balance, if any, shall constitute Excess Spread and
shall be allocated and distributed as set forth in Section 4.10.
(b) On each Transfer Date, an amount equal to the Class B Available
Funds with respect to such Transfer Date will be distributed in the
following priority:
(i) an amount equal to Class B Monthly Interest for the
related Distribution Date, plus the amount of any Class B Monthly
----
Interest previously due but not distributed to Class B
Certificateholders on a prior Distribution Date, plus the amount of
----
any Class B Additional Interest for such Distribution Date and any
Class B Additional Interest previously due but not distributed to
Class B
28
<PAGE>
Certificateholders on a prior Distribution Date, shall be transferred
to the Distribution Account for payment to the Class B
Certificateholders;
(ii) an amount equal to the Class B Servicing Fee for such
Transfer Date, plus the amount of any Class B Servicing Fee previously
----
due but not distributed to the Servicer on a prior Transfer Date,
shall be distributed to the Servicer (unless such amount has been
netted against deposits to the Collection Account in accordance with
Section 4.02 of the Agreement); and
(iii) the balance, if any, shall constitute Excess Spread and
shall be allocated and distributed as set forth in Section 4.10.
(c) On each Transfer Date an amount equal to the Collateral Available
Funds with respect to the Distribution Date will be distributed in the
following priority:
(i) during any period in which neither Chase USA nor an
affiliate thereof is Servicer, an amount equal to the Collateral
Interest Servicing Fee for such Transfer Date plus the amount of any
Collateral Interest Servicing Fee due but not paid to the Servicer on
any prior Transfer Date shall be distributed to the Servicer (unless
such amount has been netted against deposits to the Collection Account
in accordance with Section 4.02 of the Agreement); and
(ii) the balance, if any, shall constitute Excess Spread and
shall be allocated and distributed as set forth in Section 4.10.
(d) On each Transfer Date with respect to the Revolving Period, an
amount equal to the Available Principal Collections deposited in the
Principal Account for the related Monthly Period up to an amount equal to
Collateral Monthly Principal for such Transfer Date will be distributed to
the Collateral Interest Holder in accordance with the Loan Agreement and
the remainder of such Collections shall be treated as Shared Principal
Collections and applied in accordance with Section 4.13.
(e) On each Transfer Date with respect to the Controlled
Amortization Period or a Rapid Amortization Period, an amount equal to the
Available Principal Collections deposited in the Principal Account for the
related Monthly Period will be applied in the following priority:
(i) an amount equal to Class A Monthly Principal for the
related Distribution Date, up to the Class A Investor Interest on such
Transfer Date, shall be transferred to the Distribution Account for
payment to the Class A Certificateholders;
(ii) for each Transfer Date beginning on the Class B
Principal Commencement Date, an amount equal to Class B Monthly
Principal for the related Distribution Date, up to the Class B
Investor Interest on such Transfer
29
<PAGE>
Date, shall be transferred to the Distribution Account for payment to
the Class B Certificateholders; and
(iii) for each Transfer Date, after giving effect to paragraphs
(i) and (ii) above, an amount equal to the balance, if any, of such
Available Principal Collections then on deposit in the Collection
Account up to an amount equal to Collateral Monthly Principal for such
Distribution Date shall be distributed to the Collateral Interest
Holder in accordance with the Loan Agreement and the remainder of such
Collections shall be treated as Shared Principal Collections and
applied in accordance with Section 4.13 hereof.
SECTION 4.09. Defaulted Amounts; Investor Charge-Offs.
---------------------------------------
(a) On each Determination Date, the Servicer shall calculate the Class
A Investor Default Amount, if any, for the related Transfer Date. If, on any
Transfer Date, the Class A Required Amount for the related Monthly Period
exceeds the sum of (x) the sum of Reallocated Class B Principal Collections and
Reallocated Collateral Principal Collections with respect to such Monthly Period
and (y) the amount of Excess Spread and the Excess Finance Charge Collections
allocable to Series 1996-1 with respect to such Monthly Period, the Collateral
Interest (after giving effect to reductions for any Collateral Charge-Offs and
any Reallocated Principal Collections on such Distribution Date) will be reduced
by the amount of such excess, but not by more than the lesser of the Class A
Investor Default Amount and the Collateral Interest (after giving effect to
reductions for any Collateral Charge-Offs and any Reallocated Collateral
Principal Collections on such Distribution Date) for such Transfer Date. In the
event that such reduction would cause the Collateral Interest to be a negative
number, the Collateral Interest shall be reduced to zero and the Class B
Investor Interest (after giving effect to reductions for any Class B Investor
Charge-Offs and any Reallocated Class B Principal Collections on such
Distribution Date) will be reduced, as of the related Distribution Date, by the
amount by which the Collateral Interest would have been reduced below zero. In
the event that such reduction would cause the Class B Investor Interest to be a
negative number, the Class B Investor Interest shall be reduced to zero and the
Class A Investor Interest shall be reduced by the amount by which the Class B
Investor Interest would have been reduced below zero, but not by more than the
excess, if any, of the Class A Investor Default Amount for such Transfer Date
over the aggregate amount of the reductions, if any, of the Collateral Interest
and the Class B Investor Interest for such Distribution Date (a "Class A
-------
Investor Charge-Off"). Class A Investor Charge-Offs shall thereafter be
- -------------------
reimbursed and the Class A Investor Interest increased (but not by an amount in
excess of the aggregate unreimbursed Class A Investor Charge-Offs) on any
Distribution Date by the amount of Excess Spread and Excess Finance Charge
Collections allocated and available on the related Transfer Date for that
purpose pursuant to Section 4.10(b). References to "negative numbers" above
shall be determined without regard to the requirement that the Invested Amount
of a Class shall not be reduced below zero.
(b) On each Determination Date, the Servicer shall calculate the Class
B Investor Default Amount, if any, for the related Transfer Date. If, on any
Transfer Date, the Class B Investor Default Amount for such Distribution Date
exceeds the Excess Spread and Excess Finance Charge Collections with respect to
the related Monthly Period which are
30
<PAGE>
allocated and available to pay such amount pursuant to Section 4.10(e) and not
required to be applied pursuant to clause (a) above, the Collateral Interest
(after giving effect to reductions for any Collateral Charge-Offs and any
Reallocated Principal Collections on such Transfer Date and any adjustments with
respect thereto as described in subsection 4.09(a) above) will be reduced, as of
the related Distribution Date, by the amount of such excess but not by more than
the lesser of the Class B Investor Default Amount and the Collateral Interest
(after giving effect to reductions for any Collateral Charge-Offs and any
Reallocated Principal Collections on such Transfer Date and any adjustments with
respect thereto as described in subsection 4.09(a) above) for such Transfer
Date. In the event that such reduction would cause the Collateral Interest to
be a negative number, the Collateral Interest shall be reduced to zero and then
the Class B Investor Interest shall be reduced by the amount of the excess, but
not by more than the excess of the Class B Investor Default Amount over the
aggregate amount of reductions, if any, of the Collateral Interest (other than
reductions pursuant to clause (a) above) for such Distribution Date (a "Class B
-------
Investor Charge-Off"). Class B Investor Charge-Offs shall thereafter be
- -------------------
reimbursed and the Class B Investor Interest increased as of the related
Distribution Date (but not by an amount in excess of the aggregate unreimbursed
Class B Investor Charge-Offs) on any Transfer Date by the amount of Excess
Spread and Excess Finance Charge Collections allocated and available for that
purpose pursuant to Section 4.10(f). References to "negative numbers" above
shall be determined without regard to the requirement that the Invested Amount
of a Class shall not be reduced below zero.
(c) On or before each Transfer Date, the Servicer shall calculate the
Collateral Default Amount. If on any Transfer Date, the Collateral Default
Amount for the prior Monthly Period exceeds the amount of Excess Spread and
Excess Finance Charge Collections which are allocated and available to fund such
amount pursuant to subsection 4.10(i), the Collateral Interest will be reduced
by the amount of such excess but not by more than the lesser of the Collateral
Default Amount and the Collateral Interest for such Distribution Date (a
"Collateral Charge-Off"). The Collateral Interest will after any reduction
- ----------------------
pursuant to this Section 4.09 be reimbursed on any Distribution Date by the
amount of the Excess Spread allocated and available on the related Transfer Date
for that purpose as described under subsection 4.10(j).
SECTION 4.10. Excess Spread; Excess Finance Charge Collections. The
------------------------------------------------
Servicer shall apply, or shall cause the Trustee to apply, on each Transfer
Date, Excess Spread and Excess Finance Charge Collections allocated to Series
1996-1 with respect to the related Monthly Period, to make the following
distributions in the following order of priority:
(a) an amount equal to the Class A Required Amount, if any, with
respect to such Transfer Date shall be transferred by the Trustee to fund
any deficiency pursuant to Sections 4.08(a)(i), (ii) and (iii); provided,
however, that in the event the Class A Required Amount for such Transfer
Date exceeds the amount of Excess Spread and Excess Finance Charge
Collections allocated to Series 1996-1, such Excess Spread and Excess
Finance Charge Collections shall be applied first to pay amounts due with
respect to such Transfer Date pursuant to Section 4.08(a)(i), second, to
pay the Class A Servicing Fee pursuant to Section 4.08(a)(ii) and third to
pay the Class A Investor Default Amount for such Transfer Date pursuant to
Section 4.08(a)(iii);
31
<PAGE>
(b) an amount equal to the aggregate amount of Class A Investor
Charge-Offs which have not been previously reimbursed as provided in
Section 4.09(a) (after giving effect to the allocation on such Transfer
Date of any amount for that purpose pursuant to Section 4.09(a)) shall be
deposited in the Principal Account and treated as a portion of Available
Principal Collections for such Transfer Date;
(c) an amount equal to the sum of (i) any Class B Monthly Interest to
become due on the related Distribution Date but not funded from amounts
transferred to the Distribution Account on such Transfer Date and any Class
B Monthly Interest not distributed to the Class B Certificateholders on a
prior Distribution Date and (ii) the amount of any Class B Additional
Interest previously due but not funded from amounts transferred to the
Distribution Account on such Transfer Date and any Class B Additional
Interest not distributed to the Class B Certificateholders on a prior
Distribution Date, after giving effect to the allocation in Section
4.08(b)(i), shall be transferred to the Distribution Account for payment to
the Class B Certificateholders;
(d) an amount equal to any Class B Servicing Fees due but not paid to
the Servicer either on such Transfer Date or a prior Transfer Date shall be
paid to the Servicer;
(e) an amount equal to the Class B Investor Default Amount for such
Transfer Date shall be deposited in the Principal Account and treated as a
portion of Available Principal Collections for such Transfer Date;
(f) an amount equal to the aggregate amount by which the Class B
Investor Interest has been reduced pursuant to clauses (c), (d) and (e) of
the definition of "Class B Investor Interest" in this Series Supplement
(but not in excess of the aggregate amount of such reductions which have
not been previously reimbursed) shall be deposited in the Principal Account
and treated as a portion of Available Principal Collections for such
Transfer Date;
(g) an amount equal to the Collateral Monthly Interest for the related
Distribution Date, plus the amount of any Collateral Monthly Interest
----
previously due but not distributed to the Collateral Interest Holder on a
prior Distribution Date, plus the amount of any Collateral Additional
----
Interest for such Distribution Date and any Collateral Additional Interest
previously due but not distributed to the Collateral Interest Holder on a
prior Distribution Date shall be deposited in the Distribution Account for
payment to the Collateral Interest Holder in accordance with the Loan
Agreement;
(h) an amount equal to any Monthly Investor Servicing Fees due but not
paid to the Servicer either on such Transfer Date or on a prior Transfer
Date shall be paid to the Servicer;
(i) an amount equal to the Collateral Default Amount, if any, for the
prior Monthly Period shall be deposited in the Principal Account and
treated as a portion of Available Principal Collections for such Transfer
Date;
32
<PAGE>
(j) an amount equal to the aggregate amount by which the Collateral
Interest has been reduced below the Required Collateral Interest for
reasons other than the payment of principal to the Collateral Interest
Holder (but not in excess of the aggregate amount of such reductions which
have not been previously reimbursed) shall be deposited into the Principal
Account and treated as a portion of Available Principal Collections for
such Transfer Date;
(k) an amount equal to the aggregate of any other amounts then
payable (including any such amounts payable only when funds are available
therefor), other than any such amounts that may be payable to the Seller,
pursuant to the Loan Agreement (to the extent such amounts are payable
pursuant to the Loan Agreement out of Excess Finance Charge Collections and
Excess Spread) shall be distributed to the Collateral Interest Holder for
application in accordance with the Loan Agreement; and
(l) [Reserved]
(m) the balance, if any, will constitute a portion of Excess Finance
Charge Collections for such Distribution Date and will be available for
allocation to other Series in Group One or to the Holder of the Seller
Certificate as described in Section 4.12.
SECTION 4.11. Reallocated Principal Collections. On or before each
---------------------------------
Transfer Date, the Servicer shall instruct the Trustee in writing (which writing
shall be substantially in the form of Exhibit B hereto) to withdraw from the
---------
Series 1996-1 Collection Subaccount and apply the Reallocated Principal
Collections for such Transfer Date to make the following distributions on each
Distribution Date in the following priority:
(a) an amount equal to the excess, if any, of (i) the Class A
Required Amount, if any, with respect to such Transfer Date over (ii) the
amount of Excess Spread and Excess Finance Charge Collections with respect
to the related Monthly Period shall be applied pursuant to subsections
4.08(a)(i), (ii) and (iii); and
(b) an amount equal to the excess, if any, of (i) the Class B
Required Amount, if any, with respect to such Transfer Date over (ii) the
amount of Excess Spread and Excess Finance Charge Collections allocated and
available to the Class B Certificates pursuant to subsections 4.10(c), (d)
and (e) on such Transfer Date shall be applied pursuant to subsections
4.08(b)(i), (ii) and 4.10(e).
On each Distribution Date, the Collateral Interest shall be reduced by
the amount of Reallocated Principal Collections for the Transfer Date preceding
such Distribution Date. In the event that such reduction would cause the
Collateral Interest (after giving effect to any Collateral Charge-Offs for such
Distribution Date) to be a negative number, the Collateral Interest (after
giving effect to any Collateral Charge-Offs for such Distribution Date) shall be
reduced to zero and the Class B Investor Interest shall be reduced by the amount
by which the Collateral Interest would have been reduced below zero. In the
event that the reallocation of Reallocated Principal Collections would cause the
Class B Investor Interest (after giving effect to any Class B Investor Charge-
Offs for such Distribution Date) to be a negative number on any
33
<PAGE>
Distribution Date, Reallocated Principal Collections shall be reallocated on the
related Transfer Date in an aggregate amount not to exceed the amount which
would cause the Class B Investor Interest (after giving effect to any Class B
Investor Charge-Offs for such Distribution Date) to be reduced to zero.
References to "negative numbers" above shall be determined without regard to the
requirement that the Invested Amount of a Class not be reduced below zero.
SECTION 4.12. Group One Excess Finance Charge Collections. Series
-------------------------------------------
1996-1 shall be included in Group One. Excess Finance Charge Collections with
respect to all Series in Group One for any Transfer Date will be allocated to
Series 1996-1 in the event that Series 1996-1 has not produced Excess Finance
Charge Collections with respect to such Transfer Date in an amount equal to the
product of (x) the aggregate amount of Excess Finance Charge Collections with
respect to all the Series in Group One for such Transfer Date and (y) a
fraction, the numerator of which is the Investor Interest for Series 1996-1 for
such Transfer Date and the denominator of which is the aggregate amount of
Investor Interests (as defined in each Supplement) for all Series which have not
produced Excess Finance Charge Collections with respect to such Transfer Date.
Any Excess Finance Charge Collections allocated to a Series in Group One which,
when applied under this Section and the applicable Series Supplement, would
produce Excess Finance Charge Collections with respect to such Series for such
Transfer Date shall, to the extent of such latter excess, be paid to the Holder
of the Seller Certificate. The sharing of Excess Finance Charge Collections
among Series in Group One will cease if the Seller shall deliver to the Trustee
an Officer's Certificate to the affect that, in the reasonable belief of the
Seller, the continued sharing of Excess Finance Charge Collections among Series
in Group One would have adverse regulatory implications with respect to the
Seller.
SECTION 4.13. Shared Principal Collections. Shared Principal
----------------------------
Collections for any Transfer Date will be allocated to Series 1996-1 in an
amount equal to the product of (x) the aggregate amount of Shared Principal
Collections with respect to all Principal Sharing Series for such Transfer Date
and (y) a fraction, the numerator of which is the Principal Shortfall for Series
1996-1 for such Transfer Date and the denominator of which is the aggregate
amount of Principal Shortfalls for all the Series which are Principal Sharing
Series for such Transfer Date. The "Principal Shortfall" for Series 1996-1 will
be equal to (a) for any Distribution Date with respect to the Revolving Period,
zero, (b) for any Transfer Date with respect to the Controlled Amortization
Period, the excess, if any, of, prior to the date on which the Series 1996-1
Certificates are paid in full, the Controlled Distribution Amount with respect
to such Distribution Date and, thereafter, the Collateral Interest, over, in
either case, the amount of Available Principal Collections for such Distribution
Date (excluding any portion thereof attributable to Shared Principal
Collections) and (c) for any Distribution Date with respect to a Rapid
Amortization Period, the excess, if any, of the Investor Interest over the
amount of Available Principal Collections for such Transfer Date (excluding any
portion thereof attributable to Shared Principal Collections). "Principal
---------
Shortfall" for other Series in Group One shall have the meaning set forth in the
- ---------
related Series Supplement.
34
<PAGE>
SECTION 4.14. Determination of LIBOR.
----------------------
(a) On each LIBOR Determination Date, the Trustee, or the Paying Agent
on behalf of the Trustee, will determine LIBOR on the basis of the rate for one-
month United States dollar deposits that appears on Telerate Page 3750 as of
11:00 a.m., London time, on such date. If such rate does not appear on Telerate
Page 3750, the rate for that date will be determined on the basis of the rates
at which one-month United States dollars are offered by the Reference Banks at
approximately 11:00 a.m., London time, on that day to prime banks in the London
interbank market. The Trustee, or the Paying Agent on behalf of the Trustee,
will request the principal London office of each of the Reference Banks to
provide a quotation of its rate. If at least two such quotations are provided,
the rate for that date will be the arithmetic mean of the quotations. If fewer
than two quotations are provided as requested, the rate for that date will be
the arithmetic mean of the rates quoted by major banks in New York City,
selected by the Servicer, at approximately 11:00 a.m., New York City time, on
that day for one-month loans in United States dollars to leading European banks.
If on the LIBOR Determination Date, the banks selected by the Trustee are not
quoting as described above, LIBOR for such Interest Period will be LIBOR as
determined on the previous LIBOR Determination Date.
(b) On each LIBOR Determination Date, the Trustee, or the Paying Agent
on behalf of the Trustee, shall send to the Servicer by facsimile notification
of LIBOR for the following Interest Period.
SECTION 4.15. [Reserved]
SECTION 4.16. Time of Deposits and Withdrawals. Any deposit,
--------------------------------
withdrawal, transfer or other payment required to be made to or from the
Collection Account, Finance Charge Account, Principal Account, Distribution
Account or Series 1996-1 Retention Subaccount shall be deemed to occur when the
instructions with respect to such deposit, withdrawal, transfer or other payment
have been transmitted over the applicable automated payment system.
SECTION 4.17. Conversion from Collections during Billing Cycles to
----------------------------------------------------
Collections during Monthly Periods.
- ----------------------------------
(a) The Servicer may deliver to the Trustee and the Rating Agency a
notice that it has changed the software that it uses to service the Accounts and
that, effective as of a certain date specified in such notice (the "Notice
------
Date"), and on each day thereafter, the Servicer is able to calculate the
aggregate amount of Receivables, Finance Charge Receivables and Principal
Receivables effective as of any date of determination, and is not limited to
calculating such amounts by reference to the amount thereof as of the end of
each Billing Cycle. The "Conversion Date" shall occur on the later of:
---------------
(i) the first day of any Monthly Period specified in such notice;
(ii) the first day of any Monthly Period following the amendment of
the Agreement such that:
35
<PAGE>
(A) the Aggregate Receivables, Aggregate Finance Charge
Receivables and Aggregate Principal Receivables on any date of
determination shall equal the aggregate amount hereof as of the close
of business on the last day of the Monthly Period preceding such date
of determination;
(B) Collections which are available for distribution on any
Transfer Date shall be based on Collections received during the
preceding Monthly Period, not on Collections received during Billing
Cycles which ended during the preceding Monthly Period;
(C) the Agreement no longer refers to Collections received or
allocated during Billing Cycles;
(D) the Portfolio Yield for the Monthly Period in which the
Conversion Date occurs shall be adjusted, if necessary, to compensate
for any distortion in the Portfolio Yield resulting from such
conversion; and
(E) such other matters as may be required by the Trustee, the
Rating Agency or the Servicer to accomplish the intent of the
foregoing;
provided, however, that the Rating Agency shall have confirmed in writing that
such amendment will not result in the Rating Agency's reducing or withdrawing
its rating on any then outstanding Series rated by it.
(b) Notwithstanding anything contained in the Agreement to the
contrary, the Agreement may be amended pursuant to Section 13.01(a)(i) from time
to time by the Seller, the Servicer and the Trustee and without the consent of
the Certificateholders, (i) to amend the reallocation provisions of Section
4.02(b) and Section 4.04 to accomplish the intention expressed in Section
4.04(b), and (ii) to accomplish the intention expressed in Section 4.17(a).
Such amendment may also amend the provisions of the Agreement regarding the
Retention Account in order to continue the operation of such Account, modify the
provisions regarding deposits into or withdrawals from such Account (provided
that only amounts which would otherwise be payable to the Holder of the
Exchangeable Seller Certificate may be used to fund such Account) and provided
that funds therein may be treated as Principal Receivables for purposes of
satisfying the Minimum Seller Interest and Minimum Aggregate Principal
Receivables requirements of Section 2.06(a) and 6.09(b).
(c) On the Determination Date related to the Conversion Month, the
Servicer shall withdraw, or instruct the Trustee to withdraw, and the Trustee,
acting in accordance with such instructions shall, withdraw and pay to the
Holder of the Exchangeable Seller Certificate on the succeeding Transfer Date,
an amount equal to the amount by which (i) the Collections of Finance Charge
Receivables processed during each Billing Cycle which ended during the
Conversion Month and Collections of Finance Charge Receivables processed on any
other Date of Processing during the Conversion Month, in each case which are
allocated to the Investor Interest and deposited in the Finance Charge Account
pursuant to Article IV, exceeds (ii) the Available Finance Charge Collections
for the Conversion Month.
36
<PAGE>
ARTICLE V
DISTRIBUTIONS AND REPORTS TO INVESTOR
CERTIFICATEHOLDERS
(THE FOLLOWING PORTION OF THIS
ARTICLE IS APPLICABLE ONLY TO SERIES 1996-1.)
SECTION 5.01. Distributions. On each Distribution Date, the Paying
-------------
Agent shall distribute (in accordance with the certificate delivered by the
Servicer to the Trustee pursuant to Section 3.04(b)) to each Series 1996-1
Certificateholder of record on the immediately preceding Record Date and the
Collateral Interest Holder (other than as provided in Section 2.04(e) or Section
12.03 hereof respecting a final distribution) such Certificateholder's pro rata
--- ----
share (based on the aggregate Undivided Interests represented by Series 1996-1
Certificates held by such Certificateholder and the Collateral Interest Holder)
of amounts on deposit in the Distribution Account as are payable to the Series
1996-1 Certificateholders of such Class pursuant to Sections 4.08 and 4.10
hereof by check mailed to each Certificateholder except that (i) with respect to
Certificates registered in the name of the nominee of a Clearing Agency, such
distribution shall be made in immediately available funds and (ii) with respect
to the Collateral Interest, such distribution shall be made in accordance with
the Loan Agreement.
SECTION 5.02. Monthly Certificateholders' Statement.
-------------------------------------
(a) On or before each Distribution Date, the Paying Agent shall
forward to each Series 1996-1 Certificateholder, the Rating Agency and any
Series 1996-1 Certificate Owner, upon the written request of such Series 1996-1
Certificate Owner, a statement substantially in the form of Exhibit C hereto
prepared by the Servicer setting forth among other things the following
information (which, in the case of subclauses (i), (ii) and (iii) below, shall
be stated on the basis of an original principal amount of $1,000 per Certificate
and, in the case of subclauses (viii) and (ix) shall be stated on an aggregate
basis and on the basis of an original principal amount of $1,000 per
Certificate):
(i) the total amount distributed on such Distribution Date;
(ii) the amount of such distribution, if any, allocable to
Certificate Principal of each Class;
(iii) the amount of such distribution allocable to Certificate
Interest of each Class;
(iv) the amount of Collections of Principal Receivables processed
during (A) the Billing Cycles which ended during the preceding Monthly
Period, (B) the Billing Cycles which ended during the preceding Monthly
Period and on any other Date of Processing during such Monthly Period or
(C) the preceding Monthly Period, as appropriate, and allocated in respect
of the Series 1996-1 Certificates;
37
<PAGE>
(v) the aggregate amount of Principal Receivables, the Investor
Interest, the Class A Investor Interest, the Class B Investor Interest, the
Collateral Interest as a percentage of the aggregate amount of Principal
Receivables in the Trust as of the end of the day on the last day of the
preceding Monthly Period, the Class A Floating Percentage, the Class B
Floating Percentage, the Class B Principal Percentage, the Collateral
Floating Percentage and the Collateral Principal Percentage;
(vi) the aggregate outstanding balance of Accounts which are up to
29, 30-59, 60-89 and 90 or more days delinquent in accordance with the
Servicer's then existing Account Guidelines as of the end of the day on the
last day of,the related Billing Cycle which ended during the preceding
Monthly Period;
(vii) the Aggregate Investor Default Amount, the Class A Investor
Default Amount, the Class B Investor Default Amount and the Collateral
Default Amount, in each case for the preceding Monthly Period;
(viii) the Investor Charge Offs, Class A Charge Offs, Class B Charge
Offs and Collateral Charge Offs for the preceding Monthly Period;
(ix) the Investor Charge Offs, Class A Charge Offs, Class B Charge
Offs and Collateral Charge Offs reimbursed on the Transfer Date immediately
preceding such Distribution Date;
(x) the Investor Monthly Servicing Fee, Class A Monthly Servicing
Fee, Class B Monthly Servicing Fee and Collateral Monthly Servicing Fee for
the preceding Monthly Period;
(xi) the Available Collateral Interest and the Required Collateral
Interest, each as of the close of business on such Distribution Date;
(xii) the aggregate amount of Collections of Finance Charge
Receivables during (A) the Billing Cycles which ended during the preceding
Monthly Period, (B) the Billing Cycles which ended during the preceding
Monthly Period and on any other Date of Processing during such Monthly
Period or (C) the preceding Monthly Period, as appropriate, and allocated
in respect of the Series 1996-1 Certificates;
(xiii) the Deficit Controlled Amortization Amount; and
(xiv) the Pool Factor as of the preceding Record Date.
The Monthly Certificateholders' Statement, the Monthly Payment
Instructions and Notification to the Trustee and the Servicer's Certificate
shall be substantially in the form of Exhibits C, B and D, respectively, hereto,
------------- -
with such changes as the Servicer may determine to be necessary or desirable;
provided, however, that no such change shall serve to exclude information
required by this subsection 5.02(a). The Servicer shall, upon making such
determination, deliver to the Trustee and the Rating Agency an Officer's
Certificate to which
38
<PAGE>
shall be annexed the form of such Exhibit, as so changed. Upon the delivery of
such Officer's Certificate to the Trustee, such Exhibit, as so changed, shall
for all purposes of this Agreement constitute such Exhibit. The Trustee may
conclusively rely upon such Officer's Certificate as to such change conforming
to the requirements of this Agreement.
(b) Annual Certificateholders' Tax Statement. On or before January 31
----------------------------------------
of each calendar year, beginning with calendar year 1997, the Servicer shall
furnish to the Paying Agent, who shall distribute to each Person who at any time
during the preceding calendar year was a Series 1996-1 Certificateholder, a
statement prepared by the Servicer containing the information required to be
contained in the regular monthly report to Series 1996-1 Certificateholders, as
set forth in subclauses (i), (ii) and (iii) above, aggregated for such calendar
year or the applicable portion thereof during which such Person was a Series
1996-1 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 Series 1996-1
Certificateholders to prepare their tax returns. Such obligations of the Paying
Agent shall be deemed to have been satisfied to the extent that substantially
comparable information shall be provided by the Paying Agent pursuant to any
requirements of the Internal Revenue Code as from time to time in effect.
SECTION 9. Series 1996-1 Pay Out Events. If any one of the following
----------------------------
events shall occur during the Revolving Period or the Controlled Amortization
Period with respect to the Series 1996-1 Certificates:
(a) failure on the part of the Seller or the Holder of the
Exchangeable Seller Certificate (i) to make any payment or deposit required
by the terms of (A) the Agreement relating to the Series 1996-1
Certificates, or (B) this Series Supplement, on or before the date
occurring five days after the date such payment or deposit is required to
be made herein or (ii) duly to observe or perform in any material respect
any covenants or agreements of the Seller set forth in the Agreement, which
failure has a material adverse effect on the Series 1996-1
Certificateholders 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 Seller by the Trustee, or to
the Seller and the Trustee by the Enhancement Provider or the Holders of
Series 1996-1 Certificates evidencing Undivided Interests aggregating not
less than 50% of the Investor Interest of this Series 1996-1, and continues
to affect materially and adversely the interests of the Series 1996-1
Certificateholders for such period;
(b) any representation or warranty made by the Seller in the
Agreement, including this Series Supplement, or any information contained
in a computer file or microfiche list required to be delivered by the
Seller pursuant to Section 2.01, 2.06 or 3.04(c), (i) shall prove to have
been incorrect in any material respect when made or when delivered, which
continues to be incorrect in any material respect for a period of 60 days,
after the date on which written notice of such failure, requiring the same
to be remedied, shall have been given to the Seller by the Trustee, or to
the Seller and the Trustee by the Enhancement Provider or the Holders of
the Series 1996-1 Certificates evidencing Undivided Interests aggregating
not less than 50% of the Investor Interest of
39
<PAGE>
this Series 1996-1, and (ii) as a result of which the interests of the
Series 1996-1 Certificateholders are materially and adversely affected and
continue to be materially and adversely affected for such period; provided,
however, that a Series 1996-1 Pay Out Event pursuant to this subsection
9.01(b) shall not be deemed to have occurred hereunder if the Seller has
accepted reassignment of the related Receivable, or all of such
Receivables, if applicable, during such period in accordance with the
provisions hereof;
(c) the Portfolio Yield averaged for any three consecutive Monthly
Periods is reduced to a rate which is less than the Base Rate averaged over
the same three Monthly Periods;
(d) the Seller shall fail to convey Receivables arising under
Additional Accounts to the Trust, as required by subsection 2.06(a) of the
Agreement; or
(e) any Servicer Default shall occur which would have a material
adverse effect on the Holders of the Series 1996-1 Certificates;
then, in the case of any event described in subparagraph (a), (b) or (e), after
the applicable grace period set forth in such subparagraphs, either the Trustee
or the Holders of Series 1996-1 Certificates evidencing Undivided Interests
aggregating more than 50% of the Investor Interest of this Series by notice then
given in writing to the Seller and the Servicer (and to the Trustee if given by
the Certificateholders) may declare that a pay out event (a "Series 1996-1 Pay
-----------------
Out Event") has occurred and shall be deemed to have occurred as of the date of
- ---------
such notice, and in the case of any event described in subparagraphs (c) or (d),
a Series 1996-1 Pay Out Event shall occur without any notice or other action on
the part of the Trustee, the Enhancement Provider or the Series 1996-1
Certificateholders immediately upon the occurrence of such event.
SECTION 10. Series 1996-1 Termination.
-------------------------
In the event that the final distribution of principal and interest to
the Series 1996-1 Certificateholders has not occurred before the Distribution
Date occurring in the second month preceding the month in which the Scheduled
Series 1996-1 Termination Date occurs (the "Extension Date"), the right of
--------------
Series 1996-1 Certificateholders to receive payments from the Trust may, by vote
of the Holders of Series 1996-1 Certificates evidencing Undivided Interests
aggregating not less than 66 2/3% of the Investor Interest of any Class of this
Series prior to the Transfer Date in the month immediately preceding the month
in which the Scheduled Series 1996-1 Termination Date occurs, be extended until
the earlier of (i) the April 2002 Distribution Date or (ii) the day after the
Distribution Date following the date on which funds shall have been deposited in
the Distribution Account sufficient to pay the Investor Interest plus Series
1996-1 Certificate interest accrued through and including the last day of the
month preceding the month in which such Distribution Date occurs (the "Series
------
1996-1 Final Termination Date"). The Trustee shall notify the Series 1996-1
- -----------------------------
Certificateholders, by notice given by first-class mail to such Series 1996-1
Certificateholders at their addresses as they appear on the Certificate
Register, no later than the Extension Date, that: (i) unless the requisite
percentage of Holders of Series 1996-1 Certificates as of the Record Date
immediately succeeding the Extension Date vote to extend the right of the Series
1996-1
40
<PAGE>
Certificateholders to receive payments from the Trust until the Final Series
1996-1 Termination Date prior to the Transfer Date in the month immediately
preceding the month in which the Scheduled Series 1996-1 Termination Date
occurs, the right of the Series 1996-1 Certificateholders from the Trust will
terminate on the Scheduled Series 1996-1 Termination Date; and (ii) (unless the
Rating Agency notifies the Trustee to the contrary prior to such Record Date)
that the ratings assigned to the Series 1996-1 Certificates by the Rating Agency
will be withdrawn on the Scheduled Series 1996-1 Termination Date. In the event
that the Series 1996-1 Certificateholders of any Class vote to extend the right
of the Series 1996-1 Certificateholders to receive payments from the Trust, the
Servicer shall continue to collect payments on the Receivables and apply such
Collections as provided in Article IV, and the Series 1996-1 Certificates of
each Class shall be treated as a single Class of Class A Certificates for all
purposes of this Series Supplement except that the interest rate for each Class
shall continue to be the respective rate provided herein for such Class.
