<PAGE>
As filed with the Securities and Exchange Commission on October 30, 1996
Registration No. 333-07185
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------
AMENDMENT NO. 4
to
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-----------------
BRIDGESTONE/FIRESTONE MASTER TRUST
(Issuer of the Certificates)
-----------------
FIRESTONE RETAIL CREDIT CORPORATION
(Originator of the Trust described herein and exact name
of registrant as specified in its government instrument.)
-----------------
Massachusetts 6141 13-3205598
(State of (Primary Standard Industrial (IRS Employer
Incorporation) Classification Code Number) Identification Number)
JH Management Corporation
R. Douglas Donaldson
One International Place, Suite 520
Boston, Massachusetts 02110-2624
(617) 951-7690
(Address, including zip code, and telephone number, including
area code of registrant's principal executive offices)
-----------------
copies to:
<TABLE>
<S> <C> <C>
Saul Solomon, Esq. Reed D. Auerbach, Esq. Cathy Kaplan, Esq.
Bridgestone/Firestone, Inc. Stroock & Stroock & Lavan Brown & Wood LLP
50 Century Boulevard Seven Hanover Square 1 World Trade Center
Nashville, Tennessee 37214 New York, New York 10004-2696 New York, New York 10048
(615) 872-1496 (212) 806-6648 (212) 839-5531
</TABLE>
-----------------
Approximate date of commencement of proposed sale to the public. As
soon as practicable on or after the effective date of this Registration
Statement, as determined by market conditions.
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 of the Securities
Act of 1933, please check the following box. / /
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 Proposed
Maximum Maximum
Offering Aggregate Amount of
Title of Securities Amount Being Price Offering Registration
Being Registered Registered Per Unit Price Fee(1)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A Asset Backed Certificates, Series 1996-1............................. $200,000,000 100% $200,000,000 $60,606.07
- -----------------------------------------------------------------------------------------------------------------------------------
Class B Asset Backed Certificates, Series 1996-1............................. $28,205,129 100% $28,205,129 $8,547.01
===================================================================================================================================
</TABLE>
(1) Total Registration Statement Fee of $69,153.08 ($870 paid in June, 1996).
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 the 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 Securities and Exchange Commission, acting
pursuant to said Section 8(a), may determine.
<PAGE>
FIRESTONE RETAIL CREDIT CORPORATION
FURNISHED PURSUANT TO ITEM
501(b) OF REGULATION S-K
<TABLE>
<CAPTION>
Form S-1 Item Number and Heading Heading in Prospectus
- -------------------------------- ---------------------
<S> <C>
1. Forepart of the Registration Statement and Forefront of Registration Statement and Outside Front Cover Page of
Outside Front Page of Prospectus . . . . . . Prospectus
2. Inside Front and Outside Back Cover Pages Inside Front Cover and Outside Back Cover Page of the Prospectus
of Prospectus . . . . . . . . . . . . . . . .
3. Summary Information and Risk Factors . . . Summary of Terms; Risk Factors
Ratio of Earnings to Fixed Charges . . . . . . . *
4. Use of Proceeds . . . . . . . . . . . . . . Use of Proceeds
5. Determination of Offering Price . . . . . . . *
6. Dilution . . . . . . . . . . . . . . . . . . *
7. Selling Security Holders . . . . . . . . . . *
8. Plan of Distribution . . . . . . . . . . . . Underwriting
9. Description of Securities to be Registered The Trust; Description of the Offered Certificates
and the Agreement
10. Interests of Named Experts and Counsel . . Legal Matters
11. Information with Respect to the Registrant. . The Transferor and Bridgestone/Firestone
12. Disclosure of Commission Position on See Part II
Indemnification for Securities Act
Liabilities . . . . . . . . . . . . . . . . .
</TABLE>
- ------------------
*Answer negative or item inapplicable.
2
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT.
A REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY
NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE
REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SHALL
NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY
NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH
SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION
OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION, PRELIMINARY PROSPECTUS DATED OCTOBER 30, 1996
PROSPECTUS
DATED , 1996
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
$228,205,129
BRIDGESTONE/FIRESTONE MASTER TRUST
$200,000,000 % CLASS A ASSET BACKED CERTIFICATES, SERIES 1996-1
$ 28,205,129 % CLASS B ASSET BACKED CERTIFICATES, SERIES 1996-1
FIRESTONE RETAIL CREDIT CORPORATION BRIDGESTONE/FIRESTONE, INC.
TRANSFEROR SERVICER
Each Class A Asset Backed Certificates, Series 1996-1 (the 'Class A
Certificates') and each Class B Asset Backed Certificates, Series 1996-1 (the
'Class B Certificates' and, together with the Class A Certificates, the 'Offered
Certificates') will evidence an undivided interest in the Bridgestone/Firestone
Master Trust (the 'Trust') created pursuant to the Amended and Restated Pooling
and Servicing Agreement, dated as of November 1, 1996, as supplemented by the
Series 1996-1 Supplement, dated as of November 1, 1996, and each among Firestone
Retail Credit Corporation, as transferor (the 'Transferor'),
Bridgestone/Firestone, Inc. ('Bridgestone/Firestone'), as servicer (the
'Servicer'), and The Fuji Bank and Trust Company, as trustee (the 'Trustee').
The Trust assets (the 'Trust Assets') include (i) a portfolio of account
balances (the 'Receivables') generated or to be generated under a private label
credit card program (the 'Credit Card Program') established by Credit First
National Association ('CFNA'; together with any successor originator, the
'Originator'), (ii) a portfolio of certain designated Receivables to be
generated by the Originator under other credit card programs to be established
by the Originator (the 'Alternative Programs'), (iii) all monies due or to
become due under the Receivables, (iv) the right to receive certain merchant
fees attributed to cardholder charges giving rise to Receivables (the 'Merchant
Fees'), (v) all Recoveries on Defaulted
(Continued on the next page)
There currently is no secondary market for the Offered Certificates and there
can be no assurance that one will develop. The Underwriters expect, but are not
obligated, to make a market in the Offered Certificates.
THERE CAN BE NO ASSURANCE THAT ANY SUCH MARKET WILL CONTINUE. POTENTIAL
INVESTORS SHOULD CONSIDER, AMONG OTHER THINGS, THE INFORMATION SET FORTH IN
'RISK FACTORS' ON PAGE 35 IN THE PROSPECTUS.
THE OFFERED CERTIFICATES REPRESENT INTERESTS IN THE TRUST ONLY AND DO NOT
REPRESENT INTERESTS IN OR RECOURSE OBLIGATIONS OF THE TRANSFEROR, THE SERVICER,
THE ORIGINATOR OR ANY AFFILIATE THEREOF. AN OFFERED CERTIFICATE IS NOT A DEPOSIT
AND NEITHER THE OFFERED CERTIFICATES NOR THE UNDERLYING ACCOUNTS OR RECEIVABLES
ARE INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY
OTHER GOVERNMENTAL AGENCY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION (THE 'COMMISSION') OR ANY STATE SECURITIES COMMISSION NOR
HAS THE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
[CAPTION]
<TABLE>
INITIAL PUBLIC UNDERWRITING PROCEEDS TO
OFFERING PRICE(1) DISCOUNT TRANSFEROR(1)(2)
<S> <C> <C> <C>
Per Class A Certificate............... % % %
Per Class B Certificate............... % % %
Total................................. $ $ $
</TABLE>
(1) Plus accrued interest, at the Class A Certificate Rate or Class B
Certificate Rate, as applicable, from November , 1996.
(2) Before deducting estimated expenses of $ payable by the Transferor.
The Offered Certificates are offered by the Underwriters as described in
'Underwriting', subject to receipt and acceptance by the Underwriters and
subject to their right to reject any order in whole or in part. It is expected
that the Offered Certificates will be delivered in book-entry form on or about
November , 1996 (the 'Closing Date') through the facilities of The Depository
Trust Company, Cedel Bank, societe anonyme and the Euroclear System.
CITICORP SECURITIES, INC.
CHASE SECURITIES INC.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
(Continued from the previous page)
Receivables, (vi) any Enhancement issued with respect to any Series, (vii) the
proceeds of the Servicer Letter of Credit and the Transferor Letter of Credit,
(viii) all of the Transferor's right, title and interest in and to the Purchase
and Sale Agreement and the Participation Agreement, (ix) all moneys on deposit
in the Collection Account and any other accounts established for the benefit of
any other Series (which other accounts will not be available to
Certificateholders) and (x) all proceeds of any of the foregoing. Concurrently
with the issuance of the Offered Certificates, the Trust will issue $10,000,000
principal amount of an uncertificated interest in the Trust (the 'Collateral
Interest') and the Subordinated Transferor Certificate (the 'Subordinated
Transferor Certificate' and, together with the Collateral Interest and the
Offered Certificates, the 'Series 1996-1 Interests'). The fractional undivided
interest in the Trust represented by the Class B Certificates will be
subordinated to the extent necessary to fund payments with respect to the Class
A Certificates as described herein. The Collateral Interest and the Subordinated
Transferor Certificate will be subordinated to the extent necessary to fund
payments with respect to the Class A Certificates and the Class B Certificates
as described herein. See 'Description of the Offered Certificates and the
Agreement.' The Collateral Interest and the Subordinated Transferor Certificate
are not being offered hereby.
The Class A Certificateholders and the Class B Certificateholders (the
'Offered Certificateholders') will be entitled to certain assets of the Trust,
including the right to receive a varying percentage of each month's collections
with respect to the Receivables at the times and in the manner described herein.
The Trust has also issued a certificate representing a one percent interest in
the Trust to Bridgestone/Firestone, Inc. (the 'Bridgestone/Firestone
Certificate'). The Transferor will own the remaining interest in the Trust not
represented by the Series 1996-1 Interests (subject to the Participation
Agreement (as defined herein) with Bridgestone/Firestone), the
Bridgestone/Firestone Certificate and the interest of holders of other
outstanding Series. In addition, the Transferor will retain the Subordinated
Transferor Certificate (subject to the Participation Agreement with
Bridgestone/Firestone). The Transferor has offered and from time to time may
offer other series of certificates that evidence undivided interests in the
Trust (each, a 'Series'), which may have terms significantly different from the
Series 1996-1 Interests, by exchanging a portion of its interest in the Trust.
See 'Description of the Offered Certificates and the Agreement.'
Interest will accrue on the Class A Certificates at the rate of % per
annum (the 'Class A Certificate Rate'). Interest will accrue on the Class B
Certificates at the rate of % per annum (the 'Class B Certificate Rate').
Interest will accrue on the basis of a 360-day year of twelve 30-day months.
Interest with respect to the Offered Certificates is payable monthly on the 1st
of each month (or, if such day is not a business day, the next succeeding
business day) (each, a 'Distribution Date'), commencing in December, 1996.
Principal on the Class A Certificates is scheduled to be distributed on each
Distribution Date commencing on the Distribution Date in December, 1999, and
ending on the Distribution Date in November, 2000, but may be paid earlier or
later under certain limited circumstances described herein. Principal on the
Class B Certificates is scheduled to be distributed on each Distribution Date
commencing November, 2000, but may be paid earlier or later under certain
limited circumstances described herein. No principal will be payable to the
Class B Certificates until the final principal payment has been made to the
Class A Certificates. No principal will be payable to the Collateral Interest
until the final payment has been made to the Class A Certificates and Class B
Certificates. No principal will be payable to the Subordinated Transferor
Certificate until the final payment has been made to the Class A Certificates,
the Class B Certificates and the Collateral Interest. See 'Maturity
Assumptions.' The issuance of the Class B Certificates, the Collateral Interest
and the Subordinated Transferor Certificate are conditions precedent to the
issuance of the Class A Certificates. The issuance of the Collateral Interest
and the Subordinated Transferor Certificate are conditions precedent to the
issuance of the Class B Certificates. See 'Description of the Offered
Certificates and the Agreement.'
An application will be made to list the Offered Certificates on the
Luxembourg Stock Exchange.
2
<PAGE>
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVERALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE OFFERED
CERTIFICATES OFFERED HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL
IN THE OPEN MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE LUXEMBOURG STOCK
EXCHANGE. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
------------------------
REPORTS TO CERTIFICATEHOLDERS
Unless and until Definitive Certificates (as 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 registered holder of the Offered Certificates, pursuant to the
Agreement. On each Distribution Date a Payment Date Statement (as defined
herein) prepared by the Servicer will be provided setting forth information
regarding the Offered Certificates. Such reports will be made available on a
monthly basis by The Depository Trust Company to Participants (as hereinafter
defined), upon request by such Participants to The Depository Trust Company, in
accordance with the rules, regulations and procedures creating and affecting The
Depository Trust Company. Certificate Owners (as defined herein) may contact
their Participants or the Trustee to receive copies of such reports. See
'Description of the Offered Certificates and the Agreement--Book-Entry
Registration' and '--Reports to Certificateholders.' Such reports will not
contain information that has been examined and reported on by independent public
accountants and will not constitute financial statements prepared in accordance
with generally accepted accounting principles. The Transferor does not intend to
send any of its financial reports to Certificateholders or to the owners of
beneficial interests in the Offered Certificates (the 'Certificate Owners'). The
Servicer on behalf of the Trust will file with the Commission such periodic
reports with respect to the Trust as are required under the Securities Exchange
Act of 1934, as amended (the 'Exchange Act'), and the rules and regulations of
the Commission thereunder. However, in accordance with the Exchange Act and the
rules and regulations of the Commission thereunder, the Transferor expects that
the Trust's obligation to file such reports will be terminated following the end
of 1996. Upon the termination of the Trust's obligation, the Transferor intends
not to file Exchange Act reports.
AVAILABLE INFORMATION
The Transferor, as originator of the Trust, has filed a Registration
Statement under the Securities Act of 1933, as amended (the 'Act'), with the
Commission with respect to the Offered Certificates offered pursuant to this
Prospectus. For further information, reference is made to the Registration
Statement and amendments and exhibits thereto (the 'Registration Statement'),
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 Atrium
Center, 500 West Madison Street, Chicago, Illinois 60661-2511. Copies of the
Registration Statement may be obtained from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed
rates and electronically through the Commission's Electronic Data Gathering
Analysis and Retrieval system at the Commission's Web site (http:\\www.sec.gov).
3
<PAGE>
SUMMARY OF TERMS
The following summary is qualified in its entirety by reference to the
detailed information appearing elsewhere in this Prospectus. Certain capitalized
terms used in this summary 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
Terms' herein.
Securities Offered........................ $200,000,000 Class A Asset Backed
Certificates, Series 1996-1 (the
'Class A Certificates') and
$28,205,129 Class B Asset Backed
Certificates, Series 1996-1 (the
'Class B Certificates', together
with the Class A Certificates, the
'Offered Certificates'). The Offered
Certificates will be issued pursuant
to the Amended and Restated Pooling
and Servicing Agreement, dated as of
November 1, 1996 (the 'Agreement')
as supplemented by the Series 1996-1
Supplement, dated as of November 1,
1996 (the 'Series 1996-1
Supplement') (the term 'Agreement,'
unless the context requires
otherwise, refers to the Agreement
as supplemented by the Series 1996-1
Supplement), among Firestone Retail
Credit Corporation, as transferor
(the 'Transferor'),
Bridgestone/Firestone, Inc.
('Bridgestone/Firestone'), as
servicer (the 'Servicer') and The
Fuji Bank and Trust Company, as
trustee (the 'Trustee'). The
Collateral Interest and the
Subordinated Transferor Certificate
(herein collectively referred to as
the 'Other Interests'), to be issued
pursuant to the Agreement (see
'Description of the Offered
Certificates and the Agreement'
below), are not being offered
hereby. The issuance of the Other
Interests is a condition precedent
to the issuance of the Offered
Certificates. The Other Interests,
together with the Offered
Certificates, will be referred to
herein as the 'Series 1996-1
Interests.' Any information
contained herein regarding the Other
Interests is included solely to
permit a better understanding of the
Offered Certificates. See
'Description of the Offered
Certificates and the
Agreement--General.'
Bridgestone/Firestone is a direct
wholly owned subsidiary of
Bridgestone Corporation, a
corporation organized under the laws
of Japan. Bridgestone/Firestone is a
multinational organization whose
principal business is the
development, manufacture and sale of
a broad line of tires for passenger,
truck and agricultural vehicles, in
both the original equipment and
replacement markets. Credit First
National Association ('CFNA' or
together with any successor
originator, the 'Originator'), a
wholly owned subsidiary of
Bridgestone/Firestone, was organized
for the purpose of making credit
card loans and activities incidental
thereto.
The Offered Certificates represent
beneficial interests in the Trust
only and do not represent interests
in or recourse obligations of the
Transferor, the Servicer, CFNA or
any affiliate thereof.
The Trust has previously issued
several other Series. See 'Annex I:
Outstanding Series' for a summary of
all Series currently outstanding.
Transferor................................ Firestone Retail Credit
Corporation, a Massachusetts
corporation, is the transferor of
the Receivables and the originator
of the Trust. The Transferor is a
nominally capitalized special
purpose corporation and was
organized for the limited purpose of
purchasing, holding,
4
<PAGE>
owning and selling receivables and
any activities incidental to and
necessary or convenient for the
accomplishment of the foregoing. The
Transferor's principal executive
offices are located at One
International Place, Suite 520,
Boston, Massachusetts 02110. Its
telephone number is (617) 951-7690.
See 'The Transferor and
Bridgestone/Firestone.'
Servicer.................................. The Receivables will be serviced by
Bridgestone/Firestone, Inc., an Ohio
corporation. CFNA will perform
certain sub-servicing functions on
behalf of the Servicer including,
but not limited to, the approval of
new account applications, the
approval of all credit charge
transactions involving existing
accounts and collection efforts.
Trust Assets.............................. The Trust Assets include (i) a
portfolio of account balances (the
'Receivables') generated or to be
generated by the Originator in the
ordinary course of its business and
existing or arising in certain
credit card accounts (the
'Accounts') established or to be
established under a private label
credit card program described more
fully herein (the 'Credit Card
Program') established by the
Originator for customers of (a)
Bridgestone/Firestone stores, which
sell tires and automotive
maintenance and repair products and
services, (b) dealers and marketers
which have contractual arrangements
with Bridgestone/Firestone to market
Bridgestone/Firestone tires and
related products, as well as
automotive maintenance and repair
services, and (c) certain other
dealers and marketers of automotive
products, which include tires and
automotive maintenance and repair
services, which dealers and
marketers do not have such
contractual arrangements with
Bridgestone/Firestone, (ii) a
portfolio of certain designated
Receivables generated or to be
generated by the Originator and
existing or arising under certain
accounts to be established under
other credit card programs,
established or to be established by
the Originator (the 'Alternative
Programs'), (iii) all monies due or
to become due under the Receivables
on or after the billing cycle cut-
off dates occurring in the
Collection Period (as defined below)
from October 19, 1992 to November
18, 1992 (the 'Cut-off Date'), (iv)
the right to receive certain
merchant fees attributed to
cardholder charges giving rise to
Receivables ('Merchant Fees')
pursuant to the Purchase and Sale
Agreement (as defined below), (v)
all Recoveries (as defined below) on
Defaulted Receivables (as defined
below), (vi) any Enhancement (as
defined below) issued with respect
to any Series, (vii) the proceeds of
the Servicer Letter of Credit and
the Transferor Letter of Credit
(each as defined below), (viii) all
of the Transferor's right, title and
interest in and to the Purchase and
Sale Agreement and the Participation
Agreement (as defined below), (ix)
all moneys on deposit in the
Collection Account and any other
accounts established for the benefit
of any other series (which other
accounts will not be available to
Certificateholders) and (x) all
proceeds of any of the foregoing.
On the first Transfer Date (as
defined below) CFNA shall transfer
Merchant Fees to the Trust in an
amount equal to $350,000. On each
Transfer Date thereafter, CFNA shall
transfer Merchant Fees collected
during the calendar month preceding
the related Transfer
5
<PAGE>
Date in an amount equal to the
lesser of (a) $350,000 and (b) the
amount of Merchant Fees actually
collected by CFNA during such
calendar month, to the Transferor.
Such Merchant Fees shall be
transferred pursuant to the Purchase
and Sale Agreement (as defined
below). The Transferor will transfer
such Merchant Fees to the Trust
pursuant to the Agreement.
The Accounts will include (i)
eligible credit card accounts
('Eligible Accounts') established
under the Credit Card Program as of
and subsequent to the Cut-off Date
and (ii) eligible accounts
established under Alternative
Programs subsequent to the Closing
Date which are designated by the
Transferor as Eligible Alternative
Accounts (as defined below) in
accordance with selection criteria
relating to the addition of
accounts. See 'The Credit Card
Program--General' and 'Description
of the Offered Certificates and the
Agreement--Addition of Accounts'
herein.
The term 'Defaulted Receivables'
shall mean with respect to any
Collection Period, all Receivables
in any Account which are written off
as uncollectible in such Collection
Period in accordance with the
Servicer's guidelines.
Notwithstanding the foregoing
sentence, a Receivable shall be
deemed a Defaulted Receivable no
later than the last day of the
Collection Period following the
Collection Period in which it
becomes 180 days delinquent. The
term 'Recoveries,' with respect to
any Collection Period, shall mean
all amounts or payments received by
the Servicer with respect to
Receivables which have previously
become Defaulted Receivables in a
prior Collection Period, net of
reasonable expenses of the Servicer
incurred and deducted from such
amounts or payments. The term
'Enhancement' shall mean, with
respect to any Series or class
within a Series, any letter of
credit, guaranteed rate agreement,
cash collateral account, cash
collateral guaranty, liquidity
facility, maturity guaranty
facility, tax protection agreement,
interest rate swap or other contract
or agreement for the benefit of the
certificateholders of such Series.
The Receivables have been and will
be purchased by the Transferor from
the Originator pursuant to the
Second Amended and Restated Purchase
and Sale Agreement, dated as of
November 1, 1996 (the 'Purchase and
Sale Agreement'), among the
Transferor, Bridgestone/Firestone
and the Originator. The Purchase and
Sale Agreement provides, among other
things, that the Originator shall
sell and assign to the Transferor,
and the Transferor will purchase
from the Originator, on each
business day, all Eligible
Receivables (as defined herein)
arising in the Accounts under the
Credit Card Program and certain
Eligible Alternative Receivables
arising in designated Alternative
Accounts (as defined herein) under
the Alternative Programs, provided,
among other things, that the
Transferor is not in default
thereunder and that no Servicer
Event of Default (as defined herein)
and no Originator insolvency shall
have occurred. See 'Description of
the Purchase and Sale Agreement.'
The right to receive certain
Merchant Fees will also be
transferred by the Originator to the
Transferor pursuant to the Purchase
and Sale Agreement. The Transferor
has transferred and will transfer
such Receivables and will transfer
such Merchant Fees to the Trust
6
<PAGE>
pursuant to the Agreement. See
'Description of the Offered
Certificates and the
Agreement--Conveyance of
Receivables.'
The 'Receivables' consist of
amounts charged by cardholders
under the Accounts for goods and
services, and all late fees,
returned check charges, convenience
checks and amounts charged in
respect of credit-related insurance
and periodic finance charges as
described herein.
A portion of the Collections (as
defined below) received in any
applicable billing cycle for an
Account (the monthly billing cycle
periods for the Accounts ending in
the period of time commencing on
the 19th calendar day of each
calendar month and ending on the
18th calendar day of the next
succeeding calendar month during
the term of the Trust being
collectively referred to herein as
a 'Collection Period') allocable to
Receivables will be treated as
'Finance Charge Collections' and a
portion will be treated as
'Principal Collections.' Under the
Agreement and as otherwise
specified therein, the Collections
on the Receivables for any
Collection Period will be allocated
such that all finance charges
billed or accrued in respect of
Receivables in the prior Collection
Period (less certain rebates as
described herein) will be deemed
Finance Charge Collections and the
remaining amount of such
Collections will be deemed
Principal Collections.
Notwithstanding the foregoing,
Recoveries received in any
Collection Period shall be treated
as Finance Charge Collections for
such Collection Period for all
purposes. In addition, Merchant
Fees transferred to the Trust on
any Transfer Date shall be treated
as Finance Charge Collections for
the related Collection Period for
all purposes.
As of the Collection Period ended
on September 18, 1996 the amount of
Aggregate Receivables (as defined
below) in the Trust was
$434,750,566. The total amount of
Receivables and Merchant Fees in
the Trust will fluctuate from day
to day as a result of the transfer
of new Receivables to the Trust and
as a result of collections on
existing Receivables
('Collections'). 'Aggregate
Receivables' shall mean, at any
time, (a) the aggregate amount of
Eligible Receivables as of the end
of the prior Collection Period
minus Defaulted Receivables minus
(b) the amount of Discount Option
Receivables as of the end of the
prior Collection Period minus (c)
(i) an amount equal to finance
charges billed in respect of such
Eligible Receivables in such
Collection Period minus (ii) an
amount equal to finance charges
credited as a rebate in respect of
such Eligible Receivables during
such prior Collection Period minus
(iii) amounts billed in item (i)
above, net of rebates in item (ii)
above, with respect to that portion
of such Eligible Receivables that
are Discount Option Receivables.
Addition of Accounts...................... The Accounts consist of Eligible
Accounts established under the
Credit Card Program as of and
subsequent to the Cut-off Date. In
addition, the Transferor is
permitted (subject to certain
limitations and conditions) to
designate from time to time
additional eligible Accounts
established under Alternative
Programs ('Eligible Alternative
Accounts') and to convey to the
Trust Receivables of such Eligible
Alternative Accounts, whether such
Receivables are then existing or
thereafter created until either the
Ten Percent
7
<PAGE>
Number Test (as defined below) or
Ten Percent Aggregate Test (as
defined below) is met. Thereafter,
if the Transferor has not obtained
the consent of the applicable
rating agencies, as described
below, additional accounts and
additional receivables from
Alternative Programs shall not be
transferred to the Trust.