SECTION 11. Ratification and Reaffirmation of Pooling and Servicing
-------------------------------------------------------
Agreement. As supplemented by this Series Supplement, the Agreement is in all
- ---------
respects ratified and confirmed and the Agreement as so supplemented by this
Series Supplement shall be read, taken, and construed as one and the same
instrument.
SECTION 12. Ratification and Reaffirmation of Representations and
-----------------------------------------------------
Warranties. Except as otherwise provided in the Agreement, each of the Seller,
- ----------
the Servicer and the Trustee hereby ratify and reaffirm its representations and
warranties contained in the Agreement as follows: (a) with respect to the
Seller, the representations and warranties contained in (i) Section 2.03, (ii)
Section 2.04(a) (with respect to the Agreement as supplemented by this Series
Supplement) and (iii) Section 2.04(b), (b) with respect to the Servicer, the
representations and warranties contained in Section 3.03 of the Agreement and
(c) with respect to the Trustee, the representations and warranties contained in
Section 11.15 of the Agreement, as though such representations and warranties
were made by such party at and as of the Closing Date.
SECTION 13. Rights Under Section 9.02. With respect to Series 1996-1
-------------------------
and any subsequently issued Series and the reference in Section 9.02(a) of the
Agreement to "instructions of Holders of Investor Certificates evidencing more
than 50% of the investor interest of any Series (or, with respect to any Series
with two or more Classes, 50% of any Class)", neither the Series 1996-1
Certificateholders nor any Class thereof shall be deemed to have given such
instructions unless Holders of not less than 50% of the Investor Interest of
Series 1996-1 and each Class thereof together with Holders of not less than 50%
of the investor interest of each other Series issued subsequent to January 1,
1995 and each Class thereof give such instructions.
SECTION 14. No Subordination. Notwithstanding the provisions
----------------
contained in Section 13.01 to the contrary, the Agreement may also be amended
from time to time by the Servicer, the Seller and the Trustee with the consent
of (a) the Holders of Series 1996-1 Certificates evidencing Undivided Interests
aggregating not less than 100% of the Class A Investor Interest and the Class B
Investor Interest and (b) the Collateral Interest Holder, for the purpose of (i)
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Series Supplement or (ii) modifying in any manner the rights
of the Investor
41
<PAGE>
Certificateholders which would, in either case, result in the subordination of
the rights of the Series 1996-1 Certificateholders or the Collateral Interest
Holder to the rights of the Holders of any other Series.
SECTION 15. Repurchase of the Series 1996-1 Certificates. In the
--------------------------------------------
event of a breach of any of the representations and warranties set forth in
Section 12(a)(ii) of this Series Supplement, either the Trustee, or the Holders
of Series 1996-1 Certificates evidencing Undivided Interests aggregating more
than 50% of the Investor Interest, by notice then given in writing to the Seller
(and to the Trustee and the Servicer, if given by the Series 1996-1
Certificateholders), may direct the Seller to repurchase the Series 1996-1
Certificates within 60 days of such notice, or within such longer period as may
be specified in such notice, which period shall not exceed 120 days), and the
Seller shall be obligated to repurchase on a Distribution Date specified by the
Seller (such Distribution Date, the "Repurchase Date") occurring within such
---------------
applicable period on the terms and conditions set forth below; provided,
however, that no such repurchase shall be required to be made if, at any time
during such applicable period, the representations and warranties contained in
Section 12(a)(ii) hereof, shall then be true and correct in all material
respects. The Seller shall deposit on the Transfer Date (in New York Clearing
House, next day funds) immediately preceding such Repurchase Date, an amount
equal to the reassignment deposit amount for such Certificates in the
Distribution Account, for distribution to the Series 1996-1 Certificateholders
pursuant to Article XII of the Agreement and Section 10 hereof. The
reassignment deposit amount for such reassignment shall be equal to (i) the
Investor Interest at the end of the day on the last day of the Monthly Period
preceding the Repurchase Date, less the amount on deposit in the Principal
Account which will be transferred to the Distribution Account on the related
Transfer Date, (ii) an amount equal to all interest accrued but unpaid on the
Series 1996-1 Certificates at the applicable rates through the end of the
Interest Period in which such Transfer Date occurs and all other amounts then
owing to the Collateral Interest Holder, less the amount on deposit in the
Finance Charge Account which will be transferred to the Distribution Account on
the related Transfer Date, and (iii) any amounts owing by Chase USA pursuant to
the Loan Agreement. Payment of the portion of the reassignment deposit amount
and the deposit of the amounts referred to in the second portion of clause (i)
and in clause (ii) of the preceding sentence into the Distribution Account,
shall be considered a prepayment in full of the Series 1996-1 Certificates. The
Series 1996-1 Termination Date shall be deemed to have occurred on the
Repurchase Date as long as such amount was deposited in full into the
Distribution Account on such Transfer Date; provided, however, that any amounts
owing by Chase USA pursuant to the Loan Agreement shall not be deposited into
the Distribution Account, and shall be paid to the Collateral Interest Holder
for application in accordance with the terms of the Loan Agreement. If the
Trustee or the Series 1996-1 Certificateholders give notice directing the Seller
to repurchase the Series 1996-1 Certificates as provided above, the obligation
of the Seller to repurchase the Series 1996-1 Certificates and to pay the
repurchase deposit amount pursuant to this Section 15 shall constitute the sole
remedy respecting a breach of the representations and warranties contained in
Section 12(a)(ii) available to the Series 1996-1 Certificateholders or the
Trustee on behalf of the Series 1996-1 Certificateholders.
42
<PAGE>
SECTION 16. Counterparts. This Series Supplement may be executed in
------------
any number of counterparts, each of which so executed shall be deemed to be an
original, but all of such counterparts shall together constitute but one and the
same instrument.
SECTION 17. Additional Covenants of the Trustee. The Trustee hereby
-----------------------------------
covenants that it will not execute any amendment to the Loan Agreement which
relates to (i) any right or obligation of the Trust or the Trustee under the
Loan Agreement, (ii) any provision of the Loan Agreement relating to the
nonrecourse nature of the Loan Agreement, or (iii) any provision of the Loan
Agreement which constitutes an agreement by the Agent or a Collateral Interest
Holder not to institute bankruptcy or similar proceedings against the Trust or
(iv) any provision of the Loan Agreement which requires the consent of the
Trustee to any amendment or waiver of the terms thereof, unless it has received
a notice from Standard & Poor's and Moody's that such amendment will not result
in the reduction or withdrawal of their respective then existing ratings of the
Series 1996-1 Certificates.
SECTION 18. Third-Party Beneficiaries. The Agreement and this Series
-------------------------
Supplement will inure to the benefit of the Collateral Interest Holder. Without
limiting the generality of the foregoing, all covenants and agreements in the
Agreement which expressly confer rights upon the Collateral Interest Holder
shall be for the benefit of and run directly to the Collateral Interest Holder,
and the Collateral Interest Holder shall be entitled to rely on and enforce such
covenants to the same extent as if it were a party to the Agreement hereto.
SECTION 19. Series 1996-1 Investor Exchange. Pursuant to subsection
-------------------------------
6.09(b), the Series 1996-1 Certificateholders may tender their Series 1996-1
Certificates, and the Holder of the Exchangeable Seller Certificate may tender
the Exchangeable Seller Certificate, in exchange for (i) one or more newly
issued Series of Investor Certificates and (ii) a reissued Exchangeable Seller
Certificate in accordance with the terms and conditions contained in a notice of
exchange delivered to the Series 1996-1 Certificateholders. Such notice of
exchange will specify, among other things: (a) the amount of Series 1996-1
Certificates of each Class that may be tendered, (b) the Certificate Rate or
Rates with respect to the new Series, (c) the term of the Series and the terms
and amount of each Class, if any, (d) the method of computing the investor
percentage, (e) the manner of Enhancement, if any, with respect to such Series
and (f) the time and the manner in which the tender and cancellation of the
Series 1996-1 Certificates and the issuance of the new Series of Certificates
will be effectuated. Upon satisfaction of the conditions contained in
subsections 6.09(b) and 6.09(c), and the receipt by the Trustee of the exchange
notice and the related Supplement, the Trustee shall cancel the existing
Exchangeable Seller Certificate and the applicable Series 1996-1 Certificates,
and shall issue such Series of Investor Certificates and a new Exchangeable
Seller Certificate, each dated the Exchange Date.
SECTION 20. Servicing Compensation. The Monthly Investor Servicing
----------------------
Fee shall be determined by the Servicer on each Determination Date and allocated
pro rata by the Servicer on each such date to the Class A Certificates, the
- --- ----
Class B Certificates and the Collateral Interest based upon the Class A Floating
Percentage (the "Class A Servicing Fee"), the Class B Floating Percentage (the
---------------------
"Class B Servicing Fee") and the Collateral Floating Percentage (the "Collateral
- ---------------------- ----------
Interest Servicing Fee"), respectively.
- ----------------------
43
<PAGE>
SECTION 21. Governing Law. THIS SERIES SUPPLEMENT SHALL BE CONSTRUED
-------------
IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 22. Notices. Notices which are required to be given
-------
hereunder to the Collateral Interest Holder be given in the manner specified in
Section 13.05 of the Agreement to the Agent at its address specified in the Loan
Agreement, or at such other address as the Agent may direct in writing.
44
<PAGE>
IN WITNESS WHEREOF, the Seller the Servicer and the Trustee have
caused this Series Supplement to be duly executed by their respective officers
as of the day and year first above written.
THE CHASE MANHATTAN BANK (USA),
as Seller and as Servicer
By: /s/ Keith Schuck
-------------------------------------------------
Name: Keith Schuck
Title: Vice President
YASUDA BANK AND TRUST COMPANY (U.S.A.),
as Trustee
By: /s/ Anthony A. Bocchino
-------------------------------------------------
Name: Anthony A. Bocchino
Title: Vice President
<PAGE>
EXHIBIT A-1
-----------
FORM OF CLASS A CERTIFICATE
---------------------------
No. R-A-[__] $[___________]
CUSIP No. [_________]
Chase Manhattan Credit Card Master Trust
Class A Floating Rate Asset Backed Certificate, Series 1996-1
Each $1,000 minimum denomination represents
-------------------------------------------
1/1,282,500 of the Class A Investor Interest
--------------------------------------------
Evidencing an undivided interest in certain assets of a trust, the corpus of
which consists of a portfolio of selected VISA* and MasterCard* credit card
receivables generated or to be generated by The Chase Manhattan Bank (USA).
(Not an interest in or obligation of
The Chase Manhattan Bank (USA)
or any Affiliate thereof.)
UNLESS THIS CLASS A CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE CHASE
MANHATTAN BANK (USA) OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY CLASS A CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE &
CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND
ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC) ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
This certifies that CEDE & CO. (the "Class A Certificateholder") is
the registered owner of an undivided interest in certain assets of a trust (the
"Trust"), the corpus of which consists of a portfolio of receivables (the
"Receivables") now existing or hereafter created under selected VISA and
MasterCard credit card accounts (the "Accounts") of The Chase Manhattan Bank
(USA), a banking corporation organized under the laws of the State of Delaware,
all monies due or to become due in payment of the Receivables and certain other
assets and interests included in the Trust pursuant to a Pooling and Servicing
Agreement dated as of June 1, 1991 and the Series 1996-1 Supplement thereto
dated as of February 1, 1996 (collectively, the
- -----------------------------
VISA* and MasterCard are registered trademarks of VISA USA, Inc., and
MasterCard International Incorporated, respectively.
<PAGE>
"Agreement"), by and between The Chase Manhattan Bank (USA), as Seller and
Servicer, and Yasuda Bank and Trust Company (U.S.A.), as Trustee (the
"Trustee").
The Seller has structured the Agreement and the Series 1996-1
Certificates with the intention that the Series 1996-1 Certificates will qualify
under applicable tax law as indebtedness. Each Series 1996-1 Certificateholder
(or Series 1996-1 Certificate Owner) by acceptance of its Certificate (or, in
the case of a Series 1996-1 Certificate Owner, by virtue of such Series 1996-1
Certificate Owner's acquisition of a beneficial interest therein), agrees to
treat the Series 1996-1 Certificates consistently with, and to take no action
inconsistent with, the treatment of the Series 1996-1 Certificates (or
beneficial interest therein) for purposes of federal, state, local and foreign
income or franchise taxes and any other tax imposed on or measured by income, as
indebtedness.
To the extent not defined herein, capitalized terms used herein have
the meanings assigned in the Agreement. This Class A Certificate is issued
under and is subject to the terms, provisions and conditions of the Agreement,
to which Agreement, as amended from time to time, the Class A Certificateholder
by virtue of the acceptance hereof assents and by which the Class A
Certificateholder is bound.
THE AGREEMENT AND THE CLASS A CERTIFICATES CREATED THEREUNDER SHALL BE
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE 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.
The assets of the Trust in which this Class A Certificate represents
an interest consist of (i)(a) the Receivables now existing and hereafter created
and arising in connection with the Accounts, (b) all monies due or to become due
with respect thereto (including all Finance Charge Receivables), (c) all
proceeds (as defined in Section 9-306 of the UCC as in effect in the State of
Delaware) of such Receivables and Insurance Proceeds relating thereto, (d)
Recoveries relating thereto and (e) Interchange allocable to the Trust pursuant
to Section 2.05(k) of the Agreement, and (ii) such funds as from time to time
are deposited in the Collection Account, the Investor Accounts and the Principal
Account. This Class A Certificate is one of a series of Certificates entitled
"Chase Manhattan Credit Card Master Trust Class A Floating Rate Asset Backed
Certificates, Series 1996-1" (the "Class A Certificates"), each of which
represents an undivided interest in certain assets of the Trust, including the
right to receive Collections allocable to the Class A Certificates and other
amounts at the times and in the amounts specified in the Agreement to be
deposited in the Finance Charge Account, the Principal Account and the
Distribution Account.
Also issued under the Agreement are the "Chase Manhattan Credit Card
Master Trust Class B Floating Rate Asset-Backed Certificates, Series 1996-1"
(the "Class B Certificates"), which represent an undivided interest in the Trust
subordinate to the Class A Certificates, and the "Chase Manhattan Credit Card
Master Trust Collateral Interest, Series 1996-1" (the "Collateral Interest" and,
collectively with the Class A Certificates and the Class B Certificates, the
"Series 1996-1 Investor Certificates"), which represents an undivided interest
A-1-2
<PAGE>
in the Trust that is subordinate to the Class A Certificates and Class B
Certificates. The aggregate interest represented by the Class A Certificates
and the Class B Certificates at any time in the Principal Receivables in the
Trust shall not exceed an amount equal to the Class A Investor Interest and
Class B Investor Interest, respectively, at such time. The initial Class A
Investor Interest is $1,282,500,000 as of February 22, 1996 (the "Closing
Date"). The Initial Class B Investor Interest is $82,500,000 as of the Closing
Date. The Collateral Initial Interest is $135,000,000 as of the Closing Date.
The Class A Investor Interest on any date of determination will be an amount
(not less than zero) equal to (a) the Initial Class A Investor Interest, minus
-----
(b) the aggregate amount of principal payments made to the Class A
Certificateholders on or prior to such date, minus (c) the excess, if any, of
-----
the aggregate amount of Class A Investor Charge-Offs for all prior Distribution
Dates over Class A Investor Charge-Offs reimbursed prior to such date of
----
determination minus (d) the principal amount of Class A Certificates previously
-----
tendered and exchanged pursuant to an Investor Exchange.
In addition to the Certificates, an Exchangeable Seller Certificate
will be issued to the Seller pursuant to the Agreement, and other Series of
Certificates may from time to time be issued by the Trust, which will represent
an undivided interest in the Trust. The Exchangeable Seller Certificate will
represent the interest in the Principal Receivables not represented by the
Series 1996-1 Certificates or any other Series of Certificates.
Interest will accrue on the Class A Certificate with respect to each
Interest Period, at the rate of 0.11% per annum above LIBOR, as more
specifically set forth in the Agreement (the "Class A Certificate Rate"), and
will be distributed on March 15, 1996 and on the 15th day of each calendar month
thereafter (or, if such day is not a Business Day, on the next Business Day)
(each, a "Distribution Date"), to the Class A Certificateholders of record as of
the last day of the month preceding the related Distribution Date (the "Record
Date").
In general, as set forth in the Agreement, payments of principal with
respect to the Class A Certificates will be limited to the Class A Investor
Interest, which may be less than the unpaid principal balance of the Class A
Certificates. The final principal payment with respect to the Class A
Certificates is scheduled to be made on the August 1999 Distribution Date, but
the final principal payment may be made earlier or later under certain
circumstances set forth in the Agreement.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF, OR AN INTEREST
IN, THE SELLER 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 AGREEMENT.
As provided in the Agreement, withdrawals from the Investor Accounts
may be made upon the instructions of the Servicer from time to time for purposes
other than distributions to Certificateholders.
A-1-3
<PAGE>
The Agreement permits, with certain exceptions, the amendment thereof
and the modification of the rights and obligations of the Servicer and the
rights of the Investor Certificateholders under the Agreement at any time by the
Servicer, the Seller and the Trustee in certain cases with the consent of the
holders of record of Investor Certificates evidencing undivided interests
aggregating not less than 66 2/3% of the Investor Interest of each outstanding
Series adversely affected by such amendment; provided, however, that no such
amendment shall (a) reduce in any manner the amount of, or delay the timing of,
distributions which are required to be made on any Investor Certificate, (b)
change the definition of or the manner of calculating the Investor Interest, the
Investor Percentage, or the Investor Default Amount or (c) reduce the aforesaid
percentage required to consent to any such amendment, without the consent of
each Investor Certificateholder then of record. Any such amendment and any such
consent by the holder of record of this Certificate shall be conclusive and
binding on such Certificateholder and on any Certificate issued in exchange
hereof or in lieu hereof whether or not notation thereof is made upon this
Certificate.
The transfer of this Certificate shall be registered in the
Certificate Register upon surrender of this Certificate for registration of
transfer at any office or agency maintained by the Transfer Agent and Registrar
accompanied by a written instrument of transfer in a form satisfactory to the
Trustee and the Transfer Agent and Registrar duly executed by the
Certificateholder or such Certificateholder's attorney-in-fact duly authorized
in writing, and thereupon one or more new Certificates of authorized
denominations and for the same aggregate Undivided Interests will be issued to
the designated transferee or transferees.
As provided in the Agreement and subject to certain limitations
therein set forth, Certificates are exchangeable for new Certificates evidencing
like aggregate Fractional Undivided Interests, as requested by the
Certificateholder surrendering such Certificates. No service charge may be
imposed for any such exchange but the Servicer or Transfer Agent and Registrar
may require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection therewith.
The Servicer, the Trustee, the Paying Agent and the Transfer Agent and
Registrar, and any agent of any of them, may treat the person in whose name this
Certificate is registered as the owner hereof for all purposes, and neither the
Servicer, the Trustee, the Paying Agent, the Transfer Agent and Registrar, nor
any agent of any of them or of any such agent shall be affected by notice to the
contrary except in certain circumstances described in the Agreement.
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 Agreement, or be valid for any purpose.
A-1-4
<PAGE>
IN WITNESS WHEREOF, The Chase Manhattan Bank (USA) has caused this
Certificate to be executed by its duly authorized officer.
THE CHASE MANHATTAN BANK (USA)
By:___________________________
Frank DeGenova,
as Authorized Signatory
Dated: February 22, 1996
A-1-5
<PAGE>
Form of Trustee's Certificate of Authentication
-----------------------------------------------
This is one of the Class A Certificates referred to in the within-
mentioned Agreement.
Yasuda Bank and Trust Company (U.S.A.),
as Trustee
By:______________________________________
Authorized Officer
A-1-6
<PAGE>
EXHIBIT A-2
-----------
FORM OF CLASS B CERTIFICATE
---------------------------
No. R-B-[__] $[___________]
CUSIP No. [________]
Chase Manhattan Credit Card Master Trust
Class B Floating Rate Asset Backed Certificate, Series 1996-1
Each $1,000 minimum denomination represents
-------------------------------------------
1/82,500 of the Class B Investor Interest
-----------------------------------------
Evidencing an undivided interest in certain assets of a trust, the corpus of
which consists of a portfolio of selected VISA* and MasterCard* credit card
receivables generated or to be generated by The Chase Manhattan Bank (USA).
(Not an interest in or obligation of
The Chase Manhattan Bank (USA)
or any Affiliate thereof.)
THIS CLASS B CERTIFICATE IS SUBORDINATED IN CERTAIN RIGHTS OF PAYMENT TO THE
CLASS A CERTIFICATES AS DESCRIBED IN THE AGREEMENT REFERRED TO HEREIN.
UNLESS THIS CLASS B CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE CHASE
MANHATTAN BANK (USA) OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY CLASS B CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE &
CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND
ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC) ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
This certifies that CEDE & CO. (the "Class B Certificateholder") is
the registered owner of an undivided interest in certain assets of a trust (the
"Trust"), the corpus of which consists of a portfolio of receivables (the
"Receivables") now existing or hereafter created under
- -------------------------
*VISA and MasterCard are registered trademarks of VISA USA, Inc., and
MasterCard International Incorporated, respectively.
<PAGE>
selected VISA and MasterCard credit card accounts (the "Accounts") of The Chase
Manhattan Bank (USA), a banking corporation organized under the laws of the
State of Delaware, all monies due or to become due in payment of the
Receivables, and certain other assets and interests included in the Trust
pursuant to a Pooling and Servicing Agreement dated as of June 1, 1991 and the
Series 1996-1 Supplement thereto dated as of February 1, 1996 (collectively, the
"Agreement"), by and between The Chase Manhattan Bank (USA), as Seller and
Servicer, and Yasuda Bank and Trust Company (U.S.A.), as Trustee (the
"Trustee").
The Seller has structured the Agreement and the Series 1996-1
Certificates with the intention that the Series 1996-1 Certificates will qualify
under applicable tax law as indebtedness. Each Series 1996-1 Certificateholder
(or Series 1996-1 Certificate Owner) by acceptance of its Certificate (or, in
the case of a Series 1996-1 Certificate Owner, by virtue of such Series 1996-1
Certificate Owner's acquisition of a beneficial interest therein), agrees to
treat the Series 1996-1 Certificates consistently with, and to take no action
inconsistent with, the treatment of the Series 1996-1 Certificates (or
beneficial interest therein) for purposes of federal, state, local and foreign
income or franchise taxes and any other tax imposed on or measured by income, as
indebtedness.
To the extent not defined herein, capitalized terms used herein have
the meanings assigned in the Agreement. This Class B Certificate is issued
under and is subject to the terms, provisions and conditions of the Agreement,
to which Agreement, as amended from time to time, the Class B Certificateholder
by virtue of the acceptance hereof assents and by which the Class B
Certificateholder is bound.
THE AGREEMENT AND THE CLASS B CERTIFICATES CREATED THEREUNDER SHALL BE
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE 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.
The assets of the Trust in which this Class B Certificate represents
an interest consist of (i)(a) the Receivables now existing and hereafter created
and arising in connection with the Accounts, (b) all monies due or to become due
with respect thereto (including all Finance Charge Receivables), (c) all
proceeds (as defined in Section 9-306 of the UCC as in effect in the State of
Delaware) of such Receivables and Insurance Proceeds relating thereto, (d)
Recoveries relating thereto and (e) Interchange allocable to the Trust pursuant
to Section 2.05(k) of the Agreement, and (ii) such funds as from time to time
are deposited in the Collection Account, the Investor Accounts and the Principal
Account. This Class B Certificate is one of a series of Certificates entitled
"Chase Manhattan Credit Card Master Trust Class B Floating Rate Asset Backed
Certificates, Series 1996-1" (the "Class B Certificates"), each of which
represents an undivided interest in certain assets of the Trust, including the
right to receive Collections allocable to the Class B Certificates and other
amounts at the times and in the amounts specified in the Agreement to be
deposited in the Finance Charge Account, the Principal Account and the
Distribution Account.
A-2-2
<PAGE>
Also issued under the Agreement are the "Chase Manhattan Credit Card
Class A Floating Rate Asset-Backed Certificates, Series 1996-1" (the "Class A
Certificates"), which represent an undivided interest in the Trust senior to the
Class B Certificates, and the "Chase Manhattan Credit Card Master Trust
Collateral Interest, Series 1996-1" (the "Collateral Interest" and, collectively
with the Class A Certificates and the Class B Certificates, the "Series 1996-1
Investor Certificates"), which represents an undivided interest in the Trust
subordinate to the Class A Certificates and Class B Certificates. The aggregate
interest represented by the Class A Certificates and the Class B Certificates at
any time in the Principal Receivables in the Trust shall not exceed an amount
equal to the Class A Investor Interest and Class B Investor Interest,
respectively, at such time. The Initial Class A Investor Interest is
$1,282,500,000 as of February 22, 1996 (the "Closing Date"). The Initial Class B
Investor Interest is $82,500,000 as of the Closing Date. The Collateral Initial
Interest is $135,000,000 as of the Closing Date. The Class B Investor Interest
on any date of determination will be an amount (not less than zero) equal to (a)
the Initial Class B Investor Interest, minus (b) the aggregate amount of
-----
principal payments made to the Class B Certificateholders prior to such date,
minus (c) the aggregate amount of Class B Investor Charge-Offs for all prior
- -----
Transfer Dates, minus (d) the amount of Reallocated Class B Principal
-----
Collections allocated on all prior Transfer Dates, minus (e) an amount equal to
-----
the amount by which the Class B Investor Interest has been reduced to cover the
Class A Investor Default Amount on all prior Transfer Dates, plus (f) the amount
----
of Excess Spread and Excess Finance Charge Collections allocated and available
on all prior Transfer Dates for the purpose of reimbursing amounts deducted
pursuant to the forgoing clauses (c), (d) and (e), minus (g) the principal
-----
amount of Class B Certificates previously tendered and exchanged pursuant to an
Investor Exchange.
In addition to the Certificates, an Exchangeable Seller Certificate
will be issued to the Seller pursuant to the Agreement, and other Series of
certificates may from time to time be issued by the Trust, which will represent
an undivided interest in the Trust. The Exchangeable Seller Certificate will
represent the interest in the Principal Receivables not represented by the
Series 1996-1 Certificates or any other Series of certificates.
Interest will accrue on the Class B Certificates with respect to each
Interest Period, at the rate of 0.24% per annum above LIBOR, as more
specifically set forth in the Agreement (the "Class B Certificate Rate"), and
will be distributed on March 15, 1996 and on the 15th day of each calendar month
thereafter (or, if such day is not a Business Day, on the next Business Day)
(each, a "Distribution Date"), to the Class B Certificateholders of record as of
the last day of the month preceding the related Distribution Date (the "Record
Date").
In general, as set forth in the Agreement, payments of principal with
respect to the Class B Certificates will be limited to the Class B Investor
Interest, which may be less than the unpaid principal balance of the Class B
Certificates. The final principal payment with respect to the Class B
Certificates is scheduled to be made on the September 1999 Distribution Date,
but the final principal payment may be made earlier or later under certain
circumstances set forth in the Agreement.
The Class B Certificates will be subordinated to the Class A
Certificates as to priority of payment and otherwise, to the extent provided in
the Agreement. In certain
A-2-3
<PAGE>
circumstances, funds otherwise payable to Class B Certificateholders could be
reallocated to make payments on the Class A Certificates and charge-offs
otherwise allocable to the Class A Certificates could be reallocated to the
Class B Certificates, resulting in a reduced Class B Investor Interest.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF, OR AN INTEREST
IN, THE SELLER 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 AGREEMENT.
As provided in the Agreement, withdrawals from the Investor Accounts
may be made upon the instructions of the Servicer from time to time for purposes
other than distributions to Certificateholders.
The Agreement permits, with certain exceptions, the amendment thereof
and the modification of the rights and obligations of the Servicer and the
rights of the Investor Certificateholders under the Agreement at any time by the
Servicer, the Seller and the Trustee in certain cases with the consent of the
holders of record of Investor Certificates evidencing undivided interests
aggregating not less than 66 2/3% of the Investor Interest of each outstanding
Series adversely affected by such amendment; provided, however, that no such
amendment shall (a) reduce in any manner the amount of, or delay the timing of,
distributions which are required to be made on any Investor Certificate, (b)
change the definition of or the manner of calculating the Investor Interest, the
Investor Percentage, or the Investor Default Amount or (c) reduce the aforesaid
percentage required to consent to any such amendment, without the consent of
each Investor Certificateholder then of record. Any such amendment and any such
consent by the holder of record of this Certificate shall be conclusive and
binding on such Certificateholder and on any Certificate issued in exchange
hereof or in lieu hereof whether or not notation thereof is made upon this
Certificate.
The transfer of this Certificate shall be registered in the
Certificate Register upon surrender of this Certificate for registration of
transfer at any office or agency maintained by the Transfer Agent and Registrar
accompanied by a written instrument of transfer in a form satisfactory to the
Trustee and the Transfer Agent and Registrar duly executed by the
Certificateholder or such Certificateholder's attorney-in-fact duly authorized
in writing, and thereupon one or more new Certificates of authorized
denominations and for the same aggregate Undivided Interests will be issued to
the designated transferee or transferees.
As provided in the Agreement and subject to certain limitations
therein set forth, Certificates are exchangeable for new Certificates evidencing
like aggregate Fractional Undivided Interests, as requested by the
Certificateholder surrendering such Certificates. No service charge may be
imposed for any such exchange but the Servicer or Transfer Agent and Registrar
may require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection therewith.
A-2-4
<PAGE>
The Servicer, the Trustee, the Paying Agent and the Transfer Agent and
Registrar, and any agent of any of them, may treat the person in whose name this
Certificate is registered as the owner hereof for all purposes, and neither the
Servicer, the Trustee, the Paying Agent, the Transfer Agent and Registrar, nor
any agent of any of them or of any such agent shall be affected by notice to the
contrary except in certain circumstances described in the Agreement.
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 Agreement, or be valid for any purpose.
A-2-5
<PAGE>
IN WITNESS WHEREOF, The Chase Manhattan Bank (USA) has caused this
Certificate to be executed by its duly authorized officer.
THE CHASE MANHATTAN BANK (USA)
By:_______________________________
Frank DeGenova,
as Authorized Signatory
Dated: February 22, 1996
A-2-6
<PAGE>
Form of Trustee's Certificate of Authentication
-----------------------------------------------
This is one of the Class B Certificates referred to in the within-
mentioned Agreement.
Yasuda Bank and Trust Company (U.S.A.),
as Trustee
By:________________________________________
Authorized Officer
A-2-7
<PAGE>
EXHIBIT B
---------
FORM OF MONTHLY PAYMENT INSTRUCTIONS
AND NOTIFICATION TO THE TRUSTEE
-----------------------------------
THE CHASE MANHATTAN BANK (USA)
-----------------------------------
Chase Manhattan Credit Card Master Trust
Series 1996-1
-----------------------------------
Capitalized terms used in this Certificate have their respective
meanings set forth in the Pooling and Servicing Agreement, dated as of June 1,
1991, and the Series 1996-1 Supplement, dated as of February 1, 1996 (together,
the "Agreement"), by and between The Chase Manhattan Bank (USA) ("Chase"), as
Servicer, and Yasuda Bank and Trust Company (U.S.A.), as trustee (the
"Trustee"); provided, that the "preceding Monthly Period" shall mean the Monthly
Period immediately preceding the calendar month in which this Certificate is
delivered. References herein to certain sections and subsections are references
to the respective sections and subsections of the Agreement. This Certificate
is delivered pursuant to the terms of the Agreement.
The undersigned, a duly authorized representative of the Servicer does
hereby certify as follows:
1) Chase is the Servicer under the Agreement.
2) The undersigned is a Servicing Officer.
3) The date of this notice is __________, _____, which is a
Determination Date under the Agreement.
I. INSTRUCTION TO MAKE A WITHDRAWAL
--------------------------------
Pursuant to Section 4.08, the Servicer does hereby instruct the
Trustee to apply, on __________, ____, which date is a Transfer Date under the
Agreement, Class A Available Funds, Class B Available Funds, Collateral
Available Funds from the Finance Charge Account and Available Principal Funds
from the Principal Account, to make the following distributions:
B-1
<PAGE>
A) To the Distribution Account for payment to the Class A
------------------------------------------------------
Certificateholders, Pursuant to Subsection 4.08(a)(i):
-----------------------------------------------------
(1) Class A Monthly Interest for the related Distribution
Date.................................................... $_______
(2) Class A Monthly Interest accrued but not paid........... $_______
(3) Class A Additional Interest............................. $_______
(4) Class A Additional Interest accrued but not paid........ $_______
B) To the Servicer, Pursuant to Subsection 4.08(a)(ii). If
----------------------------------------------------
neither Chase USA, nor any Affiliate thereof, is the Servicer:
(1) The Class A Servicing Fee for the preceding Monthly
Period.................................................. $_______
(2) Class A Servicing Fees previously due but not
distributed............................................. $_______
C) To the Principal Account, Pursuant to Subsection 4.08(a)(iii):
-------------------------------------------------------------
(1) Class A Investor Default Amount for the preceding Monthly
Period (to be treated as a portion of Available Principal
Collections)............................................ $_______
D) Pursuant to Subsection 4.08(a)(iv):
----------------------------------
(1) Portion of Excess Spread from Class A Available Funds to
be allocated and distributed as provided in Part II
hereof.................................................. $_______
E) To the Distribution Account for payment to the Class B
------------------------------------------------------
Certificateholders, Pursuant to Subsection 4.08(b)(i):
-----------------------------------------------------
(1) Class B Monthly Interest for the related Distribution
Date.................................................... $_______
(2) Class B Monthly Interest accrued but not paid........... $_______
(3) Class B Additional Interest............................. $_______
(4) Class B Additional Interest accrued but not paid........ $_______
B-2
<PAGE>
F) To the Servicer, Pursuant to Subsection 4.08(b)(ii). If
----------------------------------------------------
neither Chase USA, nor any Affiliate thereof, is the Servicer:
(1) The Class B Servicing Fee for the preceding Monthly
Period................................................... $_______
(2) Class B Investor Servicing Fees previously due but not
distributed.............................................. $_______
G) Pursuant to Subsection 4.08(b)(iii):
-----------------------------------
(1) Portion of Excess Spread from Class B Available Funds
to be allocated and distributed as provided in Part II
hereof................................................... $_______
H) To the Servicer, Pursuant to Subsection 4.08(c)(i). If
--------------------------------------------------
neither Chase USA, nor any Affiliate thereof, is the Servicer:
(1) The Collateral Interest Servicing Fee for the preceding
Monthly Period........................................... $_______
(2) Collateral Interest Servicing Fee previously due but not
distributed.............................................. $_______
I) Pursuant to Subsection 4.08(c)(ii):
----------------------------------
(1) Portion of Excess Spread from Collateral Available Funds
to be allocated and distributed as provided in Part II
hereof................................................... $_______
J) Pursuant to Section 4.08(d):
---------------------------
(1) To the Collateral Interest Holder, Available Principal
Collections, if any, applied in accordance with the
Loan Agreement........................................... $_______
(2) Available Principal Collections, if any, to be treated as
Shared Principal Collections and distributed as provided
in Section 4.13.......................................... $_______
K) To the Distribution Account for payment to the appropriate
----------------------------------------------------------
parties, Pursuant to Section 4.08(e):
------------------------------------
(1) The amount of Class A Monthly Principal.................. $_______
(2) The amount of Class B Monthly Principal.................. $_______
B-3
<PAGE>
(3) The amount of Collateral Monthly Principal............... $_______
(4) Amounts remaining, if any, to be treated as Shared
Principal Collections and applied in accordance with
Section 4.13............................................. $_______
II. APPLICATION OF EXCESS SPREAD AND EXCESS FINANCE CHARGE COLLECTIONS
------------------------------------------------------------------
Pursuant to Section 4.10, the Servicer does hereby instruct the
Trustee to apply on _________, ____, which date is a Transfer Date under the
Agreement, Excess Spread and Excess Finance Charge Collections allocated to
Series 1996-1 as set forth below:
A) Pursuant to Section 4.10(a):
---------------------------
(1) The amount equal to the Class A Required Amount, if
any, to fund any deficiency under Section 4.08(a),
to be applied in accordance with, and in the priority
set forth in, subsection 4.10(a)...................... $_______
B) To the Principal Account, Pursuant to Section 4.10(b):
-----------------------------------------------------
(1) Aggregate amount of Class A Investor Charge-Offs not
previously reimbursed pursuant to Section 4.09(a) (to
be treated as Available Principal Collections)........ $_______
C) To the Distribution Account for payment to the Class B
------------------------------------------------------
Certificateholders, Pursuant to Section 4.10(c):
-----------------------------------------------
(1) Class B Monthly Interest that is due and unpaid or
overdue and unpaid Class B Monthly Interest, but not
available from Class B Available Funds................ $_______
(2) Class B Additional Interest that is overdue and unpaid,
but not available from Class B Available Funds........ $_______
D) To the Servicer, Pursuant to Section 4.10(d). If neither Chase
---------------------------------------------
USA nor any Affiliate thereof is the Servicer:
(1) The amount of Class B Servicing Fee for such monthly
period and overdue and unpaid Class B Servicing Fee
not available from Class B Available Funds........... $_______
B-4
<PAGE>
E) Pursuant to Section 4.10(e):
---------------------------
(1) The Class B Investor Default Amount for such Transfer
Date (to be treated as a portion of Available
Principal Collections)................................ $_______
F) Pursuant to Section 4.10(f):
---------------------------
(1) The amount by which Class B Investor Interest has been
reduced pursuant to clauses (c), (d) and (e) of the
definition thereof (to be treated as a portion of
Available Principal Collections)...................... $_______
G) To the Distribution Account for payment to the Collateral
---------------------------------------------------------
Interest Holder, Pursuant to Section 4.10(g):
--------------------------------------------
(1) Collateral Monthly Interest and any overdue and unpaid
Collateral Monthly Interest not available from
Collateral Available Funds............................ $_______
(2) Collateral Additional Interest overdue and unpaid not
available from Collateral Available Funds............. $_______
H) Pursuant to Section 4.10(h):
---------------------------
(1) Monthly Investor Servicing Fees that are due on such
Transfer Date and unpaid and any overdue and unpaid
Monthly Investor Servicing Fees....................... $_______
I) Pursuant to Section 4.10(i):
---------------------------
(1) The Collateral Default Amount for the prior Monthly
Period (to be treated as a portion of Available
Principal Collections)................................ $_______
J) To the Principal Account, Pursuant to Section 4.10(j):
-----------------------------------------------------
(1) The aggregate amount by which the Collateral Interest
has been reduced below the Required Collateral
Interest (to be treated as Available Principal
Collections).......................................... $_______
B-5
<PAGE>
K) To the Collateral Interest Holder for application, Pursuant
-----------------------------------------------------------
to the Loan Agreement Pursuant to Section 4.10(k):
-------------------------------------------------
(1) All other amounts payable under the Loan Agreement
out of Excess Spread and Excess Finance Change
Collections........................................... $_______
L) Pursuant to Section 4.10(m):
---------------------------
(1) The balance, if any, to be treated as Shared Excess
Finance Charge Collections and allocated to other
Series in Group I or the Holder of the Seller
Certificate pursuant to Section 4.12.................. $_______
III. REALLOCATED PRINCIPAL COLLECTIONS
---------------------------------
Pursuant to Section 4.11, the Servicer does hereby instruct the
Trustee to apply from the Series 1996-1 Collection Subaccount on ________, ____,
which is a Transfer Date under the Agreement, to apply Reallocated Principal
Collections to fund any deficiencies in the Class A Required Amount and the
Class B Required Amount in the following priority.
A) Pursuant to Section 4.11(a):
---------------------------
(1) The Class A Required Amount after applying Excess
Spread and Excess Finance Charge Receivables pursuant
to Section 4.10, to be applied pursuant to subsections
4.08(a)(i), (ii) and (iii)........................... $_______
B) Pursuant to Section 4.11(b):
---------------------------
(1) The Class B Required Amount after applying Excess
Spread and Excess Finance Charge Receivables pursuant
to Section 4.10, to be applied pursuant to subsections
4.08(b)(i) and (ii).................................. $_______
IV. ACCRUED AND UNPAID AMOUNTS
--------------------------
After giving effect to the withdrawals and transfers to be made in
accordance with this notice, the following amounts will be accrued and unpaid
with respect to all Monthly Periods preceding the current calendar month:
A) The aggregate amount of the Class A Interest
Shortfall............................................ $_______
B) The aggregate amount of the Class B Interest
Shortfall............................................. $_______
B-6
<PAGE>
C) The aggregate amount of the Collateral Interest Payment
Shortfall................................................. $_______
D) The aggregate amount of all accrued and unpaid Monthly
Investor Servicing Fees................................... $_______
E) Pursuant to Section 4.10:
------------------------
The aggregate amount of all unreimbursed Investor
Charge Offs.......................................... $_______
IN WITNESS WHEREOF, the undersigned has duly executed this certificate
this ____ day of __________, ____.
THE CHASE MANHATTAN BANK (USA),
Servicer
By:
----------------------------------------
Name:
Title:
B-7
<PAGE>
EXHIBIT C
---------
FORM OF MONTHLY CERTIFICATEHOLDERS' STATEMENT
-----------------------------------
THE CHASE MANHATTAN BANK (USA)
-----------------------------------
Chase Manhattan Credit Card Master Trust Series 1996-1
-----------------------------------
For the ____________________ Distribution Date
For ____________________ Monthly Period
-----------------------------------
Under Section 5.02 of the Pooling and Servicing Agreement dated as of
June 1, 1991 and the Series 1996-1 Supplement dated as of February 1, 1996
(together, the "Agreement") by and between The Chase Manhattan Bank (USA)
("Chase") and Yasuda Bank and Trust Company (U.S.A.), as trustee (the
"Trustee"), Chase, as Servicer, is required to prepare certain information each
month regarding current distributions to Series 1996-1 Certificateholders and
the performance of the Chase Manhattan Credit Card Master Trust (the "Trust")
and the Series 1996-1 Class A Certificates and Series 1996-1 Class B
Certificates during the previous month. The information which is required to be
prepared with respect to the _____________, ____ Distribution Date, the
"Distribution Date") and with respect to the performance of the Trust during the
month of __________, ____ (the "Preceding Monthly Period") is set forth below.
Certain of the information is presented on the basis of an original principal
amount of $1,000 per Series 1996-1 Investor Certificate (a "Certificate").
Certain other information is presented based on the aggregate amounts for the
Trust as a whole. Capitalized terms used in this Certificate have their
respective meanings set forth in the Agreement.
I. INFORMATION REGARDING THE CURRENT MONTHLY DISTRIBUTION TO THE CLASS
A AND CLASS B CERTIFICATEHOLDERS (STATED ON THE BASIS OF $1,000
ORIGINAL CERTIFICATE PRINCIPAL AMOUNT)
--------------------------------------------------------------------
A) The total amount of the distribution to Series 1996-1
Certificateholders on the Distribution Date per $1,000 original
certificate principal amount
(1) Class A Certificateholders.................. $________
(2) Class B Certificateholders.................. $________
C-1
<PAGE>
B) The amount of the distribution set forth in paragraph 1
above in respect of principal of the 1996-1 Certificates,
per $1,000 original certificate principal amount
(1) Class A Certificateholders.................. $________
(2) Class B Certificateholders.................. $________
C) The amount of the distribution set forth in paragraph 1
above in respect of interest on the 1996-1 Certificates,
per $1,000 original certificate principal amount
(1) Class A Certificate......................... $________
(2) Class B Certificate......................... $________
II. INFORMATION REGARDING THE PERFORMANCE OF THE TRUST
--------------------------------------------------
A) Collections
-----------
(1) The aggregate amount of Collections processed with
respect to Billing Cycles ending during the
preceding Monthly Period and allocated to the
Series 1996-1 Certificates was equal to............... $________
(2) The Payment Rate with respect to the preceding Monthly
Period was equal to................................... $________
For the 2nd Monthly Period (the preceding Monthly
Period), the monthly payment rate was equal to... $________
For the 3rd Monthly Period (the 2nd preceding
Monthly Period), the monthly payment rate was
equal to......................................... $________
(3) The aggregate amount of Collections of Principal
Receivables processed with respect to Billing Cycles
ending during the preceding Monthly Period which
were allocated in respect of the Series 1996-1
Certificates.......................................... $________
(4) The aggregate amount of Collections of Finance Charge
Receivables processed with respect to Billing Cycles
ending during the preceding Monthly Period which were
allocated in respect of the Series 1996-1
Certificates.......................................... $________
B) Deficit Controlled Amortization Amount..................... $________
--------------------------------------
C-2
<PAGE>
C) Principal Receivables in the Trust and Allocation Percentages
-------------------------------------------------------------
(1) The aggregate amount of Principal Receivables in the
Trust as of the end of each Billing Cycle ending in
the preceding Monthly Period (which reflects the
Principal Receivables represented by the Seller Interest,
by the Investor Interest of Series 1996-1, and by the
Investor Interest of all other outstanding Series)....... $________
(2) The Investor Interest as of the last day of the preceding
Monthly Period
(a) Investor Interest................................... $________
(b) Class A Investor Interest........................... $________
(c) Class B Investor Interest........................... $________
(d) Collateral Interest................................. $________
(3) The Investor Interest set forth in paragraph C(2)(a)
above as a percentage of the aggregate amount of
Principal Receivables set forth in paragraph C(1) above.. ________%
(4) The Class A Investor Interest set forth in paragraph
C(2)(b) above as a percentage of the aggregate amount of
Principal Receivables set forth in paragraph C(1) above.. ________%
(5) The Class B Investor Interest set forth in paragraph
C(2)(c) above as a percentage of the aggregate amount of
Principal Receivables set forth in paragraph C(1) above.. ________%
(6) The Collateral Interest set forth in paragraph C(2)(d)
above as a percentage of the aggregate amount of
Principal Receivables set forth in paragraph C(1) above.. ________%
(7) The Class A Floating Percentage.......................... ________%
(8) The Class B Floating Percentage.......................... ________%
(9) The Class B Principal Percentage......................... ________%
(10) The Collateral Floating Percentage....................... ________%
(11) The Collateral Principal Percentage...................... ________%
(12) The Floating Allocation Percentage....................... ________%
(13) The Principal Allocation Percentage...................... ________%
C-3
<PAGE>
D) Portfolio Yield and Base Rate
-----------------------------
(1) The annualized Portfolio Yield for the preceding Monthly
Period was equal to...................................... ________%
For the 2nd preceding Monthly Period, the
annualized portfolio yield was equal to.......... ________%
For the 3rd preceding Monthly Period, the
annualized portfolio yield was equal to.......... ________%
The three month average Portfolio Yield was
equal to......................................... ________%
(2) Base Rate for the preceding Monthly Period was equal to.. ________%
For the 2nd preceding Monthly Period, the Base
Rate was equal to................................ ________%
For the 3rd preceding Monthly Period, the Base
Rate was equal to................................ ________%
E) Delinquent Balances
-------------------
The aggregate amount of outstanding balances in the Accounts which were
delinquent, as of the end of the last day of the related Billing Cycle
which ended during the current Monthly Period by:
<TABLE>
<CAPTION>
Aggregate As a Percentage
Account of Aggregate
Balance Receivables
<S> <C> <C> <C>
(1) up to 29 days: $__________ _________%
(2) 30 - 59 days: $__________ _________%
(3) 60 - 89 days: $__________ _________%
(4) 90 or more days: $__________ _________%
Total: $ %
=========== ==========
</TABLE>
C-4
<PAGE>
F) Investor Default Amount
(1) The aggregate amount of all defaulted Principal
Receivables written off as uncollectible with respect
to Billing Cycles ending during the preceding Monthly
Period allocable to the Investor Interest less
Recoveries allocable to the Investor Interest (the
"Series 1996-1 Aggregate Investor Default Amount")..... $________
(2) The portion of the Series 1996-1 Aggregate Investor
Default Amount allocable to the Class A Investor
Interest (the "Class A Investor Default Amount")....... $________
(3) The portion of the Series 1996-1 Aggregate Investor
Default Amount allocable to the Class B Investor
Interest (the "Class B Investor Default Amount")....... $________
(4) The portion of the Series 1996-1 Aggregate Investor
Default Amount allocable to the Collateral Investor
Interest (the "Collateral Investor Default Amount").... $________
(5) The annualized investor default percentage ((Series
1996-1 Aggregate Investor Default Amount/Investor
Interest) x 12) for the preceding Monthly Period
was equal to........................................... ________%
For the 2nd preceding Monthly Period, the
annualized investor default percentage was
equal to....................................... ________%
For the 3rd preceding Monthly Period, the
annualized investor default percentage was
equal to....................................... ________%
G) Investor Charge Offs
--------------------
(1) The aggregate amount of Class A Investor Charge-Offs
for the preceding Monthly Period....................... $________
(2) The aggregate amount of Class A Investor Charge-Offs
reimbursed on the Transfer Date immediately preceding
the preceding Distribution Date........................ $________
(3) The amount of the reimbursed Investor Charge-Offs set
forth in paragraph G(2) above, per $1,000 original
Class A Certificate principal amount................... $________
C-5
<PAGE>
(4) The aggregate amount of Class B Investor Charge-Offs
for such Monthly Period................................ $________
(5) The aggregate amount of Class B Investor Charge-Offs
reimbursed on the Transfer Date immediately preceding
such Distribution Date................................. $________
(6) The amount of the reimbursed Investor Charge-Offs set
forth in paragraph G(3) above, per $1,000 original
Class B Certificate principal amount................... $________
(7) The aggregate amount of Investor Charge-Offs........... $________
(8) The aggregate amount of reimbursed Investor Charge-Offs. $________
H) Shared Excess Finance Charge Collection
---------------------------------------
The aggregate amount of shared Excess Finance Charge
Collection during the preceding Monthly Period which were
allocated to the Series 1996-1 Certificates.................. $________
I) Shared Principal Collections
----------------------------
The aggregate amount of Shared Principal Collections during
the preceding Monthly Period which were allocated to the
Series 1996-1 Certificates................................... $________
J) Reallocated Principal Collections
---------------------------------
(1) Collections of Principal Receivables allocable to
Class B Certificates paid with respect to Class A
Certificates to make up deficiencies in Class A
Required Amount for any Monthly Period.................. $________
C-6
<PAGE>
(2) Collections of Principal Receivables allocable to
Collateral Interest paid with respect to Class B
Certificates to make up deficiencies in Class B
Required Amount......................................... $________
K) Monthly Investor Servicing Fee
------------------------------
(1) The amount of the Monthly Investor Monthly Servicing
Fee payable by the Trust to the Servicer for the
preceding Monthly Period................................ $________
(2) The amount of the Class A Monthly Servicing Fee payable
by the Trust to the Servicer for the preceding Monthly
Period.................................................. $________
(3) The amount of the Class B Monthly Servicing Fee payable
by the Trust to the Servicer for the preceding Monthly
Period.................................................. $________
(4) The amount of the Collateral Monthly Servicing Fee
payable by the Trust to the Servicer for the preceding
Monthly Period.......................................... $________
L) Collateral Interest
-------------------
(1) The Available Collateral Interest, as of the close of
Transfer Date for the preceding Monthly Period was
equal to................................................ $________
M) Required Collateral Interest
----------------------------
(1) The Required Collateral Interest as of the Transfer Date
for the preceding Monthly Period was equal to........... $________
III. THE POOL FACTOR
---------------
A) The Pool Factor for the Record Date for the distribution to
be made on the Distribution Date (which represents the ratio
of the amount of the 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 Initial Investor Interest). The
amount of a Certificateholder's pro rata share of the
--- ---- -----
Investor Interest can be determined by multiplying the
original denomination of the Certificateholder's
Certificate by the Pool Factor............................ _________
C-7
<PAGE>
THE CHASE MANHATTAN BANK (USA),
Servicer
By:
------------------------------
Name:
Title:
C-8
<PAGE>
EXHIBIT D
---------
Schedule 1996-1 to
Monthly Servicer's Certificate
------------------------------
FORM OF SCHEDULE TO MONTHLY SERVICER'S CERTIFICATE
-----------------------------------
THE CHASE MANHATTAN BANK (USA)
-----------------------------------
Chase Manhattan Credit Card Master Trust, Series 1996-1
-----------------------------------
For the ____________________ Determination Date
For the ____________________ Monthly Period
1. The aggregate amount of Collections processed during the
Billing Cycles which ended during such Monthly Period (equal to
1(a) plus 1(b)) was equal to........................................ $________
(a) The aggregate amount of Collections of Finance Charge
Receivables collected during the Billing Cycles which ended
during such Monthly Period (the "Collections of Finance Charge
Receivables") allocated to Series 1996-1 was equal to.......... $________
(b) The aggregate amount of Collections of Principal
Receivables collected during the Billing Cycles which ended
during such Monthly Period (the "Collections of Principal
Receivables") allocated to Series 1996-1 was equal to.......... $________
(c) The aggregate amount of Collections deemed to be
Collections of Finance Charge Receivables pursuant to
subsection 4.02(b)(i) during the Billing Cycles which ended
during such Monthly Period relating to Series 1996-1 (the
"Estimated Collections of Billed Finance Charge Receivables")
was equal to................................................... $________
D-1
<PAGE>
(d) The aggregate amount of Collections deemed to be
Principal Receivables pursuant to subsection 4.02(b)(i) during
the Billing Cycles which ended during such Monthly Period
relating to Series 1996-1 (the "Estimated Collections of Billed
Principal Receivables") was equal to........................... $________
2. The aggregate amount of funds on deposit in the Finance
Charge Account with respect to Collections processed [during the
Billing Cycles which ended during such Monthly Period] [during such
Monthly Period], and allocated to Series 1996-1, as of the end of
the last day of such Monthly Period was equal to.................... $________
3. (a) The excess of (i) Collections of Finance Charge
Receivables allocated to Series 1996-1 over (ii) Estimated
Collections of Billed Finance Charge Receivables (1(a)-1(c)),
if any, was equal to $__________ [[of which $__________] [none
of which] will be withdrawn from the Finance Charge Account
and deposited to the Principal Account/1/].
(b) The excess of (i) Estimated Collections of Billed
Finance Charge Receivables over (ii) Collections of Finance
Charge Receivables allocated to Series 1996-1 (1(c)-1(a)), if
any, was equal to $__________ [[(of which $__________] [none
of which]] will be withdrawn from the Principal Account and
deposited to the Finance Charge Account/1/].
The aggregate amount of funds which will be on deposit in the Finance
Charge Account on the Transfer Date relating to Series 1996-1 following
this Determination Date, after giving effect to the payments and transfers
in Items 3(a) and 3(b), will be $__________
4. The aggregate amount of funds on deposit in the Principal
Account with respect to Collections processed during the Billing
Cycles which ended during such Monthly Period and allocated
$________ to Series 1996-1, as of the end of the last day of such
Monthly Period was equal to.........................................
$________
The aggregate amount of funds which will be on deposit in
the Principal Account on the Transfer Date following this
Determination Date, after giving effect to the payments and
transfers in Items 3(a) and 3(b), will be $__________.
5. The aggregate amount of funds on deposit in the Series
1996-1 Collection Subaccount as of the end of the last day of such
Monthly Period was equal to......................................... $________
D-2
<PAGE>
6. The aggregate amount of funds on deposit in the Retention
Subaccount relating to Series 1996-1 as of the end of the last day
of such Monthly Period was equal to................................. $________
7. (a) The aggregate amount of Interchange to be deposited
to the Collection Account and allocated to Series 1996-1 on
the next succeeding Transfer Date is equal to................. $________
(b) The amount of earnings (net of losses and investment
expenses) on funds on deposit in the Principal Account to be
transferred from the Retention Account to the Finance Charge
Account on the next succeeding Transfer Date is equal to...... $________
8. The aggregate amount of [withdrawals] [payments] required
to be made [from] [to] the [Collection Subaccount relating to the
Series 1996-1 Certificates] [the Retention subaccount relating to
the Series 1996-1 Certificates] is equal to......................... $________
9. The sum of all amounts payable to the Investor
Certificateholders of Series 1996-1 on the Distribution Date in
the current Monthly Period is equal to:
Payable in respect of principal of the Class A
Certificates.............................................. $________
Payable in respect of interest on the Class A
Certificates.............................................. $________
Payable in respect of principal of the Class B
Certificates.............................................. $________
Payable in respect of interest on the Class B
Certificates.............................................. $________
Payable in respect of principal of the Collateral
Interest.................................................. $________
Payable in respect of interest on the Collateral
Interest.................................................. $________
Total..................................................... $________
10. [No Series 1996-1 Pay Out Event or Trust Pay Out Event has
occurred.] [The following [Series 1996-1 Pay Out Event] [Trust Pay
Out Event] has occurred: ______________________________.]
D-3
<PAGE>
END NOTES
- ---------
1. Applicable to the Monthly Period in which the Conversion Date occurs, and
any Monthly Period thereafter.
D-4
<PAGE>
EXHIBIT 4.8
<PAGE>
- --------------------------------------------------------------------------------
THE CHASE MANHATTAN BANK (USA)
Seller and Servicer
and
YASUDA BANK AND TRUST COMPANY (U.S.A.)
Trustee
on behalf of the Series 1996-2 Certificateholders
----------------------
SERIES 1996-2 SUPPLEMENT
Dated as of May 1, 1996
to
POOLING AND SERVICING AGREEMENT
Dated as of June 1, 1991
----------------------
CHASE MANHATTAN CREDIT CARD MASTER TRUST
Series 1996-2
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
-----------------
Page
----
SECTION 1. Designation............................................ 1
-----------
SECTION 2. Definitions............................................ 2
-----------
SECTION 3. Minimum Seller Interest, Minimum Aggregate Principal
----------------------------------------------------
Receivables and Removal of Accounts................ 15
-----------------------------------
SECTION 4. Reassignment and Transfer Terms........................ 15
-------------------------------
SECTION 5. Delivery and Payment for the Class A Certificates and
-----------------------------------------------------
the Class B Certificates........................... 15
------------------------
SECTION 6. Depositary; Form of Delivery of Class A and Class B
---------------------------------------------------
Certificates....................................... 16
------------
SECTION 7. Enhancement............................................ 16
-----------
SECTION 8. Article IV of Agreement................................ 16
-----------------------
ARTICLE IV
RIGHTS OF CERTIFICATEHOLDERS
AND ALLOCATION AND APPLICATION OF COLLECTIONS
SECTION 4.02A. Rights of Investor Certificateholders.................. 16
-------------------------------------
SECTION 4.02B. The Series 1996-2 Collection Subaccount................ 17
---------------------------------------
SECTION 4.03. Establishment of Series 1996-2 Investor Accounts....... 18
------------------------------------------------
SECTION 4.04. Allocations............................................ 19
-----------
SECTION 4.05. Determination of Monthly Interest...................... 25
---------------------------------
SECTION 4.06. Determination of Monthly Principal..................... 27
----------------------------------
SECTION 4.07. Required Amount........................................ 27
---------------
SECTION 4.08. Application of Class A Available Funds, Class B
-----------------------------------------------
Available Funds, Collateral Available Funds and
-----------------------------------------------
Available Principal Collections.................... 28
-------------------------------
SECTION 4.09. Defaulted Amounts; Investor Charge-Offs............... 30
---------------------------------------
SECTION 4.10. Excess Spread; Excess Finance Charge Collections...... 32
------------------------------------------------
SECTION 4.11. Reallocated Principal Collections..................... 34
---------------------------------
SECTION 4.12. Group One Excess Finance Charge Collections........... 34
-------------------------------------------
SECTION 4.13. Shared Principal Collections.......................... 35
----------------------------
SECTION 4.14. Determination of LIBOR................................ 35
----------------------
SECTION 4.15. [Reserved]............................................ 36
SECTION 4.16. Time of Deposits and Withdrawals...................... 36
--------------------------------
SECTION 4.17. Conversion from Collections during Billing Cycles to
----------------------------------------------------
Collections during Monthly Periods................. 36
----------------------------------
ARTICLE V
DISTRIBUTIONS AND REPORTS TO INVESTOR
CERTIFICATEHOLDERS
SECTION 5.01. Distributions......................................... 37
-------------
SECTION 5.02. Monthly Certificateholders' Statement................. 38
-------------------------------------
<PAGE>
SECTION 9. Series 1996-2 Pay Out Events.......................... 40
----------------------------
SECTION 10. Series 1996-2 Termination............................. 41
-------------------------
SECTION 11. Ratification and Reaffirmation of Pooling and Servicing
-------------------------------------------------------
Agreement.......................................... 41
---------
SECTION 12. Ratification and Reaffirmation of Representations and
-----------------------------------------------------
Warranties......................................... 42
----------
SECTION 13. Rights Under Section 9.02............................. 42
-------------------------
SECTION 14. No Subordination...................................... 42
----------------
SECTION 15. Repurchase of the Series 1996-2 Certificates.......... 42
--------------------------------------------
SECTION 16. Counterparts.......................................... 43
------------
SECTION 17. Additional Covenants of the Trustee................... 43
-----------------------------------
SECTION 18. Third-Party Beneficiaries.............................. 43
-------------------------
SECTION 19. Series 1996-2 Investor Exchange........................ 44
-------------------------------
SECTION 20. Servicing Compensation................................. 44
----------------------
SECTION 21. Governing Law.......................................... 44
-------------
SECTION 22. Notices................................................ 44
-------
EXHIBITS
EXHIBIT A-1 - Form of Class A Certificate
EXHIBIT A-2 - Form of Class B Certificate
EXHIBIT B - Form of Monthly Payment Instructions and
Notification to the Trustee
EXHIBIT C - Form of Monthly Certificateholders' Statement
EXHIBIT D - Form of Servicer's Certificate
ii
<PAGE>
SERIES 1996-2 SUPPLEMENT, dated as of May 1, 1996 (this "Series
------
Supplement") by and between THE CHASE MANHATTAN BANK (USA), a Delaware banking
- ----------
corporation, as Seller and Servicer, and YASUDA BANK AND TRUST COMPANY (U.S.A.),
a New York trust company, as Trustee.
RECITALS:
--------
1. Section 6.09(b) of the Agreement (as defined herein) provides,
among other things, that the Seller and the Trustee may at any time and from
time to time enter into a supplement to the Agreement for the purpose of
authorizing the issuance by the Trustee to the Seller for the execution and
redelivery to the Trustee for authentication of one or more Series of
Certificates.
2. In the event that any term or provision contained herein shall
conflict with or be inconsistent with any provision contained in the Agreement,
the terms and provisions of this Series Supplement shall govern. All
capitalized terms not otherwise defined herein are defined in the Agreement.
All Article, Section or subsection references herein shall mean Article, Section
or subsections of the Agreement except as otherwise provided herein. Each
capitalized term used or defined herein shall relate only to the Series 1996-2
Certificates and no other Series of Certificates issued by the Trust.
SECTION 1. Designation.
-----------
(a) There is hereby created a Series of Investor Certificates to be
issued pursuant to the Agreement and this Series Supplement to be known as the
"Chase Manhattan Credit Card Master Trust, Series 1996-2." Series 1996-2 shall
- --------------------------------------------------------
be issued in three Classes, the first of which shall be known as the "Class A
-------
Floating Rate Asset Backed Certificates, Series 1996-2" and the second of which
- ------------------------------------------------------
shall be known as the "Class B Floating Rate Asset Backed Certificates, Series
-------------------------------------------------------
1996-2." In addition, there is hereby created a third class of uncertificated
- ------
interests in the Trust which shall, except as expressly provided herein, be
deemed to be a "Class" of "Investor Certificates" for all purposes under the
----- ---------------------
Agreement and this Series Supplement and shall be known as the "Collateral
----------
Interest, Series 1996-2".
- -----------------------
(b) The Collateral Interest Holder shall be entitled to the benefits
of a Holder of a Class of Investor Certificates under the Agreement and this
Series Supplement upon payment by the Collateral Interest Holder of amounts
owing on the Closing Date pursuant to the Loan Agreement. Notwithstanding the
foregoing, except as expressly provided herein, the provisions of Article VI and
Article XII of the Agreement relating to the registration, authentication,
delivery, presentation, cancellation and surrender of Registered Certificates
and clause (d) of Section 6.09(b) shall not be applicable to the Collateral
Interest.
(c) Series 1996-2 shall be included in Group One (as defined below).
Series 1996-2 shall not be subordinated to any other Series.
<PAGE>
(d) Notwithstanding any provision in the Agreement or in this
Supplement to the contrary, the first Distribution Date with respect to Series
1996-2 shall be the June 1996 Distribution Date and the first Monthly Period
shall be the Monthly Period ended May 31, 1996.
SECTION 2. Definitions.
-----------
"Additional Interest" shall mean, with respect to any Distribution
-------------------
Date, the Class A Additional Interest, the Class B Additional Interest and the
Collateral Additional Interest for such Distribution Date.
"Agreement" shall mean the Pooling and Servicing Agreement by and
---------
between The Chase Manhattan Bank (USA), a Delaware banking corporation, as
Seller and Servicer, and Yasuda Bank and Trust Company (U.S.A.), a New York
trust company, as Trustee and all amendments and supplements thereto, including
this Series Supplement.
"Amortization Period" shall mean the period following the Revolving
-------------------
Period which shall be either the Controlled Amortization Period or the Rapid
Amortization Period.
"Available Finance Charge Collections" shall mean:
------------------------------------
(a) in the case of any Monthly Period prior to the Conversion Date,
Collections of Finance Charge Receivables processed during each Billing Cycle
which ended during such Monthly Period, which are allocated to the Investor
Interest and deposited in the Finance Charge Account pursuant to Article IV (or
which will be deposited in the Collection Account on the Transfer Date following
such Monthly Period pursuant to the fourth paragraph of the subsection 4.02(a));
(b) in the case of the Conversion Month, Collections of Finance Charge
Receivables processed on any Date of Processing during such Monthly Period on
and after the Conversion Date, which are allocated to the Investor Interest and
deposited in the Finance Charge Account pursuant to Article IV (or which will be
deposited in the Collection Account on the Transfer Date following such Monthly
Period pursuant to the fourth paragraph of subsection 4.02(a)); and
(c) in the case of any Monthly Period following the Conversion Month,
Collections of Finance Charge Receivables processed on any Date of Processing
during such Monthly Period, which are allocated to the Investor Interest and
deposited in the Finance Charge Account pursuant to Article IV (or which will be
deposited in the Collection Account on the Transfer Date following such Monthly
Period pursuant to the fourth paragraph of subsection 4.02(a));
plus, in each case, an amount equal to the product of (i) the amount of
Interchange allocable to the Trust pursuant to subsection 2.05(k) with respect
to such Monthly Period (to the extent deposited in the Collection Account on the
Transfer Date following such Monthly Period) and (ii) the Investor Percentage
with respect to Finance Charge Receivables and such Monthly Period.
2
<PAGE>
"Available Principal Collections" shall mean:
-------------------------------
(a) in the case of any Monthly Period or portion thereof prior to the
Conversion Date, Collections of Principal Receivables processed during each
Billing Cycle which ended during such Monthly Period or portion thereof, which
were allocated to the Investor Interest and were deposited in the Principal
Account pursuant to subsection 4.04(d)(iii) or 4.04(e)(iii) during any such
Billing Cycle (or which will be deposited in the Collection Account on the
Transfer Date following such Monthly Period pursuant to the fourth paragraph of
subsection 4.02(a));
(b) in the case of the Conversion Month, Collections of Principal
Receivables processed on any Date of Processing during such Monthly Period on or
after the Conversion Date, which were allocated to the Investor Interest and
were deposited in the Principal Account pursuant to subsection 4.04(d)(iii) or
4.04(e)(iii) (or which will be deposited in the Collection Account on the
Transfer Date following such Monthly Period pursuant to the fourth paragraph of
subsection 4.02(a)); and
(c) in the case of any Monthly Period following the Conversion Month,
Collections of Principal Receivables processed on any Date of Processing during
such Monthly Period, which were allocated to the Investor Interest and were
deposited in the Principal Account pursuant to subsection 4.04(d)(iii) or
4.04(e)(iii) (or which will be deposited in the Collection Account on the
Transfer Date following such Monthly Period pursuant to the fourth paragraph of
subsection 4.02(a));
plus, in each case, Shared Principal Collections allocated to Series 1996-2
pursuant to Section 4.13 and the Series Supplement of each other Principal
Sharing Series and all amounts which this Series Supplement provides are to be
treated as Available Principal Collections for the related Transfer Date
(including as provided in subsections 4.04(c)(iii), 4.08(a)(iii), and clause
(b), (e), (f), (i) and (j) of Section 4.10).