Such 'Alternative Programs' are
programs for which CFNA underwrites
and originates Accounts and
Receivables and may include, but
are not limited to, the
establishment of additional private
label credit card programs and the
offering of general purpose credit
cards. As of the Closing Date, the
Originator has not established any
of these Alternative Programs. The
'Ten Percent Number Test' is
determined as of any date on which
Alternative Accounts are to be
added to the Trust and met when the
number of Eligible Alternative
Accounts as of such date equals 10%
of the number of all Accounts in
the Trust as of such date. The 'Ten
Percent Aggregate Test' is
determined as of any date on which
Alternative Accounts are to be
added to the Trust and met when the
dollar amount of Receivables from
such Eligible Alternative Accounts
as of such date equals 10% of the
Aggregate Receivables as of such
date. See 'Description of the
Offered Certificates and the
Agreement--Addition of Accounts.'
Once the Transferor has met the Ten
Percent Number Test or the Ten
Percent Aggregate Test, the
Transferor must request written
confirmation from the applicable
rating agencies to transfer to the
Trust additional Accounts related
to an Alternative Program and all
Receivables arising from such
Accounts.
In addition and subject to certain
limitations set forth in the
Agreement, on an annual basis, the
Transferor will be permitted to
include additional Eligible
Accounts and all Eligible
Receivables arising from such
Eligible Accounts up to an
aggregate number equal to 20% of
the total number of Eligible
Accounts already included in the
Trust without written confirmation
from the applicable rating
agencies.
Removal of Accounts....................... The Transferor has the right to
accept Accounts for removal from
the Trust in an amount not greater
than the lesser of (a) the excess
of the Transferor Amount (plus the
B/F Amount and amounts available
under the Transferor Letter of
Credit) over 7% of the Aggregate
Certificateholders' Interest (as
defined herein) and (b) 5% of
Aggregate Receivables on such date
of removal, provided, among other
conditions, that the Transferor has
not employed a selection procedure
adverse to the interests of the
Certificateholders and the
Transferor reasonably believes that
the removal of such Accounts from
the Trust will not result in the
occurrence of an Amortization
Event. See 'Description of the
Offered Certificates and the
Agreement--Removal of Accounts.'
Description of the Series 1996-1
Interests............................... Payments received on the Trust's
assets will be allocated among the
interest of the Class A
Certificateholders (the 'Class A
Interest'), the interest of the
Class B Certificateholders (the
'Class B Interest'), the interest
of the holder of the Collateral
Interest (the 'Collateral
Interest') and the interest of the
holder of the
8
<PAGE>
Subordinated Transferor Certificate
(the 'Subordinated Transferor
Interest,' together with the Class
A Interest, the Class B Interest
and the Collateral Interest, the
'Certificateholders' Interest'),
the interest of the holders of
other outstanding Series (together
with the Certificateholders'
Interest, the 'Aggregate
Certificateholders' Interest'), the
interest of Bridgestone/Firestone
as holder of the
Bridgestone/Firestone Certificate
(the 'B/F Interest') and the pari
passu interest of the Transferor
(the last being referred to as the
'Transferor Interest'). The amount
of the Transferor Interest at any
time (the 'Transferor Amount')
shall equal the Aggregate
Receivables at such time minus the
sum of the invested amount of the
holders of other outstanding
Series, the Class A Invested Amount
(as defined below), Class B
Invested Amount, (as defined
below), the Collateral Interest
Invested Amount (as defined below),
the Subordinated Transferor Amount
(as defined below), and the amount
of the B/F Interest (the 'B/F
Amount').
The Transferor Interest will be
evidenced by a certificate (the
'Exchangeable Transferor
Certificate') which will evidence
an undivided interest in the Trust
Assets allocated to the Transferor
Interest. The principal amount of
the Transferor Interest will
fluctuate as the amount of the
Receivables held by the Trust
changes from time to time. The
Transferor Amount (plus the amount
available under the Transferor
Letter of Credit (as defined below)
and the B/F Amount) shall at all
times equal 7% or more of the
aggregate invested amount of all
outstanding Series of certificates.
As of the Collection Period ended
September 18, 1996, the initial
Transferor Amount is equal to
$33,602,934.
The Class A Certificates offered
hereby will evidence undivided
interests in the Trust Assets
allocated to the Class A Interest
and will represent the right to
receive from such Trust Assets
funds up to (but not in excess of)
the amounts required to make
payments of interest at the rate
per annum equal to % (the 'Class A
Certificate Rate') payable monthly
on each Distribution Date
commencing December 1996, and the
payment of principal on each
Distribution Date commencing
December, 1999, or earlier or later
under certain circumstances, to the
extent of the Class A Invested
Amount (as defined herein) (which
may be less than the aggregate
unpaid principal balance of the
Class A Certificates, in certain
circumstances, if the Investor
Default Amount (as defined herein)
exceeds available Excess Finance
Charge Collections and Reallocated
Principal Collections (as defined
herein) and the Class B Invested
Amount, the Collateral Interest
Invested Amount and the
Subordinated Transferor Amount are
each zero). See 'Description of the
Offered Certificates and the
Agreement--General,' '--Allocation
Percentages,' '--Reallocation of
Cash Flows,' '--Distributions from
the Collection Account' and
'--Subordination of the Class B
Certificates.'
The Class B Certificates offered
hereby will evidence undivided
interests in the Trust Assets
allocated to the Class B Interest
and will represent the right to
receive from such Trust Assets
funds up to (but not in excess of)
the amounts required to make
payments of interest at the rate
per annum equal to % (the 'Class B
Certificate
9
<PAGE>
Rate') payable monthly on each
Distribution Date commencing
December 1996, and the payment of
principal on each Distribution Date
commencing November, 2000, or
earlier or later under certain
circumstances, to the extent of the
Class B Invested Amount (which may
be less than the aggregate unpaid
principal balance of the Class B
Certificates, in certain
circumstances, if the Investor
Default Amount exceeds available
Excess Finance Charge Collections
and Reallocated Principal
Collections and the Collateral
Interest Invested Amount and the
Subordinated Transferor Amount are
each zero). The Class B
Certificates are subordinate in
right of payment to the Class A
Certificates to the extent
necessary to fund payments with
respect to the Class A
Certificates. See 'Description of
the Offered Certificates and the
Agreement--General,' '--Allocation
Percentages,' '--Reallocation of
Cash Flows,' '--Distributions from
the Collection Account' and
'--Subordination of the Class B
Certificates.'
The Collateral Interest will
evidence undivided interests in the
Trust Assets allocated to the
Collateral Interest and will
represent the right to receive from
such Trust assets funds up to (but
not in excess of) the amounts
required to make payments of
interest at a rate per annum equal
to the London interbank offered
rate for one month United States
dollar deposits ('LIBOR') plus a
percent per annum not in excess of
1.0% (the 'Collateral Interest
Rate') payable monthly on each
Distribution Date commencing
December, 1996 and of principal
with respect to the Collateral
Interest to the extent of the
Collateral Interest Invested Amount
(which may be less than the
aggregate unpaid principal balance
of the Collateral Interest, in
certain circumstances, if the
Investor Default Amount exceeds
available Excess Finance Charge
Collections and Reallocated
Principal Collections and the
Subordinated Transferor Amount is
zero) following the final principal
payment with respect to the Offered
Certificates. The Collateral
Interest is subordinated in right
of payment to the Offered
Certificates to the extent
necessary to fund payments with
respect to the Offered
Certificates. The Collateral
Interest will be sold pursuant to a
Loan Agreement, dated as of the
Closing Date (the 'Loan
Agreement'), by and among the
Transferor, the Servicer, the
Trustee and the purchaser of the
Collateral Interest (the
'Collateral Interest Holder') and
is not being offered hereby. The
Collateral Interest will be in an
initial amount of $10,000,000 (the
'Initial Collateral Interest
Invested Amount').
The Subordinated Transferor
Certificate will evidence an
undivided interest in the Trust
Assets allocated to the
Subordinated Transferor Interest
and will represent the right to
receive from such assets funds up
to (but not in excess of) the
amounts required to make payments
of principal with respect to the
Subordinated Transferor Certificate
following the final principal
payment with respect to the
Collateral Interest (which may be
less than the aggregate unpaid
principal balance of the
Subordinated Transferor
Certificate, in certain
circumstances, if the Investor
Default Amount exceeds available
Excess Finance Charge Collections
and Reallocated Principal
Collections). The holder of the
Subordinated Transferor Certificate
will not be entitled to receive any
payments of interest. The
10
<PAGE>
Subordinated Transferor Certificate
is subordinate in right of payment
to the Offered Certificates and the
Collateral Interest to the extent
necessary to fund payments with
respect to the Offered Certificates
and the Collateral Interest. The
Subordinated Transferor Certificate
will be retained by the Transferor
and participated to
Bridgestone/Firestone pursuant to
the Participation Agreement and is
not being offered hereby. The
Subordinated Transferor Certificate
will be in an initial amount of
$18,205,129 (the 'Initial
Subordinated Transferor Amount').
The Series 1992-A Certificates and
the Series 1992-B Certificates
(collectively, the 'Series 1992
Certificates'), the Series 1995-A
Asset Backed Certificates (the
'Series 1995-A Certificates'), the
Bridgestone/Firestone Certificate
and the Exchangeable Transferor
Certificate are the only
certificates that have been issued
by the Trust as of the date hereof.
None of the Series 1992
Certificates, the Series 1995-A
Certificates, the Collateral
Interest, the Subordinated
Transferor Certificate, the
Bridgestone/Firestone Certificate
and the Exchangeable Transferor
Certificate are being offered
hereby. The Series 1992-A
Certificates are no longer
outstanding. On the Closing Date,
the Series 1995-A Certificates will
be repaid from the proceeds of the
Offered Certificates, as set forth
in 'Use of Proceeds' herein. Each
outstanding Series represents a
pari passu interest in the Trust.
The Class A Interest, the Class B
Interest, the Collateral Interest
and the Subordinated Transferor
Interest will each include the
right to receive (but only to the
extent needed to make required
payments under the Agreement)
varying percentages of Finance
Charge Collections and Principal
Collections during each Collection
Period. Finance Charge Collections
and Defaulted Receivables will be
allocated at all times to the Class
A Interest, the Class B Interest,
the Collateral Interest and the
Subordinated Transferor Interest
based on the Floating Allocation
Percentage (as defined herein)
applicable to such Class or
Interest during the related
Collection Period. The 'Class A
Floating Allocation Percentage',
the 'Class B Floating Allocation
Percentage', the 'Collateral
Interest Floating Allocation
Percentage' and the 'Subordinated
Floating Allocation Percentage'
shall be equal to the percentage
equivalent of the ratio which the
Class A Invested Amount, Class B
Invested Amount, Collateral
Interest Invested Amount or the
Subordinated Transferor Amount, as
applicable, on the last day of the
immediately preceding Collection
Period bears to the amount of
Aggregate Receivables in the Trust,
or, with respect to Finance Charge
Collections, bears to the sum of
the numerators used to calculate
the invested percentage with
respect to Finance Charge
Collections for all Series of
certificates outstanding during
such Collection Period and the B/F
Percentage. See 'Description of the
Offered Certificates and the
Agreement--Allocation Percentages.'
During the Revolving Period (as
defined below), subject to certain
limitations, all Principal
Collections allocable to the Series
1996-1 Interests (other than
Reallocated Principal Collections
(as defined below) that are used to
pay Required Amounts due on the
Class A and Class B Certificates
and the Collateral Interest) will
be paid to
11
<PAGE>
the Transferor in respect of the
Transferor Interest. During the
Controlled Amortization Period (as
defined below) and any Rapid
Amortization Period (as defined
below), Principal Collections
allocable to the Series 1996-1
Interests will be allocated to the
Class A Interest, the Class B
Interest, the Collateral Interest
and the Subordinated Transferor
Interest based on the Fixed
Allocation Percentage with respect
to such Class or Interest. The
Floating Allocation Percentage and
Fixed Allocation Percentage are
sometimes referred to herein as an
'Invested Percentage.' See
'Principal Payments; Controlled
Amortization Period' herein.
Exchanges................................. The Agreement authorizes the
Trustee to issue three types of
certificates: (i) one or more
Series of certificates which may be
in one or more classes and which
may be transferable and have the
characteristics described below,
(ii) the Bridgestone/Firestone
Certificate which is currently and
will continue to be held by
Bridgestone/Firestone and which is
not transferable, and (iii) the
Exchangeable Transferor
Certificate, which is held by the
Transferor and in which
Bridgestone/Firestone has a 100%
participation pursuant to an
Amended and Restated Participation
Agreement, dated as of November 1,
1996, by and between the Transferor
and Bridgestone/Firestone (the
'Participation Agreement'). The
Agreement also provides that,
pursuant to any one or more
supplements to the Agreement (each,
a 'Supplement'), the Transferor may
tender the Exchangeable Transferor
Certificate or, if permitted by the
applicable Supplement, certificates
representing any Series of
certificates and the Exchangeable
Transferor Certificate, to the
Trustee and, upon satisfying
certain other terms and conditions,
cause the Trustee to issue one or
more new series and reissue an
Exchangeable Transferor Certificate
(any such tender, an 'Exchange').
Any Exchange involving only the
tender of the Exchangeable
Transferor Certificate to the
Trustee will have the effect of
decreasing the Transferor Interest.
Under the Agreement, the Transferor
may define, with respect to any
Series, the Principal Terms (as
defined below) of the Series. The
Transferor 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 Act or exempt from
registration thereunder, directly
or through the Underwriters (as
defined below) or one or more other
underwriters or placement agents,
in fixed-price offerings or in
negotiated transactions or
otherwise. See Annex I for a
listing of all outstanding Series.
The Transferor may offer, from time
to time, additional Series issued
by the Trust.
Under the Agreement and pursuant to
a Supplement, an Exchange may occur
only upon delivery to the Trustee
of the following: (i) a Supplement
specifying the Principal Terms of
such Series, (ii) an opinion of
counsel to the effect that the
certificates of such Series under
existing law will be characterized
as either indebtedness or an
interest in a partnership under
existing law for Federal income tax
purposes and that the issuance of
such Series will not materially
adversely affect the Federal income
tax characterization of any
outstanding Series that have been
the subject of a previous opinion
12
<PAGE>
of tax counsel, (iii) if required
by the related Supplement, a form
of Enhancement and any related
agreement, (iv) written
confirmation from the applicable
Rating Agency (see 'Summary of
Terms-- Rating of the Offered
Certificates' below) that the
Exchange will not result in such
Rating Agency reducing or
withdrawing its rating on any then
outstanding Series rated by it or
otherwise adversely affect any
rating on any then outstanding
Series, and (v) the existing
Exchangeable Transferor Certificate
and, if applicable, the
certificates representing the
Series to be exchanged. See
'Description of the Offered
Certificates and the Agreement--
Exchanges.'
Registration of the Offered
Certificates............................ The Class A Certificates will be
issued in book-entry form only in
the initial principal amount of
$200,000,000 (the 'Initial Class A
Invested Amount') (which will be
decreased or reinstated under
certain circumstances as described
herein). The Class A Certificates
will initially be represented by
one or more Class A Certificates
registered in the name of Cede &
Co. ('Cede') as the nominee of The
Depository Trust Company ('DTC'),
in the United States, or Cedel
Bank, societe anonyme ('CEDEL') or
the Euroclear System ('Euroclear')
in Europe. The Class B Certificates
will be issued in book-entry form
only in the initial principal
amount of $28,205,129 (the 'Initial
Class B Invested Amount') (which
will be decreased or reinstated
under certain circumstances as
described herein and, accordingly,
the amount available to fund
payments with respect to the Class
A Certificates may be decreased).
The Class B Certificates will
initially be represented by one or
more Certificates registered in the
name of Cede as the nominee of DTC,
in the United States or CEDEL or
Euroclear in Europe. Transfers
within DTC, CEDEL or Euroclear, as
the case may be, will be in
accordance with the usual rules and
operating procedures of the
relevant system. So long as Offered
Certificates are in book-entry
form, such Offered Certificates
will be evidenced by one or more
securities registered in the name
of Cede, as the nominee of DTC or
one or the relevant depositaries
(collectively, the 'European
Depositaries'). Cross-market
transfers between persons holding
directly or indirectly through DTC,
on the one hand, and counterparties
holding directly or indirectly
through CEDEL or Euroclear, on the
other, will be effected in DTC
through Citibank N.A. ('Citibank')
or The Chase Manhattan Bank
('Chase'), the relevant
depositaries of CEDEL and
Euroclear, respectively, and each a
participating member of DTC. See
'Description of the Offered
Certificates and the
Agreement--Definitive
Certificates.' As used herein, the
term 'Class A Certificateholders'
refers to registered holders of the
Class A Certificates, the term
'Class B Certificateholders' refers
to registered holders of the Class
B Certificates, the term
'Collateral Interest Holder' refers
to registered holders of the
Collateral Interest, and the term
'Offered Certificateholders' refers
to the Class A Certificateholders
and the Class B Certificateholders
collectively.
The holders of beneficial interests
in the Class A Certificates and the
Class B Certificates (the
'Certificate Owners') will not be
entitled to receive a definitive
certificate representing such
person's interest,
13
<PAGE>
except in the event that Definitive
Certificates are issued under the
limited circumstances described
herein. In such event, interests in
the Class A Certificates and Class
B Certificates will be available in
denominations of $1,000 and in
integral multiples thereof. All
references herein to Class A
Certificateholders, Class B
Certificateholders or Offered
Certificateholders shall refer to
Certificate Owners, except as
otherwise specified herein. See
'Description of the Offered
Certificates and the
Agreement--Book- Entry
Registration' and '--Definitive
Certificates.'
Interest on the Class A Certificates...... Interest will accrue on the unpaid
principal amount of the Class A
Certificates at a per annum rate
equal to the Class A Certificate
Rate and, except as otherwise
provided herein, be distributed to
Class A Certificateholders monthly
on each Distribution Date,
commencing December, 1996, in an
amount equal to one-twelfth of the
product of (i) the Class A
Certificate Rate and (ii) the
outstanding principal balance of
the Class A Certificates as of the
preceding Distribution Date (or in
the case of the first Distribution
Date, as of the Closing Date).
Interest for any Distribution Date
due but not paid on any
Distribution Date will be due on
the next succeeding Distribution
Date together with, to the extent
permitted by applicable law,
additional interest on such amount
at the Class A Certificate Rate.
Interest for the first Distribution
Date will include accrued interest
at the Class A Certificate Rate
from the Closing Date through
November 30, 1996. Interest will be
calculated on the basis of a
360-day year of twelve 30-day
months ('30/360 Basis'). See
'Description of the Offered
Certificates and the
Agreement--General' and
'--Distributions from the
Collection Account.'
Interest on the Class B Certificates...... Interest will accrue on the unpaid
principal amount of the Class B
Certificates at a per annum rate
equal to the Class B Certificate
Rate and, except as otherwise
provided herein, be distributed to
Class B Certificateholders monthly
on each Distribution Date,
commencing December, 1996, in an
amount equal to one-twelfth of the
product of (i) the Class B
Certificate Rate and (ii) the
outstanding principal balance of
the Class B Certificates as of the
preceding Distribution Date (or in
the case of the first Distribution
Date, as of the Closing Date).
Interest for any Distribution Date
due but not paid on any
Distribution Date will be due on
the next succeeding Distribution
Date together with, to the extent
permitted by applicable law,
additional interest on such amount
at the Class B Certificate Rate.
Interest for the first Distribution
Date will include accrued interest
at the Class B Certificate Rate
from the Closing Date through
November 30, 1996. Interest will be
calculated on a 30/360 Basis. See
'Description of the Offered
Certificates and the
Agreement--General' and
'--Distributions from the
Collection Account.'
Distribution Date......................... The 1st day of each month (or, if
such day is not a business day, the
next succeeding business day).
Record Date............................... The 15th day of the month
immediately preceding any
Distribution Date.
Revolving Period.......................... No principal will be payable to
the Class A Certificateholders
until the Distribution Date
occurring in December, 1999, or
upon the occurrence of an
Amortization Event (as defined
below) as
14
<PAGE>
described herein, on the first
Distribution Date following the
Collection Period during which an
Amortization Event occurs. No
principal will be payable to the
Class B Certificateholders until
the final principal payment has
been made to the Class A
Certificateholders. No principal
will be payable to the Collateral
Interest Holder until the final
principal payment has been made to
the Offered Certificateholders. No
principal will be payable to the
holder of the Subordinated
Transferor Certificate until the
final principal payment has been
made to the Offered
Certificateholders and the
Collateral Interest Holder. For
each Collection Period during the
period beginning after the Closing
Date and ending on the day prior to
the day on which the Controlled
Amortization Period or the Rapid
Amortization Period commences (the
'Revolving Period'), all Principal
Collections otherwise allocable to
the Certificateholders' Interest
(other than Shared Principal
Collections paid to holders of
certificates of other Series and
any Reallocated Principal
Collections that are used to pay
Required Amounts due on the Class A
and Class B Certificates and the
Collateral Interest) will, subject
to certain limitations, be
distributed to the Transferor in
respect of the Transferor Interest.
Principal Payments; Controlled
Amortization Period..................... Unless or until an Amortization
Event (as defined below) has
occurred, commencing on the
Distribution Date occurring three
years after the Closing Date and
ending when the Class A Invested
Amount has been paid in full or on
July 1, 2003 (the 'Final Series
1996-1 Termination Date') or on the
day on which an Amortization Event
occurs or is deemed to have
occurred (the 'Controlled
Amortization Period'), Principal
Collections and Shared Principal
Collections allocable to the Series
1996-1 Interests (other than
Reallocated Principal Collections
that are used to pay Required
Amounts due on the Class A and
Class B Certificates and the
Collateral Interest) will be
distributed monthly to the Class A
Certificateholders, as provided
herein, on each Distribution Date
beginning with the Distribution
Date in December, 1999 and the
Class A Invested Amount is expected
to be paid in full to the Class A
Certificateholders on November 1,
2000 (the 'Class A Expected Final
Payment Date'). During the
Controlled Amortization Period, the
amount of Principal Collections and
Shared Principal Collections
allocable to the Class A
Certificates will generally equal
the product of such Principal
Collections and the Class A Fixed
Allocation Percentage (as defined
below) which will be paid through
to the Class A Certificateholders
to the extent of the lesser of (a)
such product and certain other
amounts and (b) $16,666,666.67 (the
'Controlled Amortization Amount').
See 'Description of the Offered
Certificates and the
Agreement--General' and
'--Distributions from the
Collection Account.'
Principal Collections received
during the Controlled Amortization
Period and Rapid Amortization
Period will be allocated to the
Class A Invested Amount, Class B
Invested Amount, Collateral
Interest and Subordinated
Transferor Invested Amount based on
the Class A Fixed Allocation
Percentage, Class B Fixed
Allocation Percentage, Collateral
Interest Fixed Allocation
Percentage and Subordinated
Transferor Fixed Allocation
Percentage, respectively.
15
<PAGE>
The 'Fixed Allocation Percentage'
means, with respect to any
Collection Period, the percentage
equivalent of a fraction, the
numerator of which is the sum of
the Class A Invested Amount, the
Class B Invested Amount, the
Collateral Interest Invested Amount
and the Subordinated Transferor
Interest (the 'Invested Amount'),
as of the close of business on the
last day of the Revolving Period
and the denominator of which is the
greater of (x) the Aggregate
Receivables as of the close of
business on the last day of the
prior Collection Period and (y) the
sum of the numerators used to
calculate the investor percentages
for allocations with respect to
Principal Collections for all
Series of certificates outstanding
for the current Distribution Date.
During the Controlled Amortization
Period and any Rapid Amortization
Period, all Principal Collections
will be allocated to the Class A
Interest, the Class B Interest, the
Collateral Interest and the
Subordinated Transferor Interest
based on the percentage equivalent
of the ratio which the Class A
Invested Amount, the Class B
Invested Amount, the Collateral
Interest Invested Amount and the
Subordinated Transferor Amount, as
applicable, each as of the last day
of the Revolving Period, bears to
the greater of (a) the Aggregate
Receivables on the last day of the
prior Collection Period and (b) the
sum of the numerators used to
calculate the Invested Percentage
with respect to Principal
Collections for all Series of
certificates outstanding for such
Collection Period (the 'Class A
Fixed Allocation Percentage', the
'Class B Fixed Allocation
Percentage', the 'Collateral
Interest Fixed Allocation
Percentage' and the 'Subordinated
Transferor Fixed Allocation
Percentage', as applicable) and the
remainder will be allocated to the
Transferor Interest and to the B/F
Interest.
The Class B Certificateholders will
not receive any payments of
principal until the Class A
Certificateholders have received
all payments of principal due to
them. Once the Class A Invested
Amount has been reduced to zero,
the Class B Invested Amount is
expected to be paid in full to the
Class B Certificateholders on
November 1, 2000 (the 'Class B
Expected Final Payment Date'). See
'Description of the Offered
Certificates and the
Agreement--General' and
'--Distributions from the
Collection Account.'
The Collateral Interest will not
receive any payments of principal
until the Class A and the Class B
Certificateholders have received
all payments of principal due to
them. Once the Class A Invested
Amount and the Class B Invested
Amount have been reduced to zero,
the Collateral Interest Invested
Amount will be paid in full to the
Collateral Interest Holder.
The holder of the Subordinated
Transferor Certificate will not
receive any payments of principal
until the Class A and the Class B
Certificateholders and the
Collateral Interest Holder have
received all payments of principal
due to them. Once the Class A
Invested Amount, the Class B
Invested Amount and the Collateral
Interest Invested Amount have been
reduced to zero, the Subordinated
Transferor Amount will be paid in
full to the holder of the
Subordinated Transferor
Certificate.
16
<PAGE>
Rapid Amortization Period................. During the period from the earlier
of the date on which (i) the Class
A Invested Amount has been paid in
full or (ii) an Amortization Event
occurs or is deemed to have
occurred and ending on the earlier
of the date on which the Invested
Amount has been paid in full or the
Final Series 1996-1 Termination
Date (the 'Rapid Amortization
Period'), Principal Collections,
Shared Principal Collections and
certain other amounts allocable to
the Certificateholders' Interest
will no longer be distributed to
the Transferor but instead will be
distributed as principal payments
on each Distribution Date beginning
with the first Distribution Date
following the Collection Period in
which the Class A Invested Amount
has been paid in full or an
Amortization Event occurs or is
deemed to have occurred. Such
Principal Collections, Shared
Principal Collections and certain
other amounts will be distributed
to the Class A Certificateholders
(to the extent not already paid in
full) and, following the final
principal payment to the Class A
Certificateholders, to the Class B
Certificateholders and, following
the final principal payment to the
Class B Certificateholders, to the
Collateral Interest Holder, and,
following the final principal
payment to the Collateral Interest
Holder, to the holder of the
Subordinated Transferor
Certificate. See 'Description of
the Offered Certificates and the
Agreement--Amortization Events.'
Flow of Funds............................. Funds on deposit in the Collection
Account allocable to the Class A
and Class B Certificates, the
Collateral Interest and the
Subordinated Transferor Certificate
with respect to each Distribution
Date shall be applied in the
priority set forth below:
(a) the Class A Floating Allocation
Percentage of Finance Charge
Collections will be distributed as
follows:
(i) Class A Monthly Interest,
plus the amount of any unpaid
interest due;
(ii) the Class A Investor Default
Amount will be distributed to
the Transferor in respect of
the Transferor Interest
during the Revolving Period
up to the amount of the
Transferor Interest after the
purchase of new Receivables
(and thereafter will be
included in the funds
available to make principal
payments);
(iii) the Class A Monthly Servicing
Fee (in the event
Bridgestone/Firestone is not
the Servicer, this amount
will be distributed before
the amount in clause (ii));
and
(iv) the balance, if any, will
constitute a portion of
Excess Finance Charge
Collections (as defined
below) and will be allocated
and distributed as described
under '--Excess Finance
Charge Collections.'
(b) the Class B Floating Allocation
Percentage of Finance Charge
Collections will be distributed as
follows:
(i) Class B Monthly Interest,
plus the amount of any unpaid
interest due;
17
<PAGE>
(ii) the Class B Monthly Servicing
Fee; and
(iii) the balance, if any, will
constitute a portion of
Excess Finance Charge
Collections and will be
allocated and distributed as
described under '--Excess
Finance Charge Collections.'
(c) the Collateral Interest
Floating Allocation Percentage of
Finance Charge Collections will be
distributed as follows:
(i) Collateral Interest Monthly
Interest, plus the amount of
any unpaid interest due;
(ii) the Collateral Interest
Monthly Servicing Fee; and
(iii) the balance, if any, will
constitute a portion of
Excess Finance Charge
Collections and will be
allocated and distributed as
described under '--Excess
Finance Charge Collections.'
(d) the Subordinated Transferor
Floating Allocation Percentage of
Finance Charge Collections will be
distributed as follows:
(i) the Subordinated Transferor
Monthly Servicing Fee; and
(ii) the balance, if any, will
constitute a portion of
Excess Finance Charge
Collections and will be
allocated and distributed as
described under '--Excess
Finance Charge Collections.'
(e) For each Distribution Date with
respect to the Revolving Period,
the remaining funds on deposit in
the Collection Account allocable to
the Class A and Class B
Certificates, the Collateral
Interest and the Subordinated
Transferor Certificate (other than
certain Excess Finance Charge
Collections and Reallocated
Principal Collections) will be
applied as Shared Principal
Collections and the balance will be
distributed to the Transferor in
respect of the Transferor Interest.
(f) For each Distribution Date with
respect to the Controlled
Amortization Period or any Rapid
Amortization Period, the remaining
funds on deposit in the Collection
Account allocable to the Class A
and Class B Certificates, the
Collateral Interest and the
Subordinated Transferor Certificate
(other than certain Excess Finance
Charge Collections and Reallocated
Principal Collections) will be
distributed as follows:
(i) Class A Monthly Principal for
such Distribution Date until
the Class A Invested Amount
is paid in full;
(ii) once the Class A Invested
Amount is paid in full, the
remaining amount will be
distributed to the Class B
Certificateholders until the
Class B Invested Amount is
paid in full;
(iii) once the Class B Invested
Amount is paid in full, the
remaining amount will be
distributed to the Collateral
Interest Holder until the
Collateral Interest Invested
Amount is paid in full;
18
<PAGE>
(iv) once the Collateral Interest
Invested Amount is paid in
full, the remaining amount
will be distributed to the
holder of the Subordinated
Transferor Certificate until
the Subordinated Transferor
Amount is paid in full;
(v) an amount equal to the
balance of any such remaining
funds on deposit in the
Collection Account will be
paid to the Transferor in
respect of the Transferor
Interest up to the amount of
the Transferor Interest; and
(vi) the balance will be applied
as Shared Principal
Collections to the extent
necessary and the remainder
will be distributed to the
Transferor in respect of the
Transferor Interest.
'Class A Monthly Interest' equals,
with respect to any Distribution
Date, one-twelfth of the product of
(i) the Class A Certificate Rate
and (ii) the outstanding principal
balance of the Class A Certificates
as of the preceding Distribution
Date (after subtracting therefrom
the aggregate amount of all
distributions of principal made to
the Class A Certificateholders on
such Distribution Date) or, with
respect to the first Distribution
Date, the Initial Class A Invested
Amount, provided, however, that
with respect to the initial
Distribution Date, Class A Monthly
Interest shall equal $ . 'Class B
Monthly Interest' equals, with
respect to any Distribution Date,
one-twelfth of the product of (i)
the Class B Certificate Rate and
(ii) the outstanding principal
balance of the Class B Certificates
as of the preceding Distribution
Date (after subtracting therefrom
the aggregate amount of all
distributions of principal made to
the Class B Certificateholders on
such Distribution Date) or, with
respect to the first Distribution
Date, the Initial Class B Invested
Amount, provided, however, that
with respect to the initial
Distribution Date, Class B Monthly
Interest shall equal $ .
'Collateral Interest Monthly
Interest' equals, with respect to
any Distribution Date, the product
of (i) the actual number of days in
the related Collateral Interest
Accrual Period (as defined below)
divided by 360, (ii) the Collateral
Interest Rate and (iii) the
outstanding principal balance of
the Collateral Interest as of the
preceding Distribution Date (after
subtracting therefrom the aggregate
amount of all distributions of
principal made to the Collateral
Interest Holder on such
Distribution Date) or, with respect
to the first Distribution Date, the
Initial Collateral Interest
Invested Amount. With respect to
any Distribution Date, the
'Collateral Interest Accrual
Period' is the period from and
including the first day of the
preceding calendar to and including
the last day of such preceding
calendar month, except the initial
Collateral Interest Accrual Period
shall be deemed to be the period
from the Closing Date through the
last day of the calendar month
preceding the initial Distribution
Date.
'Class A Investor Default Amount'
means, a portion of all Defaulted
Receivables which will be allocated
to the Class A Certificateholders
for each Distribution Date in an
amount equal to the product of the
Class A Floating Allocation
Percentage applicable during the
immediately preceding Collection
Period and the amount of Defaulted
Receivables for such Collection
Period.
19
<PAGE>
'Class B Investor Default Amount'
means, a portion of all Defaulted
Receivables which will be allocated
to the Class B Certificateholders
for each Distribution Date in an
amount equal to the product of the
Class B Floating Allocation
Percentage applicable during the
immediately preceding Collection
Period and the amount of Defaulted
Receivables for such Collection
Period.
'Collateral Interest Investor
Default Amount' means, a portion of
all Defaulted Receivables which
will be allocated to the Collateral
Interest Holder for each
Distribution Date in an amount
equal to the product of the
Collateral Interest Floating
Allocation Percentage applicable
during the immediately preceding
Collection Period and the amount of
Defaulted Receivables for such
Collection Period.
'Subordinated Transferor Default
Amount' means, a portion of all
Defaulted Receivables which will be
allocated to the holder of the
Subordinated Transferor Certificate
for each Distribution Date in an
amount equal to the product of the
Subordinated Transferor Floating
Allocation Percentage applicable
during the immediately preceding
Collection Period and the amount of
Defaulted Receivables for such
Collection Period.
'Investor Default Amount' means the
sum of the Class A Investor Default
Amount, the Class B Investor
Default Amount, the Collateral
Interest Investor Default Amount
and the Subordinated Transferor
Investor Default Amount.
'Monthly Servicing Fee' means, with
respect to any Distribution Date,
the sum of (a) the Class A Monthly
Servicing Fee, the Class B Monthly
Servicing Fee, the Collateral
Interest Monthly Servicing Fee and
the Subordinated Transferor Monthly
Servicing Fee and (b) the Servicing
Fee allocable to the Transferor
Amount and the B/F Amount.
The portion of the Servicing Fee
allocable to the Class A Interest
on each Distribution Date (the
'Class A Monthly Servicing Fee'),
to the Class B Interest on each
Distribution Date (the 'Class B
Monthly Servicing Fee'), to the
Collateral Interest on each
Distribution Date (the 'Collateral
Interest Monthly Servicing Fee')
and to the Subordinated Transferor
Interest on each Distribution Date
(the 'Subordinated Transferor
Monthly Servicing Fee') generally
will be equal to one-twelfth of the
product of 2.00% per annum and the
amount of the Class A Invested
Amount, the Class B Invested
Amount, the Collateral Interest
Invested Amount, or the
Subordinated Transferor Amount, as
the case may be, on the last day of
the second preceding Collection
Period (in the case of the first
Distribution Date, the initial
principal amount of the Class A
Certificates and Class B
Certificates, the Collateral
Interest or the Subordinated
Transferor Certificate, as the case
may be).
'Class A Invested Amount' for any
date means an amount equal to (i)
the initial principal balance of
the Class A Certificates, minus the
(ii) amount of principal payments
made to Class A Certificateholders
prior to such date and minus (iii)
the excess, if any, of the
aggregate amount of Class A
Investor Charge-Offs (as defined
below) for all Distribution Dates
preceding such date over
20
<PAGE>
the aggregate amount of any
reimbursements of Class A Investor
Charge-Offs for all Distribution
Dates preceding such date. 'Class B
Invested Amount' for any date means
an amount equal to (i) the initial
principal balance of the Class B
Certificates, minus (ii) the amount
of principal payments made to the
Class B Certificateholders prior to
such date, minus (iii) the
aggregate amount of Class B
Investor Charge-Offs (as defined
below) for all prior Distribution
Dates, minus (iv) the aggregate
amount of Class B Reallocated
Principal Collections for all prior
Distribution Dates, minus (v) an
amount equal to the aggregate
amount by which the Class B
Invested Amount has been reduced to
fund the Class A Investor Default
Amount on all prior Distribution
Dates as described herein, and plus
(vi) the amount of Excess Finance
Charge Collections applied on all
prior Distribution Dates for the
purpose of reimbursing amounts
deducted pursuant to the foregoing
clauses (iii), (iv) and (v).
'Collateral Interest Invested
Amount' for any date means an
amount equal to (i) the initial
principal balance of the Collateral
Interest, minus (ii) the amount of
principal payments made to the
Collateral Interest Holder prior to
such date, minus (iii) the
aggregate amount of Collateral
Interest Investor Charge-Offs (as
defined below) for all prior
Distribution Dates, minus (iv) the
aggregate amount of Collateral
Interest Reallocated Principal
Collections, minus (v) an amount
equal to the aggregate amount by
which the Collateral Interest
Invested Amount has been reduced to
fund the Class A and Class B
Investor Default Amounts on all
prior Distribution Dates as
described herein, and plus (vi) the
amount of Excess Finance Charge
Collections applied on all prior
Distribution Dates for the purpose
of reimbursing amounts deducted
pursuant to the foregoing clauses
(iii), (iv) and (v).
'Subordinated Transferor Amount'
for any date means an amount equal
to (i) the initial principal
balance of the Subordinated
Transferor Certificate, minus (ii)
the amount of principal payments
made to the holder of the
Subordinated Transferor Certificate
prior to such date, minus (iii) the
aggregate amount of Subordinated
Transferor Charge-Offs (as defined
below) for all prior Distribution
Dates, minus (iv) the aggregate
amount of Subordinated Transferor
Reallocated Principal Collections
for all prior Distribution Dates,
minus (v) an amount equal to the
aggregate amount by which the
Subordinated Transferor Amount has
been reduced to fund the Class A,
Class B and Collateral Interest
Investor Default Amounts on all
prior Distribution Dates as
described herein, and plus (vi) the
amount of Excess Finance Charge
Collections applied on all prior
Distribution Dates for the purpose
of reimbursing amounts deducted
pursuant to the foregoing clauses
(iii), (iv) and (v).
'Excess Finance Charge Collections'
shall mean, with respect to any
Distribution Date, an amount equal
to the sum of the amounts described
in clause (a)(iv), clause (b)(iii),
clause (c)(iii) and clause (d)(ii)
above.
21
<PAGE>
See 'Description of the Offered
Certificates and the Agreement--
Distributions from the Collection
Account.'
Excess Finance Charge Collections......... Excess Finance Charge Collections
will be applied as follows:
(a) to fund the Class A Required
Amount;
(b) to distribute Class A Investor
Charge-Offs which have not been
previously reimbursed to the
Transferor in respect of the
Transferor Interest during the
Revolving Period up to the amount
of the Transferor Interest after
the purchase of new Receivables
(and thereafter will be included in
the funds available to make
principal payments);
(c) to fund the Class B Required
Amount;
(d) to distribute the Class B
Investor Default Amount to the
Transferor in respect of the
Transferor Interest during the
Revolving Period up to the amount
of the Transferor Interest after
the purchase of new Receivables
(and thereafter will be included in
the funds available to make
principal payments);
(e) to distribute an amount equal
to the amount by which the Class B
Invested Amount has been reduced
below the Initial Class B Invested
Amount (for reasons other than the
payment of principal to the Class B
Certificateholders) to the
Transferor in respect of the
Transferor Interest during the
Revolving Period, up to the amount
of the Transferor Interest after
the purchase of new Receivables
(and thereafter will be included in
the funds available to make
principal payments);
(f) to fund the Collateral Interest
Required Amount;
(g) to distribute the Collateral
Interest Investor Default Amount to
the Transferor in respect of the
Transferor Interest during the
Revolving Period up to the amount
of the Transferor Interest after
the purchase of new Receivables
(and thereafter will be included in
the funds available to make
principal payments);
(h) to distribute an amount equal
to the amount by which the
Collateral Interest Invested Amount
has been reduced below the Initial
Collateral Interest Invested Amount
(for reasons other than the payment
of principal to the Collateral
Interest Holder) to the Transferor
in respect of the Transferor
Interest during the Revolving
Period up to the amount of the
Transferor Interest after the
purchase of new Receivables (and
thereafter will be included in the
funds available to make principal
payments);
(i) to fund any additional amounts
required to be paid on such
Distribution Date pursuant to the
terms of the Loan Agreement;
(j) to distribute the Subordinated
Transferor Default Amount to the
Transferor during the Revolving
Period up to the amount of the
Transferor Interest after the
purchase of new Receivables (and
thereafter will be included in the
funds available to make principal
payments);
(k) to distribute the amount by
which the Subordinated Transferor
Amount has been reduced below the
Initial Subordinated Transferor
Amount (for reasons other than the
payment of principal to the holder
of the Subordinated Transferor
Certificate) to the Transferor
22
<PAGE>
in respect of the Transferor
Interest during the Revolving
Period up to the amount of the
Transferor Interest after the
purchase of new Receivables (and
thereafter will be included in the
funds available to make principal
payments);
(l) the balance, if any, will be
treated as Shared Excess Finance
Charge Collections to the extent
necessary; and
(m) any remaining amounts not
treated as Shared Excess Finance
Charge Collections will be treated
as Shared Principal Collections.
The 'Class A Required Amount' means
the amount, if any, by which the
sum of Class A Monthly Interest,
any overdue Class A Monthly
Interest (with interest thereon),
the Class A Investor Default
Amount, the Class A Monthly
Servicing Fee for such Collection
Period exceeds the funds allocable
to the Class A Certificates to pay
such amounts. The 'Class B Required
Amount' means the amount, if any,
by which the sum of Class B Monthly
Interest, any overdue Class B
Monthly Interest (with interest
thereon) and the Class B Monthly
Servicing Fee for such Collection
Period exceeds the funds allocable
to the Class B Certificates to pay
such amounts.
The 'Collateral Interest Required
Amount' means the amount, if any,
by which the sum of Collateral
Interest Monthly Interest, any
overdue Collateral Interest Monthly
Interest (with interest thereon)
and the Collateral Interest Monthly
Servicing Fee for such Collection
Period exceeds the funds allocable
to the Collateral Interest to pay
such amounts.
The 'Required Amount' shall equal
the sum of the Class A Required
Amount, the Class B Required Amount
and the Collateral Interest
Required Amount.
See 'Description of the Offered
Certificates and the Agreement--
Excess Finance Charge Collections.'
Reallocated Principal Collections......... If Excess Finance Charge Collections
available with respect to such
Collection Period are less than the
remaining Required Amount,
Principal Collections allocable to
the Subordinated Transferor
Interest, the Collateral Interest
and the Class B Interest with
respect to a Collection Period will
be applied to the following
Required Amounts, if any, in the
following order of priority:
(i) Subordinated Transferor
Reallocated Principal
Collections, first, to the
remaining components of the
Class A Required Amount, if
any, then to the remaining
components of the Class B
Required Amount, if any, and
then to the remaining
components of the Collateral
Interest Required Amount, if
any;
(ii) Collateral Interest
Reallocated Principal
Collections, first, to the
remaining components of the
Class A Required Amount, if
any, then to the remaining
components of the Class B
Required Amount, if any; and
(iii) Class B Reallocated Principal
Collections, to the remaining
components of the Class A
Required Amount, if any.
'Subordinated Transferor
Reallocated Principal Collections'
means, with respect to each
Distribution Date, the Principal
23
<PAGE>
Collections allocable to the
Subordinated Transferor Certificate
with respect to such Distribution
Date (equal to the Subordinated
Transferor Floating Allocation
Percentage of Principal Collections
for the related Collection Period
for any such Distribution Date
during the Revolving Period or the
Subordinated Transferor Fixed
Allocation Percentage of Principal
Collections for any such
Distribution Date during the
Controlled Amortization Period or
Rapid Amortization Period) in an
amount equal to the Class A, Class
B and Collateral Interest Required
Amounts, if any, with respect to
such Distribution Date (after
giving effect to any payment of the
Class A, Class B and Collateral
Interest Required Amounts from
Excess Finance Charge Collections).
'Collateral Interest Reallocated
Principal Collections' means, with
respect to each Distribution Date,
the Principal Collections Allocable
to the Collateral Interest with
respect to such Distribution Date
(equal to the Collateral Interest
Floating Allocation Percentage of
Principal Collections for the
related Collection Period for any
such Distribution Date during the
Revolving Period or the Collateral
Interest Fixed Allocation
Percentage of Principal Collections
for any such Distribution Date
during the Controlled Amortization
Period or Rapid Amortization
Period) in an amount equal to the
Class A and Class B Required
Amounts, if any, with respect to
such Distribution Date (after
giving effect to any payment of the
Class A and Class B Required
Amounts from Excess Finance Charge
Collections and Subordinated
Transferor Reallocated Principal
Collections).
'Class B Reallocated Principal
Collections' means with respect to
each Distribution Date, the
Principal Collections allocable to
the Class B Certificates with
respect to such Distribution Date
(equal to the Class B Floating
Allocation Percentage of Principal
Collections for the related
Collection Period for any such
Distribution Date during the
Revolving Period or the Class B
Fixed Allocation Percentage of
Principal Collections for any such
Distribution Date during the
Controlled Amortization Period or
Rapid Amortization Period) in an
amount equal to the Class A
Required Amount, if any, with
respect to such Distribution Date
(after giving effect to any payment
of the Class A Required Amount from
Excess Finance Charge Collections,
Subordinated Transferor Reallocated
Principal Collections and
Collateral Interest Reallocated
Principal Collections).
'Reallocated Principal Collections'
will equal the sum of Subordinated
Transferor Reallocated Principal
Collections, Collateral Interest
Reallocated Principal Collections
and Class B Reallocated Principal
Collections.
Collections not applied in the
foregoing manner (and therefore not
constituting Reallocated Principal
Collections) will during the
Revolving Period, be applied as
Shared Principal Collections and,
during the Controlled Amortization
Period or any Rapid Amortization
Period, will be included in the
funds available to make principal
payments.
See 'Description of the Offered
Certificates and the Agreement--
Reallocated Principal Collections.'
24
<PAGE>
Additional Amounts Available to
Certificateholders...................... Excess Finance Charge Collections
will be applied to fund the
Required Amount, if any, as
described herein under 'Excess
Finance Charge Collections.' If
Excess Finance Charge Collections
available with respect to such
Collection Period are less than the
remaining Required Amount,
Principal Collections for such
Collection Period will then be used
to fund the remaining Required
Amount as described herein under
'Description of the Offered
Certificates and the
Agreement--Reallocated Principal
Collections.'
If Reallocated Principal
Collections with respect to any
Collection Period are insufficient
to fund the remaining Class A
Required Amount for such Collection
Period, then a portion of the
Subordinated Transferor Amount
(after giving effect to reductions
for any Subordinated Transferor
Charge-Offs and Subordinated
Transferor Reallocated Principal
Collections for such Collection
Period) equal to such insufficiency
(but not in excess of the Class A
Investor Default Amount for such
Distribution Date) will be
allocated to the Class A
Certificates to avoid a charge-off
with respect to the Class A
Certificates, and the Subordinated
Transferor Amount will be reduced
by such amount. If such reduction
would cause the Subordinated
Transferor Amount to be negative,
the Subordinated Transferor Amount
will be reduced to zero.
If the Subordinated Transferor
Amount is reduced to zero, the
Collateral Interest Invested Amount
(after giving effect to reductions
for any Collateral Interest
Investor Charge-Offs and any
Collateral Interest Reallocated
Principal Collections for such
Collection Period for which the
Subordinated Transferor Interest
was not reduced) will be reduced by
the amount by which the
Subordinated Transferor Amount
would have been reduced below zero
(but not by more than the excess of
the Class A Investor Default Amount
for such Distribution Date over the
amount of such reduction, if any,
of the Subordinated Transferor
Amount for such Distribution Date)
and such amount will be allocated
to the Class A Certificates to
avoid a charge-off with respect to
the Class A Certificates. If such
reduction would cause the
Collateral Interest Invested Amount
to be negative, the Collateral
Interest Invested Amount will be
reduced to zero.
If the Collateral Interest Invested
Amount is reduced to zero, the
Class B Invested Amount (after
giving effect to reductions for any
Class B Investor Charge-Offs and
any Class B Reallocated Principal
Collections for such Collection
Period for which the Subordinated
Transferor Amount and the
Collateral Interest Invested Amount
was not reduced) will be reduced by
the amount by which the Collateral
Interest Invested Amount would have
been reduced below zero (but not by
more than the excess of the Class A
Investor Default Amount for such
Distribution Date over the amount
of such reduction, if any, of the
Subordinated Transferor Amount and
the Collateral Interest Invested
Amount for such Distribution Date)
and such amount will be allocated
to the Class A Certificates to
avoid a charge-off with respect to
the Class A Certificates. If such
reduction would cause the Class B
Invested Amount to be negative, the
Class B Invested Amount will be
reduced to zero.
25
<PAGE>
If the Class B Invested Amount is
reduced to zero, the Class A
Invested Amount will be reduced by
the amount by which the Class B
Invested Amount would have been
reduced below zero, but not by more
than the excess of the Class A
Investor Default Amount for such
Distribution Date over the
reduction in the Subordinated
Transferor Amount the Collateral
Interest Invested Amount and the
Class B Invested Amount for such
Collection Period (a 'Class A
Investor Charge-Off '), and the
Class A Certificateholders will
bear directly the credit and other
risks associated with their
undivided interest in the Trust.
After payment of the Class A
Required Amount, if Collateral
Interest Reallocated Principal
Collections and Subordinated
Transferor Reallocated Principal
Collections not required to fund
the Class A Required Amount with
respect to any Collection Period
are insufficient to fund the
remaining Class B Required Amount
for such Collection Period, then a
portion of the Subordinated
Transferor Amount (after giving
effect to reductions for any
Subordinated Transferor
Charge-Offs, Subordinated
Transferor Reallocated Principal
Collections and any adjustments
made thereto for the benefit of the
Class A Certificateholders) equal
to such insufficiency (but not in
excess of the Class B Investor
Default Amount for such
Distribution Date) will be
allocated to the Class B
Certificates to avoid a charge-off
with respect to the Class B
Certificates, and the Subordinated
Transferor Amount will be reduced
by such amount. If such reduction
would cause the Subordinated
Transferor Amount to be negative,
the Subordinated Transferor Amount
will be reduced to zero.
If the Subordinated Transferor
Amount is reduced to zero, the
Collateral Interest Invested Amount
(after giving effect to reductions
for any Collateral Interest
Investor Charge-Offs, Collateral
Interest Reallocated Principal
Collections and any adjustments
made thereto for the benefit of the
Class A Certificateholders) will be
reduced by the amount by which the
Subordinated Transferor Amount
would have been reduced below zero
(but not by more than the excess of
the Class B Investor Default Amount
for such Distribution Date over the
amount of such reduction, if any,
of the Subordinated Transferor
Amount for such Distribution Date)
and such amount will be allocated
to the Class B Certificates to
avoid a charge-off with respect to
the Class B Certificates. If such
reduction would cause the
Collateral Interest Invested Amount
to be negative, the Collateral
Interest Invested Amount will be
reduced to zero.
If the Collateral Interest Invested
Amount is reduced to zero, the
Class B Invested Amount will be
reduced by the amount by which the
Collateral Interest Invested Amount
would have been reduced below zero,
but not by more than the excess of
the Class B Investor Default Amount
for such Distribution Date over the
reduction in the Subordinated
Transferor Amount and the
Collateral Interest Invested Amount
(a 'Class B Investor Charge-Off'),
and the Class B Certificateholders
will bear directly the credit and
other risks associated with their
undivided interest in the Trust. If
such reduction would cause the
Class B Invested Amount to be
negative, the Class B Invested
Amount will be reduced to zero.
26
<PAGE>
After payment of the Class B
Required Amount, if Subordinated
Transferor Reallocated Principal
Collections with respect to any
Collection Period are insufficient
to fund the remaining Collateral
Interest Required Amount for such
Collection Period, then a portion
of the Subordinated Transferor
Amount (after giving effect to
reductions for any Subordinated
Transferor Charge-Offs,
Subordinated Transferor Reallocated
Principal Collections and any
adjustments made thereto for the
benefit of the Class A and Class B
Certificateholders) equal to such
insufficiency (but not in excess of
the Collateral Interest Investor
Default Amount for such
Distribution Date) will be
allocated to the Collateral
Interest to avoid a charge- off
with respect to the Collateral
Interest, and the Subordinated
Transferor Amount will be reduced
by such amount. If such reduction
would cause the Subordinated
Transferor Amount to be negative,
the Subordinated Transferor Amount
will be reduced to zero.