"Base Rate" shall mean, with respect to any Monthly Period, the
---------
annualized percentage equivalent of a fraction, the numerator of which is equal
to the sum of the Class A Monthly Interest, the Class B Monthly Interest, the
Collateral Monthly Interest and the Monthly Investor Servicing Fee with respect
to the related Distribution Date and the denominator of which is the Investor
Interest as of the last day of the preceding Monthly Period.
"Class A Additional Interest" shall have the meaning assigned in
---------------------------
Section 4.05(a).
"Class A Available Funds" shall mean, with respect to any Monthly
-----------------------
Period, an amount equal to the Class A Floating Percentage of the Available
Finance Charge Collections with respect to such Monthly Period.
"Class A Certificate Rate" shall mean, with respect to the Class A
------------------------
Certificates for each Interest Period, a per annum rate of 0.08% above LIBOR
determined on the related LIBOR Determination Date, calculated on the basis of
actual days elapsed and a 360-day year.
3
<PAGE>
"Class A Certificateholder" shall mean the Person in whose name a
-------------------------
Class A Certificate is registered in the Certificate Register.
"Class A Certificates" shall mean any one of the Certificates executed
--------------------
by the Seller and authenticated by or on behalf of the Trustee, substantially in
the form of Exhibit A-1.
-----------
"Class A Expected Final Payment Date" shall mean the November 1999
-----------------------------------
Distribution Date.
"Class A Floating Percentage" shall mean, with respect to any Monthly
---------------------------
Period, the percentage equivalent (which percentage shall never exceed 100%) of
a fraction, the numerator of which is equal to the Class A Investor Interest as
of the close of business on the last day of the preceding Monthly Period and the
denominator of which is equal to the Investor Interest as of such day; provided,
however, that with respect to the first Monthly Period, the Class A Floating
Percentage shall mean the percentage equivalent of a fraction, the numerator of
which is the Class A Initial Investor Interest and the denominator of which is
the Initial Investor Interest.
"Class A Initial Investor Interest" shall mean $253,681,000.
---------------------------------
"Class A Interest Shortfall" shall have the meaning specified in
--------------------------
Section 4.05(a).
"Class A Investor Charge-Offs" shall have the meaning specified in
----------------------------
Section 4.09(a).
"Class A Investor Default Amount" shall mean, with respect to each
-------------------------------
Transfer Date, an amount equal to the product of (i) the Series 1996-2 Aggregate
Investor Default Amount for the related Monthly Period and (ii) the Class A
Floating Percentage for such Monthly Period.
"Class A Investor Interest" shall mean, on any date of determination,
-------------------------
an amount (not less than zero) equal to (a) the Class A Initial Investor
Interest, minus (b) the aggregate amount of principal payments made to the Class
-----
A Certificateholders on or prior to such date, minus (c) the excess, if any, of
-----
the aggregate amount of Class A Investor Charge-Offs for all prior Transfer
Dates over Class A Investor Charge-Offs reimbursed pursuant to Section 4.09(a)
----
prior to such date and, minus (d) the principal amount of Class A Certificates
-----
previously tendered and exchanged pursuant to a Series 1996-2 Investor Exchange.
"Class A Monthly Interest" shall have the meaning specified in Section
------------------------
4.05(a).
"Class A Monthly Principal" shall have the meaning specified in
-------------------------
Section 4.06(a).
"Class A Required Amount" shall have the meaning specified in Section
-----------------------
4.07(a).
"Class A Servicing Fee" shall have the meaning specified in Section 20
---------------------
of this Series Supplement.
4
<PAGE>
"Class B Additional Interest" shall have the meaning specified in
---------------------------
Section 4.05(b).
"Class B Available Funds" shall mean, with respect to any Monthly
-----------------------
Period, an amount equal to the Class B Floating Percentage of Available Finance
Charge Collections with respect to such Monthly Period.
"Class B Certificate Rate" shall mean, with respect to the Class B
------------------------
Certificates for each Interest Period, a per annum rate of 0.16% above LIBOR
determined on the related LIBOR Determination Date, calculated on the basis of
actual days elapsed and a 360-day year.
"Class B Certificateholder" shall mean the Person in whose name a
-------------------------
Class B Certificate is registered in the Certificate Register.
"Class B Certificates" shall mean any one of the Certificates executed
--------------------
by the Seller and authenticated by or on behalf of the Trustee, substantially in
the form of Exhibit A-2.
-----------
"Class B Expected Final Payment Date" shall mean the December 1999
-----------------------------------
Distribution Date.
"Class B Floating Percentage" shall mean, with respect to any Monthly
---------------------------
Period, the percentage equivalent (which percentage shall never exceed 100%) of
a fraction, the numerator of which is equal to the Class B Investor Interest as
of the close of business on the last day of the preceding Monthly Period and the
denominator of which is equal to the Investor Interest as of the close of
business on such day; provided, however, that with respect to the first Monthly
Period, the Class B Floating Percentage shall mean the percentage equivalent of
a fraction, the numerator of which is the Class B Initial Investor Interest and
the denominator of which is the Initial Investor Interest.
"Class B Initial Investor Interest" shall mean $16,318,000.
---------------------------------
"Class B Interest Shortfall" shall have the meaning specified in
--------------------------
Section 4.05(b).
"Class B Investor Charge-Offs" shall have the meaning specified in
----------------------------
Section 4.09(b).
"Class B Investor Default Amount" shall mean, with respect to each
-------------------------------
Transfer Date, an amount equal to the product of (i) the Series 1996-2 Aggregate
Investor Default Amount for the related Monthly Period and (ii) the Class B
Floating Percentage for such Monthly Period.
"Class B Investor Interest" shall mean, on any date of determination,
-------------------------
an amount (not less than zero) equal to (a) the Class B Initial Investor
Interest, minus (b) the aggregate amount of principal payments made to the Class
-----
B Certificateholders on or prior to such date, minus (c) the aggregate amount of
-----
Class B Investor Charge-Offs for all prior Transfer Dates, minus (d) the amount
-----
of Reallocated Class B Principal Collections allocated on all prior Transfer
Dates pursuant to Section 4.11(a), minus (e) an amount equal to the amount by
-----
which the Class
5
<PAGE>
B Investor Interest has been reduced on all prior Transfer Dates pursuant to
Section 4.09(a) and plus (f) the amount of Excess Spread and Excess Finance
----
Charge Collections allocated and available on all prior Transfer Dates pursuant
to Section 4.10(f) for the purpose of reimbursing amounts deducted pursuant to
the foregoing clauses (c), (d) and (e) and, minus (g) the principal amount of
-----
Class B Certificates previously tendered and exchanged pursuant to a Series
1996-2 Investor Exchange.
"Class B Monthly Interest" shall have the meaning specified in Section
------------------------
4.05(b).
"Class B Monthly Principal" shall have the meaning specified in
-------------------------
Section 4.06(b).
"Class B Principal Commencement Date" shall mean the Distribution Date
-----------------------------------
on which the Class A Investor Interest is paid in full or, if the Class A
Investor Interest is paid in full on the Class A Expected Final Payment Date and
the Rapid Amortization Period has not commenced, the Distribution Date following
the Class A Expected Final Payment Date.
"Class B Principal Percentage" shall mean, with respect to any Monthly
----------------------------
Period (i) during the Revolving Period, the percentage equivalent (which
percentage shall never exceed 100%) of a fraction, the numerator of which is the
Class B Investor Interest as of the last day of the immediately preceding
Monthly Period and the denominator of which is the Investor Interest as of such
day and (ii) during the Amortization Period or the Rapid Amortization Period,
the percentage equivalent (which percentage shall never exceed 100%) of a
fraction, the numerator of which is the Class B Investor Interest as of the end
of the Revolving Period, and the denominator of which is the Investor Interest
as of the end of the Revolving Period; provided, however, that with respect to
the first Monthly Period, the Class B Principal Percentage shall mean the
percentage equivalent of a fraction, the numerator of which is the Class B
Initial Investor Interest and the denominator of which is the Initial Investor
Interest.
"Class B Required Amount" shall have the meaning specified in Section
-----------------------
4.07(b).
"Class B Servicing Fee" shall have the meaning specified in Section 20
---------------------
of this Series Supplement.
"Closing Date" shall mean May 9, 1996.
------------
"Collateral Additional Interest" shall have the meaning specified in
------------------------------
subsection 4.05(c).
"Collateral Available Funds" shall mean, with respect to any Monthly
--------------------------
Period, an amount equal to the Collateral Floating Percentage of the Available
Finance Charge Collections with respect to such Monthly Period.
"Collateral Charge-Offs" shall have the meaning specified in
----------------------
subsection 4.09(c).
"Collateral Default Amount" shall mean, with respect to any
-------------------------
Distribution Date, an amount equal to the product of (a) the Series 1996-2
Aggregate Investor Default Amount for
6
<PAGE>
the related Monthly Period and (b) the Collateral Floating Percentage applicable
for the related Monthly Period.
"Collateral Floating Percentage" shall mean, with respect to any
------------------------------
Monthly Period, the percentage (rounded to the nearest ten thousandth of one
percent) equivalent (which percentage shall never exceed 100%) of a fraction,
the numerator of which is the Collateral Interest as of the close of business on
the last day of the preceding Monthly Period and the denominator of which is
equal to the Investor Interest as of the close of business on such day;
provided, however, that, with respect to the first Monthly Period, the
Collateral Floating Percentage shall mean the percentage equivalent of a
fraction, the numerator of which is the Collateral Initial Interest and the
denominator of which is the Initial Investor Interest.
"Collateral Initial Interest" shall mean $26,704,297.
---------------------------
"Collateral Interest" shall mean, on any date of determination, an
-------------------
amount equal to (a) the Collateral Initial Interest, minus (b) the aggregate
-----
amount of principal payments made to the Collateral Interest Holder prior to
such date, minus (c) the aggregate amount of Collateral Charge-Offs for all
-----
prior Transfer Dates pursuant to subsection 4.09(c), minus (d) the amount of
-----
Reallocated Principal Collections allocated pursuant to Section 4.11 on all
prior Transfer Dates, minus (e) an amount equal to the amount by which the
-----
Collateral Interest has been reduced on all prior Transfer Dates pursuant to
subsections 4.09(a) and (b), plus (f) the aggregate amount of Excess Spread and
----
Excess Finance Charge Collections allocated and available on all prior Transfer
Dates pursuant to subsection 4.10, for the purpose of reimbursing amounts
deducted pursuant to the foregoing clauses (c), (d) and (e) and, minus (g) the
-----
principal amount of the Collateral Interest previously tendered and exchanged
pursuant to a Series 1996-2 Investor Exchange; and, provided, however, that the
Collateral Interest may not be reduced below zero.
"Collateral Interest Holder" shall mean the entity so designated in
--------------------------
the Loan Agreement.
"Collateral Interest Payment Shortfall" shall have the meaning
-------------------------------------
specified in subsection 4.05(c).
"Collateral Interest Servicing Fee" shall have the meaning specified
---------------------------------
in Section 20 of this Series Supplement.
"Collateral Monthly Interest" shall mean the monthly interest
---------------------------
distributable in respect of the Collateral Interest as calculated in accordance
with subsection 4.05(c).
"Collateral Monthly Principal" shall mean the monthly principal
----------------------------
distributable in respect of the Collateral Interest as calculated in accordance
with subsection 4.06(c).
"Collateral Percentage" shall mean for any Monthly Period, (a) with
---------------------
respect to Defaulted Amounts and Finance Charge Receivables at any time or
Principal Receivables during the Revolving Period, the Collateral Floating
Percentage, and (b) with respect to Principal
7
<PAGE>
Receivables during the Controlled Amortization Period or Rapid Amortization
Period, the Collateral Principal Percentage.
"Collateral Principal Percentage" shall mean for any Monthly Period
-------------------------------
following the end of the Revolving Period, the percentage equivalent (which
percentage shall never exceed 100%) of a fraction, the numerator of which is the
Collateral Interest as of the close of business on the last day of the Revolving
Period and the denominator of which is equal to the Investor Interest as of the
close of business on the last day of the Revolving Period.
"Collateral Rate" shall mean, for any Interest Period, the rate
---------------
specified in the Loan Agreement.
"Collection Recomputation Date" shall mean, with respect to the
-----------------------------
Collections received during any Billing Cycle, the date on which the Servicer
performs the recomputations provided for in Section 4.04(a), which date shall
not be later than the Determination Date in the Monthly Period following the
Monthly Period in which such Billing Cycle ends.
"Controlled Amortization Amount" shall mean (a) for any Distribution
------------------------------
Date beginning with the December 1998 Distribution Date and ending with the
November 1999 Distribution Date, an amount equal to one-twelfth of the Class A
Investor Interest as of the last day of the Revolving Period; and (b) for the
December 1999 Distribution Date, an amount equal to the Class B Investor
Interest as of such last day.
"Controlled Amortization Period" shall mean, unless a Pay Out Event
------------------------------
shall have occurred prior thereto, the period commencing on the close of
business on October 31, 1998 and ending on the first to occur of (a) the
commencement of the Rapid Amortization Period, (b) the payment in full to the
Series 1996-2 Certificateholders of the Investor Interest or (c) the Series
1996-2 Termination Date.
"Controlled Distribution Amount" shall have the meaning specified in
------------------------------
subsection 4.04(d)(iii).
"Controlled Excess Amount" shall have the meaning specified in
------------------------
subsection 4.04(d)(iii).
"Conversion Date" shall have the meaning specified in Section 4.17.
---------------
"Conversion Month" shall mean the Monthly Period in which the
----------------
Conversion Date occurs.
"Deficit Controlled Amortization Amount" shall initially mean zero and
--------------------------------------
shall change as provided in subsection 4.04(d)(iii).
"Definitive Certificates" shall have the meaning specified in Section
-----------------------
6.11.
"Distribution Account" shall have the meaning specified in subsection
--------------------
4.03(b).
8
<PAGE>
"Distribution Date" shall mean the fifteenth day of each calendar
-----------------
month, or, if such fifteenth day is not a Business Day, the next succeeding
Business Day, commencing June 17, 1996; provided, however, that no Distribution
Date shall occur after the earlier to occur of (x) the Distribution Date on
which the Investor Interest has been paid in full or (y) the Series 1996-2
Termination Date.
"Enhancement" shall mean the Collateral Interest.
-----------
"Enhancement Provider" shall mean the Collateral Interest Holder.
--------------------
"Excess Amount" shall have the meaning specified in subsection
-------------
4.04(c)(iii).
"Excess Finance Charge Collections" shall mean amounts available for
---------------------------------
allocation to other Series in Group One pursuant to Section 4.10(m) and amounts
available for allocation to Series 1996-2 which have been designated as "Excess
Finance Charge Collections" in the Series Supplements for other Series in Group
One.
"Excess Spread" shall mean, with respect to any Distribution Date, the
-------------
sum of the amounts, if any, specified pursuant to Sections 4.08(a)(iv),
4.08(b)(iii) and 4.08(c)(ii) with respect to such Distribution Date.
"Excluded Series" shall mean any Series designated as an "Excluded
---------------
Series" in the applicable Series Supplement (but only if the Rating Agency
Condition is satisfied with respect to such exclusion) and thereby excluded from
the computation of Minimum Aggregate Principal Receivables pursuant to Section 3
of this Series Supplement.
"Finance Charge Account" shall have the meaning specified in Section
----------------------
4.03.
"Floating Allocation Percentage" shall mean, with respect to any
------------------------------
particular Monthly Period, the percentage equivalent (which percentage shall
never exceed 100%) of a fraction, the numerator of which is the Investor
Interest as of the last day of the preceding Monthly Period (or in the case of
the Monthly Period in which the Closing Date occurs, the Initial Investor
Interest) and the denominator of which is the greater of (x) the Aggregate
Principal Receivables in the Trust as of the first day of such particular
Monthly Period and (y) the sum of the numerators used to calculate the floating
allocation percentages for all Series then outstanding.
"Group One" shall mean Series 1996-2 and each other Series specified
---------
in the related Series Supplement to be included in Group One.
"Interest Funding Account" shall have the meaning specified in Section
------------------------
4.03(a).
"Initial Investor Interest" shall mean $296,703,297.
-------------------------
"Interest Payment Date" shall mean the 15th day of August, November,
---------------------
February and May through and including November 1998 or, with respect to any
Rapid Amortization
9
<PAGE>
Period, and in any event after November 1998, monthly on the 15th day of each
month (or, if any such day is not a Business Day, the next succeeding Business
Day).
"Interest Period" shall mean, with respect to any Interest Payment
---------------
Date, the period from and including the Interest Payment Date immediately
preceding such Interest Payment Date (or, in the case of the first Interest
Payment Date, from and including the Closing Date) to but excluding such
Interest Payment Date.
"Investor Charge Offs" shall mean Class A Investor Charge Offs, Class
--------------------
B Investor Charge Offs and Collateral Charge Offs.
"Investor Default Amount" shall mean, for any Billing Cycle, the
-----------------------
product of the Floating Allocating Percentage for the Monthly Period in which
such Billing Cycle ends times the amount of Receivables in Defaulted Accounts
which in such Billing Cycle are charged off as uncollectible on the Servicer's
computer master file of VISA(R) and Master Card(R) accounts.
"Investor Interest" shall mean, on any date of determination, an
-----------------
amount equal to the sum of (a) the Class A Investor Interest as of such date,
(b) the Class B Investor Interest as of such date and (c) the Collateral
Interest of such date.
"Investor Percentage" shall mean, on any date of determination:
-------------------
(a) when used with respect to any Principal Receivable on any date of
determination during the Revolving Period, the Floating Allocation
Percentage;
(b) when used with respect to Principal Receivables on any date of
determination during the Controlled Amortization period or the Rapid
Amortization Period, the Principal Allocation Percentage; and
(c) when used with respect to any Finance Charge Receivable and any
Receivable in a Defaulted Account on any date of determination, the
Floating Allocation Percentage;
provided, that in no event shall the Investor Percentage be greater than 100%.
"LIBOR" shall mean, for any Interest Period, the London interbank
-----
offered rate for three-month United States dollar deposits determined by the
Trustee for each Interest Period in accordance with the provisions of Section
4.14.
"LIBOR Determination Date" shall mean May 7, 1996 for the period from
------------------------
the Closing Date to August 14, 1996, and (i) for each quarterly Interest Period
thereafter, the second London Business Day prior to the commencement of each
Interest Period or, (ii) for each monthly Interest Period, the second London
Business Day prior to the November, February, May and August Distribution Date
commencing or, if such Interest Period does not commence on one of such
Distribution Dates, most immediately preceding such Monthly Interest Period.
10
<PAGE>
"Loan Agreement" shall mean the agreement among the Seller, the
--------------
Servicer, the Trustee, and the Collateral Interest Holder, dated as of May 9,
1996, as amended or modified from time to time.
"London Business Day" shall mean any Business Day on which dealings in
-------------------
deposits in United States dollars are transacted in the London interbank market.
"Minimum Aggregate Principal Receivables" shall have the meaning
---------------------------------------
specified in Section 3 hereof.
"Minimum Seller Interest" shall have the meaning specified in Section
-----------------------
3 hereof.
"Monthly Interest" means, with respect to any Distribution Date, the
----------------
sum of the Class A Monthly Interest, the Class B Monthly Interest and the
Collateral Monthly Interest for such Distribution Date.
"Monthly Investor Servicing Fee" shall mean, with respect to each
------------------------------
Monthly Period, an amount equal to 1/12th of the product of the Series Servicing
Fee Percentage and the Investor Interest as of the last day of the preceding
Monthly Period; provided, however, that the Monthly Investor Servicing Fee for
the first Monthly Period shall be $531,593.
"Pay Out Commencement Date" shall mean, with respect to the Series
-------------------------
1996-2 Certificates, the date on which a Trust Pay Out Event is deemed to occur
pursuant to Section 9.01 of the Agreement or a Series 1996-2 Pay Out Event is
deemed to occur pursuant to Section 9 hereof.
"Percentage Allocation" shall have the meaning specified in subsection
---------------------
4.04(d)(iii).
"Pool Amount" shall mean, with respect to any date of determination on
-----------
or after the Implementation Date, an amount equal to the sum of (i) the product
of (x) a fraction, the numerator of which is the Investor Interest on such date
of determination, and the denominator of which is the Aggregate Investor
Interest on such date of determination and (y) the aggregate amount of
Receivables determined at the end of the day immediately prior to such date of
determination, (ii) the amount on deposit in the Series 1996-2 Retention
Subaccount at the end of the day immediately prior to such date of
determination, and (iii) the amount of Excess Amounts and Controlled Excess
Amounts at the end of the day immediately prior to such date of determination.
"Portfolio Yield" shall mean, with respect to Series 1996-2 and with
---------------
respect to any Monthly Period, the annualized percentage equivalent of a
fraction the numerator of which is an amount equal to the sum of (i) the
Available Finance Charge Collections for such Monthly Period and (ii) any Excess
Finance Charge Collections (exclusive of any amounts included in (i)) that are
allocated to Series 1996-2 with respect to such Monthly Period to the extent
deposited in the Finance Charge Account on the Transfer Date following such
Monthly Period, such sum to be calculated on a cash basis after subtracting an
amount equal to the Series 1996-2
11
<PAGE>
Aggregate Investor Default Amount with respect to such Monthly Period, and the
denominator of which is the Investor Interest as of the last day of the
preceding Monthly Period.
"Principal Account" shall have the meaning specified in subsection
-----------------
4.03(a).
"Principal Allocation Percentage" shall mean, with respect to any day
-------------------------------
during a particular Monthly Period, the percentage (rounded to the nearest ten
thousandth of one percent) equivalent (which percentage shall never exceed 100%)
of a fraction, the numerator of which is (a) during the Revolving Period, the
Investor Interest as of the last day of the immediately preceding Monthly Period
and (b) during the Controlled Amortization Period or the Rapid Amortization
Period, the Investor Interest as of the last day of the Revolving Period and the
denominator of which is the greater of (x) the Aggregate Principal Receivables
in the Trust as of the first day of such particular Monthly Period and (y) the
sum of the numerators used to calculate the principal allocation percentages for
all Series outstanding with respect to such Monthly Period.
"Principal Sharing Series" shall mean Series 1996-2 and any other
------------------------
Series in Group One which does not provide that such Series is not a Principal
Sharing Series in the applicable Series Supplement.
"Principal Shortfall" shall have the meaning specified in Section
-------------------
4.10.
"Qualified Trust Institution" shall have the same meaning as
---------------------------
"Qualified Institution."
"Rapid Amortization Period" shall mean an amortization period
-------------------------
commencing on the Pay Out Commencement Date and ending on the earlier to occur
of (i) the date of termination of the Trust pursuant to Section 12.01 or (ii)
the Series 1996-2 Termination Date.
"Rating Agency" shall mean, with respect to the Series 1996-2
-------------
Certificates, each of Moody's and Standard & Poor's.
"Rating Agency Condition" shall mean, with respect to any action, that
-----------------------
the Rating Agency shall have notified the Seller, the Servicer and the Trustee
in writing that such action will not result in the reduction or withdrawal of
the rating of any outstanding Class by the Rating Agency.
"Reallocated Class B Principal Collections" shall mean, with respect
-----------------------------------------
to any Transfer Date, an amount of Collections of Principal Receivables with
respect to the prior Monthly Period, equal to the least of (i) the amount
specified in subsection 4.11(a), (ii) an amount equal to the product of (a) the
Class B Principal Percentage with respect to the Monthly Period relating to such
Transfer Date and (b) the Principal Allocation Percentage with respect to the
Monthly Period relating to such Transfer Date and (c) the amount of Collections
of Principal Receivables with respect to the Monthly Period relating to such
Transfer Date and (iii) the Class B Investor Interest after giving effect to any
Class B Investor Charge-Offs for such Transfer Date.
12
<PAGE>
"Reallocated Collateral Principal Collections" shall mean, with
--------------------------------------------
respect to any Transfer Date, an amount of Collections of Principal Receivables
with respect to the prior Monthly Period, equal to the least of (i) the sum of
the amounts specified in subsections 4.11(a) (net of Reallocated Class B
Principal Collections) and 4.11(b), (ii) an amount not to exceed the product of
(a) the Collateral Percentage with respect to the Monthly Period relating to
such Transfer Date and (b) the Principal Allocation Percentage with respect to
the Monthly Period relating to such Transfer Date and (c) the amount of
Collections of Principal Receivables with respect to the Monthly Period relating
to such Transfer Date and (iii) the Collateral Interest after giving effect to
any Collateral Charge-Offs for such Transfer Date.
"Reallocated Principal Collections" shall mean the sum of Reallocated
---------------------------------
Collateral Principal Collections and Reallocated Class B Principal Collections.
"Reference Banks" means four major banks in the London interbank
---------------
market selected by the Servicer.
"Required Collateral Interest" shall mean (a) initially, $26,704,297
----------------------------
and (b) on any Transfer Date thereafter, 9% of the Investor Interest on the
related Distribution Date (determined after taking into account the payments to
be made on such related Distribution Date), but not less than $8,901,099;
provided, however, that (1) if either (i) there is a reduction in the Collateral
Interest pursuant to clause (c), (d) or (e) of the definition of such term or
(ii) a Pay Out Event with respect to the Investor Certificates has occurred, the
Required Collateral Interest for any Transfer Date shall equal the Required
Collateral Interest for the Transfer Date immediately preceding such reduction
or Pay Out Event, (2) in no event shall the Required Collateral Interest exceed
the sum of the outstanding principal balance of (i) the Class A Certificates and
(ii) the Class B Certificates, each as of the related Distribution Date after
taking into account the payments to be made on such Distribution Date and (3)
the Required Collateral Interest may be reduced at any time to a lesser amount
if the Rating Agency delivers to each of the Seller, the Servicer, the
Collateral Interest Holder and the Trustee written confirmation that after such
reduction the Rating Agency Condition has been satisfied.
"Required Retention Percentage", shall mean (i) 3% on any date of
-----------------------------
determination on or after the Implementation Date during the Revolving Period,
(ii) 3% on any date of determination on or after the Implementation Date during
an Amortization Period and (iii) 3% on any other date of determination.
"Retention Percentage" shall mean (i) with respect to any date of
--------------------
determination on or after the Implementation Date, the numerical equivalent of a
fraction, the numerator of which is equal to the Pool Amount for such date of
determination less the Investor Interest on such date of determination and the
denominator of which is the Pool Amount for such date of determination and (ii)
0% on any other date of determination.
"Revolving Period" shall mean the period from and including May 1,
----------------
1996 to, but not including, the earlier of November 1, 1998 or the Pay Out
Commencement Date.
13
<PAGE>
"Scheduled Series 1996-2 Termination Date" shall mean the December
----------------------------------------
2001 Distribution Date.
"Series 1996-2" shall mean the Series issued pursuant to this Series
-------------
Supplement.
"Series 1996-2 Aggregate Investor Default Amount" shall mean the
-----------------------------------------------
Aggregate Investor Default Amount with respect to Series 1996-2 and such Monthly
Period determined by the Servicer pursuant to subsection 4.02(c)(iii) of the
Agreement.
"Series 1996-2 Certificates" shall mean the Class A Certificates, the
--------------------------
Class B Certificates and the Collateral Interest.
"Series 1996-2 Certificateholder" shall mean the holder of record of
-------------------------------
any Series 1996-2 Certificate.
"Series 1996-2 Collection Subaccount" shall have the meaning specified
-----------------------------------
in Section 4.02B.
"Series 1996-2 Final Termination Date" shall have the meaning set
------------------------------------
forth in Section 10.
"Series 1996-2 Investor Accounts" or "Investor Accounts" shall mean
------------------------------- -----------------
the accounts established pursuant to Section 4.03 hereof.
"Series 1996-2 Investor Exchange" shall mean an Investor Exchange
-------------------------------
pursuant to Section 6.09(b) of the Agreement and Section 19 of this Series
Supplement.
"Series 1996-2 Pay Out Event" shall have the meaning specified in
---------------------------
Section 9 hereof.
"Series 1996-2 Retention Subaccount" shall have the meaning specified
----------------------------------
in Section 4.02A.
"Series 1996-2 Termination Date" shall mean the earlier to occur of
------------------------------
(i) the day after the Distribution Date on which the Series 1996-2 Certificates
and the Collateral Interest are paid in full; (ii) the Scheduled Series 1996-2
Termination Date (unless extended pursuant to Section 10 of this Series
Supplement); or (iii) the Series 1996-2 Final Termination Date.
"Series Servicing Fee Percentage" shall mean 2.15%.
-------------------------------
"Shared Principal Collections" shall mean amounts retained in the
----------------------------
Collection Account as Shared Principal Collections pursuant to subsections
4.04(c)(iii), 4.04(d)(iii) or 4.04(e)(iii) and any amounts designated as Shared
Principal Collections in the Series Supplement for any Principal Sharing Series.
14
<PAGE>
"Telerate Page 3750" shall mean the display page currently so
------------------
designated on the Dow Jones Telerate Service (or such other page as may replace
that page on that service for the purpose of displaying comparable rates or
prices).
SECTION 3. Minimum Seller Interest, Minimum Aggregate Principal
----------------------------------------------------
Receivables and Removal of Accounts.
- -----------------------------------
(a) The Minimum Seller Interest applicable to the Series 1996-2
Certificates shall be 7%. The Minimum Aggregate Principal Receivables shall be
the greater of (i) $269,999,000 less the portion of such amount represented by
----
Series 1996-2 Certificates tendered and canceled pursuant to any Series 1996-2
Investor Exchange and (ii) the sum of the Initial Investor Interests (as defined
in each applicable Supplement) of all Series then outstanding (other than
Excluded Series) less the portion of the Initial Investor Interest of any Series
----
tendered for an Exchange pursuant to Section 6.09(b) of the Agreement and as
provided in the related Supplement or, if any Series (other than Excluded
Series) calculates the investor percentage with respect to Principal Receivables
by means of a numerator based other than on the Initial Investor Interest of
such Series, then at least equal to the sum of the Initial Investor Interest of
each Series (other than Excluded Series) then outstanding which calculates such
investor percentage on the basis of Initial Investor Interest plus, for each
----
other Series (other than Excluded Series) then outstanding, the then current
numerator used to calculate the investor percentage with respect to Principal
Receivables for such Series. Upon final payment of the Series 1996-2
Certificates, the Minimum Aggregate Principal Receivables shall be computed in a
manner consistent with the Agreement or any future Supplement, as appropriate.
(b) In addition to the requirements contained in Section 2.07(a) and
(b) with respect to the removal of Accounts, pursuant to subsection
2.07(b)(iii)(c), the removal of any Receivables of any Removed Accounts on any
Removal Date shall not, in the reasonable belief of the Seller, result in the
failure to make a Controlled Distribution Amount payment.
SECTION 4. Reassignment and Transfer Terms. The Series 1996-2
-------------------------------
Certificates shall be subject to retransfer to the Seller at its option, in
accordance with the terms specified in subsection 12.02(a) of the Agreement, on
any Distribution Date on or after the Distribution Date on which the Investor
Interest is reduced to an amount less than or equal to 5% of the Initial
Investor Interest. The deposit required in connection with any such repurchase
shall be equal to the sum of (a) the aggregate outstanding principal balance of
the Class A Certificates, the Class B Certificates and the Collateral Interest,
all as of the last day of the Monthly Period preceding the Distribution Date on
which the purchase price will be distributed, plus (b) accrued and unpaid
----
interest thereon to, but not including, the Distribution Date on which the
repurchase occurs, less (c) the amount on deposit in the Finance Charge Account
----
which will be transferred to the Distribution Account pursuant to Section 4.08
or Section 4.10 on the related Transfer Date, less (d) the amount on deposit in
----
the Principal Account which will be transferred to the Distribution Account
pursuant to subsection 4.08(e) on the related Transfer Date.
SECTION 5. Delivery and Payment for the Class A Certificates and the
---------------------------------------------------------
Class B Certificates. The Trustee shall deliver the Class A Certificates and
- --------------------
the Class B Certificates when authenticated in accordance with Section 6.02 of
the Agreement.
15
<PAGE>
SECTION 6. Depositary; Form of Delivery of Class A and Class B
---------------------------------------------------
Certificates.
- ------------
(a) The Class A Certificates and the Class B Certificates shall be
delivered as Book-Entry Certificates as provided in Sections 6.01, 6.02 and 6.09
of the Agreement.
(b) The Depositary for Series 1996-2 shall be The Depository Trust
Company, and the Class A Certificates and the Class B Certificates shall be
initially registered in the name of CEDE & Co., its nominee.
(c) For purposes of any provision of this Agreement requiring or
permitting actions with the consent of, or at the direction of, Holders of
Series 1996-2 Certificates having Undivided Interests aggregating a specified
percentage, such direction or consent may be given by the Certificate Owners of
the Class A Certificates and the Class B Certificates having interests in the
requisite percentage of Series 1996-2 Certificates, acting through the Clearing
Agency and the Clearing Agency Participants.
SECTION 7. Enhancement. Enhancement for the Series 1996-2
-----------
Certificates shall consist of the Collateral Interest.