If the Subordinated Transferor
Amount is reduced to zero, the
Collateral Interest Invested Amount
will be reduced by the amount by
which the Subordinated Transferor
Amount would have been reduced
below zero, but not by more than
the excess of the Collateral
Interest Investor Default Amount
for such Distribution Date over the
reduction in the Subordinated
Transferor Amount (a 'Collateral
Interest Investor Charge-Off '),
and the Collateral Interest Holder
will bear directly the credit and
other risks associated with their
undivided interest in the Trust. If
such reduction would cause the
Collateral Interest Invested Amount
to be negative, the Collateral
Interest Invested Amount will be
reduced to zero.
On each Distribution Date, if the
Subordinated Transferor Default
Amount for such Distribution Date
exceeds the amount of Excess
Finance Charge Collections which is
allocated and available to fund
such amount as described under
'Excess Finance Charge
Collections', the Subordinated
Transferor Amount (after giving
effect to reductions for
Subordinated Transferor Reallocated
Principal Collections and the
amount of any adjustments made
thereto for the benefit of the
Class A or Class B
Certificateholders or the
Collateral Interest Holder) will be
reduced but not in excess of the
Subordinated Transferor Default
Amount (the 'Subordinated
Transferor Charge-Off '). If such
reduction would cause the
Subordinated Transferor Amount to
be negative, the Subordinated
Transferor Amount will be reduced
to zero.
In the event that any of the
Subordinated Transferor Amount, the
Collateral Interest Invested
Amount, the Class B Invested Amount
or the Class A Invested Amount is
reduced, such amount will
thereafter be increased (but not to
a level in excess of the unpaid
principal balance of the
Subordinated Transferor
Certificate, the Collateral
Interest, the Class B Certificates
or the Class A Certificates, as
applicable) on any Distribution
Date by the amount of Excess
Finance Charge Collections
allocated and available for that
purpose as described under
'--Excess Finance Charge
Collections.'
27
<PAGE>
See 'Description of the Offered
Certificates--Additional Amounts
Available to Certificateholders.'
Principal Payments;
Certain Allocations..................... Principal Collections with respect
to any Collection Period will be
allocated on the related
Determination Date on the basis of
the applicable Invested Percentage.
Under the Agreement, such
collections will be either paid to
the Transferor in respect of the
Transferor Interest, as described
above during the Revolving Period,
or to the holders of the Series
1996-1 Interests in respect of the
Class A Invested Amount, Class B
Invested Amount, the Collateral
Interest Invested Amount or
Subordinated Transferor Amount, or
to both the Transferor and the
holders of the Series 1996-1
Interests. Such allocations will be
performed during the Revolving
Period, Controlled Amortization
Period and any Rapid Amortization
Period.
In the event that other Series are
offered by the Trust, such other
Series may or may not have
amortization periods like the
Controlled Amortization Period or
the Rapid Amortization Period or
revolving periods like the
Revolving Period for the Series
1996-1 Interests, and such periods
may have different lengths and
begin on different dates than the
Controlled Amortization Period, the
Rapid Amortization Period or the
Revolving Period. Thus, certain
Series may be in their revolving
periods, while others are in
periods during which Principal
Collections are distributed to such
Series. Under certain
circumstances, one or more Series
may be in their amortization
periods, while other Series are
not. In addition, other Series may
allocate Principal Collections
based upon different invested
percentages.
Shared Principal Collections.............. To the extent that Principal
Collections and other amounts that
are allocated to the interest of
the holders of any class of any
series (other than the Transferor
Interest) are not needed to make
payments to the certificateholders
of such class, they may be applied
to cover principal payments due to
or for the benefit of
certificateholders of another
Series ('Shared Principal
Collections'). Any such
reallocation will not result in a
reduction in the interest of the
holders of the Series to which such
Principal Collections were
initially allocated. In addition,
Principal Collections and certain
other amounts otherwise allocable
to other Series, to the extent such
collections are not needed to make
payments to the certificateholders
of such other Series, may be
applied to cover principal payments
due to or for the benefit of the
holders of the Series 1996-1
Interests. See 'Description of the
Offered Certificates and the
Agreement--Shared Principal
Collections.'
Sharing of Excess Finance Charge
Collections............................. Finance Charge Collections on any
business day in excess of the
amounts necessary to make required
payments on such business day with
respect to the Series 1996-1
Interests will be applied to cover
any shortfalls with respect to
amounts payable from Finance Charge
Collections allocable to any other
Series then outstanding, pro rata
based upon the amount of the
shortfall, if any, with respect to
such other Series. In addition,
Finance Charge Collections in
excess of the amounts necessary to
make required payments on such
business day with respect to
certificates of other outstanding
Series will be
28
<PAGE>
applied to cover any shortfalls
with respect to Finance Charge
Collections allocable to the Series
1996-1 Interests. Any Excess
Finance Charge Collections
remaining after covering shortfalls
with respect to all outstanding
Series will be paid to the
Transferor in respect of the
Transferor Interest. See
'Description of the Offered
Certificates and the
Agreement--Sharing of Excess
Finance Charge Collections.'
Discount Option........................... The Agreement provides that the
Transferor may at any time and from
time to time, but without any
obligation to do so, designate a
fixed percentage or a variable
percentage based on a formula (the
'Discount Percentage'), but in
either case not to exceed 6%, of
Receivables giving rise to
Principal Collections ('Principal
Receivables') that are charges for
goods or services or obligations
for repayment of cash advances,
part of which have not previously
been sold as Discount Option
Receivables, arising from then on
to be treated as Receivables giving
rise to Finance Charge Collections
('Finance Charge Receivables').
Such Receivables will be designated
'Discount Option Receivables.'
After any such designation,
pursuant to the Agreement, the
Transferor may, without notice to
or consent of the
Certificateholders, from time to
time increase, reduce or withdraw
the Discount Percentage. Such
increase, reduction or withdrawal
will become effective upon
satisfaction of the conditions in
the Agreement, including written
confirmation by each Rating Agency.
On each Distribution Date on or
after the date the exercise of the
discount option takes effect, the
lower of (a) the product of the
Discount Percentage then in effect
and Collections received during
such Collection Period and (b) the
Discount Option Receivables
outstanding at the end of such
Collection Period that otherwise
would be Principal Receivables will
be deemed collections of Finance
Charge Receivables and will be
applied accordingly. Such feature
is intended to permit the
Transferor to increase the
Portfolio Yield and thereby
decrease the risk of the occurrence
of an Amortization Event.
On the Closing Date, the Transferor
will designate an initial Discount
Percentage equal to 2.0%. Any
increase, reduction or withdrawal
of such Discount Percentage will be
made in accordance with the
conditions described in the
Agreement.
See 'Description of the Offered
Certificates and the Agreement--
Discount Option.'
Amortization Events....................... An 'Amortization Event' with
respect to the Series 1996-1
Interests refers to any of the
following events:
(i) failure on the part of the
Servicer, the Originator or
the Transferor to make any
payment or deposit required
by the terms of the Agreement
on or before five business
days after the date such
payment or deposit is
required to be made
thereunder;
29
<PAGE>
(ii) the failure on the part of
the Servicer, the Originator
or the Transferor duly to
observe or perform in any
material respect certain
covenants or agreements set
forth in the Agreement or the
Purchase and Sale Agreement
which, in the case of certain
of such covenants or
agreements, continues
unremedied for a period of 60
days after the date on which
written notice of such
failure requiring the same to
be remedied shall have been
given to the Servicer, the
Originator or the Transferor,
as applicable, provided,
however, that an Amortization
Event shall not be deemed to
occur if the Transferor has
accepted the transfer of the
related Receivable (or all of
such Receivables, if
applicable) during such
period (or such longer period
as the Trustee may specify)
in accordance with the
provisions of the Agreement
or the Purchase and Sale
Agreement;
(iii) any representation or
warranty made by the
Servicer, the Originator or
the Transferor in the
Agreement or the Purchase and
Sale Agreement or any
information required to be
delivered by the Transferor
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 Servicer,
the Originator or the
Transferor, as applicable,
and as a result of which the
interests of the
certificateholders are
materially and adversely
affected; provided, however,
that such an Amortization
Event shall not be deemed to
have occurred if the
Transferor has accepted the
transfer of the related
Receivable (or all of such
Receivables, if applicable)
during such period (or such
longer period as the Trustee
may specify) in accordance
with the provisions of the
Agreement;
(iv) certain events of insolvency,
conservatorship, receivership
or bankruptcy with respect to
the Originator,
Bridgestone/Firestone or the
Transferor;
(v) the annualized percentage
equivalent of a fraction, the
numerator of which is the
amount of Finance Charge
Collections for the related
Collection Period, calculated
on an accrual basis after
subtracting the Investor
Default Amount and that
portion of Finance Charge
Collections arising from
Receivables that are ninety
or more days delinquent, and
the denominator of which is
the Aggregate Receivables as
of the end of the preceding
Collection Period (the
'Portfolio Yield') averaged
over any three consecutive
Collection Periods is less
than a fraction, calculated
as of the related
Determination Date, the
numerator of which is the sum
of (a) the product of the
Class A Certificate Rate and
the Class A Invested Amount,
(b) the product of the Class
B Certificate Rate and the
Class B Invested Amount and
(c) the product of the
Collateral Interest Rate and
the Collateral Interest
Invested Amount, and the
denominator which is the sum
of the Class A Invested
Amount, the Class B Invested
Amount, the Collateral
Interest Invested Amount and
the Subordinated Transferor
Amount (each such Certificate
Rate and Invested Amount
calculated as of the
30
<PAGE>
related Determination Date
and such fraction equaling
the 'Weighted Average
Certificate Rate') plus 2.00%
per annum (the 'Base Rate');
(vi) the Trust shall become an
'investment company' within
the meaning of the Investment
Company Act of 1940, as
amended;
(vii) the Transferor Amount (plus
the amount available under
the Transferor Letter of
Credit and the B/F Amount) is
less than 7% of the aggregate
invested amount of all
outstanding Series of
certificates issued by the
Trust as of the last day of
any Collection Period;
(viii) the sum of (a) the Transferor
Amount, (b) the B/F Amount,
(c) the Subordinated
Transferor Amount and (d) the
invested amount of any
subordinated class of
certificates of any other
Series which, when issued, is
retained by the Transferor
and with respect to which no
legal opinion is delivered
characterizing such
certificates as indebtedness
is less than 7% of the
Aggregate Receivables as of
the last day of any
Collection Period;
(ix) the Class A Invested Amount
is not paid in full on the
Class A Expected Final
Payment Date or the Class B
Invested Amount is not paid
in full on the Class B
Expected Final Payment Date;
(x) the Transferor becomes unable
for any reason to transfer
Receivables to the Trust in
accordance with the
provisions of the Agreement;
(xi) the Aggregate Receivables as
of the last day of any
Collection Period are less
than the sum of (a) the
Transferor Amount (plus the
amount available under the
Transferor Letter of Credit
and the BIF Amount) and (b)
the aggregate initial
invested amount of
Series 1996-1; and
(xii) any Servicer Event of Default
shall occur which would have
a material adverse effect on
the Certificateholders.
See 'Description of the Offered
Certificates and the Agreement--
Amortization Events.'
Final Payment of Principal; Termination of
the Trust............................... The Series 1996-1 Interests will be
subject to optional repurchase by
the Transferor on any Distribution
Date on or after which the Invested
Amount is reduced to an amount less
than or equal to $11,910,257 (5% of
the sum of the Initial Class A
Invested Amount, Initial Class B
Invested Amount and Initial
Collateral Interest Invested
Amount), unless certain events of
bankruptcy, insolvency or
receivership have occurred with
respect to the Transferor. The
repurchase price will be equal to
the Invested Amount plus accrued
and unpaid interest on the Series
1996-1 Interests through the day
preceding the Distribution Date on
which the repurchase occurs. After
such date, neither the Trust nor
the Transferor will have any
further obligation to pay principal
or interest on the Series 1996-1
Interests. In any event, the final
payment of principal and interest
on
31
<PAGE>
the Class A Certificates will be no
later than the July 1, 2003,
Distribution Date (the 'Final Class
A Termination Date') and the final
payment of principal and interest
on the Class B Certificates will be
no later than the July 1, 2003,
Distribution Date (the 'Final Class
B Termination Date').
Servicing................................. Under the Agreement, the Servicer
(initially, Bridgestone/Firestone)
will be responsible for servicing,
managing and making collections on
all Receivables in the Trust.
Subject to certain conditions
including the availability of the
Servicer Letter of Credit (as
defined below), the Servicer may
use for its own benefit and not
segregate Collections of
Receivables received in each
Collection Period until the
business day preceding the
Distribution Date for such
Collection Period (the 'Transfer
Date'). On the second business day
preceding each Distribution Date
(each, a 'Determination Date') or,
at the Servicer's option, more
frequently, the Servicer will
allocate as described herein all
Collections of Receivables received
with respect to the related
Collection Period to the Series
1996-1 Interests, any other
applicable Series,
Bridgestone/Firestone and the
Transferor and on the Transfer Date
will deposit the portion allocable
to the Certificateholders and the
holders of certificates of any
other Series into a segregated
trust account held in the name of
the Trustee for the benefit of
certificateholders (the 'Collection
Account'). In certain limited
circumstances,
Bridgestone/Firestone may resign or
be removed as Servicer, in which
event either the Trustee or a
third-party servicer may be
appointed as successor Servicer
(Bridgestone/Firestone or any such
successor Servicer is referred to
herein as the 'Servicer'). As
servicing compensation from the
Trust, the Servicer will receive a
Servicing Fee from allocations of
Finance Charge Collections based
upon the outstanding principal
amount, from time to time, of
certificates issued by the Trust.
See 'Description of the Offered
Certificates and the
Agreement--Collection and Other
Servicing Procedures,' '--Servicer
Covenants,' '--Servicing
Compensation and Payment of
Expenses,' '--Servicer Events of
Default' and '--Certain Matters
Regarding the Servicer.'
The Servicer may perform any of its
obligations under the Agreement
through one or more Subservicers.
The Servicer will remain liable for
its servicing duties and
obligations as if the Servicer
alone were servicing the
Receivables. CFNA shall initially
act as a Subservicer.
Servicer Letter of Credit................. The Servicer has obtained an
irrevocable letter of credit (the
'Servicer Letter of Credit') issued
by The Sumitomo Bank, Limited,
acting through its New York Branch
(the 'Letter of Credit Bank'), in
favor of the Trustee on behalf of
certificateholders of all Series,
to secure timely remittance of
Collections by the Servicer to the
Trustee. The Servicer Letter of
Credit was initially in the stated
amount of $45,000,000 and will
expire on May 30, 1997, unless
extended or earlier terminated by
the Letter of Credit Bank. During
the period that
Bridgestone/Firestone is the
Servicer, if aggregate Collections
at any time held by
Bridgestone/Firestone exceed the
amount available under the Servicer
Letter of Credit, the Servicer
shall deposit all such Collections
in excess of the amount available
32
<PAGE>
under the Servicer Letter of Credit
into the Collection Account no
later than the second business day
after the date of processing
thereof. In the event that (i) the
Letter of Credit Bank's unsecured
short-term debt ratings are reduced
below A-1 + or P-1 or F-1+ (the
'Required Ratings') by the
applicable Rating Agency and either
(x) a substitute Servicer Letter of
Credit is not delivered to the
Trustee, (y) the Servicer Letter of
Credit is not drawn on in full as
described in the Prospectus or (z)
the Servicer has not established a
cash collateral account in the name
of the Trustee for the benefit of
Certificateholders or (ii) the
Servicer is not
Bridgestone/Firestone, the Servicer
shall deposit Collections into the
Collection Account no later than
the second business day after the
date of processing thereof. In
addition, in the event that a
substitute Servicer Letter of
Credit is not delivered to the
Trustee on or before the fifth
business day prior to the
expiration of the Servicer Letter
of Credit or a cash collateral
account has not been established,
the Servicer shall commence
depositing Collections into the
Collection Account no later than
the second business day after the
date of processing thereof.
The Letter of Credit Bank's
unsecured short-term debt rating
has been reduced to below the
Required Ratings and the full
amount of the proceeds from the
Servicer Letter of Credit are
currently held in a segregated
trust account available to the
Trustee in the event
Bridgestone/Firestone fails to
timely remit Collections to the
Collection Account. See 'The Letter
of Credit Bank' and 'Description of
the Offered Certificates and the
Agreement--The Letters of Credit.'
Transferor Letter of Credit............... The Transferor has obtained an
irrevocable letter of credit (the
'Transferor Letter of Credit')
issued by the Letter of Credit Bank
in favor of the Trustee, on behalf
of Certificateholders, to secure
the obligation of the Transferor to
make certain payments in respect of
returned merchandise and other
credit adjustments on the
Receivables. The Transferor Letter
of Credit was initially in the
stated amount of $15,000,000 and
will expire on May 30, 1997, unless
extended or earlier terminated by
the Letter of Credit Bank. The
Transferor Letter of Credit will be
available, up to its stated amount,
to cover any shortfall in payments
allocated to any Series and
required to be deposited into the
Collection Account by the
Transferor. The proceeds of any
drawing on the Transferor Letter of
Credit will be allocated in much
the same manner as are the
Collections (generally speaking,
such allocations to the Series
1996-1 Interests will be based on
the ratio of the Invested Amount to
the Aggregate Receivables). As a
result, if other Series of
certificates are outstanding, such
other Series will benefit from
drawings made on the Transferor
Letter of Credit. See 'The Letter
of Credit Bank' and 'Description of
the Offered Certificates and the
Agreement--The Letters of Credit.'
Currently, the full amount of the
proceeds from the Transferor Letter
of Credit are held in a segregated
trust account available to the
Trustee to cover any shortfall in
payments allocated to any Series
and required to be deposited in the
Collection Account by the
Transferor.
33
<PAGE>
Certain Federal Income Tax Consequences... Special tax counsel to the
Transferor has advised the
Transferor that, in its opinion,
(i) the Offered Certificates will
be treated for Federal income tax
purposes as indebtedness and (ii)
the Trust will not be treated as
either an association or a publicly
traded partnership taxable as a
corporation for Federal income tax
purposes. Under the Agreement, the
Transferor, the Trustee and,
pursuant to the terms of the
Offered Certificates by virtue of
the acceptance thereof, the Offered
Certificateholders and the
Certificate Owners agree to treat
the Offered Certificates as debt
for Federal and state tax purposes.
If the Offered Certificates are not
characterized as debt, there may be
adverse tax consequences for
Certificate Owners. See 'Federal
Income Tax Consequences.'
ERISA Considerations...................... Under the regulations issued by the
Department of Labor, the Trust's
assets would not be deemed 'plan
assets' of any employee benefit
plan holding interests in the Class
A Certificates if certain
conditions are met, including that
interests in the Class A
Certificates be held by at least
100 independent persons upon
completion of the public offering
being made hereby. The Underwriters
expect, although no assurance can
be given, that interests in the
Class A Certificates will be held
by at least 100 independent
persons, and it is anticipated that
the other conditions of the
regulations will be met. However,
if the Class A Certificates are not
held by at least 100 independent
persons and the Trust's assets were
deemed to be 'plan assets' of such
a plan, there is uncertainty as to
whether existing exemptions from
the 'prohibited transaction' rules
of the Employee Retirement Income
Security Act of 1974, as amended
('ERISA') would apply to all
transactions involving the Trust's
assets. Accordingly, employee
benefit plans contemplating
purchasing the Class A Certificates
should consult their counsel before
making a purchase. See 'ERISA
Considerations.'
The Class B Certificates may not be
purchased by any employee benefit
plan subject to the requirements of
the fiduciary responsibility
provisions of ERISA, or the
provisions of Section 4975 of the
Internal Revenue Code of 1986, as
amended (the 'Code'), including any
individual retirement accounts.
Rating of the Offered Certificates........ It is a condition to the issuance
of the Class A Certificates that
they be rated 'AAA' by Standard &
Poor's Rating Services, a division
of The McGraw-Hill Companies, Inc.
('S&P') and 'Aaa' by Moody's
Investors Service, Inc.
('Moody's'). It is a condition to
the issuance of the Class B
Certificates that they be rated 'A'
by S&P and 'A2' by Moody's. Such
ratings are based primarily on the
quality of the Receivables and the
terms of the subordination of the
Class B Certificates, the
Collateral Interest and the
Subordinated Transferor
Certificate, as applicable.
Risk Factors.............................. There are risks associated with the
purchase of the Offered
Certificates. See 'Risk Factors'
herein.
34
<PAGE>
RISK FACTORS
Investors should consider, among other things, the following factors in
connection with the purchase of the Offered Certificates:
No Assurance that Secondary Market Will Develop. There currently is no
secondary market for the Offered Certificates, and there can be no assurance
that a secondary market will develop or, if it does develop, that it will
provide Offered Certificateholders with liquidity of investment or will continue
for the life of the Offered Certificates. The Underwriters expect, but are not
obligated, to make a market in the Offered Certificates. There can be no
assurance that any such market will continue.
Non-Recourse Obligation. Certificateholders will not have recourse for
payment of their Offered Certificates to any assets of the Transferor, the
Originator, Bridgestone/Firestone, the Servicer or any of their affiliates.
Consequently, the Certificateholders must rely solely upon payments on the
Receivables for the payment of principal of and interest on the Offered
Certificates. Furthermore, under the Agreement, the Certificateholders have an
interest in the Receivables and Collections with respect thereto only to the
extent of the Certificateholders' Interest. Should the Offered Certificates not
be paid in full on a timely basis, Certificateholders may not look to any assets
of any of the Transferor, Bridgestone/Firestone, the Servicer, the Originator or
any affiliates thereof to satisfy their claims.
Commingling. While Bridgestone/Firestone is the Servicer, Collections held
by Bridgestone/Firestone may, subject to certain conditions, including the
availability of the Servicer Letter of Credit, be commingled and used for
Bridgestone/Firestone's own benefit prior to the business day preceding each
Distribution Date and, in the event of the bankruptcy or insolvency of
Bridgestone/Firestone or, in certain circumstances, the lapse of certain time
periods, the Trust may not have a perfected interest in such Collections and
such Collections are subject to risk of loss, including risk of loss due to
Bridgestone/Firestone's bankruptcy or insolvency. During the period that
Bridgestone/Firestone is the Servicer, if aggregate Collections at any time held
by Bridgestone/Firestone exceed the amount available under the Servicer Letter
of Credit, the Servicer shall deposit all such Collections in excess of the
amount available under the Servicer Letter of Credit into the Collection Account
no later than the second business day after the date of processing thereof. In
the event that either (x) the unsecured short-term debt rating of the Letter of
Credit Bank is reduced below A-1+, P-1 or F-1+ by the applicable Rating Agency
(the 'Required Ratings'), within 35 days of notice thereof to the Servicer or
(y) in the event that the Servicer Letter of Credit is scheduled to expire
within five business days, either (i) Bridgestone/Firestone will begin
depositing Collections received within two business days of the date of
processing thereof directly into the Collection Account, (ii)
Bridgestone/Firestone will provide the Trustee with a substitute letter of
credit substantially similar to the Servicer Letter of Credit issued by a
financial institution whose unsecured short-term debt rating is A-1+, P-1 or
F-1+ by the applicable Rating Agency or (iii) the Trustee will, but only with
respect to clause (x) hereof, make a demand under the Servicer Letter of Credit
for the full amount available thereunder and deposit the proceeds of such demand
into a segregated trust account to be available to the Trustee in the event
Bridgestone/Firestone fails to timely remit Collections to the Collection
Account. The Letter of Credit Bank's unsecured short-term debt rating has been
reduced to A-1, which is below the Required Ratings and the full amount of the
proceeds from the Servicer Letter of Credit are currently held in a segregated
trust account available to the Trustee in the event Bridgestone/Firestone fails
to timely remit Collections to the Collection Account. The Letter of Credit
Bank's unsecured short-term rating is unlikely to increase to the Required
Ratings. Furthermore, there can be no assurance that any increase in the Letter
of Credit Bank's unsecured short-term rating will occur. See 'Description of the
Offered Certificates and the Agreement-- Allocation of Collections; Deposits in
Collection Account.'
Potential Priority of Certain Liens. The Originator warrants in the
Purchase and Sale Agreement that the sale or transfer of the Receivables
thereunder by it to the Transferor is free and clear of any lien, security
interest, encumbrance or other right, title or interest of any person and that
all filings and recordings required to perfect the title of the Transferor in
the Receivables have been accomplished and are in full force and effect, and the
Transferor warrants in the Agreement that the transfer of such 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
Originator and the Transferor will take all actions as are required under Ohio
and Massachusetts law to perfect the Trust's interest in the Receivables and the
Transferor warrants that if the transfer by the Transferor to
35
<PAGE>
the Trust granted the Trust a security interest in the Receivables, the Trust
will at all times have a first priority perfected security interest therein and,
with certain exceptions, and for certain limited periods of time, in proceeds
thereof. Nevertheless, if the sale or transfer of Receivables to the Transferor
or the transfer of the Receivables to the Trust is deemed to create a security
interest therein under the New York, Ohio and Massachusetts Uniform Commercial
Code (collectively, the 'UCC'), a tax or government lien or other nonconsensual
lien on property of the Originator or the Transferor arising before any
Receivable comes into existence may have priority over the Transferor's or the
Trust's interest in such Receivable or, if the Federal Deposit Insurance
Corporation were appointed receiver of the Originator, the receiver's
administrative expenses may also have priority over the Trust's interest in such
Receivables. The existence of such liens or the rights of the receiver of the
Originator could reduce the amount payable on the Receivables and result in
possible reductions in the amounts of payments on the Offered Certificates. See
'Certain Legal Aspects of the Receivables--Transfer of Receivables.'
Insolvency or Bankruptcy of Originator. The Originator and the Transferor
have treated and will treat the transfer of Receivables under the Purchase and
Sale Agreement as a sale. A court could treat such transactions as assignments
of collateral as security. To the extent that the Originator has granted or will
grant a security interest in the Receivables to the Transferor and that security
interest was validly perfected before any insolvency of the Originator and was
not granted or taken in or will not be granted or taken in contemplation of
insolvency or with the intent to hinder, delay or defraud the Originator or its
creditors, that security interest should not be subject to avoidance in the
event of the insolvency and receivership of the Originator, and payments to the
Transferor with respect to the Receivables should not be subject to recovery by
a conservator or receiver for the Originator. If, however, the conservator or
receiver were to assert a contrary position, or were to require the Transferor
to establish its rights to those payments by submitting to and completing the
administrative claims procedure established under the Financial Institutions
Reform, Recovery and Enforcement Act of 1989 ('FIRREA'), or the conservator or
receiver were to request a stay of proceedings with respect to the Originator as
provided under FIRREA, delays in payments on the Offered Certificates and
possible reductions in the amount of such payments could occur. If a conservator
or receiver is appointed for the Originator, pursuant to the Purchase and Sale
Agreement, new Receivables would not be sold to the Transferor and an
Amortization Event would occur. Upon the occurrence of an Amortization Event, if
a conservator or receiver is appointed for the Originator and no other
Amortization Event other than such conservatorship, receivership or insolvency
of the Originator exists, the conservator or receiver may have the power to
prevent the commencement of the Rapid Amortization Period. See 'Certain Legal
Aspects of the Receivables--Certain Matters Relating to Bankruptcy.'
Sole Remedy for Breaches of Representations and Warranties Relating to the
Receivables. The Transferor will make certain representations and warranties
relating to the validity and enforceability of the Accounts and 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. Pursuant to the Agreement, in the event of
a material breach of such representations and warranties with respect to any
Receivables, the Transferor will be obligated to accept the transfer of such
Receivables, whereupon such Receivables will no longer be included in the Trust.
With certain exceptions, such obligation will constitute the sole remedy in the
event of any such breach. Pursuant to the agreement by which
Bridgestone/Firestone purchased a participation interest in the Exchangeable
Transferor Certificate and will purchase a participation interest in the
Subordinated Transferor Certificate (the 'Participation Agreement'),
Bridgestone/Firestone will agree, for the benefit of the Trustee, to purchase
from the Transferor any Ineligible Receivable required to be repurchased by the
Transferor from the Trust. See 'Description of the Offered Certificates and the
Agreement--Covenants, Representations and Warranties.'
Effects of Consumer Protection and Banking Laws. The Accounts and the
Receivables are subject to numerous Federal and state consumer protection laws
which impose requirements on the extension of consumer credit and collections of
such obligations. In addition, the extension of credit, and the interest charged
thereon, by national banks such as the Originator, is subject to regulation
under Federal law. Such laws, as well as any new laws, rulings or decisions
construing such laws or rulings which may be adopted, whether Federal or state,
may adversely affect the ability of the Servicer to collect on the Receivables
or maintain previous levels of monthly finance charges and other charges. One
effect of any legislation which regulates the amount of interest and other
36
<PAGE>
charges that may be assessed on credit card account balances would be to reduce
the Portfolio Yield on Accounts. If a significant reduction in Portfolio Yield
occurred, an Amortization Event could occur, in which case the Rapid
Amortization Period would commence. See 'Certain Legal Aspects of the
Receivables--Consumer Protection and Banking Laws.'
Application of Federal and state bankruptcy, debtor relief or consumer
protection laws would affect the interest of the Certificateholders in the
Receivables, if such laws result in any Receivables being written off as
uncollectible when there are no funds available from other sources to cover any
resulting shortfalls in amounts payable to Certificateholders. See 'Description
of the Offered Certificates and the Agreement--Defaulted Receivables;
Recoveries, Rebates and Fraudulent Charges.'
Effects of New Legislation. From time to time, there are proposed in the
Congress and certain state legislatures new laws and amendments to existing laws
to regulate further the consumer credit industry. The Transferor is unable to
determine and has no basis on which to predict whether or to what extent changes
in laws or regulations will affect charge use, payment patterns or revenues.
Dependence on Bridgestone/Firestone. Because the credit cards issued under
the Credit Card Program are primarily used by customers of Bridgestone/Firestone
stores and dealers and marketers of Bridgestone/Firestone products, the Trust is
largely dependent upon Bridgestone/Firestone and such dealers and marketers for
the generation of Receivables and new Accounts. In addition to manufacturing a
full line of tires, Bridgestone/Firestone is a major retailer of tires,
automotive maintenance and repair services in the United States with
approximately 1,500 company operated tire and automotive service centers and is
a major supplier of tires to several thousand independent dealer outlets.
However, there are thousands of competitors that compete with
Bridgestone/Firestone operated service centers and independent dealer outlets.
The automotive service and repair industry is highly competitive. Many
considerations enter into the competition for the customer's patronage,
including quality, service, product mix, convenience, price and credit
availability and terms. Further, there can be no assurance that new Accounts or
new Receivables will continue to be generated under the Credit Card Program at
the same rate as in prior years or that the Originator will implement
Alternative Programs.
In addition, in April 1994, the contract between certain
Bridgestone/Firestone employees now represented by the United Steelworkers of
America ('Union') and Bridgestone/Firestone expired and the parties were unable
to reach agreement on a new contract. In July, 1994, a strike by such employees
commenced. Although the strike ended in June, 1995, Bridgestone/Firestone and
the Union have not yet agreed on a new contract. There is no assurance that
Bridgestone/Firestone and the Union will agree on a new contract and future
labor difficulties could negatively impact Bridgestone/Firestone's ability to
manufacture automotive products and the ability of CFNA to generate new Accounts
or new Receivables.
Competition in the Credit Card Industry. The credit card market is highly
competitive and is experiencing increasing use of advertising, target marketing
and pricing competition in finance charges and other fees as traditional and new
credit card issuers seek to expand or enter the market. The ability of the
Credit Card Program and any Alternative Programs to compete in the credit card
industry will affect the Originator's ability to generate new Accounts and new
Receivables. Bridgestone/Firestone stores and dealers accept certain third-party
credit cards not issued by the Originator. If consumers choose to use competing
sources of payment or credit, the rate at which the new Accounts are opened
and/or new Receivables are generated in Accounts may be reduced and certain
purchase and payment patterns with respect to Receivables may be affected.
Historically, the opening of new Accounts has been a primary source for the
generation of new Receivables. If the rate at which the new Accounts are opened
and/or the new Receivables are generated declines significantly, an Amortization
Event could occur, in which case, a Rapid Amortization Period would commence.
See 'The Credit Card Program.'
Social, Legal and Economic Factors. Changes in card use and payment
patterns by cardholders may result from a variety of legal, economic and social
factors, including the rate of unemployment and inflation and relative interest
rates offered for various types of loans. Such factors will also be reflected in
changes in consumer spending and payment patterns including increased risk of
default by cardholders. The Transferor is unable to determine, and has no means
of predicting, whether or to what extent legal or economic factors will affect
future credit purchases or repayment patterns.
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<PAGE>
Timing of Payments and Maturity. A number of legal and economic factors
may affect payment patterns and there is no accurate means of predicting the
effect of such factors. The Receivables may be paid at any time and there is no
assurance that any particular pattern of cardholder repayments will occur or
that sufficient eligible Receivables will be generated to maintain required
levels of collateralization. A significant decline in the amount of Receivables
generated or the failure of the Transferor to maintain the Aggregate Receivables
as of the last day of each Collection Period at a level sufficient to result in
(i) the Transferor Amount (plus the amount available to be drawn under the
Transferor Letter of Credit and the B/F Amount) being not less than 7% of the
aggregate invested amount of all outstanding Series of certificates (including
the Series 1996-1 Interests) issued by the Trust or (ii) the Transferor Amount
plus the B/F Amount plus the Subordinated Transferor Amount (plus the invested
amount of any subordinated class of certificates of additional Series which,
when issued, is retained by the Transferor and with respect to which no legal
opinion is delivered characterizing such certificates as indebtedness) being not
less than 7% of Aggregate Receivables could result in the occurrence of an
Amortization Event. During either the Controlled Amortization Period or a Rapid
Amortization Period (either such period, an 'Amortization Period'), a
significant decrease in the cardholder monthly payment rate could slow the
return of principal. See 'The Credit Card Program' and 'Maturity Assumptions.'
Effect of Subordination. The Class B Certificates will be subordinated in
right of payment of principal to the Class A Certificates. Payments of principal
in respect of the Class B Certificates will not commence until after the Class A
Invested Amount has been paid in full. Moreover, the Class B Invested Amount is
subject to reduction on any Determination Date if Principal Collections
allocable to the Class B Certificates are reallocated to cover the Class A
Required Amount or (b) if Collateral Interest Reallocated Principal Collections
or Subordinated Transferor Reallocated Principal Collections with respect to any
Collection Period are insufficient to fund the remaining Class A Required Amount
and the Subordinated Transferor Amount and the Collateral Interest Invested
Amount have been reduced to zero. If the Class B Invested Amount suffers such a
reduction, Finance Charge Collections allocable to the Class B
Certificateholders' Interest in future Collection Periods will be reduced.
Moreover, to the extent the amount of such reduction in the Class B
Certificateholders is not reimbursed, the amount of principal distributable to
the Class B Certificateholders will be reduced. See 'Description of the Offered
Certificates and the Agreement--Allocation Percentages,' '--Reallocated
Principal Collections,' '--Additional Amounts Available to Certificateholders'
and '--Subordination of the Class B Certificates.'
The Originator's Ability to Change Terms of Receivables or Policies
Relating to the Accounts. Subject to applicable law and with the consent of
Bridgestone/Firestone, the Originator reserves the right to amend the terms or
policies applicable to the Accounts, including, without limitation, the level of
finance charges and other fees applicable from time to time to the Accounts and
the minimum monthly payments required on the Accounts. Except as specified in
the next succeeding sentence, there are no restrictions on the Originator's
ability to change the terms or policies of the Accounts or other credit card
guidelines or policies, including policies on credit approval. Under the
Purchase and Sale Agreement, the Originator will agree that, except as otherwise
required by law or as is deemed by the Originator, in its sole discretion, based
upon a good faith assessment by it of the nature of its competition, to be
necessary or advisable, it will not reduce the annual percentage rate of the
monthly finance charge assessed on the Receivables, if as a result of such
reduction, its reasonable expectation is that the Portfolio Yield (defined
below) (see 'Description of the Offered Certificates and the Agreement--
Amortization Events') would be a rate less than the Base Rate, or reduce the
minimum payment terms or otherwise alter the terms of the Accounts or the
policies applicable thereto, if, as a result of such change, in its reasonable
expectation, an Amortization Event with respect to the Series 1996-1 Interests
or any other Series of certificates would occur. While the Originator and
Bridgestone/Firestone have no current intention of changing the terms of the
Accounts, there can be no assurance that changes in applicable law, in the
marketplace or prudent business practice might not result in a determination by
the Originator and Bridgestone/Firestone to make or to consent to such a change.
Master Trust Considerations and the Effect of the Issuance of Additional
Series. The Trust, as a master trust, may issue additional Series from time to
time. 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,
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<PAGE>
provisions creating different or additional security or other credit
enhancement, provisions subordinating such Series to another Series or other
Series (if the Supplement relating to such Series so permits) to such Series,
and any other amendment or supplement to the Agreement which is made applicable
only to such Series. As long as the Offered Certificates are outstanding, a
condition to the execution of any Supplement will be that each applicable Rating
Agency shall have advised the Trustee that the issuance of such Series will not
result in the reduction or withdrawal of their rating of any prior outstanding
Series (including the Offered Certificates). See 'Description of the Offered
Certificates and the Agreement--Exchanges.' Any such determination by any such
Rating Agency would not, however, provide any assurance that the issuance of any
such Series would not, in fact, have a materially adverse effect on the Offered
Certificates.
In addition, certain remedies require the consent of a majority of the
holders of all outstanding Series of certificates, and the interest of the
holders of one Series of certificates may conflict with the interest of another
Series of certificates. See 'Description of the Offered Certificates and the
Agreement--Exchanges.'
Scope of Certificate Rating. It is a condition to the issuance of the
Class A Certificates that they be rated at least 'AAA' by S&P and 'Aaa' by
Moody's and to the issuance of the Class B Certificates that they be rated at
least 'A' by S&P and 'A2' by Moody's (the rating agency or rating agencies
requested by the Transferor and initially rating any Series is herein referred
to as the 'Rating Agency'). The rating of the Class A Certificates is based
primarily on the credit quality of the Receivables and the terms of the
subordination of the Class B Certificates, the Collateral Interest and the
Subordinated Transferor Certificate. The rating of the Class B Certificates is
based primarily on the credit quality of the Receivables and the terms of the
subordination of the Collateral Interest and the Transferor Subordinated
Certificate. The ratings of the Offered Certificates are not a recommendation to
purchase, hold or sell the Offered Certificates, and such ratings do not comment
as to market price or suitability for a particular investor. There is no
assurance that the rating will remain for any given period of time or that the
rating will not be lowered or withdrawn entirely by the Rating Agency, if in its
judgment circumstances in the future so warrant.
Discount Option. Pursuant to the Agreement, the Transferor has the option,
from time to time, to designate a fixed or variable percentage of Receivables
(the 'Discount Percentage') that otherwise would be treated as Principal
Receivables to be treated as Finance Charge Receivables. Any such designation
would result in an increase in the amount of Finance Charge Receivables and a
slower rate of payment of collections in respect of Principal Receivables than
otherwise would occur. On the Closing Date, the Transferor will designate an
initial Discount Percentage of 2.0%. Pursuant to the Agreement, the Transferor
can increase, reduce or withdraw such Discount Percentage without notice to or
the consent of the Certificateholders. The Transferor must provide 30 days'
prior written notice to the Servicer, the Trustee, and any provider of
Enhancement and each Rating Agency of any increase, reduction or withdrawal of
the Discount Percentage, and such designation will become effective only if (i)
in the reasonable belief of the Transferor such designation would not cause to
occur a Series 1996-1 Amortization Event or an event which with notice or the
lapse of time or both would constitute a Series 1996-1 Amortization Event and
(ii) each Rating Agency confirms in writing its then current rating on any
outstanding Series. See 'Description of the Offered Certificates--Discount
Option.'
Effects of Book-Entry Registration. The Offered Certificates initially
will be represented by Certificates registered in the name of Cede, the nominee
for DTC, and will not be registered in the names of the Certificate Owners or
their nominees. As a result, unless and until Definitive Certificates are
issued, Certificate Owners will not be recognized by the Trustee as
Certificateholders, as that term is used in the Agreement. Until such time,
Certificate Owners will only be able to receive payments from, and exercise the
rights of Certificateholders indirectly, through DTC, CEDEL or Euroclear and
their participating organizations, and, unless a Certificate Owner requests a
copy of any such report from the Trustee, Certificate Owners will receive
reports and other information provided for under the Agreement only if, when and
to the extent provided to Certificate Owners at such Certificate Owners' request
through DTC and its participating organizations. In addition, the ability of
Certificate Owners to pledge Offered 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 physical certificates for such
Certificates. See 'Description of the Offered Certificates and the
Agreement--Book-Entry Registration' and '--Definitive Certificates.'
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Effect of the Issuance of New Series. The Trust, as a master trust, is
expected to issue new Series from time to time. While the terms of any Series
will be specified in a Supplement, the provisions of a Supplement and,
therefore, the terms of any new Series, will not be subject to the prior review
or consent of holders of the Certificates of any previously issued Series. Such
terms may include methods for determining applicable investor percentages and
allocating collections, provisions creating different or additional security or
other enhancements, provisions subordinating such Series to other Series or
subordinating other Series (if the Supplement relating to such Series so
permits) to such Series, and any other amendment or supplement to the Pooling
and Servicing Agreement which is made applicable only to such Series. The
obligation of the Trustee to issue any new Series is subject to the condition
that the Trustee shall have received the following: (a) a Supplement in form
satisfactory to the Trustee executed by the Transferor and specifying the
principal terms of such Series, (b) the applicable Enhancement, if any, (c) an
opinion of counsel to the effect that the newly issued Series will be
characterized as either indebtedness or an interest in a partnership under
existing law for Federal income tax purposes and that the issuance of the newly
issued Series will not have any material adverse impact on the Federal income
tax characterization of any outstanding Series that have been the subject of a
previous opinion of tax counsel, (d) an agreement, if any, to provide
Enhancement, (e) written confirmation from each Rating Agency that such issuance
will not result in the Rating Agency's reducing or withdrawing its rating or
otherwise adversely affect any rating on any then outstanding Series rated by it
and (f) the existing Exchangeable Transferor Certificate or applicable Series,
as the case may be. There can be no assurance, however, that the issuance of any
other Series, including any Series issued from time to time hereafter, might not
have an impact on the timing or amount of payments received by a
Certificateholder.
USE OF PROCEEDS
The net proceeds from the sale of the Series 1996-1 Asset Backed
Certificates will be used first to repay an outstanding Series of Investor
Certificates, the Series 1995-A Certificates. The remaining balance will be paid
to the Transferor. The proceeds will be distributed by the Transferor to
Bridgestone/Firestone in accordance with the Participation Agreement.
THE TRANSFEROR AND BRIDGESTONE/FIRESTONE
The Transferor was incorporated in Massachusetts on October 24, 1983 under
the name 1200 Capital Corporation, which was later amended to Firestone Consumer
Funding Corporation. On October 3, 1989, Firestone Consumer Funding Corporation
filed a Certificate of Merger, merging it with Firestone Retail Credit
Corporation. The Transferor was the surviving corporation. The Transferor is a
nominally capitalized special purpose corporation and was organized for the
limited purpose of purchasing, holding, owning and selling receivables and any
activities incidental to and necessary or convenient for the accomplishment of
such purpose. The Transferor's principal executive office is located at the
following address: c/o JH Management Corporation, One International Place, Suite
520, Boston, Massachusetts 02110, telephone (617) 951-7690.
Bridgestone/Firestone, formerly named The Firestone Tire & Rubber Company,
was incorporated in Ohio on March 4, 1910 and is the successor to the business
founded by Harvey S. Firestone in 1900. Pursuant to a merger which became
effective on May 5, 1988, Bridgestone/Firestone became a direct wholly owned
subsidiary of Bridgestone Corporation, a corporation organized under the laws of
Japan. On August 1, 1989, Bridgestone/Firestone adopted its current name.
Bridgestone/Firestone is a multinational organization whose principal
business is the development, manufacture and sale of a broad line of tires for
passenger, truck and agricultural vehicles, in both the original equipment and
replacement markets. It sells tires under Firestone, Bridgestone, Dayton and
other brand names through a large network of independent dealers.
Bridgestone/Firestone also provides a wide range of automotive maintenance and
repair services and sells tires and automotive replacement parts and supplies
through Bridgestone/Firestone operated retail stores. Other products sold by
Bridgestone/Firestone include single-ply rubber roofing systems, synthetic
rubber, air springs, and synthetic fibers and textiles.
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THE CREDIT CARD PROGRAM
GENERAL
The Receivables that the Originator has sold and will sell to the
Transferor pursuant to the Purchase and Sale Agreement and which the Transferor
has or will in turn transfer to the Trust pursuant to the Agreement have been
and will be generated primarily from purchases charged under credit cards issued
by the Originator pursuant to a private label credit card program (the 'Credit
Card Program') established for customers of (a) Bridgestone/Firestone stores,
which sell tires and automotive maintenance and repair products and services,
(b) dealers and marketers which have contractual arrangements with
Bridgestone/Firestone to market Bridgestone/Firestone tires and related products
as well as automotive maintenance and repair services and (c) certain other
dealers and marketers of automotive products, which include tires and automotive
maintenance and repair services, which dealers and marketers do not have such
contractual arrangements with Bridgestone/Firestone (collectively, the 'Retail
Establishments'). The Receivables will also include a portfolio of certain
designated Receivables generated or to be generated by the Originator and
existing or arising under certain accounts to be established under other credit
card programs established or to be established by the Originator (the
'Alternative Programs'). See 'Description of the Offered Certificates and the
Agreement-- Addition of Accounts' herein.
The initial purpose of a credit card program was to support the
merchandising efforts of The Firestone Tire & Rubber Company, now known as
Bridgestone/Firestone, Inc. ('Bridgestone/Firestone'). Credit cards were first
issued in 1978 to revolving account holders at company operated stores. In early
1979, the credit card program was extended to include customers of independent
authorized Firestone dealers. In 1983, the program was extended again to include
independent authorized dealers of Dayton and Road King tires, which are
associate brands manufactured by Bridgestone/Firestone. Such credit card program
was replaced in 1985 by the Credit Card Program described herein.
In July 1989, the Credit Card Program was extended to customers of
Bridgestone dealers. In 1990, the Credit Card Program was extended to
unaffiliated third-parties including Merchants, Inc., and American Car Care
Centers, Inc. In 1992, the program was extended to certain customers of
independent dealers selling Bridgestone/Firestone manufactured private brand
tires. Prior to 1993, Society National Bank ('SNB') acted as originator of the
Credit Card Program. In 1993, Credit First National Association ('CFNA' or the
'Originator'), a wholly owned subsidiary of Bridgestone/Firestone, was organized
for the purpose of making credit card loans and activities incidental to such
purpose and replaced SNB. In 1994, the Credit Card Program with American Car
Care Center, Inc. terminated. Also, in 1994, Bridgestone/Firestone introduced
convenience checks drawn on the Originator for use by existing Credit Card
Program cardholders to purchase consumer merchandise. Such cash advances made
via convenience checks are estimated to be less than 3% of total card sales. In
1995, the Credit Card Program was further extended to Meineke Discount Muffler
Shops, Inc., an unaffiliated third-party.
As originator of the credit cards, the Originator is responsible for all
aspects of the Credit Card Program, including underwriting and granting of
credit, issuance of cards and direct customer service. BFS Credit Services
('Credit Services'), a stand-alone profit center of Bridgestone/Firestone based
in Brook Park, Ohio, provides certain administration and servicing functions on
behalf of the Originator. The Originator earns certain Merchant Fees attributed
to cardholder charges giving rise to Receivables. On the first Transfer Date,
CFNA shall transfer Merchant Fees to the Trust in an amount equal to $350,000.
On each Transfer Date thereafter, Merchant Fees in an amount equal to the lesser
of (a) $350,000 and (b) the Merchant Fees collected by CFNA in the calendar
month preceding such Transfer Date, shall be transferred to the Transferor
pursuant to the Purchase and Sale Agreement. The Transferor will transfer such
Merchant Fees to the Trust pursuant to the Agreement.
The Accounts consist of eligible credit card accounts ('Eligible Accounts')
established under the Credit Card Program as of or subsequent to the Cut-off
Date and accounts to be established under Alternative Programs subsequent to the
Cut-off Date which are designated by the Transferor as Eligible Accounts in
accordance with the selection criteria relating to the addition of accounts. The
Receivables will include all amounts payable by cardholders under the Accounts
as of the Cut-off Date and thereafter. The Initial Invested Amounts were
determined by taking into account, among other considerations, the nature of the
Accounts and the Receivables.
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Account balances are created primarily by the purchase of merchandise and
service from the Retail Establishments. The Trust will consequently depend on
the continued ability of the Retail Establishments to generate credit sales. In
addition, since many of the Retail Establishments accept other credit cards,
such as American Express, Diner's Club and Carte Blanche charge cards and Visa,
MasterCard and Discover credit cards, the Trust also will depend upon decisions
of customers purchasing merchandise at the Retail Establishments to use the
cards of the Credit Card Program and any Alternative Programs, rather than other
credit cards. See 'Risk Factors--Competition in the Credit Card Industry.' The
following table shows the relationship between Credit Card Program sales at
Bridgestone/Firestone company operated stores and total Credit Card Program
sales for the periods indicated.
CREDIT CARD PROGRAM SALES AT
BRIDGESTONE/FIRESTONE COMPANY OPERATED STORES
($ IN THOUSANDS)
<TABLE>
<CAPTION>
PERCENT OF
CREDIT CARD CREDIT CARD
SALES AT SALES AT
BRIDGESTONE/FIRESTONE- TOTAL CREDIT BRIDGESTONE/FIRESTONE-
YEAR ENDING DECEMBER 31, OPERATED STORES CARD SALES OPERATED STORES
- ------------------------------------ ---------------------- ------------ ----------------------
<S> <C> <C> <C>
1989................................ $386,001 $528,610 73.02%
1990................................ 409,145 568,364 71.99
1991................................ 419,054 594,152 70.53
1992................................ 412,470 593,284 69.52
1993................................ 396,353 592,392 66.91
1994................................ 401,589 618,219 64.96
1995................................ 392,894 617,485 63.63
September 1996, year to date........ 279,310 446,952 62.49
</TABLE>
MARKETING AND ORIGINATION
CFNA is responsible for the marketing of the Credit Card Program. CFNA
works directly with the sales organizations of Bridgestone/Firestone and other
dealers and marketers of automotive products and services. CFNA promotes each
credit card program primarily through (i) communicating through a wide variety
of mediums (such as point of sale displays and mail promotions) the advantages
of using the credit card; (ii) coordinating the activities of Credit Services'
field account representatives; and (iii) developing client incentive programs to
increase credit card activity and acquire new accountholders. In addition, CFNA
directs and administers various accountholder direct response programs, such as
direct mail merchandise programs and other services available to accountholders,
which promote the use of the credit card and generate additional revenue for the
credit card operations.
NEW ACCOUNT ORIGINATION
The Credit Authorization area ('Credit Authorization') of CFNA is
responsible for (i) processing credit applications to establish new accounts,
(ii) authorizing sales to existing accounts, and (iii) managing credit limits
and continually assessing credit risk. New accounts are generated primarily
through Retail Establishment operations. Credit card applications are available
in the Retail Establishments, whose personnel offer the Credit Card Program to
customers. Customers interested in purchasing specified merchandise or services
on credit may complete a credit card application in the Retail Establishment. An
application may be processed either by direct telephone contact with Credit
Authorization or by mailing a completed application to Credit Authorization.
Most new accounts are opened at the point of sale in a Retail
Establishment. Through the use of a direct computer link with the major credit
bureaus and a computer supported credit scoring system, most decisions on new
credit applications are made within three to four minutes.