SECTION 8. Article IV of Agreement. Any provision of Article IV of
-----------------------
the Agreement which distributes Collections to the Holder of the Exchangeable
Seller Certificate on the basis of the Seller Percentage shall continue to apply
irrespective of the issuance of the Series 1996-2 Certificates. Sections 4.01
and 4.02 of the Agreement shall be read in their entirety as provided in the
Agreement. Article IV of the Agreement (except for Sections 4.01 and 4.02
thereof) shall read in its entirety as follows and shall be applicable to the
Series 1996-2 Certificates:
ARTICLE IV
RIGHTS OF CERTIFICATEHOLDERS
AND ALLOCATION AND APPLICATION OF COLLECTIONS
SECTION 4.02A. Rights of Investor Certificateholders. The Series
-------------------------------------
1996-2 Certificates shall represent fractional Undivided Interests in the Trust,
consisting of the right to receive, to the extent necessary to make the required
payments with respect to such Series 1996-2 Certificates at the times and in the
amounts specified in this Agreement, (a) the related Investor Percentage of
Collections received with respect to the Receivables and (b) other funds, if
any, allocable to the Series 1996-2 Certificates on deposit in the Collection
Account, the Finance Charge Account, the Principal Account, the Interest Funding
Account, the Distribution Account, the Series 1996-2 Collection Subaccount and
the Retention Subaccount (the "Series 1996-2 Retention Subaccount") with respect
----------------------------------
to the Series 1996-2 Certificates (the "Series 1996-2 Interest"). The
----------------------
Exchangeable Seller Certificate shall represent the ownership interest in the
Trust Assets not allocated to Series 1996-2 or any other Series outstanding;
provided, however, the ownership interest represented by the Exchangeable Seller
Certificate and any other Series
16
<PAGE>
outstanding at any time shall not represent any interest in the Series 1996-2
Collection Subaccount or in the Enhancement, except as specifically provided in
this Article IV.
SECTION 4.02B. The Series 1996-2 Collection Subaccount. Pursuant to
---------------------------------------
Section 4.01 of the Agreement, the Servicer, on behalf of the Trustee, shall
establish and maintain with a Qualified Trust Institution a subaccount of the
Collection Account, for the benefit of the Series 1996-2 Certificateholders,
bearing a designation clearly indicating that the funds therein are held in
trust for the benefit of the Series 1996-2 Certificateholders. The Servicer, on
behalf of the Trustee, at all times shall maintain accurate records reflecting
each transaction in the Series 1996-2 Collection Subaccount and that funds held
therein shall at all times be held in trust for the benefit of the Series 1996-2
Certificateholders. Pursuant to the authority granted to it pursuant to
subsection 3.01(b), the Servicer shall have the power, revocable by the Trustee,
to withdraw funds, and to instruct the Trustee to withdraw funds, from the
Series 1996-2 Collection Subaccount for the purpose of carrying out its duties
hereunder. All such instructions from the Servicer to the Trustee shall be in
writing; provided, however, that the Servicer is entitled to give instructions
to the Trustee by facsimile. Funds on deposit in the Series 1996-2 Collection
Subaccount that are not required to be deposited in the Finance Charge Account,
the Principal Account or the Series 1996-2 Retention Subaccount 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 third
Business Day following the day on which such funds were so deposited, provided,
that such funds shall be available for withdrawal on the Transfer Date following
the Record Date occurring in the Monthly Period in which such funds were
processed for collection. All interest and earnings (net of losses and
investment expenses) on funds on deposit in the Series 1996-2 Collection
Subaccount shall be deposited by the Servicer upon written notice to the Trustee
by the Seller in a separate deposit account with a Qualified Trust Institution
in the name of Servicer, which shall not constitute a part of the Trust, or
shall otherwise be turned over to the Servicer, not less frequently than
monthly; provided, however, that following the failure of the Servicer to make a
payment or deposit, which failure results in the occurrence of a Servicer
Default with respect to the Series 1996-2 Certificates, such interest and
earnings shall not be paid to the Servicer during the period such Servicer
Default is continuing, but shall be retained in, or deposited into, the Finance
Charge Account and shall be treated as Collections of Finance Charge Receivables
allocable to the Series 1996-2 Certificateholders. The Qualified Institution
shall maintain for the benefit of the Series 1996-2 Certificateholders and the
Servicer (as its interest appears herein), possession of any negotiable
instrument or security evidencing the Permitted Investments described in clause
(a) of the definition thereof relating to the Collection Account from the time
of purchase thereof until the time of maturity. Subject to the restrictions set
forth above, the Servicer, or a Person designated in writing by the Servicer,
shall instruct the applicable Qualified Institution in writing with respect to
the investment of funds on deposit in the Series 1996-2 Collection Subaccount.
For purposes of determining the availability of funds or the balances in the
Series 1996-2 Collection Subaccount for any reason under this Agreement, all
investment earnings on such funds (net of losses and expenses) shall be deemed
not to be available or on deposit.
17
<PAGE>
SECTION 4.03. Establishment of Series 1996-2 Investor Accounts.
------------------------------------------------
(a) The Finance Charge Account and Principal Account and the Interest
-----------------------------------------------------------------
Funding Account. The Servicer, for the benefit of the Series 1996-2
- ---------------
Certificateholders shall establish and maintain with a Qualified Trust
Institution in the name of the Trustee, on behalf of the Trust, three segregated
trust accounts maintained in the corporate trust department of such Qualified
Trust Institution, and held in trust by such Qualified Trust Institution (the
"Finance Charge Account," "Principal Account," and "Interest Funding Account,"
- ----------------------- ----------------- ------------------------
respectively), bearing a designation clearly indicating that the funds therein
are held in trust for the benefit of the Series 1996-2 Certificateholders. The
Servicer, on behalf of the Trustee, at all times shall maintain accurate records
reflecting each transaction in the Principal Account and the Finance Charge
Account and the Interest Funding Account and that funds held therein shall at
all times be held in trust for the benefit of the Series 1996-2
Certificateholders. Pursuant to the authority granted to it pursuant to
subsection 3.01(b), the Servicer shall have the power, revocable by the Trustee,
to withdraw funds, and to instruct the Trustee to withdraw funds, from the
Finance Charge Account, Principal Account and the Interest Funding Account for
the purpose of carrying out its duties hereunder. All such instructions from
the Servicer to the Trustee shall be in writing; provided, however, that the
Servicer is entitled to give instructions to the Trustee by facsimile.
(b) The Distribution Account. The Servicer, for the benefit of the
------------------------
Series 1996-2 Certificateholders, shall cause to be established and maintained
in the name of the Trustee, with an office or branch of a Qualified Trust
Institution (other than the Seller), a non-interest bearing segregated demand
deposit account maintained in the corporate trust department of such Qualified
Trust Institution, and held in trust by such Qualified Trust Institution (the
"Distribution Account") bearing a designation clearly indicating that the funds
- ---------------------
deposited therein are held in trust for the benefit of the Series 1996-2
Certificateholders. The Paying Agent shall have the revocable authority to make
withdrawals from the Distribution Account.
(c) Administration of the Finance Charge Account Principal Account and
------------------------------------------------------------------
the Interest Funding Account. Funds on deposit in the Principal Account, the
- ----------------------------
Finance Charge Account and the Interest 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
following the Record Date occurring in the Monthly Period in which such funds
were processed for collection. The Qualified Trust Institution which holds the
Principal Account, the Finance Charge Account and the Interest Funding Account
shall maintain for the benefit of the Series 1996-2 Certificateholders and the
Servicer, as their respective interests appear herein, possession of any
negotiable instrument or security evidencing the Permitted Investments relating
to the Principal Account, the Finance Charge Account or the Interest Funding
Account, as the case may be, described in clause (a) of the definition thereof
from the time of purchase thereof until the time of maturity. At the end of
each month, all interest and earnings (net of losses and investment expenses) on
funds on deposit in the Principal Account, the Finance Charge Account and the
Interest Funding Account shall be deposited by the Servicer upon written notice
to the Trustee in a separate deposit account with a Qualified Trust Institution
in the name of the Servicer, which shall not constitute a part of the Trust, or
shall otherwise be turned over by the Servicer not less frequently than monthly.
Subject to the
18
<PAGE>
restrictions set forth above, the Servicer, or a Person designated in writing by
the Servicer, shall instruct the Qualified Trust Institution which holds the
Principal Account, the Finance Charge Account and the Interest Funding Account
in writing with respect to the investment of funds on deposit in the Principal
Account, the Finance Charge Account and the Interest Funding Account. For
purposes of determining the availability of funds or the balances in the Finance
Charge Account, the Principal Account and the Interest Funding Account for any
reason under this Agreement, all investment earnings on such funds (net of
losses and expenses) shall be deemed not to be available or on deposit.
(d) No Qualified Trust Institution shall be eligible to be the
depository for any of the accounts established pursuant to this Section 4.03
unless it has agreed that, if it ceases to be a "Qualified Trust Institution",
then (i) such entity shall provide the Trustee, the Enhancement Provider, and
the Servicer with prompt written notice that it is no longer a "Qualified Trust
Institution" and (ii) transfer the funds deposited in each of the accounts in
the manner directed by the Servicer within 10 Business Days of the day on which
such entity ceased to be a "Qualified Trust Institution".
SECTION 4.04. Allocations.
-----------
(a) Allocation Adjustment. Unless the Servicer is depositing
---------------------
Collections monthly pursuant to Section 4.02(a) of the Agreement, on each
Collection Recomputation Date to and including the Collection Recomputation Date
after the Collection Recomputation Date referred to in clause (ii) below, the
Servicer shall recompute the allocations to the Series 1996-2 Certificates
previously made pursuant to subsections 4.01(d), 4.02(a), 4.02(b), 4.04(c),
4.04(d) and 4.04(e):
(i) in the case of a Collection Recomputation Date which occurs
prior to the Conversion Date, during each Billing Cycle which ended during
the preceding Monthly Period; and
(ii) in the case of the Collection Recomputation Date which occurs
in the Monthly Period in which the Conversion Date occurs, during each
Billing Cycle which ended during the preceding Monthly Period and on any
other Date of Processing during such Monthly Period;
(such allocations with respect to any such period, the "Estimated Allocations")
---------------------
based on the Collected Finance Charge Receivables and the Collected Principal
Receivables (such allocations with respect to any such period, the "Actual
------
Allocations"), and based on the Actual Allocations of Finance Charge Receivables
- -----------
and Principal Receivables not later than 11:00 a.m. New York City time on the
Transfer Date following such Collection Recomputation Date:
(A) make any necessary deposits or withdrawals with respect to the
Finance Charge Account, the Principal Account, and the Series 1996-2
Retention Subaccount such that the amount on deposit in such Finance Charge
Account and such Principal Account with respect to such Monthly Period is
equal to the Actual Allocation of Finance Charge Receivables and the Actual
Allocation of Principal Receivables, respectively;
19
<PAGE>
(B) pay to the Holder of the Exchangeable Seller Certificate any
underpayment with respect to allocations of Principal Receivables or
Finance Charge Receivables with respect to such Monthly Period;
(C) notify the Holder of the Exchangeable Seller Certificate of the
amount of any overpayment to such Holder and the Holder of the Exchangeable
Seller Certificate shall deposit into the Finance Charge Account, the
Principal Account or the Series 1996-2 Retention Subaccount, as the case
may be, as provided in the notice from the Servicer, the amount of any
overpayment to such Holder which such recomputation discloses; and
(D) for the purposes of administrative convenience, payments to be
made to the Holder of the Exchangeable Seller Certificate and deposits to
be made by the Holder of the Exchangeable Seller Certificate pursuant to
Section 4.04(a) may be netted against each other.
(b) It is the intention of the parties hereto that Section 4.04(a)
be construed so that the reallocation provided for therein shall result in the
Series 1996-2 Certificateholders and the Collateral Interest Holder on the one
hand and the Holder of the Exchangeable Seller Certificate on the other hand
being in the same position they would have been in if the Estimated Allocations
had been based upon actual Collections of Finance Charge Receivables and actual
Collections of Principal Receivables.
(c) Allocations During the Revolving Period. During the Revolving
---------------------------------------
Period, the Servicer shall, prior to the close of business on the day any
Collections are deposited in the Collection Account, pay from the Collection
Account (or, if applicable, the Principal Account) the following amounts as set
forth below:
(i) Deposit in the Finance Charge Account an amount equal to the
product of (A) the applicable Investor Percentage on the Date of Processing
of such Collections (or as determined on the applicable Determination Date
with respect to the preceding Monthly Period if the Servicer is depositing
Collections monthly pursuant to Section 4.02(a) of the Agreement) and (B)
the aggregate amount of Collections processed in respect of Finance Charge
Receivables on such Date of Processing (or during such Monthly Period, as
applicable).
(ii) Deposit in the Series 1996-2 Collection Subaccount for
application, to the extent required by Section 4.11, as Reallocated
Principal Collections on the related Transfer Date, an amount equal to the
product of (A) the sum of the Class B Principal Percentage and the
Collateral Floating Percentage on the Date of Processing of such
Collections (or as determined on the applicable Determination Date with
respect to the previous Monthly Period if the Servicer is depositing
Collections monthly pursuant to Section 4.02(a) of the Agreement), (B) the
applicable Investor Percentage on the Date of Processing of such
Collections (or as determined on the applicable Determination Date with
respect to the preceding Monthly Period if the Servicer is depositing
Collections monthly pursuant to Section 4.02(a) of the Agreement) and (C)
the aggregate amount of such Collections processed in respect of Principal
Receivables on such Date of Processing
20
<PAGE>
(or during such Monthly Period, as applicable), and if on the related
Determination Date such amounts are determined to exceed Reallocated
Principal Collections for the related Transfer Date, the excess shall be
applied on or before such Transfer Date in accordance with clause (iii)
below.
(iii) If any other Principal Sharing Series is outstanding and in
its Amortization Period, retain in the Collection Account for application,
to the extent of any Principal Shortfall with respect to such other
Principal Sharing Series, as Shared Principal Collections on the related
Transfer Date, and otherwise pay to the Holder of the Exchangeable Seller
Certificate, an amount equal to (A) the product of (1) the applicable
Investor Percentage on the Date of Processing of such Collections (or as
determined on the applicable Determination Date with respect to the
preceding Monthly Period if the Servicer is depositing Collections monthly
pursuant to Section 4.02(a) of the Agreement) and (2) the aggregate amount
of such Collections processed in respect of Principal Receivables on such
Date of Processing (or during such Monthly Period, as applicable) less (B)
the amount of Collections applied pursuant to clause (ii) above; provided,
however, that in the event that the amount to be paid to the Holder of the
Exchangeable Seller Certificate pursuant to this subsection 4.04(c)(iii)
with respect to any Date of Processing (or during such Monthly Period, as
applicable) exceeds (such excess hereinafter referred to as the "Excess
------
Amount") the Seller Interest (determined without regard to any amounts on
------
deposit in the Retention Account, "Excess Amounts", "Controlled Excess
Amounts" or such other amounts specified in the Supplement with respect to
any Series) on such Date of Processing (or at the close of business on the
last Business Day of such Monthly Period, as applicable) after giving
effect to the inclusion in the Trust of all Receivables created on or prior
to such date and the application of payments referred to in subsection
4.01(d), the Excess Amount shall be deposited into the Principal Account to
be treated, during any Amortization Period, as Available Principal
Collections for the first Monthly Period thereof unless otherwise provided
in this Section 4.04; further, provided, however, that in the event that,
on any Date of Processing (or at the close of business on the last Business
day of such Monthly Period, as applicable) on or after the Implementation
Date, the Retention Percentage is less than the Required Retention
Percentage, the Servicer shall, after giving effect to the transfer of the
Excess Amount required by the preceding proviso, deposit in the Series
1996-2 Retention Subaccount an amount equal to the amount otherwise payable
to the Holder of the Exchangeable Seller Certificate pursuant to this
clause 4.04(c)(iii). If, after the Implementation Date, on any
Determination Date with respect to an Amortization Period, the Seller's
Interest (as determined above) is less than zero, an amount equal to the
Principal Allocation Percentage of such deficiency (less amounts previously
deposited in the Principal Account with respect to such deficiency pursuant
to this subsection 4.04(c)(iii) and subsection 4.04(d)(iii)) shall be
transferred from the Series 1996-2 Retention Account to the Principal
Account to be applied as Available Principal Collections on the related
Transfer Date.
(iv) If, on any Business Day, (x) Excess Amounts are on deposit in the
Principal Account, and (y) after application of the Collections deposited
on such Business Day in accordance with subsections 4.01(d), 4.04(c)(iii)
and 4.04(d)(iii), the Seller Interest
21
<PAGE>
(determined without regard to any amounts on deposit in the Retention
Account, "Excess Amounts", "Controlled Excess Amounts" or such other
amounts specified in the Supplement with respect to any Series) exceeds
zero, (A) the Servicer shall, if such Business Day occurs before the
Implementation Date, withdraw, or instruct the Trustee to withdraw, and in
such case the Trustee shall withdraw, from the Principal Account funds in
an amount equal to the lesser of (1) the Seller Interest (as determined
above) on such Business Day and (2) the Excess Amounts then on deposit in
the Principal Account and pay such funds to the Holder of the Exchangeable
Seller Certificate, and (B) if such Business Day occurs on or after the
Implementation Date and the Retention Percentage is greater than the
Required Retention Percentage, the Servicer shall withdraw, or instruct the
Trustee to withdraw, and in such case the Trustee shall withdraw, from the
Principal Account and pay to the Holder of the Exchangeable Seller
Certificate, funds in an amount equal to the lesser of (i) the Excess
Amounts then on deposit in the Principal Account and (ii) the product of
(x) the Pool Amount on such date of determination and (y) the amount by
which the Retention Percentage on such date of determination exceeds the
Required Retention Percentage on such date of determination.
(d) Allocations During the Controlled Amortization Period. During the
-----------------------------------------------------
Controlled Amortization Period, the Servicer shall, prior to the close of
business on the day any Collections are deposited in the Collection Account, pay
from the Collection Account (or, if applicable, the Principal Account) the
following amounts as set forth below:
(i) Deposit in the Finance Charge Account an amount equal to the
product of (A) the applicable Investor Percentage on the Date of Processing
of such Collections (or as determined on the applicable Determination date
with respect to the preceding Monthly Period if the Servicer is depositing
Collections monthly pursuant to Section 4.02(a) of the Agreement) and (B)
the aggregate amount of Collections processed in respect of Finance Charge
Receivables on such Date of Processing (or during such Monthly Period, as
applicable);
(ii) Deposit in the Series 1996-2 Collection Subaccount for
application, to the extent required by Section 4.11, as Reallocated
Principal Collections on the related Transfer Date an amount equal to the
product of (A) the sum of the Class B Principal Percentage and the
Collateral Principal Percentage on the Date of Processing of such
Collections (or as determined on the applicable Determination Date with
respect to the previous Monthly Period if the Servicer is depositing
Collections monthly pursuant to Section 4.02(a) of the Agreement), (B) the
applicable Investor Percentage on the Date of Processing of such
Collections (or as determined on the applicable Determination Date with
respect to the preceding Monthly Period if the Servicer is depositing
Collections monthly pursuant to Section 4.02(a) of the Agreement) and (C)
the aggregate amount of such Collections processed in respect of Principal
Receivables on such Date of Processing (or during such Monthly Period, as
applicable), and if on the related Determination Date such amounts are
determined to exceed Reallocated Principal Collections for the related
Transfer Date, the excess shall be applied on or before such Transfer Date
in accordance with clause (iii) below.
22
<PAGE>
(iii) Deposit in the Principal Account an amount, if any, equal to
(A) the product of (1) the applicable Investor Percentage on the Date of
Processing of such Collections (or as determined on the applicable
Determination Date with respect to the preceding Monthly Period if the
Servicer is depositing Collections monthly pursuant to Section 4.02(a) of
the Agreement) and (2) the aggregate amount of such Collections processed
in respect of Principal Receivables on such Date of Processing (or during
such Monthly Period, as applicable) (for any such Date of Processing, a
"Percentage Allocation") less (B) the amount of Collections applied
----------------------
pursuant to clause (ii) above; provided, however, that if the sum of such
Percentage Allocation and all preceding Percentage Allocations with respect
to the same Monthly Period (the "Monthly Total Percentage Allocation")
-----------------------------------
exceeds the sum of the Controlled Amortization Amount and the Deficit
Controlled Amortization Amount for such Monthly Period (the "Controlled
----------
Distribution Amount"), then such excess (the "Controlled Excess Amount")
------------------- ------------------------
shall not be treated as a Percentage Allocation and shall, if any other
Principal Sharing Series is outstanding and in its Amortization Period, be
retained in the Collection Account for application, to the extent of any
Principal Shortfall with respect to such Principal Sharing Series, as
Shared Principal Collections on the related Transfer Date, and otherwise be
paid to the Holder of the Exchangeable Seller Certificate up to the Seller
Interest (determined without regard to any amounts on deposit in the
Retention Account, "Excess Amounts", "Controlled Excess Amounts" or such
other amounts specified in the Supplement with respect to any Series) and
thereafter shall be applied in the manner described in the two immediately
following sentences; provided further, that if on the last day of the
Monthly Period the Monthly Total Percentage Allocation is less than the
Controlled Distribution Amount, then such deficit shall be the "Deficit
Controlled Amortization Amount" for the next succeeding Monthly Period and
the Monthly Total Percentage Allocation shall be deposited to the Principal
Account; further, provided, however, that the Deficit Controlled
Amortization Amount for the next succeeding Monthly Period shall be
recomputed following the latest Collection Recomputation Date related to
such Monthly Period, based on the adjustments, if any, made pursuant to
subsection 4.04(a). In the event that, on any Date of Processing on which
a Controlled Excess Amount exists, the Controlled Excess Amount exceeds the
Seller Interest (as determined above) after giving effect to the inclusion
in the Trust of all Receivables created on or prior to such Date of
Processing, the Controlled Excess Amount shall be deposited into the
Principal Account. In the event that, on any Date of Processing on or
after the Implementation Date in which a Controlled Excess Amount is on
deposit in the Principal Account, and the Retention Percentage is equal to
or less than the Required Retention Percentage, the Servicer shall, after
giving effect to the transfer of the Controlled Excess Amount referred to
in the preceding sentence, withdraw, or instruct the Trustee to withdraw,
and in such case the Trustee shall withdraw, from the Principal Account and
deposit in the Series 1996-2 Retention Subaccount an amount equal to the
amount otherwise payable to the Holder of the Exchangeable Seller
Certificate pursuant to this clause 4.04(d)(iii).
(iv) If, on any Business Day, (x) Controlled Excess Amounts are on
deposit in the Principal Account and (y) after application of the
Collections deposited on such Business Day in accordance with subsections
4.01(d), 4.04(c)(iii) and 4.04(d)(iii), the
23
<PAGE>
Seller Interest (determined without regard to any amounts on deposit in the
Retention Account, "Excess Amounts", "Controlled Excess Amounts" or such
other amounts specified in the Supplement with respect to any Series)
exceeds zero, (A) the Servicer shall, if such Business Day occurs before
the Implementation Date, withdraw, or instruct the Trustee to withdraw, and
in such case the Trustee shall withdraw, from the Principal Account funds
in an amount equal to the lesser of (1) the Seller Interest (as determined
above) on such Business Day and (2) the Controlled Excess Amounts then on
deposit in the Principal Account, and pay such funds to the Holder of the
Exchangeable Seller Certificate, and (B) if such Business Day occurs on or
after the Implementation Date and the Retention Percentage is equal to or
greater than the Required Retention Percentage, the Servicer shall
withdraw, or instruct the Trustee to withdraw, and in such case the Trustee
shall withdraw, from the Principal Account and pay to the Holder of the
Exchangeable Seller Certificate, funds in an amount equal to the lesser of
(i) the Controlled Excess Amounts then on deposit in the Principal Account
and (ii) the product of (x) the Pool Amount on such date of determination
and (y) the amount by which the Retention Percentage on such date of
determination exceeds the Required Retention Percentage on such date of
determination.
(e) Allocations During the Rapid Amortization Period. During the
------------------------------------------------
Rapid Amortization Period, the Servicer shall, prior to the close of business on
the day any Collections are deposited in the Collection Account, pay from the
Collection Account the following amounts as set forth below:
(i) Deposit in the Finance Charge Account an amount equal to the
product of (A) the applicable Investor Percentage on the Date of Processing
of such Collections (or as determined on the applicable Determination Date
with respect to the preceding Monthly Period if the Servicer is depositing
Collections monthly pursuant to Section 4.02(a) of the Agreement) and (B)
the aggregate amount of such Collections processed in respect of Finance
Charge Receivables on such Date of Processing (or during such Monthly
Period, as applicable).
(ii) Deposit in the Series 1996-2 Collection Subaccount for
application, to the extent required by Section 4.11, as Reallocated
Principal Collections on the related Transfer Date an amount equal to the
product of (A) the sum of the Class B Principal Percentage and the
Collateral Principal Percentage on the Date of Processing of such
Collections (or as determined on the applicable Determination Date with
respect to the previous Monthly Period if the Servicer is depositing
Collections monthly pursuant to Section 4.02(a) of the Agreement), (B) the
applicable Investor Percentage on the Date of Processing of such
Collections (or as determined on the applicable Distribution Date with
respect to the preceding Monthly Period if the Servicer is depositing
Collections monthly pursuant to Section 4.02(a) of the Agreement) and (C)
the aggregate amount of such Collections processed in respect of Principal
Receivables on such Date of Processing (or during such Monthly Period, as
applicable), and if on the related Determination Date such amounts are
determined to exceed Reallocated Principal Collections for the related
Transfer Date, the excess shall be applied on or before such Transfer Date
in accordance with clause (ii) below.
24
<PAGE>
(iii) Deposit in the Principal Account an amount equal to (A) the
product of (1) the applicable Investor Percentage on the Date of Processing
of such Collections (or as determined on the applicable Determination Date
with respect to the preceding Monthly Period if the Servicer is depositing
Collections monthly pursuant to Section 4.02(a) of the Agreement) and (2)
the aggregate amount of such Collections processed in respect of Principal
Receivables on such Date of Processing (or during such Monthly Period, as
applicable) less (B) the amount of Collections applied pursuant to clause
(ii) above; provided, however, that after the date on which the Investor
Interest has been reduced to zero, the amount determined in accordance with
this subparagraph (iii) shall, if any other Principal Sharing Series is
outstanding and in its Amortization Period, be retained in the Collection
Account for application, to the extent necessary, as Shared Principal
Collections on the related Transfer Date, and otherwise be paid to the
Holder of the Exchangeable Seller Certificate up to the Seller Interest,
and the excess if any, will be allocated as a Principal Receivable in the
manner provided in Article IV excluding any allocations to Series 1996-2.
SECTION 4.05. Determination of Monthly Interest.
---------------------------------
(a) The amount of monthly interest ("Class A Monthly Interest")
------------------------
distributable with respect to the Class A Certificates on any Distribution Date
shall be an amount equal to the product of (i) (A) a fraction, the numerator of
which is the actual number of days in the period from (and including) the
immediately prior Distribution Date (or in the case of the first Distribution
Date, the Closing Date) to (but excluding) such Distribution Date and the
denominator of which is 360, times (B) the Class A Certificate Rate and (ii) the
outstanding principal amount of the Class A Certificates as of the close of
business on the last day of the preceding Monthly Period.
On the Determination Date preceding each Distribution Date, the
Servicer shall determine the excess, if any (the "Class A Interest Shortfall"),
--------------------------
of (x) the Class A Monthly Interest for such Distribution Date over (y) the
aggregate amount of funds allocated and available to pay such Class A Monthly
Interest on such Distribution Date. If the Class A Interest Shortfall with
respect to any Distribution Date is greater than zero, an additional amount
("Class A Additional Interest") equal to the product of (i) (A) a fraction, the
- -----------------------------
numerator of which is the actual number of days in the related Interest Period
and the denominator of which is 360, times (B) the Class A Certificate Rate and
(ii) such Class A Interest Shortfall (or the portion thereof which has not been
paid to the Class A Certificateholders or deposited in the Interest Funding
Account with respect to the Class A Certificates) shall be payable as provided
herein with respect to the Class A Certificates on each Interest Payment Date
following such Distribution Date to and including the Distribution Date on which
such Class A Interest Shortfall is paid to the Class A Certificateholders.
Notwithstanding anything to the contrary herein, Class A Additional Interest
shall be payable or distributed to the Class A Certificateholders only to the
extent permitted by applicable law.
(b) The amount of monthly interest ("Class B Monthly Interest")
------------------------
distributable with respect to the Class B Certificates on any Distribution Date
shall be an amount equal to the product of (i) (A) a fraction, the numerator of
which is the actual number of days in the period
25
<PAGE>
from (and including) the immediately prior Distribution Date (or in the case of
the first Distribution Date, the Closing Date) to (but excluding) such
Distribution Date and the denominator of which is 360, times (B) the Class B
Certificate Rate and (ii) the outstanding principal amount of the Class B
Certificates as of the close of business on the last day of the preceding
Monthly Period.
On the Determination Date preceding each Distribution Date, the
Servicer shall determine the excess, if any (the "Class B Interest Shortfall"),
--------------------------
of (x) the Class B Monthly Interest for such Distribution Date over (y) the
aggregate amount of funds allocated and available to pay such Class B Monthly
Interest on such Distribution Date. If the Class B Interest Shortfall with
respect to any Distribution Date is greater than zero, an additional amount
("Class B Additional Interest") equal to the product of (i) (A) a fraction, the
- -----------------------------
numerator of which is the actual number of days in the related Interest Period
and the denominator of which is 360, times (B) the Class B Certificate Rate and
(ii) such Class B Interest Shortfall (or the portion thereof which has not been
paid to the Class B Certificateholders or deposited in the Interest Funding
Account with respect to the Class A Certificates) shall be payable as provided
herein with respect to the Class B Certificates on each Interest Payment Date
following such Distribution Date to and including the Distribution Date on which
such Class B Interest Shortfall is paid to the Class B Certificateholders.
Notwithstanding anything to the contrary herein, Class B Additional Interest
shall be payable or distributed to the Class B Certificateholders only to the
extent permitted by applicable law.
(c) The amount of monthly interest distributable from the Distribution
Account to the Collateral Interest Holder, which shall be an amount equal to the
product of (i)(A) a fraction, the numerator of which is the actual number of
days in the period from (and including) the immediately prior Distribution Date
(or in the case of the first Distribution Date, the Closing Date) to (but
excluding) such Distribution Date and the denominator of which is 360, times (B)
-----
the Collateral Rate in effect with respect to the related Interest Period, times
-----
(ii) the Collateral Interest as of the close of business on the last day of the
preceding Monthly Period (the "Collateral Monthly Interest").
---------------------------
On the Determination Date preceding each Distribution Date, the
Servicer shall determine the excess, if any (the "Collateral Interest Payment
---------------------------
Shortfall"), of (x) the Collateral Monthly Interest for such Distribution Date
- ---------
over (y) the aggregate amount of funds allocated and available to pay such
Collateral Monthly Interest on such Distribution Date. If the Collateral
Interest Payment Shortfall with respect to any Distribution Date is greater than
zero, an additional amount ("Collateral Additional Interest") equal to the
------------------------------
product of (i) (A) a fraction, the numerator of which is the actual number of
days in the related Interest Period and the denominator of which is 360, times
(B) the Collateral Rate and (ii) such Collateral Interest Payment Shortfall (or
the portion thereof which has not been paid to the Collateral Interest Holder)
shall be payable as provided herein with respect to the Collateral Interest on
each Distribution Date following such Distribution Date to and including the
Distribution Date on which such Collateral Interest Payment Shortfall is paid to
the Collateral Interest Holder. Notwithstanding anything to the contrary
herein, Collateral Additional Interest shall be payable or distributed to the
Collateral Interest Holder only to the extent permitted by applicable law.
26
<PAGE>
SECTION 4.06. Determination of Monthly Principal.
----------------------------------
(a) The amount of monthly principal ("Class A Monthly Principal") to
-------------------------
be transferred from the Principal Account to the Distribution Account with
respect to the Class A Certificates on each Transfer Date, beginning with the
first to occur of (i) the first Transfer Date with respect to a Rapid
Amortization Period, if any, and (ii) the first Transfer Date with respect to
the Class A Controlled Amortization Period, shall be equal to the least of (x)
the Available Principal Collections on deposit in the Principal Account with
respect to such Transfer Date, (y) for each Transfer Date with respect to the
Class A Controlled Amortization Period, the Controlled Distribution Amount for
the related Distribution Date and (z) the Class A Investor Interest on such
Transfer Date.
(b) The amount of monthly principal ("Class B Monthly Principal") to
-------------------------
be transferred from the Principal Account to the Distribution Account with
respect to the Class B Certificates on each Transfer Date, beginning with the
Transfer Date with respect to Class B Principal Commencement Date, shall be
equal to the least of (x) the Available Principal Collections on deposit in the
Principal Account with respect to such Transfer Date (minus the portion of such
-----
Available Principal Collections to be applied to Class A Monthly Principal on
the related Distribution Date), (y) for each Transfer Date with respect to the
Class B Controlled Amortization Period, the Controlled Distribution Amount for
the related Distribution Date and (z) the Class B Investor Interest on such
Transfer Date.
(c) The amount of monthly principal (the "Collateral Monthly
------------------
Principal") to be distributed from the Principal Account to the Collateral
Interest Holder with respect to the Collateral Interest on each Transfer Date
shall be (A) during the Revolving Period following any reduction of the Required
Collateral Interest pursuant to clause (3) of the proviso in the definition
thereof an amount equal to the lesser of (1) the excess, if any, of the
Collateral Interest (after taking into account any adjustments to be made on
such Transfer Date pursuant to Sections 4.09 and 4.11) over the Required
Collateral Interest on such Transfer Date, or (2) the Available Principal
Collections on such Transfer Date or (B) during the Controlled Amortization
Period or Rapid Amortization Period an amount equal to the lesser of (1) the
excess, if any, of the Collateral Interest (after taking into account any
adjustments to be made on such Transfer Date pursuant to Sections 4.09 and 4.11)
over the Required Collateral Interest on such Transfer Date, or (2) the excess,
if any, of (i) the Available Principal Collections on such Transfer Date over
(ii) the sum of the Class A Monthly Principal and the Class B Monthly Principal
for such Transfer Date.
SECTION 4.07. Required Amount.