In accordance with CFNA credit card policies, Credit Authorization
evaluates the ability of an applicant to repay credit card balances by applying
a credit scoring model jointly developed by CFNA and outside consultants. Credit
scoring is intended to provide a general indication, based upon available
information (including credit bureau reports), of the applicant's willingness
and ability to repay account balances. The result
42
<PAGE>
of the credit scoring computed for a prospective cardholder is the primary
factor in determining the approval decision and the initial credit limit.
The scores required for credit approval are established on the basis of
expected profitability from the accounts. Profitability is projected on the
basis of anticipated finance charge receipts as these may be offset by credit
losses sustained in the accounts. The probability of losses is predicted on the
basis of statistical evaluation performed by the credit scoring models which are
based on past performance, periodically reviewed for statistical accuracy, of
credit card accounts.
Initial credit limits, which are based on an applicant's risk, score and,
in certain cases, income, range from $300 to $2,500. Credit limits for
individual accounts may be adjusted periodically based upon an evaluation of the
cardholder's payment performance. Credit limits may be increased annually for
accounts that exceed a pre-determined score. Credit limits on delinquent
accounts may be reduced at any time if warranted by the risk score. Decisions to
adjust credit limits are based upon a customer's payment history and/or credit
bureau status.
BILLING AND PAYMENT
The accounts are grouped into billing cycles. Each billing cycle has a
separate monthly billing date on which the activity in the related accounts
during the month ended on such billing date is processed and billed to
cardholders. New accounts are assigned to billing cycles in a manner generally
intended, for purposes of administrative convenience, to equalize the number of
accounts in the billing cycles.
In connection with the servicing of the Credit Card Program, Credit
Services generates and mails to each cardholder at the end of each cardholder's
monthly billing cycle a statement summarizing account activity, unless there is
no balance, no payment due (as occurs in the 'No Payment for 90 Days' payment
plan described below) or no account activity. Accordingly, cardholders must make
a minimum monthly payment by the date shown on the monthly statement. The
minimum monthly payment is calculated by taking 5% of the new balance resulting
after a purchase of products and services that are charged to the account and
rounding that amount to an even $5.00 increment. To that amount Credit Services
adds any past due to establish the total minimum payment due. The minimum
payment due will not be less than $10.00 except where the remaining balance plus
unpaid finance charges and other fees is less than $10.00.
A monthly finance charge is assessed on the account when the account is not
paid in full. The periodic rate now ranges between 1.587% and 1.82% monthly (or
between 19.04% and 21.84% per annum). The finance charge is a flat rate, based
on competitive conditions. No finance charge is assessed on unpaid finance
charges. The monthly finance charge is calculated by multiplying the periodic
rate times the average daily balance. The average daily balance is determined,
where permitted by applicable state law, by taking the beginning balance each
day, subtracting any payments or credits and adding any new purchases each day.
All the daily balances are added for the billing cycle and divided by the number
of days in the billing cycle.
The Originator currently has a 'No Payment for 90 Days' payment plan where
if the full amount of any qualifying purchase made under such plans is not paid
within the specified time (i.e., within 90 days from the initial billing date),
finance charges associated with the purchase will be imposed from the date of
purchase. A minimum monthly payment is not required under this plan during the
90-day period. A pay-ahead option is also available for cardholders who are not
past due and who make a payment of at least twice the amount of the minimum
payment due. A minimum monthly payment will not be due in the following month.
There are also special promotions, in which certain rights under the credit card
agreement may be waived from time to time for limited periods for qualifying
purchases.
LOSS AND DELINQUENCY EXPERIENCE
CFNA performs certain collection activity on behalf of Credit Services.
Collection methods with regard to delinquent credit card receivables include
collection activity by company personnel, collection agencies and attorneys in
private practice.
Delinquent cardholders who do not make scheduled payments by the payment
due date may be subject to several actions. These actions include billing
statement notices, collection letters, automated telephone reminders, telephone
contact with collectors for accounts delinquent from 30-150 days and placement
with third-party collection agencies or collection attorneys for accounts
delinquent beyond 150 days. The specific action or
43
<PAGE>
actions depend on the number of missed payments, the dollar amount of the
outstanding balance and a statistical probability of further delinquency which
is developed using a customized statistical scoring model.
An account generally is closed to further purchases when two payments are
past due. Pursuant to the Agreement, Receivables in any Account will be deemed
defaulted and classified as 'Defaulted Receivables' on the last day of the
Collection Period following the Collection Period in which such Receivable
becomes 180 days delinquent or earlier upon the Servicer's receipt of notice of
bankruptcy.
Cardholders requesting financial relief may be given a reduction in their
minimum monthly payment if certain conditions are met and upon receipt of the
new monthly payment amount. If qualified, the account is re-aged to current.
Credit Card Program credit evaluation, servicing and charge-off policies and
collection practices may change at any time in accordance with the Agreement,
the Purchase and Sale Agreement and applicable law and the business judgment of
the Originator and the Servicer.
Losses and delinquencies are affected by a number of factors such as
competitive behavior and general economic conditions, including consumer debt
levels. Bridgestone/Firestone has informed the Transferor that it is unable to
determine the extent to which, if any, loss and delinquency experience described
herein reflects the influence of these or other factors.
The following tables set forth the historical default and delinquency
experience for the Receivables generated in Eligible Accounts under the Credit
Card Program. The statistics are with respect to payments by cardholders for the
Collection Periods noted. There can be no assurance, however, that default and
delinquency experience for the Receivables in the future will be similar to the
historical experience.
DEFAULTED RECEIVABLES
($ IN THOUSANDS)
<TABLE>
<CAPTION>
NINE COLLECTION TWELVE COLLECTION PERIODS
PERIODS ENDING ENDING DECEMBER 18,
SEPTEMBER 18, --------------------------------
1996 1995 1994 1993
--------------- -------- -------- --------
<S> <C> <C> <C> <C>
Average Receivables Outstanding(1)......................... $ 448,907 $457,317 $445,293 $418,862
Defaulted Receivables(2):
Contractual Past-due aging (210 days past due)............. $ 29,143 $ 28,234 $ 21,102 $ 21,593
Bankrupt/Other............................................. 8,628 9,416 8,106 8,925
Less--Recoveries(3)........................................ (5,694) (6,448) (6,576) (7,064)
--------------- -------- -------- --------
Net Defaulted Receivables................................ $ 32,077 $ 31,202 $ 22,632 $ 23,454
Percent per annum of Average
Receivables Outstanding............................... 9.53% 6.82% 5.08% 5.60%
</TABLE>
- ------------------
(1) Average Receivables Outstanding is a thirteen-point average. It averages the
December 19 receivables balance at the start of the first Collection Period
ending in the year indicated with the ending balances of each of the twelve
Collection Periods ending in the year indicated (or in the case of 1996,
with the ending balance of each of the nine Collection Periods through
September 18, 1996).
(2) 'Contractual Past-due aging' Defaulted Receivables represent those
Receivables deemed Defaulted Receivables on the last day of the Collection
Period following the period in which such Receivable becomes 180 days
delinquent. 'Bankrupt' Defaulted Receivables represents those Receivables
deemed Defaulted Receivables upon the Servicer's notice of bankruptcy.
(3) Recoveries are gross account receivable recoveries. They are not net of
collection costs and commission.
44
<PAGE>
AVERAGE DELINQUENCIES
($ IN THOUSANDS)
<TABLE>
<CAPTION>
NINE COLLECTION TWELVE COLLECTION PERIODS ENDING DECEMBER 18,
PERIODS ENDING -----------------------------------------------------------------
SEPTEMBER 18,
1996 1995 1994 1993
------------------------- ------------------------- ------------------------- ---------
AMOUNT(1) PERCENTAGE(2) AMOUNT(1) PERCENTAGE(2) AMOUNT(1) PERCENTAGE(2) AMOUNT(1)
--------- ------------- --------- ------------- --------- ------------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Delinquent Receivables:
1-30 Days............ $ 63,650 14.18% $ 64,633 14.13% $ 67,425 15.14% $ 78,719
31-60 Days............ 19,820 4.42 18,932 4.14 17,007 3.82 19,630
61-90 Days............ 9,169 2.04 8,042 1.76 6,694 1.50 7,208
91-180 Days........... 15,123 3.37 12,081 2.64 9,460 2.13 9,672
Average Receivables
Outstanding......... $ 448,907 100.00% $ 457,317 100.00% $ 445,293 100.00% $ 418,862
<CAPTION>
PERCENTAGE(2)
-------------
<S> <C>
Delinquent Receivables:
1-30 Days............ 18.79%
31-60 Days............ 4.69
61-90 Days............ 1.72
91-180 Days........... 2.31
Average Receivables
Outstanding......... 100.00%
</TABLE>
- ------------------
(1) Average amounts outstanding of Delinquent Receivables and total receivables
are calculated by the thirteen-point average method, described in Footnote 1
of the table titled 'Defaulted Receivables.'
(2) Percentages are calculated by dividing Delinquent Receivables by Average
Receivables Outstanding for the applicable period.
REVENUE EXPERIENCE
The following table sets forth the gross revenues from monthly finance
charge billings for the Collection Periods noted. The table includes only the
Receivables and finance charge billings generated in Eligible Accounts under the
Credit Card Program.
The historic gross revenue figures in the table are calculated on an as
billed basis and represent amounts billed to cardholders before deduction of
charge-offs, reductions due to fraud, returned goods and customer disputes and
other expenses. Future cash collections on Receivables may not reflect the
historical experience in the table. During periods of increasing delinquencies,
billings of monthly finance charges may exceed cash as amounts collected on
Receivables lag behind amounts billed to cardholders. Conversely, as
delinquencies decrease, cash may exceed billings of monthly finance charges as
amounts collected in a current period may include amounts billed during prior
periods. However, the Transferor believes that during the periods shown,
revenues on a billed basis closely approximated revenues on a cash basis.
Revenues from monthly finance charges on both a billed and a cash basis will be
affected by numerous factors, including the monthly finance charges on principal
receivables, the percentage of cardholders who pay off their balances in full
each month and do not incur monthly finance charges on purchases, the number of
promotional programs offered to cardholders and changes in the delinquency rate
on the Receivables.
REVENUE EXPERIENCE
($ IN THOUSANDS)
<TABLE>
<CAPTION>
NINE COLLECTION TWELVE COLLECTION PERIODS
PERIODS ENDING ENDING DECEMBER 18,
SEPTEMBER 18, --------------------------------
1996 1995 1994 1993
--------------- -------- -------- --------
<S> <C> <C> <C> <C>
Average Start-of-Month Receivables(1)...................... $ 449,771 $456,513 $444,147 $417,475
Finance Charges Billed(2).................................. $ 58,856 $ 81,026 $ 78,828 $ 78,547
Finance Charges Billed as Percentage of Average Receivables
Outstanding.............................................. 17.45% 17.75% 17.75% 18.81%
</TABLE>
- ------------------
(1) 'Average Start-of-Month Receivables' is a twelve-point average. It averages
the receivables balances at the start of each of the twelve Collection
Periods ending in the year indicated. It differs from the Average
Receivables in the 'Defaulted Receivables' and 'Average Delinquencies'
tables, which are thirteen-point averages.
(2) Finance Charges are as billed during the Collection Periods noted in each
column, adjusted for rebated finance charges and accruals of 'No Payment for
90 Days' finance charges.
45
<PAGE>
PROMOTIONS
The Credit Card Program features a 'No Payment for 90 Days' payment plan
which is intended to increase sales to existing cardholders and to generate new
accounts. Under this program, if customers pay the full purchase price of
merchandise or services within 90 days from the initial billing date, the
finance charges associated with the initial purchase will not be imposed on the
account. If the customer does not pay the full purchase price within the
specified 90-day period, finance charges associated with the purchase will be
imposed from the date of purchase.
Special financing programs are offered to customers from time to time to
promote merchandise and service sales and the greater utilization of the Credit
Card Program. The most frequently offered program is a deferred payment program
in which customers may be allowed to defer their payment obligations for a
period generally ranging from two to six months. Typically, finance charges
accrue during the deferral period.
THE ACCOUNTS
The following tables summarize the portfolio of Active and Creditworthy
Accounts in the Credit Card Program by various criteria as of September 30,
1996. An Account is an 'Active Account' if it currently has a balance. An
Account is a 'Creditworthy Account' if it does not currently have a balance, but
it has had a balance within the last 17 months and is eligible for further
sales. Given the specialized nature of the eligible merchandise and services
offered under the Credit Card Program, customers typically use their credit
cards infrequently. Because the future composition of the Credit Card Program
portfolio will change over time, these tables are not necessarily indicative of
future results.
As of September 30, 1996, the Active and Creditworthy Accounts in the Credit
Card Program totaled 4,289,184 Accounts and Receivables outstanding totaled
$435,910,099. Approximately 10.53%, 9.21%, 8.93% and 5.75% of the Total
Receivables Outstanding related to Account holders having billing addresses in
Texas, Florida, California and Ohio, respectively. Economic and social
conditions in these states may negatively impact the ability of obligors in such
states to pay their outstanding card balances in a timely manner or to pay such
balances at all. Not more than 5% of the Receivables related to Account holders
having billing addresses in any other single state.
COMPOSITION OF ACTIVE AND CREDITWORTHY ACCOUNTS BY TYPE OF RETAILER
AS OF SEPTEMBER 30, 1996
<TABLE>
<CAPTION>
PERCENTAGE PERCENTAGE
NUMBER OF TOTAL OF TOTAL
OF NUMBER RECEIVABLES RECEIVABLES
CARD PROGRAM PARTICIPANTS ACCOUNTS OF ACCOUNTS OUTSTANDING OUTSTANDING
- ---------------------------------------------------------- --------- ----------- ------------ -----------
<S> <C> <C> <C> <C>
Bridgestone/Firestone operated stores and Participating
Dealers................................................. 4,040,958 94.21% $420,471,205 96.46%
Third-Party Dealers and marketers without contractual
arrangements............................................ 248,226 5.79 15,438,895 3.54
--------- ----------- ------------ -----------
Total................................................ 4,289,184 100.00% $435,910,099 100.00%
</TABLE>
COMPOSITION OF ACTIVE AND CREDITWORTHY ACCOUNTS BY CREDIT LIMIT
AS OF SEPTEMBER 30, 1996
<TABLE>
<CAPTION>
PERCENTAGE PERCENTAGE
OF TOTAL OF TOTAL
NUMBER OF NUMBER RECEIVABLES RECEIVABLES
CREDIT LIMIT(1) ACCOUNTS OF ACCOUNTS OUTSTANDING OUTSTANDING
- ---------------------------------------------------------- --------- ----------- ------------ -----------
<S> <C> <C> <C> <C>
$0(2)..................................................... 265,025 6.2% $ 61,492,900 14.1%
$100 to $500.............................................. 360,190 8.4 41,499,281 9.5
$600 to 1,000............................................. 1,848,572 43.1 156,143,445 35.8
$1,100 to $1,500.......................................... 1,081,816 25.2 66,306,727 15.2
$1,600 to $2,000.......................................... 686,955 16.0 105,567,049 24.2
$2,100 or More............................................ 46,626 1.1 4,900,698 1.1
--------- ----------- ------------ -----------
Total................................................ 4,289,184 100.0% $435,910,099 100.0%
</TABLE>
(Footnotes on next page)
46
<PAGE>
(Footnotes from previous page)
- ------------------
(1) Credit limits are in increments of $100.
(2) Credit policy sets credit limit to $0 for any cardholder 90 days or more
delinquent.
COMPOSITION OF ACTIVE AND CREDITWORTHY ACCOUNTS BY ACCOUNTS BALANCE
AS OF SEPTEMBER 30, 1996
<TABLE>
<CAPTION>
PERCENTAGE PERCENTAGE
OF TOTAL OF TOTAL
NUMBER OF NUMBER RECEIVABLES RECEIVABLES
ACCOUNT BALANCE ACCOUNTS OF ACCOUNTS OUTSTANDING OUTSTANDING
- ---------------------------------------------------------- --------- ----------- ------------ -----------
<S> <C> <C> <C> <C>
Credit Balance(1)......................................... 16,939 0.39% $ (684,627) (0.16)%
No Balance(2)............................................. 3,081,723 71.85 -- --
$.01 to $100.............................................. 221,279 5.16 10,524,448 2.41
$101 to $200.............................................. 194,116 4.53 29,148,835 6.69
$201 to $300.............................................. 187,853 4.38 46,886,809 10.76
$301 to $400.............................................. 167,179 3.90 58,401,262 13.40
$401 to $500.............................................. 133,773 3.12 59,891,809 13.74
$501 to $600.............................................. 88,741 2.07 48,508,844 11.13
$601 to $1,000............................................ 139,075 3.24 104,878,819 24.06
$1,001 and up............................................. 58,506 1.36 78,353,900 17.97
--------- ----------- ------------ -----------
Total................................................ 4,289,184 100.0% $435,910,099 100.0%
</TABLE>
- ------------------
(1) Credit balances are a result of cardholder payments and credit adjustments
applied in excess of an Account's unpaid balance. Accounts currently with a
credit balance are included, as Receivables may be generated with respect
thereto in the future.
(2) Accounts currently with no balance are included, as Receivables may be
generated with respect thereto in the future.
COMPOSITION OF ACTIVE AND CREDITWORTHY ACCOUNTS BY AGE
AS OF SEPTEMBER 30, 1996
<TABLE>
<CAPTION>
PERCENTAGE PERCENTAGE
OF TOTAL OF TOTAL
NUMBER OF NUMBER RECEIVABLES RECEIVABLES
AGE(1) ACCOUNTS OF ACCOUNTS OUTSTANDING OUTSTANDING
- ---------------------------------------------------------- --------- ----------- ------------ -----------
<S> <C> <C> <C> <C>
Under 6 months............................................ 300,988 7.02% $ 50,382,519 11.56%
6 months to 1 year........................................ 295,649 6.89 39,070,155 8.96
1-2 years................................................. 675,884 15.76 75,596,531 17.34
2-3 years................................................. 537,860 12.54 43,669,963 10.02
3-4 years................................................. 481,247 11.22 30,800,234 7.07
4-5 years................................................. 497,923 11.61 26,455,882 6.07
5-6 years................................................. 339,263 7.91 24,042,440 5.52
6-7 years................................................. 257,738 6.01 21,423,891 4.91
7-8 years................................................. 171,169 3.99 16,259,922 3.73
8-9 years................................................. 109,710 2.56 11,910,929 2.73
9-10 years................................................ 103,387 2.41 12,281,658 2.82
10 years or older......................................... 518,366 12.09 84,015,975 19.27
--------- ----------- ------------ -----------
Total................................................ 4,289,184 100.0% $435,910,099 100.0%
</TABLE>
- ------------------
(1) Age is calculated based on the initial opening of the account.
47
<PAGE>
MATURITY ASSUMPTIONS
The Agreement provides that the Controlled Amortization Period will
commence three years after the Closing Date and that the Rapid Amortization
Period will commence on the earlier of the day on which (i) an Amortization
Event occurs or is deemed to occur and (ii) the Class A Invested Amount has been
reduced to zero. Although it is anticipated that principal payments will be made
on the Class A Certificates in an amount equal to the Controlled Amortization
Amount beginning on the December, 1999 Distribution Date and on the Class B
Certificates beginning on the November, 2000 Distribution Date, no assurance can
be given in that regard. Payments of principal are scheduled to be made on the
Class A Certificates on each Distribution Date during the Controlled
Amortization Period in an amount equal to the lesser of (a) the Controlled
Amortization Amount and (b) (i) the product of the Fixed Allocation Percentage
and all Principal Collections in respect of the applicable Collection Period
(other than Reallocated Principal Collections that are used to pay Required
Amounts due on the Class A Certificates, Class B Certificates and the Collateral
Interest) plus (ii) certain other amounts. Based on the following assumptions,
among others: cardholder monthly payment rates for the Accounts being not less
than 7.89% of the Receivables outstanding under Eligible Accounts at the time of
the Controlled Amortization Period (which rate is below the average monthly
payment rate shown in the 'Monthly Payment Rates' table below), Aggregate
Receivables being constant, the Net Defaulted Receivables as a percentage of
Average Receivables outstanding remaining constant at the levels indicated in
the tables above for the Collection Period ended September 18, 1996, the Series
1992-B Certificates are not outstanding and revolving, there is sharing of
principal among series and no Amortization Event, Servicer Event of Default
(defined below) or default by the Transferor under the Purchase and Sale
Agreement occurring during the Controlled Amortization Period, the Transferor
believes that there will be sufficient funds on each Distribution Date of the
Controlled Amortization Period to pay the Controlled Amortization Amount on such
date. However, the actual rate of payment of principal to Certificateholders
will depend, among other factors, on the rate of repayment, the rate of default
by cardholders and the amount of Aggregate Receivables.
In the event of the occurrence of an Amortization Event, the Rapid
Amortization Period will begin on the day on which such Amortization Event
occurs or is deemed to occur. During the Rapid Amortization Period,
distributions of principal to Class A Certificateholders will not be subject to
the Controlled Amortization Amount. Principal Collections allocable to the
Certificateholders' Interest will no longer be distributed to the Transferor but
instead will be distributed as principal payments to the Class A
Certificateholders and, following the final principal payment to the Class A
Certificateholders, to the Class B Certificateholders. Although the Transferor
believes that the likelihood of an Amortization Event occurring is remote, there
can be no assurance that an Amortization Event will not occur. See 'Description
of the Offered Certificates and the Agreement-- Amortization Events.'
The following table sets forth the cardholder payment rates for Eligible
Accounts under the Credit Card Program. For the groups of nine or twelve
Collection Periods noted, the table gives the lowest payment rate for any
Collection Period, the highest payment rate for any Collection Period, and the
average payment rate for all nine or twelve Collection Periods. The payment rate
for any Collection Period represents the payments received under Eligible
Accounts for the Collection Period, divided by the Receivables outstanding under
Eligible Accounts as of the beginning of such Collection Period. Payments shown
in the table include amounts which would be deemed Principal Collections and
Finance Charge Collections (except Recoveries on Defaulted Receivables, certain
credit-related insurance proceeds and Merchant Fees) under the Agreement.
MONTHLY PAYMENT RATES
<TABLE>
<CAPTION>
TWELVE COLLECTION
PERIODS
NINE COLLECTION ENDING DECEMBER 18,
PERIODS ENDING -----------------------
PAYMENT RATE SEPT. 18, 1996 1995 1994 1993
- --------------------------------------------------- ---------------- ----- ----- -----
<S> <C> <C> <C> <C>
Low................................................ 11.00% 11.60% 11.30% 12.14%
High............................................... 13.34% 13.07% 12.87% 13.62%
Average............................................ 12.51% 12.30% 12.41% 13.20%
</TABLE>
48
<PAGE>
The amount of Collections may vary from period to period, due to seasonal
variations, general economic conditions and payment habits of individual
cardholders. Accordingly, there can be no assurance that future cardholder
monthly payment rate experience, and thus the rate at which Certificateholders
could expect to receive payments of principal on their Offered Certificates
during any Rapid Amortization Period, will be similar to the historical
experience shown above. See 'Risk Factors.'
THE LETTER OF CREDIT BANK
The Servicer Letter of Credit and Transferor Letter of Credit has been
issued by The Sumitomo Bank, Limited, New York Branch (the 'Letter of Credit
Bank'), a New York state licensed branch of The Sumitomo Bank, Limited (the
'Bank'). Upon request therefor, the Bank will provide without charge to each
person to whom this Prospectus is delivered, a copy of the annual report of the
Bank which contains the consolidated statements of the Bank for fiscal year
ended 1995. Written requests should be sent to The Sumitomo Bank, Limited, New
York Branch, 277 Park Avenue, New York, NY 10172 Attention: Loan Operations.
DESCRIPTION OF THE OFFERED CERTIFICATES AND THE AGREEMENT
The Series 1996-1 Interests will be issued pursuant to the Agreement, as
supplemented by the Series 1996-1 Supplement, each entered into among the
Transferor, the Servicer and the Trustee, substantially in the forms filed as
exhibits to the Registration Statement of which this Prospectus is a part.
Pursuant to the Agreement, the Transferor may execute further Supplements
thereto between the Transferor and the Trustee in order to issue additional
Series. See '--Exchanges.' The Trustee will provide a copy of the Agreement
(without exhibits or schedules), including any Supplements, to Offered
Certificateholders without charge upon written request. The following summary
describes certain terms of the Agreement and the Series 1996-1 Supplement.
GENERAL
The Class A Certificates and the Class B Certificates will represent
undivided interests in the Trust, including the right to receive the Class A
Invested Percentage and the Class B Invested Percentage, respectively, of all
Collections received with respect to the Receivables in the Trust. The Trust
Assets will consist of the following: (i) the Receivables existing on or created
after the Cut-off Date under the Accounts established under the Credit Card
Program, (ii) Receivables arising under designated Accounts established under
Alternative Programs, (iii) all amounts due or to become due on or after the
Cut-off Date, (iv) all Recoveries with respect to previously Defaulted
Receivables, net of reasonable expenses of the Servicer incurred and deducted
from such amounts or payments, (v) the right to receive certain Merchant Fees
attributed to cardholder charges giving rise to Receivables, (vi) all of the
Transferor's right, title and interest under the Purchase and Sale Agreement and
the Participation Agreement, (vii) the proceeds of the Servicer Letter of Credit
and the Transferor Letter of Credit, (viii) all moneys on deposit in the
Collection Account and any other accounts established for the benefit of any
other Series (which other accounts will not be available to Certificateholders),
(ix) payments made in respect of Enhancements issued with respect to any other
Series (the drawing on or payment of such Enhancement not being available to
Certificateholders) and (x) all proceeds of any of the foregoing. The term
'Enhancement' is defined in the Agreement as any letter of credit, liquidity
facility, guaranteed rate agreement, maturity guaranty, facility, cash
collateral account, cash collateral guaranty, tax protection agreement, interest
rate swap or other contract or agreement for the benefit of the
certificateholders of any Series issued by the Trust. As of the Closing Date,
the Initial Class A Invested Amount will be $200,000,000 and the Initial Class B
Invested Amount will be $28,205,129.
The Transferor will initially hold the interest (the 'Transferor Interest')
not represented by the Series 1996-1 Interests, the Bridgestone/Firestone
Certificate and any other Series of certificates issued or to be issued. The
Transferor Interest will be evidenced by the Exchangeable Transferor Certificate
and will represent an undivided interest in the Trust, which may vary from month
to month. The Transferor has participated its interest in the Exchangeable
Transferor Certificate to Bridgestone/Firestone pursuant to the Participation
Agreement and will participate its interest in the Subordinated Transferor
Certificate to Bridgestone/Firestone pursuant to the Participation Agreement.
The issuance of the Class B Certificates, the Collateral Interest and the
Subordinated Transferor Certificate are conditions precedent to the issuance of
the Class A Certificates. The issuance of the
49
<PAGE>
Collateral Interest and the Subordinated Transferor Certificate are conditions
precedent to the issuance of the Class B Certificates.
Interest will accrue on the unpaid principal amount of the Class A
Certificates at a per annum rate equal to the Class A Certificate Rate and,
except as otherwise provided herein, be distributed to the Class A
Certificateholders monthly on each Distribution Date, commencing December, 1996,
in an amount equal to Class A Monthly Interest. 'Class A Monthly Interest'
equals, with respect to any Distribution Date, one-twelfth of the product of (i)
the Class A Certificate Rate and (ii) the outstanding principal balance of the
Class A Certificates as of the preceding Distribution Date (after subtracting
therefrom the aggregate amount of all distributions of principal made to the
Class A Certificateholders on such Distribution Date) or, with respect to the
first Distribution Date, the Initial Class A Invested Amount, provided, however,
that with respect to the initial Distribution Date, Class A Monthly Interest
shall equal $ .
Interest will accrue on the unpaid principal amount of the Class B
Certificates at a per annum rate equal to the Class B Certificate Rate and,
except as otherwise provided herein, be distributed to the Class B
Certificateholders monthly on each Distribution Date, commencing December, 1996,
in an amount equal to Class B Monthly Interest. 'Class B Monthly Interest'
equals, with respect to any Distribution Date, one-twelfth of the product of (i)
the Class B Certificate Rate and (ii) the outstanding principal balance of the
Class B Certificates as of the preceding Distribution Date (after subtracting
therefrom the aggregate amount of all distributions of principal made to the
Class B Certificateholders on such Distribution Date) or, with respect to the
first Distribution Date, the Initial Class B Invested Amount, provided, however,
that with respect to the initial Distribution Date, Class B Monthly Interest
shall equal $ .
No principal payments will be made to the Class A Certificateholders until
the Distribution Date occurring in December, 1996, or, upon the occurrence of an
Amortization Event as described herein. No principal payments will be made to
the Class B Certificateholders until the final principal payment has been made
to the Class A Certificateholders. No principal payments will be made to the
Collateral Interest Holder until the final principal payment has been made to
the Class B Certificateholders. The holder of the Subordinated Transferor
Certificate will not receive any payments of principal until the Offered
Certificateholders and the Collateral Interest Holder have received all payments
of principal due them. On each Distribution Date with respect to the Revolving
Period (and, at the option of the Servicer, more frequently), Principal
Collections allocable to the Certificateholders' Interest will, subject to
certain limitations, including certain Excess Finance Charge Collections and the
reallocation of any Reallocated Principal Collections with respect to the
related Collection Period, be applied as Shared Principal Collections and the
balance will be paid to the Transferor in respect of the Transferor Interest to
maintain the Class A Invested Amount, the Class B Invested Amount, the
Collateral Interest Invested Amount and the Subordinated Transferor Amount.
Unless and until an Amortization Event shall have occurred, on each
Distribution Date with respect to the Controlled Amortization Period, all
Principal Collections allocable to the Certificateholders' Interest plus certain
other amounts comprising Class A Monthly Principal and principal allocable to
the Class B Certificates and the Collateral Interest and certain other amounts
will no longer be paid to the Transferor as described above but instead an
amount thereof up to the Controlled Amortization Amount will be distributed to
the Class A Certificateholders. Any such collections in excess of the Controlled
Amortization Amount will be paid to the Transferor in respect of the Transferor
Interest.
Distributions of principal and interest on the Offered Certificates will be
made by the Trustee directly to Certificateholders in accordance with the
procedures set forth herein and in the Agreement. Interest payments and any
principal payments on each Distribution Date will be made to Certificateholders
in whose name the Offered Certificates were registered (expected to be Cede, as
nominee of DTC) at the close of business on the 15th day of the calendar month
preceding such Distribution Date (each a 'Record Date') (however, the final
payment on any Offered Certificates will be made only upon presentation and
surrender of such Offered Certificate). Distributions will be made to DTC in
immediately available funds.
The Offered Certificates will initially be represented by one or more
Certificates registered in the name of the nominee of The Depository Trust
Company ('DTC') (together with any successor depository selected by the
Transferor, the 'Depository') except as set forth below. The interests of
holders of beneficial interests in the Class A Certificates and the Class B
Certificates ('Certificate Owners') will be available for purchase in
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denominations of $1,000 and integral multiples thereof in book-entry form only.
The Transferor has been informed by DTC that DTC's nominee will be Cede.
Accordingly, Cede is expected to be the holder of record of the Offered
Certificates. Unless and until Definitive Certificates are issued under the
limited circumstances described herein, no Certificate Owner will be entitled to
receive a certificate representing such person's interest in the Offered
Certificates. All references herein to actions by Certificateholders shall refer
to actions taken by DTC upon instructions from its participating organizations
(the '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
Class A Certificates and the Class B 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
Holders of the Certificates or the Offered Certificates (the 'Offered
Certificates') may hold through DTC (in the United States) or, solely in the
case of the Offered Certificates, CEDEL or Euroclear (in Europe) if they are
participants of such systems, or indirectly through organizations that are
participants in such systems. The Certificates may not be held, directly or
indirectly, through CEDEL or Euroclear.
Cede, as nominee for DTC, will hold the Offered Certificates. CEDEL and
Euroclear will hold omnibus positions in the Offered Certificates on behalf of
the CEDEL Participants and the Euroclear Participants, respectively, through
customers' securities accounts in CEDEL's and Euroclear's names on the books of
their respective depositaries (collectively, the 'Depositaries'), which in turn
will hold such positions in customers' securities accounts in the Depositaries'
names on the books of DTC.
Transfers between DTC's participating organizations (the 'Participants')
will occur in accordance with DTC rules. Transfers between CEDEL Participants
and Euroclear Participants will occur in the ordinary way in accordance with
their applicable rules and operating procedures.
Cross-market transfers between persons holding directly or indirectly
through DTC, on the one hand, and directly or indirectly through CEDEL
Participants or Euroclear Participants, on the other, will be effected in DTC in
accordance with DTC rules on behalf of the relevant European international
clearing system by its Depositary; however, such cross-market transactions will
require delivery of instructions to the relevant European international clearing
system by the counterparty in such system in accordance with its rules and
procedures and within its established deadlines (European time). The relevant
European international clearing system will, if the transaction meets its
settlement requirements, deliver instructions to its Depositary to take action
to effect final settlement on its behalf by delivering or receiving securities
in DTC, and making or receiving payment in accordance with normal procedures for
same-day funds settlement applicable to DTC. CEDEL Participants and Euroclear
Participants may not deliver instructions directly to the Depositaries.
Because of time-zone differences, credits of securities in CEDEL or
Euroclear as a result of a transaction with a Participant will be made during
the subsequent securities settlement processing, dated the business day
following the DTC settlement date, and such credits or any transactions in such
securities settled during such processing will be reported to the relevant CEDEL
Participant or Euroclear Participant on such business day. Cash received in
CEDEL or Euroclear as a result of sales of securities by or through a CEDEL
Participant or a Euroclear Participant to a 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 a description of transfers between persons holding directly or
indirectly through DTC, see also 'Global Clearance, Settlement and Tax
Documentation Procedures' in Annex II to this Prospectus.
Cedel Bank, societe anonyme ('CEDEL') is incorporated under the laws of
Luxembourg as a professional depository. CEDEL holds securities for its
participating organizations ('CEDEL Participants') and facilitates the clearance
and settlement of securities transactions between CEDEL Participants through
electronic book-entry changes in accounts of CEDEL Participants, thereby
eliminating the need for physical movement of certificates. Transactions may be
settled in CEDEL in any of 28 currencies, including United States dollars. CEDEL
provides to its CEDEL Participants, among other things, services for
safekeeping, administration, clearance and settlement of internationally traded
securities and securities lending and borrowing. CEDEL
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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.
The Euroclear System was created in 1968 to hold securities for
participants of the Euroclear System ('Euroclear Participants') and to clear and
settle transactions between Euroclear Participants through simultaneous
electronic book-entry delivery against payment, thereby eliminating the need for
physical movement of certificates and any risk from lack of simultaneous
transfers of securities and cash. Transactions may now be settled in Euroclear
in any of 32 currencies, including United States dollars. The Euroclear System
includes various other services, including securities lending and borrowing, and
interfaces with domestic markets in several countries generally similar to the
arrangements for cross-market transfers with DTC described in 'Global Clearance,
Settlement and Tax Documentation Procedures' in Annex II of the Prospectus. The
Euroclear System is operated by Morgan Guaranty Trust Company of New York,
Brussels, Belgium office (the 'Euroclear Operator' or 'Euroclear'), under
contract with Euroclear Clearance System, S.C., a Belgian cooperative
corporation (the 'Cooperative'). All operations are conducted by the Euroclear
Operator, and all Euroclear securities clearance accounts and Euroclear cash
accounts are accounts with the Euroclear Operator, not the Cooperative. The
Cooperative establishes policy for the Euroclear System on behalf of Euroclear
Participants. Euroclear Participants include banks (including central banks),
securities brokers and dealers and other professional financial intermediaries
and may include the Underwriters. Indirect access to the Euroclear System is
also available to other firms that clear through or maintain a custodial
relationship with a Euroclear Participant, either directly or indirectly.
The Euroclear Operator is the Belgian branch of a New York banking
corporation which is a member bank of the Federal Reserve System. As such, it is
regulated and examined by the Board of Governors of the Federal Reserve System
and the New York State Banking Department, as well as the Belgian Banking
Commission.
Securities clearance accounts and cash accounts with the Euroclear Operator
are governed by the Terms and Conditions Governing Use of Euroclear and the
related Operating Procedures of the Euroclear System and applicable Belgian law
(collectively, the 'Terms and Conditions'). The Terms and Conditions govern
transfers of securities and cash within the Euroclear System, withdrawal of
securities and cash from the Euroclear System, and receipts of payments with
respect to securities in the Euroclear System. All securities in the Euroclear
System are held on a fungible basis without attribution of specific certificates
to specific securities clearance accounts. The Euroclear Operator acts under the
Terms and Conditions only on behalf of Euroclear Participants and has no record
of or relationship with persons holding through Euroclear Participants.
Distributions with respect to Offered 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 'Federal Income Tax Consequences' herein and 'Global Clearance,
Settlement and Tax Documentation Procedures' in Annex II to this Prospectus.
CEDEL or the Euroclear Operator, as the case may be, will take any other action
permitted to be taken by a Certificateholder under the Indenture on behalf of a
CEDEL Participant or Euroclear Participant only in accordance with its relevant
rules and procedures and subject to its Depositary's ability to effect such
actions on its behalf through DTC.
Although DTC, CEDEL and Euroclear have agreed to the foregoing procedures
in order to facilitate transfers of Offered 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.
In the event that any of DTC, CEDEL or Euroclear should discontinue its
services, the Administrator would seek an alternative depository (if available)
or cause the issuance of Definitive Securities to the owners thereof or their
nominees in the manner described in 'Global Clearance, Settlement and Tax
Document Procedures' in Annex II to this Prospectus.
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DEFINITIVE CERTIFICATES
The Offered Certificates will be issued in fully registered, certificated
form to Certificate Owners or their nominees (the 'Definitive Certificates'),
rather than to DTC or its nominee, only if (i) the Transferor advises the
Trustee in writing that DTC is no longer willing or able to discharge properly
its responsibilities as Depository with respect to the Offered Certificates, and
the Trustee or the Transferor is unable to locate a qualified successor, (ii)
the Transferor, at its option, elects to terminate the book-entry system through
DTC, or (iii) after the occurrence of a Servicer Event of Default, Certificate
Owners representing in the aggregate not less than a majority of the aggregate
invested amount of all Series then issued and outstanding advise the Trustee and
DTC through Participants in writing that the continuation of a book-entry system
through any Depository is no longer in the best interest of the Certificate
Owners.
Upon the occurrence of any of the events described in the immediately
preceding paragraph, the Trustee, through DTC, is required to notify all
Participants of the availability through DTC of Definitive Certificates. Upon
surrender by DTC to the Trustee of the Definitive Certificates representing the
Offered Certificates and instructions for re-registration, the Trustee will
issue the Offered Certificates as Definitive Certificates, and thereafter the
Trustee will recognize the holders of such Definitive Certificates as holders
under the Agreement ('Holders').
Distributions of principal and interest on the Offered Certificates will be
made by the Paying Agent directly to Holders of Definitive Certificates in
accordance with the procedures set forth herein and in the Agreement. Interest
and principal payments on each Distribution Date will be made to Holders in
whose names the Definitive Certificates were registered at the close of business
on the related Record Date. Distributions will be made by check mailed to the
address of such Holder as it appears on the certificate register. The final
payment on any Offered Certificate (whether Definitive Certificates or the
Offered Certificates registered in the name of Cede representing the Offered
Certificates), however, will be made only upon presentation and surrender of
such Offered 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 day of such final
distribution.
Definitive Certificates will be transferable and exchangeable at the
offices of the transfer agent and registrar, which shall initially be the
Trustee. No service charge will be imposed for any registration of transfer or
exchange, but the transfer agent and registrar may require payment of a sum
sufficient to cover any tax or other governmental charge imposed in connection
therewith.
CONVEYANCE OF RECEIVABLES
Pursuant to the Agreement, the Transferor has transferred and assigned to
the Trust all of its right, title and interest in and to Eligible Receivables in
the Accounts outstanding as of the Cut-off Date, all of the Eligible Receivables
thereafter created under the Eligible Accounts and the proceeds of all of the
foregoing (including Recoveries with respect to previously charged-off
Receivables). Prior to such transfer and assignment, and pursuant to the
Purchase and Sale Agreement, the Originator sold to the Transferor all Eligible
Receivables existing under the Eligible Accounts as of the Cut-off Date.
Pursuant to the Purchase and Sale Agreement, provided, among other things, that
the Transferor is not in default of its obligations under the Purchase and Sale
Agreement and no Servicer Event of Default or Originator insolvency shall have
occurred, the Originator has agreed to sell and assign to the Transferor, and
the Transferor has agreed to purchase from the Originator, on each business day,
all Eligible Receivables arising in the Accounts. On the Closing Date, the
Trustee will authenticate the Offered Certificates and deliver such Offered
Certificates to the Transferor which will in turn deliver the Offered
Certificates to the Underwriters against payment of the net proceeds of the sale
of the Offered Certificates. The Trustee will also deliver a newly issued
Exchangeable Transferor Certificate and the Subordinated Transferor Certificate
to the Transferor.
In connection with the sale of the Receivables by the Originator to the
Transferor and the transfer of the Receivables by the Transferor to the Trust,
the Originator and Bridgestone/Firestone will indicate in their computer files
that such Receivables have been sold to the Transferor and then transferred to
the Trust and the Transferor will indicate in its files that such Receivables
have been transferred from the Transferor to the Trust. Bridgestone/Firestone,
as initial Servicer, will retain and will not deliver to the Trustee any other
records or agreements relating to the Accounts or the Receivables. Except as set
forth above, the records and agreements
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relating to the Accounts and the Receivables will not be segregated from those
relating to other consumer accounts and receivables and neither the computer
files nor the physical documentation relating to the Accounts or Receivables
will be stamped or marked to reflect the transfer of Receivables to the Trust.
The Trustee will have reasonable access to such records and agreements as
required by applicable law or to enforce the rights of the Certificateholders.
The Originator will file one or more financing statements under the Uniform
Commercial Code in accordance with Ohio state law to perfect the Transferor's
interest in the Receivables. The Transferor, in turn, will file one or more
financing statements in accordance with Massachusetts state law to perfect the
Trust's interest in the Receivables. See 'Risk Factors' and 'Certain Legal
Aspects of the Receivables.'
ADDITION OF ACCOUNTS
The Accounts consist of Eligible Accounts established under the Credit Card
Program as of and subsequent to the Cut-off Date. In addition, the Transferor is
permitted (subject to certain limitations and conditions) to designate from time
to time eligible Accounts established under Alternative Programs ('Eligible
Alternative Accounts') and to convey to the Trust Receivables of such Eligible
Additional Accounts, whether such Receivables are then existing or thereafter
created until either the Ten Percent Number Test (as defined below) or Ten
Percent Aggregate Test (as defined below) is met. Thereafter, if the Transferor
has not obtained the consent of the applicable rating agencies, as described
below, additional accounts and additional receivables from Alternative Programs
shall not be transferred to the Trust.
Such 'Alternative Programs' are programs for which CFNA underwrites and
originates Accounts and Receivables and may include, but are not limited to, the
establishment of additional private label credit card programs and the offering
of general purpose credit cards. As of the Closing Date, the Originator has not
established any of these Alternative Programs. The 'Ten Percent Number Test' is
determined as of any date on which Alternative Accounts are to be added to the
Trust and met when the number of Eligible Alternative Accounts as of such date
equals 10% of the number of all Accounts in the Trust as of such date. The 'Ten
Percent Aggregate Test' is determined as of any date on which Alternative
Accounts are to be added to the Trust and met when the dollar amount of
Receivables from such Eligible Alternative Accounts as of such date equals 10%
of the Aggregate Receivables as of such date. See 'Description of the Offered
Certificates and the Agreement--Addition of Accounts.'
Once the Transferor has met the Ten Percent Number Test or the Ten Percent
Aggregate Test, the Transferor must request written confirmation from the
applicable rating agencies to transfer to the Trust additional Accounts related
to an Alternative Program and all Receivables arising from such Accounts.
In addition and subject to certain limitations set forth in the Agreement,
on an annual basis, the Transferor will be permitted to include additional
Eligible Accounts and all Eligible Receivables arising from such Eligible
Accounts up to an aggregate number equal to 20% of the total number of Eligible
Accounts already included in the Trust without written confirmation from the
applicable rating agencies.
REMOVAL OF ACCOUNTS
Subject to the conditions set forth in the next succeeding sentence, on
each Determination Date on which the Transferor Amount (plus the B/F Amount and
any amounts available under the Transferor Letter of Credit) exceeds 7% of the
aggregate invested amount of all outstanding Series of certificates issued by
the Trust, the Transferor may, but shall not be obligated to, accept all
Receivables and proceeds thereof from certain Accounts offered to it by the
Trustee ('Removed Accounts'), without notice to the Certificateholders, in an
aggregate amount not greater than the lesser of (a) the excess of the Transferor
Amount (plus amounts available to be drawn under the Transferor Letter of Credit
or the Transferor Escrow Account plus the B/F Amount) over 7% of the Aggregate
Certificateholders' Interest and (b) 5% of Aggregate Receivables on such date of
removal. The Transferor may, at its sole discretion, accept such offer in an
aggregate amount equal to an amount not greater than the excess of the
Transferor Amount (plus the B/F Amount and any amounts available under the
Transferor Letter of Credit) over 7% of the aggregate invested amount of all
outstanding Series of certificates issued by the Trust. The Transferor is
permitted to designate and require reassignment to it of the Receivables from
Removed Accounts only upon satisfaction of the conditions set forth in the
Agreement, including the following conditions: (i) the Trustee shall have
executed and delivered to the Transferor a written reassignment and the
Transferor shall
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have delivered a computer file or microfiche list containing a true and complete
list of all Accounts in the Trust after such removal, the Accounts to be
identified by account number, (ii) the Transferor shall represent and warrant
that no selection procedure used by the Transferor which is adverse to the
interests of the certificateholders was utilized in selecting the Removed
Accounts, (iii) the removal of any Receivables of any Removed Accounts shall
not, in the reasonable belief of the Transferor, cause an Amortization Event to
occur, (iv) the Transferor shall have delivered written notice twenty days prior
to such removal to each Rating Agency which has rated any outstanding Series and
prior to the date on which such Receivables are to be removed the Trustee shall
have received confirmation from each Rating Agency of its intention not to
reduce or withdraw the rating of any Series of certificates as a result of such
removal and (v) the Transferor shall have delivered to the Trustee an officer's
certificate confirming the items set forth in clauses (i) through (iv) above.
EXCHANGES
The Agreement provides for the Trustee to issue four types of certificates:
(i) one or more Series of certificates which generally are transferable and have
the characteristics described below, (ii) the Bridgestone/Firestone Certificate,
which is currently and will continue to be held by Bridgestone/Firestone and
which generally is not transferable, (iii) the Exchangeable Transferor
Certificate, a certificate which evidences the Transferor Interest, and (iv) the
Subordinated Transferor Certificate, a certificate of the Transferor which
evidences an interest subordinate to the Transferor Certificate. The
Exchangeable Transferor Certificate was initially held by the Transferor and
participated to Bridgestone/Firestone pursuant to a Participation Agreement by
and between the Transferor and Bridgestone/Firestone (the 'Participation
Agreement'). The Subordinated Transferor Certificate will also be participated
to Bridgestone/Firestone pursuant to the Participation Agreement. The Agreement
also provides that, pursuant to any one or more Supplements, the Transferor may
tender the Exchangeable Transferor Certificate, or the Exchangeable Transferor
Certificate and the certificates evidencing any Series of certificates to the
Trustee in exchange for one or more new Series and a reissued Exchangeable
Transferor Certificate. Under the Agreement, the Transferor may define, with
respect to any newly issued Series: (i) its name or designation, (ii) its
initial principal amount (or method for calculating such amount), (iii) its
coupon rate (or formula for the determination thereof), (iv) the interest
payment date or dates and the date or dates from which interest shall accrue,
(v) the method for allocating collections to certificateholders, (vi) the names
of any accounts to be used by such Series and the terms governing the operation
of any such accounts, (vii) the percentage used to calculate monthly servicing
fees, (viii) the minimum transferor interest percentage, (ix) the minimum amount
of Aggregate Receivables required to be maintained by the Transferor, (x) the
issuer and terms of any Enhancement with respect thereto, (xi) the base rate
applicable to such Series, (xii) the terms on which the certificates of such
Series may be repurchased by the Transferor or remarketed to other investors,
(xiii) the Series termination date, (xiv) any deposit into any account
maintained for the benefit of certificateholders, (xv) the number of classes of
such Series, and if more than one class, the rights and priorities of each such
class, (xvi) the extent to which the certificates of such Series will be
issuable in bearer form and any limitations imposed thereon, (xvii) the priority
of any Series with respect to any other Series, (xviii) the rights of the holder
of the Exchangeable Transferor Certificate that have been transferred to the
holders of such Series and (xix) any other relevant terms (all such terms, the
'Principal Terms' of such Series). None of the Transferor, the Servicer, the
Trustee or the Trust is required to obtain the consent of any Certificateholder
to issue any additional Series. However, as a condition of an Exchange, the
Transferor will deliver to the Trustee written confirmation that the Exchange
will not result in the applicable Rating Agency reducing or withdrawing its
rating of any outstanding Series or otherwise adversely affect any rating on any
then outstanding Series, including the Offered Certificates. The Transferor may
offer any Series to the public under a Disclosure Document in transactions
either registered under the Act 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 Transferor. See Annex I for a listing of
Outstanding Series. The Transferor may offer, from time to time, additional
Series.
The Agreement provides that the Transferor 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 be in their
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revolving periods, while other Series are amortizing. Moreover, each Series may
have the benefits of a form of Enhancement issued by issuers different from the
issuers of the form of Enhancement with respect to any other Series. Under the
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 Transferor may deliver a different form of Enhancement
agreement. The Agreement also provides that the Transferor may specify different
coupon rates and monthly servicing fees with respect to each Series. Finance
Charge Collections not used to pay interest on the certificates, the monthly
servicing fee, the investor default amount or investor charge-offs with respect
to any Series will be allocated as provided in such form of Enhancement
agreement, if applicable. The Transferor also has the option under the Agreement
to vary between Series the terms upon which a Series may be repurchased by the
Transferor or remarketed to other investors. Additionally, certain Series may be
subordinated to other Series, or classes within a Series may have different
priorities. No Series of certificates may be senior to this Series 1996-1
Interests. The Class B Certificates will be subordinate to the Class A
Certificates but not to any other Series of certificates. The Collateral
Interest and the Subordinated Transferor Certificate will be subordinated to the
Class A and Class B Certificates but not to any other Series of Certificates.
There is no limit to the number of Exchanges that the Transferor may perform
under the Agreement. The Trust will terminate only as provided in the Agreement.
Under the Agreement and pursuant to a Supplement, an Exchange may only
occur upon the satisfaction of certain conditions provided in the Agreement.
Under the Agreement, the Transferor may perform an Exchange by notifying the
Trustee, at least five days in advance of the date upon which the Exchange is to
occur. Under the Agreement, the notice will state the designation of any Series
to be issued on the date of the Exchange and, with respect to each such Series:
(i) its initial principal amount (or method for calculating such amount) and
(ii) its certificate rate. On the date of the Exchange, the Agreement provides
that the Trustee will issue any such Series only upon delivery to it of the
following: (i) a Supplement in form satisfactory to the Trustee signed by the
Transferor and specifying the Principal Terms of such Series, (ii) an opinion of
counsel to the effect that certificates of such Series will be characterized as
either indebtedness or an interest in a partnership under existing law for
Federal income tax purposes and that the issuance of such Series will not
materially adversely impact the Federal income tax characterization of any
outstanding Series that have been the subject of a previous opinion of counsel,
(iii) the Enhancement, if any, and the form of Enhancement agreement, if any,
with respect thereto executed by the Transferor and the provider of the form of
Enhancement, (iv) written confirmation from the applicable Rating Agency that
the Exchange will not result in such Rating Agency reducing or withdrawing its
rating on any outstanding Series or otherwise adversely affect any rating on any
then outstanding Series and (v) the existing Exchangeable Transferor Certificate
and the applicable certificates of the Series to be exchanged, if applicable.
Upon satisfaction of such conditions, the Trustee will cancel the existing
Exchangeable Transferor Certificate and the certificates of the exchange Series,
if applicable, and issue the new Series and a new Exchangeable Transferor
Certificate.