---------------
(a) With respect to each Transfer Date, on the related Determination
Date, the Servicer shall determine the amount (the "Class A Required Amount"),
-----------------------
if any, by which (a) the sum of (i) Class A Monthly Interest for the related
Distribution Date, (ii) any Class A Monthly Interest previously due but not paid
to the Class A Certificateholders or deposited into the Interest Funding Account
on a prior Distribution Date, (iii) any Class A Additional Interest for the
related Distribution Date and any Class A Additional Interest previously due but
not paid to the Class A Certificateholders or deposited into the Interest
Funding Account on a prior
27
<PAGE>
Distribution Date, (iv) the Class A Servicing Fee for such Transfer Date, (v)
any Class A Servicing Fee previously due but not paid to the Servicer, and (vi)
the Class A Investor Default Amount, if any, for such Transfer Date exceeds (b)
the Class A Available Funds. In the event that the Class A Required Amount for
such Transfer Date is greater than zero, the Servicer shall give written notice
to the Trustee of such positive Class A Required Amount on the date of
computation.
(b) With respect to each Transfer Date, on the related Determination
Date, the Servicer shall determine the amount (the "Class B Required Amount"),
-----------------------
if any, by which (a) the sum of (i) Class B Monthly Interest for the related
Distribution Date, (ii) any Class B Monthly Interest previously due but not paid
to the Class B Certificateholders or deposited into the Interest Funding Account
on a prior Distribution Date, (iii) any Class B Additional Interest for the
related Distribution Date and any Class A Additional Interest previously due but
not paid to the Class B Certificateholders or deposited into the Interest
Funding Account on a prior Distribution Date, (iv) the Class B Servicing Fee for
such Transfer Date, (v) any Class B Servicing Fee previously due but not paid to
the Servicer, and (vi) the Class B Investor Default Amount, if any, for such
Transfer Date exceeds (b) the Class B Available Funds. In the event that the
Class B Required Amount for such Transfer Date is greater than zero, the
Servicer shall give written notice to the Trustee of such positive Class B
Required Amount on the date of computation.
SECTION 4.08. Application of Class A Available Funds, Class B
-----------------------------------------------
Available Funds, Collateral Available Funds and Available Principal Collections.
- -------------------------------------------------------------------------------
The Servicer shall apply, or shall cause the Trustee to apply, on each Transfer
Date, Class A Available Funds, Class B Available Funds, Collateral Available
Funds on deposit in the Finance Charge Account and Available Principal
Collections on deposit in the Principal Account, in each case with respect to
such Transfer Date, to make the following distributions:
(a) On each Transfer Date, an amount equal to the Class A Available
Funds with respect to such Transfer Date will be distributed in the
following priority:
(i) an amount equal to Class A Monthly Interest for the
related Distribution Date, plus the amount of any Class A Monthly
----
Interest previously due but not distributed to Class A
Certificateholders or deposited to the Interest Funding Account on a
prior Distribution Date, plus the amount of any Class A Additional
----
Interest for such Distribution Date and any Class A Additional
Interest previously due but not distributed to Class A
Certificateholders or deposited to the Interest Funding Account on a
prior Distribution Date, shall be (A) deposited to the Distribution
Account for distribution to the Class A Certificateholders if such
Distribution Date is an Interest Payment Date or (B) deposited in the
Interest Funding Account if such Distribution Date is not an Interest
Payment Date, and transferred to the Distribution Account on the next
Interest Payment Date for distribution to the Class A
Certificateholders on such Interest Payment Date;
(ii) an amount equal to the Class A Servicing Fee for such
Transfer Date, plus the amount of any Class A Servicing Fee previously
----
due but not
28
<PAGE>
distributed to the Servicer on a prior Transfer Date, shall be
distributed to the Servicer (unless such amount has been netted
against deposits to the Collection Account in accordance with Section
4.02 of the Agreement);
(iii) an amount equal to the Class A Investor Default Amount
for such Transfer Date shall be treated as a portion of Available
Principal Collections for such Transfer Date and deposited into the
Principal Account; and
(iv) the balance, if any, shall constitute Excess Spread and
shall be allocated and distributed as set forth in Section 4.10.
(b) On each Transfer Date, an amount equal to the Class B Available
Funds with respect to such Transfer Date will be distributed in the
following priority:
(i) an amount equal to Class B Monthly Interest for the
related Distribution Date, plus the amount of any Class B Monthly
----
Interest previously due but not distributed to Class B
Certificateholders or deposited to the Interest Funding Account on a
prior Distribution Date, plus the amount of any Class B Additional
----
Interest for such Distribution Date and any Class B Additional
Interest previously due but not distributed to Class B
Certificateholders or deposited to the Interest Funding Account on a
prior Distribution Date, shall be (A) deposited to the Distribution
Account for distribution to the Class B Certificateholders if such
Distribution Date is an Interest Payment Date or (B) deposited in the
Interest Funding Account if such Distribution Date is not an Interest
Payment Date, and transferred to the Distribution Account on the next
succeeding Interest Payment Date for distribution to the Class B
Certificateholders on the such Interest Payment Date;
(ii) an amount equal to the Class B Servicing Fee for such
Transfer Date, plus the amount of any Class B Servicing Fee previously
----
due but not distributed to the Servicer on a prior Transfer Date,
shall be distributed to the Servicer (unless such amount has been
netted against deposits to the Collection Account in accordance with
Section 4.02 of the Agreement); and
(iii) the balance, if any, shall constitute Excess Spread and
shall be allocated and distributed as set forth in Section 4.10.
(c) On each Transfer Date an amount equal to the Collateral Available
Funds with respect to the Distribution Date will be distributed in the
following priority:
(i) during any period in which neither Chase USA nor an
affiliate thereof is Servicer, an amount equal to the Collateral
Interest Servicing Fee for such Transfer Date plus the amount of any
Collateral Interest Servicing Fee due but not paid to the Servicer on
any prior Transfer Date shall be distributed to the Servicer (unless
such amount has been netted against deposits to the Collection Account
in accordance with Section 4.02 of the Agreement); and
29
<PAGE>
(ii) the balance, if any, shall constitute Excess Spread and shall
be allocated and distributed as set forth in Section 4.10.
(d) On each Transfer Date with respect to the Revolving Period, an
amount equal to the Available Principal Collections deposited in the
Principal Account for the related Monthly Period up to an amount equal to
Collateral Monthly Principal for such Transfer Date will be distributed to
the Collateral Interest Holder in accordance with the Loan Agreement and
the remainder of such Collections shall be treated as Shared Principal
Collections and applied in accordance with Section 4.13.
(e) On each Transfer Date with respect to the Controlled Amortization
Period or a Rapid Amortization Period, an amount equal to the Available
Principal Collections deposited in the Principal Account for the related
Monthly Period will be applied in the following priority:
(i) an amount equal to Class A Monthly Principal for the
related Distribution Date, up to the Class A Investor Interest on such
Transfer Date, shall be transferred to the Distribution Account for
payment to the Class A Certificateholders;
(ii) for each Transfer Date beginning on the Class B Principal
Commencement Date, an amount equal to Class B Monthly Principal for
the related Distribution Date, up to the Class B Investor Interest on
such Transfer Date, shall be transferred to the Distribution Account
for payment to the Class B Certificateholders; and
(iii) for each Transfer Date, after giving effect to paragraphs
(i) and (ii) above, an amount equal to the balance, if any, of such
Available Principal Collections then on deposit in the Collection
Account up to an amount equal to Collateral Monthly Principal for such
Distribution Date shall be distributed to the Collateral Interest
Holder in accordance with the Loan Agreement and the remainder of such
Collections shall be treated as Shared Principal Collections and
applied in accordance with Section 4.13 hereof.
SECTION 4.09. Defaulted Amounts; Investor Charge-Offs.
---------------------------------------
(a) On each Determination Date, the Servicer shall calculate the Class
A Investor Default Amount, if any, for the related Transfer Date. If, on any
Transfer Date, the Class A Required Amount for the related Monthly Period
exceeds the sum of (x) the sum of Reallocated Class B Principal Collections and
Reallocated Collateral Principal Collections with respect to such Monthly Period
and (y) the amount of Excess Spread and the Excess Finance Charge Collections
allocable to Series 1996-2 with respect to such Monthly Period, the Collateral
Interest (after giving effect to reductions for any Collateral Charge-Offs and
any Reallocated Principal Collections on such Distribution Date) will be reduced
by the amount of such excess, but not by more than the lesser of the Class A
Investor Default Amount and the Collateral Interest (after giving effect to
reductions for any Collateral Charge-Offs and any
30
<PAGE>
Reallocated Principal Collections on such Distribution Date) for such Transfer
Date. In the event that such reduction would cause the Collateral Interest to
be a negative number, the Collateral Interest shall be reduced to zero and the
Class B Investor Interest (after giving effect to reductions for any Class B
Investor Charge-Offs and any Reallocated Class B Principal Collections on such
Distribution Date) will be reduced, as of the related Distribution Date, by the
amount by which the Collateral Interest would have been reduced below zero. In
the event that such reduction would cause the Class B Investor Interest to be a
negative number, the Class B Investor Interest shall be reduced to zero and the
Class A Investor Interest shall be reduced by the amount by which the Class B
Investor Interest would have been reduced below zero, but not by more than the
excess, if any, of the Class A Investor Default Amount for such Transfer Date
over the aggregate amount of the reductions, if any, of the Collateral Interest
and the Class B Investor Interest for such Distribution Date (a "Class A
-------
Investor Charge-Off"). Class A Investor Charge-Offs shall thereafter be
- -------------------
reimbursed and the Class A Investor Interest increased (but not by an amount in
excess of the aggregate unreimbursed Class A Investor Charge-Offs) on any
Distribution Date by the amount of Excess Spread and Excess Finance Charge
Collections allocated and available on the related Transfer Date for that
purpose pursuant to Section 4.10(b). References to "negative numbers" above
shall be determined without regard to the requirement that the Invested Amount
of a Class shall not be reduced below zero.
(b) On each Determination Date, the Servicer shall calculate the Class
B Investor Default Amount, if any, for the related Transfer Date. If, on any
Transfer Date, the Class B Investor Default Amount for such Distribution Date
exceeds the Excess Spread and Excess Finance Charge Collections with respect to
the related Monthly Period which are allocated and available to pay such amount
pursuant to Section 4.10(e) and not required to be applied pursuant to clause
(a) above, the Collateral Interest (after giving effect to reductions for any
Collateral Charge-Offs and any Reallocated Principal Collections on such
Transfer Date and any adjustments with respect thereto as described in
subsection 4.09(a) above) will be reduced, as of the related Distribution Date,
by the amount of such excess but not by more than the lesser of the Class B
Investor Default Amount and the Collateral Interest (after giving effect to
reductions for any Collateral Charge-Offs and any Reallocated Principal
Collections on such Transfer Date and any adjustments with respect thereto as
described in subsection 4.09(a) above) for such Transfer Date. In the event
that such reduction would cause the Collateral Interest to be a negative number,
the Collateral Interest shall be reduced to zero and then the Class B Investor
Interest shall be reduced by the amount of the excess, but not by more than the
excess of the Class B Investor Default Amount over the aggregate amount of
reductions, if any, of the Collateral Interest (other than reductions pursuant
to clause (a) above) for such Distribution Date (a "Class B Investor Charge-
-----------------------
Off"). Class B Investor Charge-Offs shall thereafter be reimbursed and the
Class B Investor Interest increased as of the related Distribution Date (but not
by an amount in excess of the aggregate unreimbursed Class B Investor Charge-
Offs) on any Transfer Date by the amount of Excess Spread and Excess Finance
Charge Collections allocated and available for that purpose pursuant to Section
4.10(f). References to "negative numbers" above shall be determined without
regard to the requirement that the Invested Amount of a Class shall not be
reduced below zero.
(c) On or before each Transfer Date, the Servicer shall calculate the
Collateral Default Amount. If on any Transfer Date, the Collateral Default
Amount for the prior Monthly
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Period exceeds the amount of Excess Spread and Excess Finance Charge Collections
which are allocated and available to fund such amount pursuant to subsection
4.10(i), the Collateral Interest will be reduced by the amount of such excess
but not by more than the lesser of the Collateral Default Amount and the
Collateral Interest for such Distribution Date (a "Collateral Charge-Off"). The
---------------------
Collateral Interest will after any reduction pursuant to this Section 4.09 be
reimbursed on any Distribution Date by the amount of the Excess Spread allocated
and available on the related Transfer Date for that purpose as described under
subsection 4.10(j).
SECTION 4.10. Excess Spread; Excess Finance Charge Collections. The
------------------------------------------------
Servicer shall apply, or shall cause the Trustee to apply, on each Transfer
Date, Excess Spread and Excess Finance Charge Collections allocated to Series
1996-2 with respect to the related Monthly Period, to make the following
distributions in the following order of priority:
(a) an amount equal to the Class A Required Amount, if any, with
respect to such Transfer Date shall be transferred by the Trustee to fund
any deficiency pursuant to Sections 4.08(a)(i), (ii) and (iii); provided,
however, that in the event the Class A Required Amount for such Transfer
Date exceeds the amount of Excess Spread and Excess Finance Charge
Collections allocated to Series 1996-2, such Excess Spread and Excess
Finance Charge Collections shall be applied first to pay amounts due with
respect to such Transfer Date pursuant to Section 4.08(a)(i), second, to
pay the Class A Servicing Fee pursuant to Section 4.08(a)(ii) and third to
pay the Class A Investor Default Amount for such Transfer Date pursuant to
Section 4.08(a)(iii);
(b) an amount equal to the aggregate amount of Class A Investor
Charge-Offs which have not been previously reimbursed as provided in
Section 4.09(a) (after giving effect to the allocation on such Transfer
Date of any amount for that purpose pursuant to Section 4.09(a)) shall be
deposited in the Principal Account and treated as a portion of Available
Principal Collections for such Transfer Date;
(c) an amount equal to the sum of (i) any Class B Monthly Interest to
become due on the related Distribution Date but not funded from amounts
transferred to the Distribution Account on such Transfer Date and any Class
B Monthly Interest not distributed to the Class B Certificateholders or
deposited in the Interest Funding Account on a prior Distribution Date and
(ii) the amount of any Class B Additional Interest previously due but not
funded from amounts transferred to the Distribution Account or deposited in
the Interest Funding Account on such Transfer Date and any Class B
Additional Interest not distributed to the Class B Certificateholders or
deposited in the Interest Funding Account on a prior Distribution Date,
after giving effect to the allocation in Section 4.08(b)(i), shall be
transferred to the Distribution Account for payment to the Class B
Certificateholders;
(d) an amount equal to any Class B Servicing Fees due but not paid to
the Servicer either on such Transfer Date or a prior Transfer Date shall be
paid to the Servicer;
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<PAGE>
(e) an amount equal to the Class B Investor Default Amount for such
Transfer Date shall be deposited in the Principal Account and treated as a
portion of Available Principal Collections for such Transfer Date;
(f) an amount equal to the aggregate amount by which the Class B
Investor Interest has been reduced pursuant to clauses (c), (d) and (e) of
the definition of "Class B Investor Interest" in this Series Supplement
(but not in excess of the aggregate amount of such reductions which have
not been previously reimbursed) shall be deposited in the Principal Account
and treated as a portion of Available Principal Collections for such
Transfer Date;
(g) an amount equal to the Collateral Monthly Interest for the related
Distribution Date, plus the amount of any Collateral Monthly Interest
----
previously due but not distributed to the Collateral Interest Holder on a
prior Distribution Date, plus the amount of any Collateral Additional
----
Interest for such Distribution Date and any Collateral Additional Interest
previously due but not distributed to the Collateral Interest Holder on a
prior Distribution Date shall be deposited in the Distribution Account for
payment to the Collateral Interest Holder in accordance with the Loan
Agreement;
(h) an amount equal to any Monthly Investor Servicing Fees due but not
paid to the Servicer either on such Transfer Date or on a prior Transfer
Date shall be paid to the Servicer;
(i) an amount equal to the Collateral Default Amount, if any, for the
prior Monthly Period shall be deposited in the Principal Account and
treated as a portion of Available Principal Collections for such Transfer
Date;
(j) an amount equal to the aggregate amount by which the Collateral
Interest has been reduced below the Required Collateral Interest for
reasons other than the payment of principal to the Collateral Interest
Holder (but not in excess of the aggregate amount of such reductions which
have not been previously reimbursed) shall be deposited into the Principal
Account and treated as a portion of Available Principal Collections for
such Transfer Date;
(k) an amount equal to the aggregate of any other amounts then payable
(including any such amounts payable only when funds are available
therefor), other than any such amounts that may be payable to the Seller,
pursuant to the Loan Agreement (to the extent such amounts are payable
pursuant to the Loan Agreement out of Excess Finance Charge Collections and
Excess Spread) shall be distributed to the Collateral Interest Holder for
application in accordance with the Loan Agreement; and
(l) [Reserved]
(m) the balance, if any, will constitute a portion of Excess Finance
Charge Collections for such Distribution Date and will be available for
allocation to other Series in Group One or to the Holder of the Seller
Certificate as described in Section 4.12.
33
<PAGE>
SECTION 4.11. Reallocated Principal Collections. On or before each
---------------------------------
Transfer Date, the Servicer shall instruct the Trustee in writing (which writing
shall be substantially in the form of Exhibit B hereto) to withdraw from the
---------
Series 1996-2 Collection Subaccount and apply the Reallocated Principal
Collections for such Transfer Date to make the following distributions on each
Distribution Date in the following priority:
(a) an amount equal to the excess, if any, of (i) the Class A Required
Amount, if any, with respect to such Transfer Date over (ii) the amount of
Excess Spread and Excess Finance Charge Collections with respect to the
related Monthly Period shall be applied pursuant to subsections 4.08(a)(i),
(ii) and (iii); and
(b) an amount equal to the excess, if any, of (i) the Class B Required
Amount, if any, with respect to such Transfer Date over (ii) the amount of
Excess Spread and Excess Finance Charge Collections allocated and available
to the Class B Certificates pursuant to subsections 4.10(c), (d) and (e) on
such Transfer Date shall be applied pursuant to subsections 4.08(b)(i),
(ii) and 4.10(e).
On each Distribution Date, the Collateral Interest shall be reduced by
the amount of Reallocated Principal Collections for the Transfer Date preceding
such Distribution Date. In the event that such reduction would cause the
Collateral Interest (after giving effect to any Collateral Charge-Offs for such
Distribution Date) to be a negative number, the Collateral Interest (after
giving effect to any Collateral Charge-Offs for such Distribution Date) shall be
reduced to zero and the Class B Investor Interest shall be reduced by the amount
by which the Collateral Interest would have been reduced below zero. In the
event that the reallocation of Reallocated Principal Collections would cause the
Class B Investor Interest (after giving effect to any Class B Investor Charge-
Offs for such Distribution Date) to be a negative number on any Distribution
Date, Reallocated Principal Collections shall be reallocated on the related
Transfer Date in an aggregate amount not to exceed the amount which would cause
the Class B Investor Interest (after giving effect to any Class B Investor
Charge-Offs for such Distribution Date) to be reduced to zero. References to
"negative numbers" above shall be determined without regard to the requirement
that the Invested Amount of a Class not be reduced below zero.
SECTION 4.12. Group One Excess Finance Charge Collections. Series
-------------------------------------------
1996-2 shall be included in Group One. Excess Finance Charge Collections with
respect to all Series in Group One for any Transfer Date will be allocated to
Series 1996-2 in the event that Series 1996-2 has not produced Excess Finance
Charge Collections with respect to such Transfer Date in an amount equal to the
product of (x) the aggregate amount of Excess Finance Charge Collections with
respect to all the Series in Group One for such Transfer Date and (y) a
fraction, the numerator of which is the Investor Interest for Series 1996-2 for
such Transfer Date and the denominator of which is the aggregate amount of
Investor Interests (as defined in each Supplement) for all Series which have not
produced Excess Finance Charge Collections with respect to such Transfer Date.
Any Excess Finance Charge Collections allocated to a Series in Group One which,
when applied under this Section and the applicable Series Supplement, would
produce Excess Finance Charge Collections with respect to such Series for such
Transfer Date shall, to the extent of such latter excess, be paid to the Holder
of the Seller Certificate. The sharing of Excess Finance Charge Collections
among Series in Group One will cease if the
34
<PAGE>
Seller shall deliver to the Trustee an Officer's Certificate to the affect that,
in the reasonable belief of the Seller, the continued sharing of Excess Finance
Charge Collections among Series in Group One would have adverse regulatory
implications with respect to the Seller.
SECTION 4.13. Shared Principal Collections. Shared Principal
----------------------------
Collections for any Transfer Date will be allocated to Series 1996-2 in an
amount equal to the product of (x) the aggregate amount of Shared Principal
Collections with respect to all Principal Sharing Series for such Transfer Date
and (y) a fraction, the numerator of which is the Principal Shortfall for Series
1996-2 for such Transfer Date and the denominator of which is the aggregate
amount of Principal Shortfalls for all the Series which are Principal Sharing
Series for such Transfer Date. The "Principal Shortfall" for Series 1996-2 will
be equal to (a) for any Distribution Date with respect to the Revolving Period,
zero, (b) for any Transfer Date with respect to the Controlled Amortization
Period, the excess, if any, of, prior to the date on which the Series 1996-2
Certificates are paid in full, the Controlled Distribution Amount with respect
to such Distribution Date and, thereafter, the Collateral Interest, over, in
either case, the amount of Available Principal Collections for such Distribution
Date (excluding any portion thereof attributable to Shared Principal
Collections) and (c) for any Distribution Date with respect to a Rapid
Amortization Period, the excess, if any, of the Investor Interest over the
amount of Available Principal Collections for such Transfer Date (excluding any
portion thereof attributable to Shared Principal Collections). "Principal
---------
Shortfall" for other Series in Group One shall have the meaning set forth in the
- ---------
related Series Supplement.
SECTION 4.14. Determination of LIBOR.
----------------------
(a) On each LIBOR Determination Date, the Trustee, or the Paying Agent
on behalf of the Trustee, will determine LIBOR on the basis of the rate for
three-month United States dollar deposits that appears on Telerate Page 3750 as
of 11:00 a.m., London time, on such date. If such rate does not appear on
Telerate Page 3750, the rate for that date will be determined on the basis of
the rates at which three-month United States dollars are offered by the
Reference Banks at approximately 11:00 a.m., London time, on that day to prime
banks in the London interbank market. The Trustee, or the Paying Agent on
behalf of the Trustee, will request the principal London office of each of the
Reference Banks to provide a quotation of its rate. If at least two such
quotations are provided, the rate for that date will be the arithmetic mean of
the quotations. If fewer than two quotations are provided as requested, the
rate for that date will be the arithmetic mean of the rates quoted by major
banks in New York City, selected by the Servicer, at approximately 11:00 a.m.,
New York City time, on that day for three-month loans in United States dollars
to leading European banks. If on the LIBOR Determination Date, the banks
selected by the Trustee are not quoting as described above, LIBOR for such
Interest Period will be LIBOR as determined on the previous LIBOR Determination
Date.
(b) On each LIBOR Determination Date, the Trustee, or the Paying Agent
on behalf of the Trustee, shall send to the Servicer by facsimile notification
of LIBOR for the following Interest Period.
35
<PAGE>
SECTION 4.15. [Reserved]
SECTION 4.16. Time of Deposits and Withdrawals. Any deposit,
--------------------------------
withdrawal, transfer or other payment required to be made to or from the
Collection Account, Finance Charge Account, Principal Account, Distribution
Account or Series 1996-2 Retention Subaccount shall be deemed to occur when the
instructions with respect to such deposit, withdrawal, transfer or other payment
have been transmitted over the applicable automated payment system.
SECTION 4.17. Conversion from Collections during Billing Cycles to
----------------------------------------------------
Collections during Monthly Periods.
- ----------------------------------
(a) The Servicer may deliver to the Trustee and the Rating Agency a
notice that it has changed the software that it uses to service the Accounts and
that, effective as of a certain date specified in such notice (the "Notice
------
Date"), and on each day thereafter, the Servicer is able to calculate the
aggregate amount of Receivables, Finance Charge Receivables and Principal
Receivables effective as of any date of determination, and is not limited to
calculating such amounts by reference to the amount thereof as of the end of
each Billing Cycle. The "Conversion Date" shall occur on the later of:
---------------
(i) the first day of any Monthly Period specified in such notice;
(ii) the first day of any Monthly Period following the amendment of
the Agreement such that:
(A) the Aggregate Receivables, Aggregate Finance Charge
Receivables and Aggregate Principal Receivables on any date of
determination shall equal the aggregate amount hereof as of the close
of business on the last day of the Monthly Period preceding such date
of determination;
(B) Collections which are available for distribution on any
Transfer Date shall be based on Collections received during the
preceding Monthly Period, not on Collections received during Billing
Cycles which ended during the preceding Monthly Period;
(C) the Agreement no longer refers to Collections received or
allocated during Billing Cycles;
(D) the Portfolio Yield for the Monthly Period in which the
Conversion Date occurs shall be adjusted, if necessary, to compensate
for any distortion in the Portfolio Yield resulting from such
conversion; and
(E) such other matters as may be required by the Trustee, the
Rating Agency or the Servicer to accomplish the intent of the
foregoing;
36
<PAGE>
provided, however, that the Rating Agency shall have confirmed in writing that
such amendment will not result in the Rating Agency's reducing or withdrawing
its rating on any then outstanding Series rated by it.
(b) Notwithstanding anything contained in the Agreement to the
contrary, the Agreement may be amended pursuant to Section 13.01(a)(i) from time
to time by the Seller, the Servicer and the Trustee and without the consent of
the Certificateholders, (i) to amend the reallocation provisions of Section
4.02(b) and Section 4.04 to accomplish the intention expressed in Section
4.04(b), and (ii) to accomplish the intention expressed in Section 4.17(a).
Such amendment may also amend the provisions of the Agreement regarding the
Retention Account in order to continue the operation of such Account, modify the
provisions regarding deposits into or withdrawals from such Account (provided
that only amounts which would otherwise be payable to the Holder of the
Exchangeable Seller Certificate may be used to fund such Account) and provided
that funds therein may be treated as Principal Receivables for purposes of
satisfying the Minimum Seller Interest and Minimum Aggregate Principal
Receivables requirements of Section 2.06(a) and 6.09(b).
(c) On the Determination Date related to the Conversion Month, the
Servicer shall withdraw, or instruct the Trustee to withdraw, and the Trustee,
acting in accordance with such instructions shall, withdraw and pay to the
Holder of the Exchangeable Seller Certificate on the succeeding Transfer Date,
an amount equal to the amount by which (i) the Collections of Finance Charge
Receivables processed during each Billing Cycle which ended during the
Conversion Month and Collections of Finance Charge Receivables processed on any
other Date of Processing during the Conversion Month, in each case which are
allocated to the Investor Interest and deposited in the Finance Charge Account
pursuant to Article IV, exceeds (ii) the Available Finance Charge Collections
for the Conversion Month.
ARTICLE V
DISTRIBUTIONS AND REPORTS TO INVESTOR
CERTIFICATEHOLDERS
(THE FOLLOWING PORTION OF THIS
ARTICLE IS APPLICABLE ONLY TO SERIES 1996-2.)
SECTION 5.01. Distributions. On each Interest Payment Date, the
-------------
Paying Agent shall (i) transfer from the Interest Funding Account amounts on
deposit in such account for deposit to the Distribution Account and (ii)
distribute (in accordance with the certificate delivered by the Servicer to the
Trustee pursuant to Section 3.04(b)) to each Series 1996-2 Certificateholder of
record on the immediately preceding Record Date and the Collateral Interest
Holder (other than as provided in Section 2.04(e) or Section 12.03 hereof
respecting a final distribution) such Certificateholder's pro rata share (based
--- ----
on the aggregate Undivided Interests represented by Series 1996-2 Certificates
held by such Certificateholder and the Collateral Interest Holder) of amounts on
deposit in the Distribution Account as are payable to the Series 1996-2
Certificateholders of such Class pursuant to Sections 4.08 and 4.10 hereof by
check
37
<PAGE>
mailed to each Certificateholder except that (i) with respect to Certificates
registered in the name of the nominee of a Clearing Agency, such distribution
shall be made in immediately available funds and (ii) with respect to the
Collateral Interest, such distribution shall be made in accordance with the Loan
Agreement.
SECTION 5.02. Monthly Certificateholders' Statement.
-------------------------------------
(a) On or before each Distribution Date, the Paying Agent shall
forward to each Series 1996-2 Certificateholder, the Rating Agency and any
Series 1996-2 Certificate Owner, upon the written request of such Series 1996-2
Certificate Owner, a statement substantially in the form of Exhibit C hereto
prepared by the Servicer setting forth among other things the following
information (which, in the case of subclauses (i), (ii) and (iii) below, shall
be stated on the basis of an original principal amount of $1,000 per Certificate
and, in the case of subclauses (viii) and (ix) shall be stated on an aggregate
basis and on the basis of an original principal amount of $1,000 per
Certificate):
(i) the total amount distributed on such Distribution Date;
(ii) the amount of such distribution, if any, allocable to Certificate
Principal of each Class;
(iii) the amount of such distribution allocable to Certificate
Interest of each Class;
(iv) the amount of Collections of Principal Receivables processed
during (A) the Billing Cycles which ended during the preceding Monthly
Period, (B) the Billing Cycles which ended during the preceding Monthly
Period and on any other Date of Processing during such Monthly Period or
(C) the preceding Monthly Period, as appropriate, and allocated in respect
of the Series 1996-2 Certificates;
(v) the aggregate amount of Principal Receivables, the Investor
Interest, the Class A Investor Interest, the Class B Investor Interest, the
Collateral Interest as a percentage of the aggregate amount of Principal
Receivables in the Trust as of the end of the day on the last day of the
preceding Monthly Period, the Class A Floating Percentage, the Class B
Floating Percentage, the Class B Principal Percentage, the Collateral
Floating Percentage and the Collateral Principal Percentage;
(vi) the aggregate outstanding balance of Accounts which are up to 29,
30-59, 60-89 and 90 or more days delinquent in accordance with the
Servicer's then existing Account Guidelines as of the end of the day on the
last day of,the related Billing Cycle which ended during the preceding
Monthly Period;
(vii) the Aggregate Investor Default Amount, the Class A Investor
Default Amount, the Class B Investor Default Amount and the Collateral
Default Amount, in each case for the preceding Monthly Period;
38
<PAGE>
(viii) the Investor Charge Offs, Class A Charge Offs, Class B Charge
Offs and Collateral Charge Offs for the preceding Monthly Period;
(ix) the Investor Charge Offs, Class A Charge Offs, Class B Charge
Offs and Collateral Charge Offs reimbursed on the Transfer Date immediately
preceding such Distribution Date;
(x) the Investor Monthly Servicing Fee, Class A Monthly Servicing Fee,
Class B Monthly Servicing Fee and Collateral Monthly Servicing Fee for the
preceding Monthly Period;
(xi) the Available Collateral Interest and the Required Collateral
Interest, each as of the close of business on such Distribution Date;
(xii) the aggregate amount of Collections of Finance Charge
Receivables during (A) the Billing Cycles which ended during the preceding
Monthly Period, (B) the Billing Cycles which ended during the preceding
Monthly Period and on any other Date of Processing during such Monthly
Period or (C) the preceding Monthly Period, as appropriate, and allocated
in respect of the Series 1996-2 Certificates;
(xiii) the Deficit Controlled Amortization Amount; and
(xiv) the Pool Factor as of the preceding Record Date.
The Monthly Certificateholders' Statement, the Monthly Payment
Instructions and Notification to the Trustee and the Servicer's Certificate
shall be substantially in the form of Exhibits C, B and D, respectively, hereto,
------------- -
with such changes as the Servicer may determine to be necessary or desirable;
provided, however, that no such change shall serve to exclude information
required by this subsection 5.02(a). The Servicer shall, upon making such
determination, deliver to the Trustee and the Rating Agency an Officer's
Certificate to which shall be annexed the form of such Exhibit, as so changed.
Upon the delivery of such Officer's Certificate to the Trustee, such Exhibit, as
so changed, shall for all purposes of this Agreement constitute such Exhibit.
The Trustee may conclusively rely upon such Officer's Certificate as to such
change conforming to the requirements of this Agreement.
(b) Annual Certificateholders' Tax Statement. On or before January 31
----------------------------------------
of each calendar year, beginning with calendar year 1997, the Servicer shall
furnish to the Paying Agent, who shall distribute to each Person who at any time
during the preceding calendar year was a Series 1996-2 Certificateholder, a
statement prepared by the Servicer containing the information required to be
contained in the regular monthly report to Series 1996-2 Certificateholders, as
set forth in subclauses (i), (ii) and (iii) above, aggregated for such calendar
year or the applicable portion thereof during which such Person was a Series
1996-2 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 Series 1996-2
Certificateholders to prepare their tax returns. Such obligations of the Paying
Agent shall be deemed to have been satisfied to the extent that substantially
comparable
39
<PAGE>
information shall be provided by the Paying Agent pursuant to any requirements
of the Internal Revenue Code as from time to time in effect.
SECTION 9. Series 1996-2 Pay Out Events. If any one of the following
----------------------------
events shall occur during the Revolving Period or the Controlled Amortization
Period with respect to the Series 1996-2 Certificates:
(a) failure on the part of the Seller or the Holder of the
Exchangeable Seller Certificate (i) to make any payment or deposit required
by the terms of (A) the Agreement relating to the Series 1996-2
Certificates, or (B) this Series Supplement, on or before the date
occurring five days after the date such payment or deposit is required to
be made herein or (ii) duly to observe or perform in any material respect
any covenants or agreements of the Seller set forth in the Agreement, which
failure has a material adverse effect on the Series 1996-2
Certificateholders 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 Seller by the Trustee, or to
the Seller and the Trustee by the Enhancement Provider or the Holders of
Series 1996-2 Certificates evidencing Undivided Interests aggregating not
less than 50% of the Investor Interest of this Series 1996-2, and continues
to affect materially and adversely the interests of the Series 1996-2
Certificateholders for such period;
(b) any representation or warranty made by the Seller in the
Agreement, including this Series Supplement, or any information contained
in a computer file or microfiche list required to be delivered by the
Seller pursuant to Section 2.01, 2.06 or 3.04(c), (i) shall prove to have
been incorrect in any material respect when made or when delivered, which
continues to be incorrect in any material respect for a period of 60 days,
after the date on which written notice of such failure, requiring the same
to be remedied, shall have been given to the Seller by the Trustee, or to
the Seller and the Trustee by the Enhancement Provider or the Holders of
the Series 1996-2 Certificates evidencing Undivided Interests aggregating
not less than 50% of the Investor Interest of this Series 1996-2, and (ii)
as a result of which the interests of the Series 1996-2 Certificateholders
are materially and adversely affected and continue to be materially and
adversely affected for such period; provided, however, that a Series 1996-2
Pay Out Event pursuant to this subsection 9.01(b) shall not be deemed to
have occurred hereunder if the Seller has accepted reassignment of the
related Receivable, or all of such Receivables, if applicable, during such
period in accordance with the provisions hereof;
(c) the Portfolio Yield averaged for any three consecutive Monthly
Periods is reduced to a rate which is less than the Base Rate averaged over
the same three Monthly Periods;
(d) the Seller shall fail to convey Receivables arising under
Additional Accounts to the Trust, as required by subsection 2.06(a) of the
Agreement; or
(e) any Servicer Default shall occur which would have a material
adverse effect on the Holders of the Series 1996-2 Certificates;
40
<PAGE>
then, in the case of any event described in subparagraph (a), (b) or (e), after
the applicable grace period set forth in such subparagraphs, either the Trustee
or the Holders of Series 1996-2 Certificates evidencing Undivided Interests
aggregating more than 50% of the Investor Interest of this Series by notice then
given in writing to the Seller and the Servicer (and to the Trustee if given by
the Certificateholders) may declare that a pay out event (a "Series 1996-2 Pay
-----------------
Out Event") has occurred and shall be deemed to have occurred as of the date of
- ---------
such notice, and in the case of any event described in subparagraphs (c) or (d),
a Series 1996-2 Pay Out Event shall occur without any notice or other action on
the part of the Trustee, the Enhancement Provider or the Series 1996-2
Certificateholders immediately upon the occurrence of such event.
SECTION 10. Series 1996-2 Termination.
-------------------------
In the event that the final distribution of principal and interest to
the Series 1996-2 Certificateholders has not occurred before the Distribution
Date occurring in the second month preceding the month in which the Scheduled
Series 1996-2 Termination Date occurs (the "Extension Date"), the right of
--------------
Series 1996-2 Certificateholders to receive payments from the Trust may, by vote
of the Holders of Series 1996-2 Certificates evidencing Undivided Interests
aggregating not less than 66 2/3% of the Investor Interest of any Class of this
Series prior to the Transfer Date in the month immediately preceding the month
in which the Scheduled Series 1996-2 Termination Date occurs, be extended until
the earlier of (i) the December 2002 Distribution Date or (ii) the day after the
Distribution Date following the date on which funds shall have been deposited in
the Distribution Account sufficient to pay the Investor Interest plus Series
1996-2 Certificate interest accrued through and including the last day of the
month preceding the month in which such Distribution Date occurs (the "Series
------
1996-2 Final Termination Date"). The Trustee shall notify the Series 1996-2
- -----------------------------
Certificateholders, by notice given by first-class mail to such Series 1996-2
Certificateholders at their addresses as they appear on the Certificate
Register, no later than the Extension Date, that: (i) unless the requisite
percentage of Holders of Series 1996-2 Certificates as of the Record Date
immediately succeeding the Extension Date vote to extend the right of the Series
1996-2 Certificateholders to receive payments from the Trust until the Final
Series 1996-2 Termination Date prior to the Transfer Date in the month
immediately preceding the month in which the Scheduled Series 1996-2 Termination
Date occurs, the right of the Series 1996-2 Certificateholders from the Trust
will terminate on the Scheduled Series 1996-2 Termination Date; and (ii) (unless
the Rating Agency notifies the Trustee to the contrary prior to such Record
Date) that the ratings assigned to the Series 1996-2 Certificates by the Rating
Agency will be withdrawn on the Scheduled Series 1996-2 Termination Date. In
the event that the Series 1996-2 Certificateholders of any Class vote to extend
the right of the Series 1996-2 Certificateholders to receive payments from the
Trust, the Servicer shall continue to collect payments on the Receivables and
apply such Collections as provided in Article IV, and the Series 1996-2
Certificates of each Class shall be treated as a single Class of Class A
Certificates for all purposes of this Series Supplement except that the interest
rate for each Class shall continue to be the respective rate provided herein for
such Class.
SECTION 11. Ratification and Reaffirmation of Pooling and Servicing
-------------------------------------------------------
Agreement. As supplemented by this Series Supplement, the Agreement is in all
- ---------
respects
41
<PAGE>
ratified and confirmed and the Agreement as so supplemented by this Series
Supplement shall be read, taken, and construed as one and the same instrument.
SECTION 12. Ratification and Reaffirmation of Representations and
-----------------------------------------------------
Warranties. Except as otherwise provided in the Agreement, each of the Seller,
- ----------
the Servicer and the Trustee hereby ratify and reaffirm its representations and
warranties contained in the Agreement as follows: (a) with respect to the
Seller, the representations and warranties contained in (i) Section 2.03, (ii)
Section 2.04(a) (with respect to the Agreement as supplemented by this Series
Supplement) and (iii) Section 2.04(b), (b) with respect to the Servicer, the
representations and warranties contained in Section 3.03 of the Agreement and
(c) with respect to the Trustee, the representations and warranties contained in
Section 11.15 of the Agreement, as though such representations and warranties
were made by such party at and as of the Closing Date.
SECTION 13. Rights Under Section 9.02. With respect to Series 1996-2
-------------------------
and any subsequently issued Series and the reference in Section 9.02(a) of the
Agreement to "instructions of Holders of Investor Certificates evidencing more
than 50% of the investor interest of any Series (or, with respect to any Series
with two or more Classes, 50% of any Class)", neither the Series 1996-2
Certificateholders nor any Class thereof shall be deemed to have given such
instructions unless Holders of not less than 50% of the Investor Interest of
Series 1996-2 and each Class thereof together with Holders of not less than 50%
of the investor interest of each other Series issued subsequent to January 1,
1995 and each Class thereof give such instructions.
SECTION 14. No Subordination. Notwithstanding the provisions
----------------
contained in Section 13.01 to the contrary, the Agreement may also be amended
from time to time by the Servicer, the Seller and the Trustee with the consent
of (a) the Holders of Series 1996-2 Certificates evidencing Undivided Interests
aggregating not less than 100% of the Class A Investor Interest and the Class B
Investor Interest and (b) the Collateral Interest Holder, for the purpose of (i)
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Series Supplement or (ii) modifying in any manner the rights
of the Investor Certificateholders which would, in either case, result in the
subordination of the rights of the Series 1996-2 Certificateholders or the
Collateral Interest Holder to the rights of the Holders of any other Series.
SECTION 15. Repurchase of the Series 1996-2 Certificates. In the
--------------------------------------------
event of a breach of any of the representations and warranties set forth in
Section 12(a)(ii) of this Series Supplement, either the Trustee, or the Holders
of Series 1996-2 Certificates evidencing Undivided Interests aggregating more
than 50% of the Investor Interest, by notice then given in writing to the Seller
(and to the Trustee and the Servicer, if given by the Series 1996-2
Certificateholders), may direct the Seller to repurchase the Series 1996-2
Certificates within 60 days of such notice, or within such longer period as may
be specified in such notice, which period shall not exceed 120 days), and the
Seller shall be obligated to repurchase on a Distribution Date specified by the
Seller (such Distribution Date, the "Repurchase Date") occurring within such
---------------
applicable period on the terms and conditions set forth below; provided,
however, that no such repurchase shall be required to be made if, at any time
during such applicable period, the representations and warranties contained in
Section 12(a)(ii) hereof, shall
42
<PAGE>
then be true and correct in all material respects. The Seller shall deposit on
the Transfer Date (in New York Clearing House, next day funds) immediately
preceding such Repurchase Date, an amount equal to the reassignment deposit
amount for such Certificates in the Distribution Account, for distribution to
the Series 1996-2 Certificateholders pursuant to Article XII of the Agreement
and Section 10 hereof. The reassignment deposit amount for such reassignment
shall be equal to (i) the Investor Interest at the end of the day on the last
day of the Monthly Period preceding the Repurchase Date, less the amount on
deposit in the Principal Account which will be transferred to the Distribution
Account on the related Transfer Date, (ii) an amount equal to all interest
accrued but unpaid on the Series 1996-2 Certificates at the applicable rates
through the end of the Interest Period in which such Transfer Date occurs and
all other amounts then owing to the Collateral Interest Holder, less the amount
on deposit in the Finance Charge Account which will be transferred to the
Distribution Account on the related Transfer Date, and (iii) any amounts owing
by Chase USA pursuant to the Loan Agreement. Payment of the portion of the
reassignment deposit amount and the deposit of the amounts referred to in the
second portion of clause (i) and in clause (ii) of the preceding sentence into
the Distribution Account, shall be considered a prepayment in full of the Series
1996-2 Certificates. The Series 1996-2 Termination Date shall be deemed to have
occurred on the Repurchase Date as long as such amount was deposited in full
into the Distribution Account on such Transfer Date; provided, however, that any
amounts owing by Chase USA pursuant to the Loan Agreement shall not be deposited
into the Distribution Account, and shall be paid to the Collateral Interest
Holder for application in accordance with the terms of the Loan Agreement. If
the Trustee or the Series 1996-2 Certificateholders give notice directing the
Seller to repurchase the Series 1996-2 Certificates as provided above, the
obligation of the Seller to repurchase the Series 1996-2 Certificates and to pay
the repurchase deposit amount pursuant to this Section 15 shall constitute the
sole remedy respecting a breach of the representations and warranties contained
in Section 12(a)(ii) available to the Series 1996-2 Certificateholders or the
Trustee on behalf of the Series 1996-2 Certificateholders.
SECTION 16. Counterparts. This Series Supplement may be executed in
------------
any number of counterparts, each of which so executed shall be deemed to be an
original, but all of such counterparts shall together constitute but one and the
same instrument.
SECTION 17. Additional Covenants of the Trustee. The Trustee hereby
-----------------------------------
covenants that it will not execute any amendment to the Loan Agreement which
relates to (i) any right or obligation of the Trust or the Trustee under the
Loan Agreement, (ii) any provision of the Loan Agreement relating to the
nonrecourse nature of the Loan Agreement, or (iii) any provision of the Loan
Agreement which constitutes an agreement by the Agent or a Collateral Interest
Holder not to institute bankruptcy or similar proceedings against the Trust or
(iv) any provision of the Loan Agreement which requires the consent of the
Trustee to any amendment or waiver of the terms thereof, unless it has received
a notice from Standard & Poor's and Moody's that such amendment will not result
in the reduction or withdrawal of their respective then existing ratings of the
Series 1996-2 Certificates.
SECTION 18. Third-Party Beneficiaries. The Agreement and this Series
-------------------------
Supplement will inure to the benefit of the Collateral Interest Holder. Without
limiting the generality of the foregoing, all covenants and agreements in the
Agreement which expressly
43
<PAGE>
confer rights upon the Collateral Interest Holder shall be for the benefit of
and run directly to the Collateral Interest Holder, and the Collateral Interest
Holder shall be entitled to rely on and enforce such covenants to the same
extent as if it were a party to the Agreement hereto.
SECTION 19. Series 1996-2 Investor Exchange. Pursuant to subsection
-------------------------------
6.09(b), the Series 1996-2 Certificateholders may tender their Series 1996-2
Certificates, and the Holder of the Exchangeable Seller Certificate may tender
the Exchangeable Seller Certificate, in exchange for (i) one or more newly
issued Series of Investor Certificates and (ii) a reissued Exchangeable Seller
Certificate in accordance with the terms and conditions contained in a notice of
exchange delivered to the Series 1996-2 Certificateholders. Such notice of
exchange will specify, among other things: (a) the amount of Series 1996-2
Certificates of each Class that may be tendered, (b) the Certificate Rate or
Rates with respect to the new Series, (c) the term of the Series and the terms
and amount of each Class, if any, (d) the method of computing the investor
percentage, (e) the manner of Enhancement, if any, with respect to such Series
and (f) the time and the manner in which the tender and cancellation of the
Series 1996-2 Certificates and the issuance of the new Series of Certificates
will be effectuated. Upon satisfaction of the conditions contained in
subsections 6.09(b) and 6.09(c), and the receipt by the Trustee of the exchange
notice and the related Supplement, the Trustee shall cancel the existing
Exchangeable Seller Certificate and the applicable Series 1996-2 Certificates,
and shall issue such Series of Investor Certificates and a new Exchangeable
Seller Certificate, each dated the Exchange Date.
SECTION 20. Servicing Compensation. The Monthly Investor Servicing
----------------------
Fee shall be determined by the Servicer on each Determination Date and allocated
pro rata by the Servicer on each such date to the Class A Certificates, the
- --- ----
Class B Certificates and the Collateral Interest based upon the Class A Floating
Percentage (the "Class A Servicing Fee"), the Class B Floating Percentage (the
---------------------
"Class B Servicing Fee") and the Collateral Floating Percentage (the "Collateral
- ---------------------- ----------
Interest Servicing Fee"), respectively.
- ----------------------
SECTION 21. Governing Law. THIS SERIES SUPPLEMENT SHALL BE CONSTRUED
-------------
IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 22. Notices. Notices which are required to be given
-------
hereunder to the Collateral Interest Holder be given in the manner specified in
Section 13.05 of the Agreement to the Agent at its address specified in the Loan
Agreement, or at such other address as the Agent may direct in writing.
44
<PAGE>
IN WITNESS WHEREOF, the Seller the Servicer and the Trustee have
caused this Series Supplement to be duly executed by their respective officers
as of the day and year first above written.
THE CHASE MANHATTAN BANK (USA),
as Seller and as Servicer
By: /s/ Keith Schuck
--------------------------------
Name: Keith Schuck
Title: Vice President
YASUDA BANK AND TRUST COMPANY (U.S.A.),
as Trustee
By: /s/ Anthony A. Bocchino
--------------------------------
Name: Anthony A. Bocchino
Title: Vice President
<PAGE>
EXHIBIT A-1
-----------
FORM OF CLASS A CERTIFICATE
---------------------------
No. R-A-[__] $[___________]
CUSIP No. 161612 AK2
Chase Manhattan Credit Card Master Trust
Class A Floating Rate Asset Backed Certificate, Series 1996-2
Each $1,000 minimum denomination represents
-------------------------------------------
1/253,681 of the Class A Investor Interest
------------------------------------------
Evidencing an undivided interest in certain assets of a trust, the corpus of
which consists of a portfolio of selected VISA* and MasterCard* credit card
receivables generated or to be generated by The Chase Manhattan Bank (USA).
(Not an interest in or obligation of
The Chase Manhattan Bank (USA)
or any Affiliate thereof.)
UNLESS THIS CLASS A CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE CHASE
MANHATTAN BANK (USA) OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY CLASS A CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE &
CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND
ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC) ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
This certifies that CEDE & CO. (the "Class A Certificateholder") is
the registered owner of an undivided interest in certain assets of a trust (the
"Trust"), the corpus of which consists of a portfolio of receivables (the
"Receivables") now existing or hereafter created under selected VISA and
MasterCard credit card accounts (the "Accounts") of The Chase Manhattan Bank
(USA), a banking corporation organized under the laws of the State of Delaware,
all monies due or to become due in payment of the Receivables and certain other
assets and interests included in the Trust pursuant to a Pooling and Servicing
Agreement dated as of June 1, 1991 and the Series 1996-2 Supplement thereto
dated as of May 1, 1996 (collectively, the
- -------------------
*VISA and MasterCard are registered trademarks of VISA USA, Inc., and MasterCard
International Incorporated, respectively.
<PAGE>
"Agreement"), by and between The Chase Manhattan Bank (USA), as Seller and
Servicer, and Yasuda Bank and Trust Company (U.S.A.), as Trustee (the
"Trustee").
The Seller has structured the Agreement and the Series 1996-2
Certificates with the intention that the Series 1996-2 Certificates will qualify
under applicable tax law as indebtedness. Each Series 1996-2 Certificateholder
(or Series 1996-2 Certificate Owner) by acceptance of its Certificate (or, in
the case of a Series 1996-2 Certificate Owner, by virtue of such Series 1996-2
Certificate Owner's acquisition of a beneficial interest therein), agrees to
treat the Series 1996-2 Certificates consistently with, and to take no action
inconsistent with, the treatment of the Series 1996-2 Certificates (or
beneficial interest therein) for purposes of federal, state, local and foreign
income or franchise taxes and any other tax imposed on or measured by income, as
indebtedness.
To the extent not defined herein, capitalized terms used herein have
the meanings assigned in the Agreement. This Class A Certificate is issued
under and is subject to the terms, provisions and conditions of the Agreement,
to which Agreement, as amended from time to time, the Class A Certificateholder
by virtue of the acceptance hereof assents and by which the Class A
Certificateholder is bound.
THE AGREEMENT AND THE CLASS A CERTIFICATES CREATED THEREUNDER SHALL BE
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE 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.
The assets of the Trust in which this Class A Certificate represents
an interest consist of (i)(a) the Receivables now existing and hereafter created
and arising in connection with the Accounts, (b) all monies due or to become due
with respect thereto (including all Finance Charge Receivables), (c) all
proceeds (as defined in Section 9-306 of the UCC as in effect in the State of
Delaware) of such Receivables and Insurance Proceeds relating thereto, (d)
Recoveries relating thereto and (e) Interchange allocable to the Trust pursuant
to Section 2.05(k) of the Agreement, and (ii) such funds as from time to time
are deposited in the Collection Account, the Investor Accounts and the Principal
Account. This Class A Certificate is one of a series of Certificates entitled
"Chase Manhattan Credit Card Master Trust Class A Floating Rate Asset Backed
Certificates, Series 1996-2" (the "Class A Certificates"), each of which
represents an undivided interest in certain assets of the Trust, including the
right to receive Collections allocable to the Class A Certificates and other
amounts at the times and in the amounts specified in the Agreement to be
deposited in the Finance Charge Account, the Principal Account and the
Distribution Account.
Also issued under the Agreement are the "Chase Manhattan Credit Card
Master Trust Class B Floating Rate Asset-Backed Certificates, Series 1996-2"
(the "Class B Certificates"), which represent an undivided interest in the Trust
subordinate to the Class A Certificates, and the "Chase Manhattan Credit Card
Master Trust Collateral Interest, Series 1996-2" (the "Collateral Interest" and,
collectively with the Class A Certificates and the Class B Certificates, the
"Series 1996-2 Investor Certificates"), which represents an undivided interest
A-1-2
<PAGE>
in the Trust that is subordinate to the Class A Certificates and Class B
Certificates. The aggregate interest represented by the Class A Certificates
and the Class B Certificates at any time in the Principal Receivables in the
Trust shall not exceed an amount equal to the Class A Investor Interest and
Class B Investor Interest, respectively, at such time. The initial Class A
Investor Interest is $253,681,000 as of May 9, 1996 (the "Closing Date"). The
Initial Class B Investor Interest is $16,318,000 as of the Closing Date. The
Collateral Initial Interest is $26,704,297 as of the Closing Date. The Class A
Investor Interest on any date of determination will be an amount (not less than
zero) equal to (a) the Initial Class A Investor Interest, minus (b) the
-----
aggregate amount of principal payments made to the Class A Certificateholders on
or prior to such date, minus (c) the excess, if any, of the aggregate amount of
-----
Class A Investor Charge-Offs for all prior Distribution Dates over Class A
----
Investor Charge-Offs reimbursed prior to such date of determination minus (d)
-----
the principal amount of Class A Certificates previously tendered and exchanged
pursuant to an Investor Exchange.
In addition to the Certificates, an Exchangeable Seller Certificate
will be issued to the Seller pursuant to the Agreement, and other Series of
Certificates may from time to time be issued by the Trust, which will represent
an undivided interest in the Trust. The Exchangeable Seller Certificate will
represent the interest in the Principal Receivables not represented by the
Series 1996-2 Certificates or any other Series of Certificates.
Interest will accrue on the Class A Certificate with respect to each
Interest Period, at the rate of 0.08% per annum above LIBOR, as more
specifically set forth in the Agreement (the "Class A Certificate Rate"), and
will be distributed on August 15, 1996 and the 15th day of November, February
and August through and including November 1998 or with respect to any Rapid
Amortization Period, and in any event after November 1998, monthly on the 15th
day of each month (or, if such day is not a Business Day, on the next Business
Day) (each, a "Distribution Date"), to the Class A Certificateholders of record
as of the last day of the month preceding the related Distribution Date (the
"Record Date").
In general, as set forth in the Agreement, payments of principal with
respect to the Class A Certificates will be limited to the Class A Investor
Interest, which may be less than the unpaid principal balance of the Class A
Certificates. The final principal payment with respect to the Class A
Certificates is scheduled to be made on the November 1999 Distribution Date, but
the final principal payment may be made earlier or later under certain
circumstances set forth in the Agreement.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF, OR AN INTEREST
IN, THE SELLER 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 AGREEMENT.
A-1-3
<PAGE>
As provided in the Agreement, withdrawals from the Investor Accounts
may be made upon the instructions of the Servicer from time to time for purposes
other than distributions to Certificateholders.
The Agreement permits, with certain exceptions, the amendment thereof
and the modification of the rights and obligations of the Servicer and the
rights of the Investor Certificateholders under the Agreement at any time by the
Servicer, the Seller and the Trustee in certain cases with the consent of the
holders of record of Investor Certificates evidencing undivided interests
aggregating not less than 66 2/3% of the Investor Interest of each outstanding
Series adversely affected by such amendment; provided, however, that no such
amendment shall (a) reduce in any manner the amount of, or delay the timing of,
distributions which are required to be made on any Investor Certificate, (b)
change the definition of or the manner of calculating the Investor Interest, the
Investor Percentage, or the Investor Default Amount or (c) reduce the aforesaid
percentage required to consent to any such amendment, without the consent of
each Investor Certificateholder then of record. Any such amendment and any such
consent by the holder of record of this Certificate shall be conclusive and
binding on such Certificateholder and on any Certificate issued in exchange
hereof or in lieu hereof whether or not notation thereof is made upon this
Certificate.
The transfer of this Certificate shall be registered in the
Certificate Register upon surrender of this Certificate for registration of
transfer at any office or agency maintained by the Transfer Agent and Registrar
accompanied by a written instrument of transfer in a form satisfactory to the
Trustee and the Transfer Agent and Registrar duly executed by the
Certificateholder or such Certificateholder's attorney-in-fact duly authorized
in writing, and thereupon one or more new Certificates of authorized
denominations and for the same aggregate Undivided Interests will be issued to
the designated transferee or transferees.
As provided in the Agreement and subject to certain limitations
therein set forth, Certificates are exchangeable for new Certificates evidencing
like aggregate Fractional Undivided Interests, as requested by the
Certificateholder surrendering such Certificates. No service charge may be
imposed for any such exchange but the Servicer or Transfer Agent and Registrar
may require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection therewith.
The Servicer, the Trustee, the Paying Agent and the Transfer Agent and
Registrar, and any agent of any of them, may treat the person in whose name this
Certificate is registered as the owner hereof for all purposes, and neither the
Servicer, the Trustee, the Paying Agent, the Transfer Agent and Registrar, nor
any agent of any of them or of any such agent shall be affected by notice to the
contrary except in certain circumstances described in the Agreement.
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 Agreement, or be valid for any purpose.
A-1-4
<PAGE>
IN WITNESS WHEREOF, The Chase Manhattan Bank (USA) has caused this
Certificate to be executed by its duly authorized officer.
THE CHASE MANHATTAN BANK (USA)
By:
----------------------------------
Frank DeGenova,
as Authorized Signatory
Dated: May 9, 1996
A-1-5
<PAGE>
Form of Trustee's Certificate of Authentication
-----------------------------------------------
This is one of the Class A Certificates referred to in the within-
mentioned Agreement.
Yasuda Bank and Trust Company (U.S.A.),
as Trustee
By:
---------------------------------------------
Authorized Officer
A-1-6
<PAGE>
EXHIBIT A-2
-----------
FORM OF CLASS B CERTIFICATE
---------------------------
No. R-B-[__] $[___________]
CUSIP No. 161612 AL0
Chase Manhattan Credit Card Master Trust
Class B Floating Rate Asset Backed Certificate, Series 1996-2
Each $1,000 minimum denomination represents
-------------------------------------------
1/16,318 of the Class B Investor Interest
-----------------------------------------
Evidencing an undivided interest in certain assets of a trust, the corpus of
which consists of a portfolio of selected VISA* and MasterCard* credit card
receivables generated or to be generated by The Chase Manhattan Bank (USA).
(Not an interest in or obligation of
The Chase Manhattan Bank (USA)
or any Affiliate thereof.)
THIS CLASS B CERTIFICATE IS SUBORDINATED IN CERTAIN RIGHTS OF PAYMENT TO THE
CLASS A CERTIFICATES AS DESCRIBED IN THE AGREEMENT REFERRED TO HEREIN.
UNLESS THIS CLASS B CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE CHASE
MANHATTAN BANK (USA) OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY CLASS B CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE &
CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND
ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC) ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
This certifies that CEDE & CO. (the "Class B Certificateholder") is
the registered owner of an undivided interest in certain assets of a trust (the
"Trust"), the corpus of which consists of a portfolio of receivables (the
"Receivables") now existing or hereafter created under
- ---------------------
*VISA and MasterCard are registered trademarks of VISA USA, Inc., and MasterCard
International Incorporated, respectively.
<PAGE>
selected VISA and MasterCard credit card accounts (the "Accounts") of The Chase
Manhattan Bank (USA), a banking corporation organized under the laws of the
State of Delaware, all monies due or to become due in payment of the
Receivables, and certain other assets and interests included in the Trust
pursuant to a Pooling and Servicing Agreement dated as of June 1, 1991 and the
Series 1996-2 Supplement thereto dated as of May 1, 1996 (collectively, the
"Agreement"), by and between The Chase Manhattan Bank (USA), as Seller and
Servicer, and Yasuda Bank and Trust Company (U.S.A.), as Trustee (the
"Trustee").
The Seller has structured the Agreement and the Series 1996-2
Certificates with the intention that the Series 1996-2 Certificates will qualify
under applicable tax law as indebtedness. Each Series 1996-2 Certificateholder
(or Series 1996-2 Certificate Owner) by acceptance of its Certificate (or, in
the case of a Series 1996-2 Certificate Owner, by virtue of such Series 1996-2
Certificate Owner's acquisition of a beneficial interest therein), agrees to
treat the Series 1996-2 Certificates consistently with, and to take no action
inconsistent with, the treatment of the Series 1996-2 Certificates (or
beneficial interest therein) for purposes of federal, state, local and foreign
income or franchise taxes and any other tax imposed on or measured by income, as
indebtedness.
To the extent not defined herein, capitalized terms used herein have
the meanings assigned in the Agreement. This Class B Certificate is issued
under and is subject to the terms, provisions and conditions of the Agreement,
to which Agreement, as amended from time to time, the Class B Certificateholder
by virtue of the acceptance hereof assents and by which the Class B
Certificateholder is bound.
THE AGREEMENT AND THE CLASS B CERTIFICATES CREATED THEREUNDER SHALL BE
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE 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.
The assets of the Trust in which this Class B Certificate represents
an interest consist of (i)(a) the Receivables now existing and hereafter created
and arising in connection with the Accounts, (b) all monies due or to become due
with respect thereto (including all Finance Charge Receivables), (c) all
proceeds (as defined in Section 9-306 of the UCC as in effect in the State of
Delaware) of such Receivables and Insurance Proceeds relating thereto, (d)
Recoveries relating thereto and (e) Interchange allocable to the Trust pursuant
to Section 2.05(k) of the Agreement, and (ii) such funds as from time to time
are deposited in the Collection Account, the Investor Accounts and the Principal
Account. This Class B Certificate is one of a series of Certificates entitled
"Chase Manhattan Credit Card Master Trust Class B Floating Rate Asset Backed
Certificates, Series 1996-2" (the "Class B Certificates"), each of which
represents an undivided interest in certain assets of the Trust, including the
right to receive Collections allocable to the Class B Certificates and other
amounts at the times and in the amounts specified in the Agreement to be
deposited in the Finance Charge Account, the Principal Account and the
Distribution Account.
A-2-2
<PAGE>
Also issued under the Agreement are the "Chase Manhattan Credit Card
Class A Floating Rate Asset-Backed Certificates, Series 1996-2" (the "Class A
Certificates"), which represent an undivided interest in the Trust senior to the
Class B Certificates, and the "Chase Manhattan Credit Card Master Trust
Collateral Interest, Series 1996-2" (the "Collateral Interest" and, collectively
with the Class A Certificates and the Class B Certificates, the "Series 1996-2
Investor Certificates"), which represents an undivided interest in the Trust
subordinate to the Class A Certificates and Class B Certificates. The aggregate
interest represented by the Class A Certificates and the Class B Certificates at
any time in the Principal Receivables in the Trust shall not exceed an amount
equal to the Class A Investor Interest and Class B Investor Interest,
respectively, at such time. The Initial Class A Investor Interest is
$253,681,000 as of May 9, 1996 (the "Closing Date"). The Initial Class B
Investor Interest is $16,318,000 as of the Closing Date. The Collateral Initial
Interest is $26,704,297 as of the Closing Date. The Class B Investor Interest
on any date of determination will be an amount (not less than zero) equal to (a)
the Initial Class B Investor Interest, minus (b) the aggregate amount of
-----
principal payments made to the Class B Certificateholders prior to such date,
minus (c) the aggregate amount of Class B Investor Charge-Offs for all prior
- -----
Transfer Dates, minus (d) the amount of Reallocated Class B Principal
-----
Collections allocated on all prior Transfer Dates, minus (e) an amount equal to
-----
the amount by which the Class B Investor Interest has been reduced to cover the
Class A Investor Default Amount on all prior Transfer Dates, plus (f) the amount
----
of Excess Spread and Excess Finance Charge Collections allocated and available
on all prior Transfer Dates for the purpose of reimbursing amounts deducted
pursuant to the forgoing clauses (c), (d) and (e), minus (g) the principal
-----
amount of Class B Certificates previously tendered and exchanged pursuant to an
Investor Exchange.
In addition to the Certificates, an Exchangeable Seller Certificate
will be issued to the Seller pursuant to the Agreement, and other Series of
certificates may from time to time be issued by the Trust, which will represent
an undivided interest in the Trust. The Exchangeable Seller Certificate will
represent the interest in the Principal Receivables not represented by the
Series 1996-2 Certificates or any other Series of certificates.
Interest will accrue on the Class B Certificates with respect to each
Interest Period, at the rate of 0.16% per annum above LIBOR, as more
specifically set forth in the Agreement (the "Class B Certificate Rate"), and
will be distributed on August 15, 1996 and the 15th day of November, February
and August through and including November 1998 or with respect to any Rapid
Amortization Period, and in any event after November 1998, monthly on the 15th
day of each month (or, if such day is not a Business Day, on the next Business
Day) (each, a "Distribution Date"), to the Class B Certificateholders of record
as of the last day of the month preceding the related Distribution Date (the
"Record Date").
In general, as set forth in the Agreement, payments of principal with
respect to the Class B Certificates will be limited to the Class B Investor
Interest, which may be less than the unpaid principal balance of the Class B
Certificates. The final principal payment with respect to the Class B
Certificates is scheduled to be made on the December 1999 Distribution Date, but
the final principal payment may be made earlier or later under certain
circumstances set forth in the Agreement.
A-2-3
<PAGE>
The Class B Certificates will be subordinated to the Class A
Certificates as to priority of payment and otherwise, to the extent provided in
the Agreement. In certain circumstances, funds otherwise payable to Class B
Certificateholders could be reallocated to make payments on the Class A
Certificates and charge-offs otherwise allocable to the Class A Certificates
could be reallocated to the Class B Certificates, resulting in a reduced Class B
Investor Interest.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF, OR AN INTEREST
IN, THE SELLER 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 AGREEMENT.
As provided in the Agreement, withdrawals from the Investor Accounts
may be made upon the instructions of the Servicer from time to time for purposes
other than distributions to Certificateholders.
The Agreement permits, with certain exceptions, the amendment thereof
and the modification of the rights and obligations of the Servicer and the
rights of the Investor Certificateholders under the Agreement at any time by the
Servicer, the Seller and the Trustee in certain cases with the consent of the
holders of record of Investor Certificates evidencing undivided interests
aggregating not less than 66 2/3% of the Investor Interest of each outstanding
Series adversely affected by such amendment; provided, however, that no such
amendment shall (a) reduce in any manner the amount of, or delay the timing of,
distributions which are required to be made on any Investor Certificate, (b)
change the definition of or the manner of calculating the Investor Interest, the
Investor Percentage, or the Investor Default Amount or (c) reduce the aforesaid
percentage required to consent to any such amendment, without the consent of
each Investor Certificateholder then of record. Any such amendment and any such
consent by the holder of record of this Certificate shall be conclusive and
binding on such Certificateholder and on any Certificate issued in exchange
hereof or in lieu hereof whether or not notation thereof is made upon this
Certificate.
The transfer of this Certificate shall be registered in the
Certificate Register upon surrender of this Certificate for registration of
transfer at any office or agency maintained by the Transfer Agent and Registrar
accompanied by a written instrument of transfer in a form satisfactory to the
Trustee and the Transfer Agent and Registrar duly executed by the
Certificateholder or such Certificateholder's attorney-in-fact duly authorized
in writing, and thereupon one or more new Certificates of authorized
denominations and for the same aggregate Undivided Interests will be issued to
the designated transferee or transferees.
As provided in the Agreement and subject to certain limitations
therein set forth, Certificates are exchangeable for new Certificates evidencing
like aggregate Fractional Undivided Interests, as requested by the
Certificateholder surrendering such Certificates. No service charge may be
imposed for any such exchange but the Servicer or Transfer Agent and Registrar
may
A-2-4
<PAGE>
require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection therewith.
The Servicer, the Trustee, the Paying Agent and the Transfer Agent and
Registrar, and any agent of any of them, may treat the person in whose name this
Certificate is registered as the owner hereof for all purposes, and neither the
Servicer, the Trustee, the Paying Agent, the Transfer Agent and Registrar, nor
any agent of any of them or of any such agent shall be affected by notice to the
contrary except in certain circumstances described in the Agreement.
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 Agreement, or be valid for any purpose.
A-2-5
<PAGE>
IN WITNESS WHEREOF, The Chase Manhattan Bank (USA) has caused this
Certificate to be executed by its duly authorized officer.
THE CHASE MANHATTAN BANK (USA)
By:
----------------------------------
Frank DeGenova,
as Authorized Signatory
Dated: May 9, 1996
A-2-6
<PAGE>
Form of Trustee's Certificate of Authentication
-----------------------------------------------
This is one of the Class B Certificates referred to in the within-
mentioned Agreement.
Yasuda Bank and Trust Company (U.S.A.),
as Trustee
By:
---------------------------------------------
Authorized Officer
A-2-7
<PAGE>
EXHIBIT B
---------
FORM OF MONTHLY PAYMENT INSTRUCTIONS
AND NOTIFICATION TO THE TRUSTEE
___________________________________
THE CHASE MANHATTAN BANK (USA)
___________________________________
Chase Manhattan Credit Card Master Trust
Series 1996-2
____________________________________
Capitalized terms used in this Certificate have their respective
meanings set forth in the Pooling and Servicing Agreement, dated as of June 1,
1991, and the Series 1996-2 Supplement, dated as of May 1, 1996 (together, the
"Agreement"), by and between The Chase Manhattan Bank (USA) ("Chase"), as
Servicer, and Yasuda Bank and Trust Company (U.S.A.), as trustee (the
"Trustee"); provided, that the "preceding Monthly Period" shall mean the Monthly
Period immediately preceding the calendar month in which this Certificate is
delivered. References herein to certain sections and subsections are references
to the respective sections and subsections of the Agreement. This Certificate
is delivered pursuant to the terms of the Agreement.
The undersigned, a duly authorized representative of the Servicer does
hereby certify as follows:
1) Chase is the Servicer under the Agreement.
2) The undersigned is a Servicing Officer.
3) The date of this notice is __________, _____, which is a
Determination Date under the Agreement.
I. INSTRUCTION TO MAKE A WITHDRAWAL
--------------------------------
Pursuant to Section 4.08, the Servicer does hereby instruct the
Trustee to apply, on __________, ____, which date is a Transfer Date under the
Agreement, Class A Available Funds, Class B Available Funds, Collateral
Available Funds from the Finance Charge Account [and the Interest Funding
Account] and Available Principal Funds from the Principal Account, to make the
following distributions:
B-1
<PAGE>
A) [To the Distribution Account for payment to the Class A
------------------------------------------------------
Certificateholders] [For deposit into the Interest Funding
----------------------------------------------------------
Account], Pursuant to Subsection 4.08(a)(i):
--------------------------------------------
$_______
(1) Class A Monthly Interest for the related Distribution
Date...............................................
(2) Class A Monthly Interest accrued but not paid...... $_______
(3) Class A Additional Interest........................ $_______
(4) Class A Additional Interest accrued but not paid... $_______
B) To the Servicer, Pursuant to Subsection 4.08(a)(ii). If
---------------------------------------------------
neither Chase USA, nor any Affiliate thereof, is the
Servicer:
(1) The Class A Servicing Fee for the preceding Monthly
Period............................................. $_______
(2) Class A Servicing Fees previously due but not
distributed........................................ $_______
C) To the Principal Account, Pursuant to Subsection 4.08(a)(iii):
-------------------------------------------------------------
(1) Class A Investor Default Amount for the preceding
Monthly Period (to be treated as a portion of Available
Principal Collections)............................. $_______
D) Pursuant to Subsection 4.08(a)(iv):
----------------------------------
(1) Portion of Excess Spread from Class A Available Funds
to be allocated and distributed as provided in Part II
hereof............................................. $_______
E) [To the Distribution Account for payment to the Class B
-------------------------------------------------------
Certificateholders] [For deposit into the Interest
--------------------------------------------------
Funding Account], Pursuant to Subsection 4.08(b)(i):
---------------------------------------------------
$_______
(1) Class B Monthly Interest for the related Distribution
Date...............................................
(2) Class B Monthly Interest accrued but not paid...... $_______
(3) Class B Additional Interest........................ $_______
(4) Class B Additional Interest accrued but not paid... $_______
B-2
<PAGE>
F) To the Servicer, Pursuant to Subsection 4.08(b)(ii). If
----------------------------------------------------
neither Chase USA, nor any Affiliate thereof, is the
Servicer:
(1) The Class B Servicing Fee for the preceding Monthly
Period............................................. $_______
(2) Class B Investor Servicing Fees previously due but
not distributed.................................... $_______
G) Pursuant to Subsection 4.08(b)(iii):
-----------------------------------
(1) Portion of Excess Spread from Class B Available Funds
to be allocated and distributed as provided in Part II
hereof............................................. $_______
H) To the Servicer, Pursuant to Subsection 4.08(c)(i). If
--------------------------------------------------
neither Chase USA, nor any Affiliate thereof, is the
Servicer:
(1) The Collateral Interest Servicing Fee for the preceding
Monthly Period..................................... $_______
(2) Collateral Interest Servicing Fee previously due but
not distributed.................................... $_______
I) Pursuant to Subsection 4.08(c)(ii):
----------------------------------
(1) Portion of Excess Spread from Collateral Available
Funds to be allocated and distributed as provided in
Part II hereof..................................... $_______
J) Pursuant to Section 4.08(d):
---------------------------
(1) To the Collateral Interest Holder, Available Principal
Collections, if any, applied in accordance with the Loan
Agreement.......................................... $_______
(2) Available Principal Collections, if any, to be
treated as Shared Principal Collections and
distributed as provided in Section 4.13............ $_______
K) To the Distribution Account for payment to the appropriate
----------------------------------------------------------
parties, Pursuant to Section 4.08(e):
------------------------------------
(1) The amount of Class A Monthly Principal............ $_______
(2) The amount of Class B Monthly Principal............ $_______
B-3
<PAGE>
(3) The amount of Collateral Monthly Principal......... $_______
(4) Amounts remaining, if any, to be treated as Shared
Principal Collections and applied in accordance with
Section 4.13....................................... $_______
II. APPLICATION OF EXCESS SPREAD AND EXCESS FINANCE CHARGE COLLECTIONS
------------------------------------------------------------------
Pursuant to Section 4.10, the Servicer does hereby instruct the
Trustee to apply on _________, ____, which date is a Transfer Date under the
Agreement, Excess Spread and Excess Finance Charge Collections allocated to
Series 1996-2 as set forth below:
A) Pursuant to Section 4.10(a):
---------------------------
(1) The amount equal to the Class A Required Amount, if
any, to fund any deficiency under Section 4.08(a), to be
applied in accordance with, and in the priority
set forth in, subsection 4.10(a)................... $_______
B) To the Principal Account, Pursuant to Section 4.10(b):
-----------------------------------------------------
(1) Aggregate amount of Class A Investor Charge-Offs not
previously reimbursed pursuant to Section 4.09(a) (to be
treated as Available Principal Collections)........ $_______
C) To the Distribution Account for payment to the Class B
------------------------------------------------------
Certificateholders, Pursuant to Section 4.10(c):
-----------------------------------------------
(1) Class B Monthly Interest that is due and unpaid or
overdue and unpaid Class B Monthly Interest, but not
available from Class B Available Funds............. $_______
(2) Class B Additional Interest that is overdue and unpaid,
but not available from Class B Available Funds..... $_______
D) To the Servicer, Pursuant to Section 4.10(d). If neither
--------------------------------------------
Chase USA nor any Affiliate thereof is the Servicer:
(1) The amount of Class B Servicing Fee for such monthly
period and overdue and unpaid Class B Servicing Fee not
available from Class B Available Funds............. $_______
B-4
<PAGE>
E) Pursuant to Section 4.10(e):
---------------------------
(1) The Class B Investor Default Amount for such Transfer
Date (to be treated as a portion of Available Principal
Collections)....................................... $_______
F) Pursuant to Section 4.10(f):
---------------------------
(1) The amount by which Class B Investor Interest has been
reduced pursuant to clauses (c), (d) and (e) of the
definition thereof (to be treated as a portion of Available
Principal Collections)............................. $_______
G) To the Distribution Account for payment to the Collateral
---------------------------------------------------------
Interest Holder, Pursuant to Section 4.10(g):
--------------------------------------------
(1) Collateral Monthly Interest and any overdue and unpaid
Collateral Monthly Interest not available from
Collateral Available Funds......................... $_______
(2) Collateral Additional Interest overdue and unpaid not
available from Collateral Available Funds.......... $_______
H) Pursuant to Section 4.10(h):
---------------------------
(1) Monthly Investor Servicing Fees that are due on such
Transfer Date and unpaid and any overdue and unpaid
Monthly Investor Servicing Fees.................... $_______
I) Pursuant to Section 4.10(i):
---------------------------
(1) The Collateral Default Amount for the prior Monthly
Period (to be treated as a portion of Available
Principal Collections)............................. $_______
J) To the Principal Account, Pursuant to Section 4.10(j):
-----------------------------------------------------
(1) The aggregate amount by which the Collateral Interest
has been reduced below the Required Collateral Interest
(to be treated as Available Principal Collections). $_______
B-5
<PAGE>
K) To the Collateral Interest Holder for application, Pursuant
-----------------------------------------------------------
to the Loan Agreement Pursuant to Section 4.10(k):
-------------------------------------------------
(1) All other amounts payable under the Loan Agreement out
of Excess Spread and Excess Finance Change
Collections........................................ $_______
L) Pursuant to Section 4.10(m):
---------------------------
(1) The balance, if any, to be treated as Shared Excess
Finance Charge Collections and allocated to other
Series in Group I or the Holder of the Seller
Certificate pursuant to Section 4.12............... $_______
III. REALLOCATED PRINCIPAL COLLECTIONS
---------------------------------
Pursuant to Section 4.11, the Servicer does hereby instruct the
Trustee to apply from the Series 1996-2 Collection Subaccount on ________, ____,
which is a Transfer Date under the Agreement, to apply Reallocated Principal
Collections to fund any deficiencies in the Class A Required Amount and the
Class B Required Amount in the following priority.
A) Pursuant to Section 4.11(a):
---------------------------
(1) The Class A Required Amount after applying Excess
Spread and Excess Finance Charge Receivables pursuant
to Section 4.10, to be applied pursuant to subsections
4.08(a)(i), (ii) and (iii)......................... $_______
B) Pursuant to Section 4.11(b):
---------------------------
(1) The Class B Required Amount after applying Excess
Spread and Excess Finance Charge Receivables pursuant
to Section 4.10, to be applied pursuant to subsections
4.08(b)(i) and (ii)................................ $_______
IV. ACCRUED AND UNPAID AMOUNTS
--------------------------
After giving effect to the withdrawals and transfers to be made in
accordance with this notice, the following amounts will be accrued and unpaid
with respect to all Monthly Periods preceding the current calendar month:
A) The aggregate amount of the Class A Interest Shortfall. $_______
B) The aggregate amount of the Class B Interest Shortfall.. $_______
B-6
<PAGE>
C) The aggregate amount of the Collateral Interest Payment
Shortfall............................................... $_______
D) The aggregate amount of all accrued and unpaid Monthly
Investor Servicing Fees................................. $_______
E) Pursuant to Section 4.10:
------------------------
The aggregate amount of all unreimbursed Investor
Charge Offs........................................ $_______
IN WITNESS WHEREOF, the undersigned has duly executed this certificate
this ____ day of __________, ____.
THE CHASE MANHATTAN BANK (USA),
Servicer
By:
_____________________________
Name:
Title:
B-7
<PAGE>
EXHIBIT C
---------
FORM OF MONTHLY CERTIFICATEHOLDERS' STATEMENT
___________________________________
THE CHASE MANHATTAN BANK (USA)
___________________________________
Chase Manhattan Credit Card Master Trust Series 1996-2
___________________________________
For the ____________________ Distribution Date
For ____________________ Monthly Period
___________________________________
Under Section 5.02 of the Pooling and Servicing Agreement dated as of
June 1, 1991 and the Series 1996-2 Supplement dated as of May 1, 1996 (together,
the "Agreement") by and between The Chase Manhattan Bank (USA) ("Chase") and
Yasuda Bank and Trust Company (U.S.A.), as trustee (the "Trustee"), Chase, as
Servicer, is required to prepare certain information each month regarding
current distributions to Series 1996-2 Certificateholders and the performance of
the Chase Manhattan Credit Card Master Trust (the "Trust") and the Series 1996-2
Class A Certificates and Series 1996-2 Class B Certificates during the previous
month. The information which is required to be prepared with respect to the
_____________, ____ Distribution Date, the "Distribution Date") and with respect
to the performance of the Trust during the month of __________, ____ (the
"Preceding Monthly Period") is set forth below. Certain of the information is
presented on the basis of an original principal amount of $1,000 per Series
1996-2 Investor Certificate (a "Certificate"). Certain other information is
presented based on the aggregate amounts for the Trust as a whole. Capitalized
terms used in this Certificate have their respective meanings set forth in the
Agreement.
I. INFORMATION REGARDING THE CURRENT MONTHLY DISTRIBUTION
TO THE CLASS A AND CLASS B CERTIFICATEHOLDERS (STATED ON THE BASIS OF
------------
$1,000 ORIGINAL CERTIFICATE PRINCIPAL AMOUNT)
---------------------------------------------
A) The total amount of [the distribution] [deposit into the
Interest Funding Account] to Series 1996-2
Certificateholders on the Distribution Date per $1,000
original certificate principal amount
(1) Class A Certificateholders......................... $_______
(2) Class B Certificateholders......................... $_______
C-1
<PAGE>
B) The amount of the [distribution] [deposit] set forth in
paragraph 1 above in respect of principal of the 1996-2
Certificates, per $1,000 original certificate principal
amount
(1) Class A Certificateholders......................... $_______
(2) Class B Certificateholders......................... $_______
C) The amount of the [distribution] [deposit] set forth in
paragraph 1 above in respect of interest on the 1996-2
Certificates, per $1,000 original certificate principal
amount
(1) Class A Certificates............................... $_______
(2) Class B Certificates............................... $_______
II. INFORMATION REGARDING THE PERFORMANCE OF THE TRUST
--------------------------------------------------
A) Collections
-----------
(1) The aggregate amount of Collections processed with
respect to Billing Cycles ending during the preceding
Monthly Period and allocated to the Series 1996-2
Certificates was equal to.......................... $_______
(2) The Payment Rate with respect to the preceding Monthly
Period was equal to................................ _______%
For the 2nd Monthly Period (the preceding
Monthly Period), the monthly payment rate was
equal to...................................... _______%
For the 3rd Monthly Period (the 2nd preceding
Monthly Period), the monthly payment rate was
equal to...................................... _______%
(3) The aggregate amount of Collections of Principal
Receivables processed with respect to Billing Cycles
ending during the preceding Monthly Period which were
allocated in respect of the Series 1996-2
Certificates....................................... $_______
(4) The aggregate amount of Collections of Finance
Charge Receivables processed with respect to
Billing Cycles ending during the preceding
Monthly Period which were allocated in respect of
the Series 1996-2 Certificates..................... $_______
B) Deficit Controlled Amortization Amount.................. $_______
--------------------------------------
C-2
<PAGE>
C) Principal Receivables in the Trust and Allocation Percentages
-------------------------------------------------------------
(1) The aggregate amount of Principal Receivables in the
Trust as of the end of each Billing Cycle ending in the
preceding Monthly Period (which reflects the Principal
Receivables represented by the Seller Interest, by the
Investor Interest of Series 1996-2, and by the Investor
Interest of all other outstanding Series)......... $_______
(2) The Investor Interest as of the last day of the
preceding Monthly Period
(a) Investor Interest............................ $_______
(b) Class A Investor Interest.................... $_______
(c) Class B Investor Interest.................... $_______
(d) Collateral Interest.......................... $_______
(3) The Investor Interest set forth in paragraph C(2)(a)
above as a percentage of the aggregate amount of
Principal Receivables set forth in paragraph C(1)
above............................................. _______%
(4) The Class A Investor Interest set forth in paragraph
C(2)(b) above as a percentage of the aggregate amount
of Principal Receivables set forth in paragraph C(1)
above............................................. _______%
(5) The Class B Investor Interest set forth in paragraph
C(2)(c) above as a percentage of the aggregate amount
of Principal Receivables set forth in paragraph C(1)
above............................................. _______%
(6) The Collateral Interest set forth in paragraph C(2)(d)
above as a percentage of the aggregate amount of
Principal Receivables set forth in paragraph C(1)
above............................................. _______%
(7) The Class A Floating Percentage................... _______%
(8) The Class B Floating Percentage................... _______%
(9) The Class B Principal Percentage.................. _______%
(10) The Collateral Floating Percentage................ _______%
(11) The Collateral Principal Percentage............... _______%
(12) The Floating Allocation Percentage................ _______%
(13) The Principal Allocation Percentage............... _______%
C-3
<PAGE>
D) Portfolio Yield and Base Rate
-----------------------------
(1) The annualized Portfolio Yield for the preceding
Monthly Period was equal to........................ _______%
For the 2nd preceding Monthly Period, the
annualized portfolio yield was equal to....... _______%
For the 3rd preceding Monthly Period, the
annualized portfolio yield was equal to....... _______%
The three month average Portfolio Yield was
equal to...................................... _______%
(2) Base Rate for the preceding Monthly Period was equal
to................................................. _______%
For the 2nd preceding Monthly Period, the Base
Rate was equal to............................. _______%
For the 3rd preceding Monthly Period, the Base
Rate was equal to............................. _______%
E) Delinquent Balances
-------------------
The aggregate amount of outstanding balances in the Accounts which
were delinquent, as of the end of the last day of the related Billing
Cycle which ended during the current Monthly Period by:
Aggregate As a Percentage
Account of Aggregate
Balance Receivables
(1) up to 29 days: $__________ _________%
(2) 30 - 59 days: $__________ _________%
(3) 60 - 89 days: $__________ _________%
(4) 90 or more days: $__________ _________%
Total: $ %
=========== ==========
C-4
<PAGE>
F) Investor Default Amount
-----------------------
(1) The aggregate amount of all defaulted Principal
Receivables written off as uncollectible with respect
to Billing Cycles ending during the preceding Monthly
Period allocable to the Investor Interest less
Recoveries allocable to the Investor Interest
(the "Series 1996-2 Aggregate Investor Default
Amount")........................................... $_______
(2) The portion of the Series 1996-2 Aggregate Investor
Default Amount allocable to the Class A Investor
Interest (the "Class A Investor Default Amount")... $_______
(3) The portion of the Series 1996-2 Aggregate Investor
Default Amount allocable to the Class B Investor
Interest (the "Class B Investor Default Amount")... $_______
(4) The portion of the Series 1996-2 Aggregate Investor
Default Amount allocable to the Collateral Investor
Interest (the "Collateral Investor Default Amount") $_______
(5) The annualized investor default percentage ((Series
1996-2 Aggregate Investor Default Amount/Investor
Interest) x 12) for the preceding Monthly Period
was equal to....................................... _______%
For the 2nd preceding Monthly Period, the
annualized investor default percentage was
equal to...................................... _______%
For the 3rd preceding Monthly Period, the
annualized investor default percentage was
equal to...................................... _______%
G) Investor Charge Offs
--------------------
(1) The aggregate amount of Class A Investor Charge-Offs
for the preceding Monthly Period................... $_______
(2) The aggregate amount of Class A Investor Charge-Offs
reimbursed on the Transfer Date immediately preceding
the preceding Distribution Date.................... $_______
(3) The amount of the reimbursed Investor Charge-Offs
set forth in paragraph G(2) above, per $1,000
original Class A Certificate principal amount...... $_______
C-5
<PAGE>
(4) The aggregate amount of Class B Investor Charge-Offs
for such Monthly Period............................ $_______
(5) The aggregate amount of Class B Investor Charge-Offs
reimbursed on the Transfer Date immediately preceding
such Distribution Date............................. $_______
(6) The amount of the reimbursed Investor Charge-Offs set
forth in paragraph G(3) above, per $1,000 original
Class B Certificate principal amount............... $_______
(7) The aggregate amount of Investor Charge-Offs....... $_______
(8) The aggregate amount of reimbursed Investor
Charge-Offs........................................ $_______
H) Shared Excess Finance Charge Collection
---------------------------------------
The aggregate amount of shared Excess Finance Charge
Collection during the preceding Monthly Period which were
allocated to the Series 1996-2 Certificates............. $_______
I) Shared Principal Collections
----------------------------
The aggregate amount of Shared Principal Collections during
the preceding Monthly Period which were allocated to the
Series 1996-2 Certificates.............................. $_______
J) Reallocated Principal Collections
---------------------------------
(1) Collections of Principal Receivables allocable to
Class B Certificates paid with respect to Class A
Certificates to make up deficiencies in Class A
Required Amount for any Monthly Period............. $_______
C-6
<PAGE>
(2) Collections of Principal Receivables allocable to
Collateral Interest paid with respect to Class B
Certificates to make up deficiencies in Class B
Required Amount.................................... $_______
K) Monthly Investor Servicing Fee
------------------------------
(1) The amount of the Monthly Investor Monthly Servicing
Fee payable by the Trust to the Servicer for the
preceding Monthly Period........................... $_______
(2) The amount of the Class A Monthly Servicing Fee
payable by the Trust to the Servicer for the
preceding Monthly Period........................... $_______
(3) The amount of the Class B Monthly Servicing Fee
payable by the Trust to the Servicer for the
preceding Monthly Period........................... $_______
(4) The amount of the Collateral Monthly Servicing Fee
payable by the Trust to the Servicer for the preceding
Monthly Period..................................... $_______
L) Collateral Interest
-------------------
(1) The Available Collateral Interest, as of the close of
Transfer Date for the preceding Monthly Period was
equal to........................................... $_______
M) Required Collateral Interest
----------------------------
(1) The Required Collateral Interest as of the Transfer
Date for the preceding Monthly Period was equal
to................................................. $_______
III. THE POOL FACTOR
---------------
A) The Pool Factor for the Record Date for the distribution
to be made on the Distribution Date (which represents the
ratio of the amount of the 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 Initial Investor
Interest). The amount of a Certificateholder's pro rata
share of the Investor Interest can be determined by
multiplying the original denomination of the
Certificateholder's Certificate by the Pool Factor..... ________
C-7
<PAGE>
THE CHASE MANHATTAN BANK (USA),
Servicer
By:
______________________________
Name:
Title:
C-8
<PAGE>
EXHIBIT D
---------
Schedule 1996-2 to
Monthly Servicer's Certificate
------------------------------
FORM OF SCHEDULE TO MONTHLY SERVICER'S CERTIFICATE
___________________________________
THE CHASE MANHATTAN BANK (USA)
___________________________________
Chase Manhattan Credit Card Master Trust, Series 1996-2
___________________________________
For the ____________________ Determination Date
For the ____________________ Monthly Period
1. The aggregate amount of Collections processed during
the Billing Cycles which ended during such Monthly Period
(equal to 1(a) plus 1(b)) was equal to............................
$_______
(a) The aggregate amount of Collections of Finance Charge
Receivables collected during the Billing Cycles which ended during
such Monthly Period (the "Collections of Finance Charge
Receivables") allocated to Series 1996-2 was equal to........
$_______
(b) The aggregate amount of Collections of Principal
Receivables collected during the Billing Cycles which ended
during such Monthly Period (the "Collections of Principal
Receivables") allocated to Series 1996-2 was equal to........
$_______
(c) The aggregate amount of Collections deemed to be
Collections of Finance Charge Receivables pursuant to
subsection 4.02(b)(i) during the Billing Cycles which ended
during such Monthly Period relating to Series 1996-2
(the "Estimated Collections of Billed Finance Charge
Receivables") was equal to................................... $_______
D-1
<PAGE>
(d) The aggregate amount of Collections deemed to be
Principal Receivables pursuant to subsection 4.02(b)(i) during
the Billing Cycles which ended during such Monthly Period
relating to Series 1996-2 (the "Estimated Collections of
Billed Principal Receivables") was equal to.................. $_______
2. The aggregate amount of funds on deposit in the Finance
Charge Account with respect to Collections processed
[during the Billing Cycles which ended during such Monthly
Period] [during such Monthly Period], and allocated to
Series 1996-2, as of the end of the last day of such Monthly
Period was equal to..................................... $_______
3. (a) The excess of (i) Collections of Finance Charge
Receivables allocated to Series 1996-2 over (ii) Estimated
Collections of Billed Finance Charge Receivables (1(a)-1(c)),
if any, was equal to $__________ [[of which $__________]
[none of which] will be withdrawn from the Finance Charge Account
and deposited to the Principal Account/1/].
(b) The excess of (i) Estimated Collections of Billed
Finance Charge Receivables over (ii) Collections of Finance
Charge Receivables allocated to Series 1996-2 (1(c)-1(a)),
if any, was equal to $__________ [[(of which $__________] [none
of which]] will be withdrawn from the Principal Account and
deposited to the Finance Charge Account/1/].
The aggregate amount of funds which will be on deposit in the Finance
Charge Account on the Transfer Date relating to Series 1996-2 following
this Determination Date, after giving effect to the payments and transfers
in Items 3(a) and 3(b), will be $__________
4. The aggregate amount of funds on deposit in the Principal Account with
respect to Collections processed during the Billing Cycles which ended during
such Monthly Period and allocated to Series 1996-2, as of the end of the last
day of such Monthly Period was equal to..............................
$_______
The aggregate amount of funds which will be on deposit in
the Principal Account on the Transfer Date following this
Determination Date, after giving effect to the payments and
transfers in Items 3(a) and 3(b), will be $__________.
5. The aggregate amount of funds on deposit in the Series
1996-2 Collection Subaccount as of the end of the last day of such
Monthly Period was equal to....................................... $_______
D-2
<PAGE>
6. The aggregate amount of funds on deposit in the
Retention Subaccount relating to Series 1996-2 as of the end
of the last day of such Monthly Period was equal to............. $_______
7. (a) The aggregate amount of Interchange to be deposited to
the Collection Account and allocated to Series 1996-2 on
the next succeeding Transfer Date is equal to.............. $_______
(b) The amount of earnings (net of losses and investment
expenses) on funds on deposit in the Principal Account to be
transferred from the Retention Account to the Finance Charge
Account on the next succeeding Transfer Date is equal to..... $_______
8. The aggregate amount of [withdrawals] [payments] required
to be made [from] [to] the [Collection Subaccount relating to
the Series 1996-2 Certificates] [the Retention subaccount
relating to the Series 1996-2 Certificates] is equal to...... $_______
9. The sum of all amounts payable to the Investor
Certificateholders of Series 1996-2 on the Distribution Date
in the current Monthly Period is equal to:
Payable in respect of principal of the Class A
Certificates............................................ $_______
Payable in respect of interest on the Class A
Certificates............................................ $_______
Payable in respect of principal of the Class B
Certificates............................................ $_______
Payable in respect of interest on the Class B
Certificates............................................ $_______
Payable in respect of principal of the Collateral
Interest................................................ $_______
Payable in respect of interest on the Collateral
Interest................................................ $_______
Total................................................... $_______
10. [No Series 1996-2 Pay Out Event or Trust Pay Out Event has
[Series 1996-2 Pay Out Event] [Trust Pay Out Event] has
occurred: ______________________________.]
D-3
<PAGE>
END NOTES
- ---------
1. Application to the Monthly Period in which The Conversation Date occurs, and
any Monthly Period thereafter.
D-4
<PAGE>
EXHIBIT 5.1
The Chase Manhattan Bank (USA) Andrew T. Semmelman
Legal Department Vice President
1 Chase Manhattan Plaza Senior Associate Counsel
Wilmington, Delaware 19801
[LOGO OF CHASE APPEARS HERE]
June 4, 1996
The Chase Manhattan Bank (USA)
802 Delaware Avenue
Wilmington, DE 19801
RE: Chase Manhattan Credit Card Master Trust
Asset Backed Certificates
Ladies and Gentlemen:
I have acted as counsel for The Chase Manhattan Bank (USA) (the "Bank")
in connection with the registration statement on Form S-3 (the "Registration
Statement") filed today by the Bank on behalf of Chase Manhattan Credit Card
Master Trust (the "Trust") with the Securities and Exchange Commission under the
Securities Act of 1933, as amended, with respect to the issuance by the Trust of
one or more series (each a "Series") of asset backed certificates representing
undivided interests in the Trust (the "Certificates"). Each Series of
Certificates is to be issued pursuant to the Pooling and Servicing Agreement
(the "Pooling and Servicing Agreement") between the Bank, as seller and
servicer, and a trustee (the "Trustee") as supplemented by a supplement relating
to such Series of Certificates.
I have made such investigations of law as I deem appropriate and have
examined the proceedings heretofore taken and am familiar with the procedures
proposed to be taken by the Bank in connection with the authorization, issuance
and sale of the Certificates.
Based on the foregoing, I am of the opinion that when the Certificates
have been duly executed and authenticated by the Trustee in accordance with the
terms of the Pooling and Servicing Agreement, as supplemented by a Supplement in
the form filed with the Registration Statement, and issued and delivered against
payment therefor, the Certificates will be legally issued, fully paid and
nonassessable.
<PAGE>
I am admitted to the Bar of the State of Delaware and express no opinion
as to the law of any jurisdiction other than the law of the State of Delaware
and the federal laws of the United States of America.
I hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and the reference to me under the heading "Legal Matters"
in the prospectus relating to the Certificates.
Very truly yours,
[SIGNATURE APPEARS HERE]
-------------------------------
Andrew T. Semmelman
2
<PAGE>
EXHIBIT 8.1
June 4, 1996
The Chase Manhattan Bank (USA)
802 Delaware Avenue
Wilmington, Delaware 19801
Re: Chase Manhattan Credit Card Master Trust
Asset Backed Certificates Registration Statement on Form S-3
------------------------------------------------------------
Ladies and Gentlemen:
We have acted as special tax counsel for The Chase Manhattan Bank (USA)
(the "Seller"), in connection with the preparation of the Registration Statement
on Form S-3 to be filed with the Securities and Exchange Commission on June 4,
19969 (the "Registration Statement"), under the Securities Act of 1933, as
amended (the "Act"), for the registration under the Act of Asset Backed
Certificates (collectively, the "Certificates") issuable in series (each, a
"Series"). Each Series will represent an undivided interest in the Chase
Manhattan Credit Card Master Trust (the "Trust"). Each Series of Certificates is
to be issued pursuant to the he Pooling and Servicing Agreement (the "Pooling
and Servicing Agreement"), dated as of June 1, 1991, among the Seller, The Chase
Manhattan Bank (USA), as servicer, and the Yasuda Bank and Trust Company
(U.S.A.), as trustee.
We hereby confirm that the statements set forth under the heading
"Certain Federal Income Tax Consequences" in the prospectus relating to the
Certificates (the "Prospectus") forming a part of the Registration Statement and
the statements set forth under the heading "Summary of Series Terms-Tax Status"
in the Prospectus and in the form of prospectus supplement relating to the
Certificates (the "Prospectus Supplement") forming a part of the Registration
Statement, which statements have been prepared by us, to the extent that they
constitute matters of law or legal conclusions with respect thereto, are correct
in all material respects.
<PAGE>
The Chase Manhattan Bank (USA)
June 4, 1996
Page 2
We note that the forms of Prospectus and Prospectus Supplement do not
relate to a specific transaction. Accordingly, the above-referenced description
of federal income tax consequences may, under certain circumstances, require
modification in the context of an actual transaction.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. We also consent to the reference to Orrick, Herrington &
Sutcliffe under the captions "Legal Matters" and "Certain Federal Income Tax
Consequences" in the Prospectus. In giving such consent, we do not consider that
we are "experts," within the meaning of the term used in the Act or the rules
and regulations of the Securities and Exchange Commission promulgated
thereunder, with respect to any part of the Registration Statement, including
this opinion as an exhibit or otherwise.
Very truly yours,
ORRICK, HERRINGTON & SUTCLIFFE
<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 The Chase Manhattan Bank (USA) (the "Bank"), hereby
constitutes and appoints, DEBORAH L. DUNCAN, DONALD TAGGART, CHARLES A. 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
accompanying registration statement 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 June 3, 1996.
/s/ Deborah L. Duncan
-----------------------------------
Name: Deborah L. Duncan
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, in his or her capacity
as an officer or director of The Chase Manhattan Bank (USA) (the "Bank"), hereby
constitutes and appoints, DEBORAH L. DUNCAN, DONALD TAGGART, CHARLES A. 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
accompanying registration statement 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 June 3, 1996.
/s/ Donald L. Boudreau
-----------------------------------
Name: Donald L. Boudreau
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, in his or her capacity
as an officer or director of The Chase Manhattan Bank (USA) (the "Bank"), hereby
constitutes and appoints, DEBORAH L. DUNCAN, DONALD TAGGART, CHARLES A. 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
accompanying registration statement 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 June 3, 1996.
/s/ Michael Barret
-----------------------------------
Name: Michael Barret
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, in his or her capacity
as an officer or director of The Chase Manhattan Bank (USA) (the "Bank"), hereby
constitutes and appoints, DEBORAH L. DUNCAN, DONALD TAGGART, CHARLES A. 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
accompanying registration statement 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 June 3, 1996.
/s/ Charles Walsh
-----------------------------------
Name: Charles Walsh
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, in his or her capacity
as an officer or director of The Chase Manhattan Bank (USA) (the "Bank"), hereby
constitutes and appoints, DEBORAH L. DUNCAN, DONALD TAGGART, CHARLES A. 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
accompanying registration statement 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 June 3, 1996.
/s/ Thomas C. Lynch
-----------------------------------
Name: Thomas C. Lynch