COVENANTS, REPRESENTATIONS AND WARRANTIES
The Transferor will covenant to the Trustee for the benefit of all
certificateholders of all Series which from time to time may have an interest in
the Trust that, as to the Receivables and the Accounts, unless cured within 60
days from the earlier to occur of the discovery of such event by the Transferor
or Bridgestone/Firestone or receipt of notice by the Transferor or
Bridgestone/Firestone from the Trustee, the Servicer or the Originator, the
Transferor will accept the transfer of any Receivable which is determined to be
an Ineligible Receivable. Additionally, the Transferor covenants in the
Agreement to accept, under certain conditions, the transfer of each Receivable
which is subject to certain specified liens immediately upon the discovery of
such liens.
The Transferor shall accept the transfer of any Receivable as described
above (an 'Ineligible Receivable') by paying the principal balance of such
Receivables to the Trust (the 'Transfer Deposit Amount'). In the event that such
payment is not made, the principal balance of such Receivables shall be deducted
from the amount of Aggregate Receivables used to calculate the Transferor
Interest; provided, however, that if such deduction would reduce the Transferor
Interest below zero or would otherwise not be permitted by law, the principal
balance of such Receivables shall be deducted from the B/F Amount. In the event
that such removal would reduce the B/F Amount below zero, such Ineligible
Receivable shall not be removed from the Trust. Any such deposit shall be
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treated as a collection of such Receivable and be allocated as provided in the
Agreement. Such remedy with respect to such breach will constitute the sole
remedy of the Certificateholders in the event of any such breach.
In the Agreement, the Transferor has made additional representations and
warranties as to the following: (i) the organization and good standing of the
Transferor and the legality and enforceability of the Agreement against the
Transferor, (ii) that the Agreement constitutes a valid transfer to the Trust of
all right, title and interest of the Transferor in and to the Receivables,
whether then existing or thereafter created in the applicable Accounts, and the
proceeds thereof (including amounts in any of the accounts established for the
benefit of the Certificateholders) or the grant of a first priority perfected
security interest in such Receivables and the proceeds thereof (including
amounts in any of the accounts established for the benefit of the
Certificateholders), which is effective as to each Receivable upon the transfer
thereof to the Trust or upon its creation, as the case may be, (iii) that all
material information with respect to the Accounts and Receivables provided to
the Trustee was true and correct in all material respects as of the Closing
Date, (iv) each Receivable conveyed to the Trust is free and clear of liens
(except for liens which may be permitted by the Agreement), (v) the Transferor
has obtained all consents, licenses, approvals or authorizations required in
connection with the conveyance of the Receivables to the Trust, (vi) the due
qualification of the Transferor, (vii) the due authorization of the Transferor
to execute and deliver the Purchase and Sale Agreement, the Participation
Agreement, the Agreement and the Series 1996-1 Interests, (viii) the creation of
a binding obligation of the Transferor by the Purchase and Sale Agreement, the
Participation Agreement and the Agreement, (ix) the non-violation by the
execution and delivery of the Purchase and Sale Agreement, the Participation
Agreement, the Agreement and the Series 1996-1 Interests of any agreement
binding the Transferor or its property, (x) the non-existence of any proceedings
threatening the transfer of the Receivables or the issuance of the Series 1996-1
Interests and (xi) the eligibility of each Receivable. In the event that any of
the representations and warranties described in clauses (ii), (iii), (iv), (v)
and (viii) above are not true and correct and such event has a material adverse
effect on the interests of holders of the certificates of all Series, either the
Trustee or the holders of certificates evidencing undivided interests in the
Trust aggregating more than 50% of the outstanding principal balance of all
Series, by written notice to the Transferor (and to the Trustee and the
Servicer, if given by the certificateholders), may direct the Transferor to
purchase all certificates of all Series outstanding (including the Series 1996-1
Interests) within 60 days of such notice. The Transferor shall be obligated to
purchase all Series on a Distribution Date occurring within such applicable
period, unless the representations and warranties shall then be satisfied in all
material respects and any adverse effect on the certificateholders caused
thereby shall have been cured. The purchase price for the certificates shall be
equal to the aggregate invested amount of all Series on the Record Date related
to the applicable payment date on which the purchase is scheduled to be made
plus an amount equal to all interest accrued but unpaid on all Series at the
applicable certificate rates through the end of the interest accrual periods of
such Series. The payment of such purchase price into the Collection Account in
immediately available funds will be considered a prepayment in full of all
Receivables and will be paid in full to the certificateholders upon presentation
and surrender of their certificates. The obligations described above shall be
the sole remedies respecting the foregoing representations, warranties and
events available to the Trustee or the certificateholders. Pursuant to the
Participation Agreement, Bridgestone/Firestone will agree, for the benefit of
the Trustee, to purchase from the Transferor any Ineligible Receivable
repurchased by the Transferor from the Trust and any certificates purchased by
the Transferor as described above.
An 'Eligible Receivable' is defined to mean each receivable (i) which has
risen under an Eligible Account or an Eligible Alternative Account (as defined
below), (ii) which was created in compliance with all requirements of law and
pursuant to an accountholder agreement which complies with all requirements of
law in either case other than those with respect to which there is no reasonable
likelihood that a failure to comply could have a material adverse effect upon
certificateholders, (iii) with respect to which all consents, licenses,
approvals or authorizations of, or registrations with, any governmental
authority required to be obtained or given in connection with the creation of
such Receivable or the execution, delivery and performance of the related
accountholder agreement have been duly obtained or given and are in full force
and effect as of such date of creation, (iv) as to which the Trust will at all
times have good and marketable title, free and clear of all liens, encumbrances,
charges and security interests (except those permitted by the Agreement), (v)
which has been the subject of either a valid transfer and assignment from the
Transferor to the Trust of all of the Transferor's right, title and interest
therein or the grant to the Trust of a perfected security interest therein (and
in the proceeds thereof) which is prior to any interest of all third-parties,
effective until the termination of the Trust, (vi) which will at all times be
the legal,
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valid and binding payment obligation of the accountholder thereof enforceable
against such accountholder in accordance with its terms, subject to certain
bankruptcy and equity related exceptions, (vii) which constitutes either an
'account' or a 'general intangible' under and as defined in Article 9 of the UCC
as then in effect in the States of New York and Ohio and the Commonwealth of
Massachusetts, (viii) which, at the time of its transfer to the Trust, has not
been waived or modified except as permitted by the Agreement, (ix) which is not
subject to any right of rescission, setoff, counterclaim or other defense
(including the defense of usury), other than certain bankruptcy and equity
related defenses and adjustments permitted by the Agreement to be made by the
Servicer, (x) as to which each of the Originator and the Transferor has
satisfied all obligations to be fulfilled pursuant to the credit card agreement
or in connection with the transfer of the Receivable at the time of transfer of
the Receivable to the Trust or at the time of sale of such Receivable to the
Transferor and (xi) as to which the Originator and the Transferor have done
nothing, at the time of its transfer to the Trust, to impair the rights of the
Trust or certificateholders therein. An 'Eligible Account' is defined to mean an
account (i) which has been established under the Credit Card Program, (ii) which
is denominated in U.S. dollars, (iii) the credit card or cards related to which
have not been reported lost or stolen, (iv) the obligor on which has provided,
as its most recent billing address, an address with a zip code in the United
States or its territories or possessions, (v) which is not an account of an
obligor in bankruptcy or an account as to which the Servicer has any confirmed
record of any fraud-related activity, and (vi) the Receivables in which have not
been charged off or the account itself has not been closed prior to its billing
cycle cut-off date. An 'Eligible Alternative Account' is defined to mean an
account (i) which has been established under an Alternative Program subsequent
to the Closing Date, (ii) which has been designated by the Transferor in
accordance with the criteria relating to the Addition of Accounts, (iii) which
is denominated in U.S. dollars, (iv) the credit card or cards related to which
have not been reported lost or stolen, (v) the obligor on which has provided, as
its most recent billing address, an address with a zip code in the United States
or its territories or possessions, (vi) which is not an account of an obligor in
bankruptcy or an account as to which the Servicer has any confirmed record of
any fraud-related activity, and (vii) the Receivables in which have not been
charged off or the account itself has not been closed prior to its billing cycle
cut-off date.
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 Transferor's representations and warranties or for any other
purpose. In addition, it is not anticipated or required that the Trustee will
make any initial or periodic general examination of the Servicer for the purpose
of establishing the compliance by the Servicer with its representations or
warranties or the performance by the Servicer of its obligations under the
Agreement for any other purpose. The Servicer, however, is required to deliver
to the Trustee on or before March 31 of each year an opinion of counsel with
respect to the necessity of filing additional UCC financing statements or other
filings as may be required under state law to continue the Trust's perfection of
the security interest of the Trust in and to the Receivables and certain other
components of the Trust.
COLLECTION ACCOUNT
The Trustee has caused to be established and maintained an account with
respect to the Certificates (the 'Collection Account') for deposit of
Collections received from the Servicer. Funds on deposit in the Collection
Account shall be invested in one or more Permitted Investments maturing no later
than the next succeeding Transfer Date. Net investment earnings on funds in the
Collection Account will be paid monthly to the Transferor. The Servicer has the
revocable power to withdraw funds from the Collection Account and to instruct
the Trustee to make withdrawals and payments from the Collection Account for the
purpose of carrying out the Servicer's or the Trustee's duties under the
Agreement.
The term 'Permitted Investments' means (a) investments having maturities at
the date of purchase of not later than the next succeeding Transfer Date in the
following: (i) obligations issued by, or the principal of and interest on which
is fully guaranteed by, the United States of America; (ii) commercial paper
rated A-1+ by S&P, F-1+ by Fitch Investors Service, Inc. ('Fitch') and P-1 by
Moody's; (iii) certificates of deposit, other deposits or bankers' acceptances,
which are rated A-1+ by S&P, F-1+ by Fitch and P-1 by Moody's, or money market
funds rated A-1+ by S&P, F-1+ by Fitch and P-1 by Moody's, (iv) investments in
money market funds having the highest long-term rating granted by the applicable
Rating Agency and maintained by commercial banks having unimpaired capital and
unimpaired surplus of at least $500,000,000; (v) eurodollar time deposits that
have been
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rated A-1+ by S&P and F-1+ by Fitch and P-1 by Moody's; and (vi) repurchase
agreements involving any of the Permitted Investments described in clauses (i)
through (iv) above so long as the other party to the repurchase agreement has
the rating described in clause (ii) above and (vii) any other investment the
applicable Rating Agency confirms will not adversely affect any ratings of the
Series 1996-1 Interests and (b) demand deposit or time deposits in any
institution described in clause (iii) above.
SUBORDINATION OF THE CLASS B CERTIFICATES
The Class B Certificate will be subordinated to the extent necessary to
fund certain payments with respect to the Class A 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 Invested Amount may be reduced if the Collateral Interest Invested
Amount and the Subordinated Transferor Amount are equal to zero. To the extent
the Class B Invested Amount is reduced, the percentage of collections of Finance
Charge Receivables allocated to the Class B Certificates in subsequent
Collection Periods will be reduced. Moreover, to the extent the amount of such
reduction in the Class B Invested Amount is not reimbursed, the amount of
principal distributable to, and the amounts available to be distributed with
respect to interest on, the Class B Certificateholders will be reduced. No
principal will be paid to the Class B Certificateholders until the Class A
Invested Amount is paid in full. See 'Risk Factors--Effect of Subordination' and
'--Allocation Percentages,' '--Reallocated Principal Collections' and
'--Additional Amounts Available to Certificateholders.'
ALLOCATION PERCENTAGES
Pursuant to the Agreement, for each Collection Period the Servicer will
allocate Finance Charge Collections (including Recoveries on Defaulted
Receivables and Merchant Fees), all Principal Collections and the amount of all
Defaulted Receivables (defined below) (see '--Defaulted Receivables; Recoveries;
Rebates and Fraudulent Charges') among the Class A Interest, the Class B
Interest, the Collateral Interest, the Subordinated Transferor Interest, any
other Series of certificates issued by the Trust, the B/F Interest and, in the
case of Principal Collections and the amount of Defaulted Receivables, the
Transferor Interest. Finance Charge Collections will be allocated at all times
to the Class A Interest, the Class B Interest, the Collateral Interest and the
Subordinated Transferor Interest based on the percentage equivalent of the ratio
which the amount of the Class A Invested Amount, the Class B Invested Amount,
the Collateral Interest Invested Amount or the Subordinated Transferor Amount,
as applicable, on the last day of the immediately preceding Collection Period
bears to the amount of Aggregate Receivables in the Trust, or, with respect to
Finance Charge Collections, bears to the sum of the numerators used to calculate
the Invested Percentage with respect to Finance Charge Collections for all
Series of certificates outstanding during such Collection Period and the B/F
Percentage (the 'Class A Floating Allocation Percentage,' the 'Class B Floating
Allocation Percentage,' the 'Collateral Interest Floating Allocation Percentage'
and the 'Subordinated Transferor Floating Allocation Percentage,' in each case
with respect to Finance Charge Collections). The amount of Defaulted Receivables
will be allocated to the Class A Interest, the Class B Interest, the Collateral
Interest and the Subordinated Transferor Interest based on the percentage
equivalent of the ratio which the Class A Invested Amount, the Class B Invested
Amount, the Collateral Interest Invested Amount and the Subordinated Transferor
Amount, as applicable, on the last day of the immediately preceding Collection
Period bears to the Aggregate Receivables on the last day of the immediately
preceding Collection Period (the 'Class A Floating Allocation Percentage,' the
'Class B Floating Allocation Percentage,' the 'Collateral Interest Floating
Allocation Percentage' and the 'Subordinated Transferor Floating Allocation
Percentage,' in each case with respect to the amount of Defaulted Receivables).
During the initial Collection Period following the Closing Date, the Class A
Floating Allocation Percentage, the Class B Floating Allocation Percentage, the
Collateral Interest Floating Allocation Percentage and the Subordinated
Transferor Floating Allocation Percentage will be calculated by reference to the
date of such issuance. During the Revolving Period, all Principal Collections
will be allocated and paid to the Transferor (except for Reallocated Principal
Collections used to pay Required Amounts on the Class A Certificates, Class B
Certificates and the Collateral Interest, as described under '--Reallocation of
Cash Flows' and Shared Principal Collections distributable to the holder of the
Bridgestone/Firestone Certificate in accordance with its interest in the Trust)
but not exceeding the Transferor Interest after giving effect to any purchases
of Receivables. During the Controlled Amortization Period and any Rapid
Amortization Period, all Principal Collections will be allocated to the Class A
Interest, the Class B Interest, the Collateral Interest and the Subordinated
Transferor Interest based on the percentage equivalent of the ratio
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which the Class A Invested Amount, the Class B Invested Amount, the Collateral
Interest Invested Amount and the Subordinated Transferor Amount, as applicable,
each as of the last day of the Revolving Period, bears to the greater of (a) the
Aggregate Receivables on the last day of the prior Collection Period and (b) the
sum of the numerators used to calculate the Invested Percentage with respect to
Principal Collections for all Series of certificates outstanding for such
Collection Period (the 'Class A Fixed Allocation Percentage', the 'Class B Fixed
Allocation Percentage', the 'Collateral Interest Fixed Allocation Percentage'
and the 'Subordinated Transferor Fixed Allocation Percentage', as applicable)
and the remainder will be allocated to the Transferor Interest and to the B/F
Interest.
'Class A Invested Amount' for any date means an amount equal to the initial
principal balance of the Class A Certificates, minus the amount of principal
payments made to Class A Certificateholders prior to such date and minus the
excess, if any, of the aggregate amount of Class A Investor Charge-Offs (as
defined below) for all Distribution Dates preceding such date over the aggregate
amount of any reimbursements of Class A Investor Charge-Offs for all
Distribution Dates preceding such date.
'Class B Invested Amount' for any date means an amount equal to (i) the
initial principal balance of the Class B Certificates, minus (ii) the amount of
principal payments made to Class B Certificateholders prior to such date, minus
(iii) the aggregate amount of Class B Investor Charge-Offs (as defined below)
for all prior Distribution Dates, minus (iv) the aggregate amount of Class B
Reallocated Principal Collections for all prior Distribution Dates, minus (v) an
amount equal to the aggregate amount by which the Class B Invested Amount has
been reduced to fund the Class A Investor Default Amount on all prior
Distribution Dates as described herein and plus (vi) the amount of Excess
Finance Charge Collections applied on all prior Distribution Dates for the
purpose of reimbursing amounts deducted pursuant to the foregoing clauses (iii),
(iv) and (v).
'Collateral Interest Invested Amount' for any date means an amount equal to
(i) the initial principal balance of the Collateral Interest, minus (ii) the
amount of principal payments made to the Collateral Interest Holder prior to
such date, minus (iii) the aggregate amount of Collateral Interest Investor
Charge-Offs (as defined below) for all prior Distribution Dates, minus (iv) the
aggregate amount of Collateral Interest Reallocated Principal Collections for
all prior Distribution Dates, minus (v) an amount equal to the aggregate amount
by which the Collateral Interest Invested Amount has been reduced to fund the
Class A and Class B Investor Default Amount on all prior Distribution Dates as
described herein, and plus (vi) the amount of Excess Finance Charge Collections
applied on all prior Distribution Dates for the purpose of reimbursing amounts
deducted pursuant to the foregoing clauses (iii), (iv) and (v).
'Subordinated Transferor Amount' for any date means an amount equal to (i)
the initial principal balance of the Subordinated Transferor Certificate, minus
(ii) the amount of principal payments made to the holder of the Subordinated
Transferor Certificate prior to such date, minus (iii) the aggregate amount of
Subordinated Transferor Charge-Offs (as defined below) for all prior
Distribution Dates, minus (iv) the aggregate amount of Subordinated Transferor
Reallocated Principal Collections for all prior Distribution Dates, minus (v) an
amount equal to the aggregate amount by which the Subordinated Transferor Amount
has been reduced to fund the Class A, Class B and Collateral Interest Investor
Default Amount on all prior Distribution Dates as described herein, and plus
(vi) the amount of Excess Finance Charge Collections applied on all prior
Distribution Dates for the purpose of reimbursing amounts deducted pursuant to
the foregoing clauses (iii), (iv) and (v).
'Invested Amount' means the sum of the Class A Invested Amount, the Class B
Invested Amount, the Collateral Interest Invested Amount and the Subordinated
Transferor Amount.
'Transferor Percentage' means (i) when used with respect to Principal
Collections during the Revolving Period and the amount of Defaulted Receivables,
100% minus the sum of the applicable Floating Allocation Percentages with
respect to all Series of certificates then issued and outstanding and 1% (the
'B/F Percentage') and (ii) when used with respect to Principal Collections
during the Controlled Amortization Period and any Rapid Amortization Period,
100% minus the sum of the Fixed Allocation Percentages with respect to all
Series of certificates then issued and outstanding and the B/F Percentage.
As a result of the Class A Floating Allocation Percentage, the Class B
Floating Allocation Percentage, the Collateral Interest Floating Allocation
Percentage and the Subordinated Transferor Floating Allocation Percentage,
Finance Charge Collections allocated to the Class A and Class B
Certificateholders, Collateral
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Interest Holder and the Subordinated Transferor Certificateholder may change
each Collection Period based on the relationship between the amount of the Class
A Invested Amount, the Class B Invested Amount, the Collateral Interest Invested
Amount and the Subordinated Transferor Amount to the aggregate invested amount
of all Series of certificates issued by the Trust. In addition, the portion of
Defaulted Receivables allocated to the Class A and Class B Certificateholders,
Collateral Interest Holder and the Subordinated Transferor Certificateholder
will change each Collection Period based in part on the relationship of the
amount of the Class A Invested Amount, the Class B Invested Amount, the
Collateral Interest Invested Amount and the Subordinated Transferor Amount to
the Aggregate Receivables on the last day of the immediately preceding
Collection Period. The numerator used to calculate the Fixed Allocation
Percentage each day during the Controlled Amortization Period or any Rapid
Amortization Period will remain fixed; however, the denominator used to
calculate such percentage may increase or decrease from time to time.
ALLOCATION OF COLLECTIONS; DEPOSITS IN COLLECTION ACCOUNT
The Servicer, no later than the second business day following the date of
processing, will deposit into the Collection Account any payment collected by
the Servicer on the Receivables and will make the allocations and payments
described below to the Collection Account and the parties shown below on the day
of such deposit; provided, however, that for so long as Bridgestone/Firestone is
the Servicer, and either (i) the unsecured short-term debt ratings of the Letter
of Credit Bank have not been reduced below A-1+ or F-1+ by the applicable Rating
Agency or withdrawn by the Rating Agency for a period in excess of 35 days of
notice to the Servicer thereof, and at least five business days remain prior to
the expiration of the Servicer Letter of Credit, (ii) the Servicer has delivered
to the Trustee a substitute Servicer Letter of Credit issued by a financial
institution whose unsecured short-term debt ratings are A-1+ and F-1+ by the
applicable Rating Agency and at least five business days remain prior to the
expiration of such substitute Servicer Letter of Credit or (iii) the Trustee has
drawn the full amount available under the Servicer Letter of Credit and
deposited the proceeds of such demand into a segregated trust account available
to the Trustee in the event the Servicer fails to timely remit Collections to
the Collection Account, then the Servicer may use for its own benefit all such
Collections up to the amount of the Servicer Letter of Credit until the business
day preceding the Distribution Date, at which time the Servicer will make a
deposit to the Collection Account in an amount equal to the net amount of such
deposits and withdrawals which would have been made had the conditions of this
proviso not applied.
While Collections are held by the Servicer pending deposit into the
Collection Account, the Servicer shall be permitted to use such funds for its
own benefit and the certificateholders of all Series (including the
Certificateholders) are subject to risk of loss, including risk of loss
resulting from the bankruptcy or insolvency of the Servicer. The Servicer Letter
of Credit will be available in the event that Bridgestone/Firestone as Servicer
fails to deposit the required amount of Collections into the Collection Account
on the business day prior to any Distribution Date, including any such failure
caused by the bankruptcy or insolvency of Bridgestone/Firestone as Servicer. The
Servicer will not pay to the Trust any fee for use of the Collections. See 'Risk
Factors-- Commingling.' Under the Agreement, the Collections on the Receivables
for any Collection Period will be allocated such that all finance charges billed
or accrued in respect of Receivables in the prior Collection Period (less the
aggregate amount of finance charges billed or accrued on Accounts in prior
periods which are rebated to cardholders during such Collection Period) will be
deemed Finance Charge Collections and the remaining amount of such Collections
will be deemed Principal Collections. Notwithstanding the foregoing, Recoveries
received in any Collection Period shall be treated as Finance Charge Collections
for such Collection Period for all purposes. In addition, when any Discount
Percentage is in effect, certain Principal Receivables will be deemed to be
Finance Charge Receivables and the collections thereon will be treated as
Finance Charge Collections. Merchant Fees received or accrued in any Collection
Period shall also be treated as Finance Charge Collections for such Collection
Period for all purposes.
If the amount in respect of Finance Charge Collections to be deposited into
the Collection Account on any Distribution Date pursuant to the preceding
sentence exceeds the sum of (a) the Class A Monthly Interest for such
Distribution Date, any overdue Class A Monthly Interest (plus any additional
interest accrued on such overdue Class A Monthly Interest), the Class A Investor
Default Amount, the Class B Monthly Interest for such Distribution Date, any
overdue Class B Monthly Interest (plus any additional interest accrued on such
overdue Class B Monthly Interest), the Collateral Interest Monthly Interest for
such Distribution Date and any overdue
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Collateral Interest Monthly Interest (plus any additional interest accrued on
such overdue Collateral Interest Monthly Interest for such Distribution Date)
and (b) the Class A Monthly Servicing Fee, the Class B Monthly Servicing Fee,
the Collateral Interest Monthly Servicing Fee and the Subordinated Transferor
Monthly Servicing Fee (collectively, the 'Monthly Servicing Fee'), the Servicer
may deduct the Monthly Servicing Fee (see '-- Servicing Compensation and Payment
of Expenses'), and during the Revolving Period, the Class A Investor Default
Amount, the Class B Investor Default Amount, the Collateral Interest Investor
Default Amount and the Subordinated Transferor Default Amount (which will be
distributed to the Transferor in respect of the Transferor Interest, but not in
an amount exceeding the Transferor Interest on such day (after giving effect to
any new Receivables transferred to the Trust on such day)) from the net amount
to be deposited into the Collection Account.
APPLICATION OF COLLECTIONS
Any amounts in respect of Principal Collections not distributed to the
Transferor because such Principal Collections would exceed the Transferor
Interest (after giving effect to any new Receivables transferred to the Trust
for the Collection Period relating to such Determination Date) ('Unallocated
Principal Collections') will be held in the Collection Account until
distributable to the Transferor or, if the Controlled Amortization Period or the
Rapid Amortization Period has commenced, on each Distribution Date all or a
portion thereof will be treated as part of Class A Monthly Principal. Any
Transfer Deposit Amounts, Adjustment Payments and the proceeds of any sale,
disposition or liquidation of Receivables following the occurrence of an
Amortization Event caused by the bankruptcy or insolvency of the Transferor or
Bridgestone/Firestone or in connection with the Final Series 1996-A Termination
Date will also be deposited into the Collection Account immediately upon receipt
and will be allocated as Principal Collections or Finance Charge Collections, as
applicable.
THE LETTERS OF CREDIT
Bridgestone/Firestone as Servicer has delivered to the Trustee the Servicer
Letter of Credit. The Servicer Letter of Credit will be available, up to its
stated amount, to cover any shortfall in Collections allocated to any Series and
required to be deposited into the Collection Account by the Servicer. The
Servicer Letter of Credit shall provide that the Trustee may make a demand
thereunder on any day on which Bridgestone/Firestone as Servicer fails to remit
to the Collection Account the full amount of Collections required to be remitted
pursuant to the Agreement. The amount of any such demand shall be equal to the
difference between the total Collections required to be so deposited and the
total Collections actually so deposited. The initial stated amount of the
Servicer Letter of Credit shall be $45,000,000. The proceeds of any drawing on
the Servicer Letter of Credit will be allocated among all outstanding Series of
certificates (including the Series 1996-1 Interests issued by the Trust). Such
allocations will be performed in much the same manner as are allocations of
Collections (generally speaking, such allocations will be based on the ratio of
the Invested Amount to the Aggregate Receivables). During the period that
Bridgestone/Firestone is the Servicer, if aggregate Collections at any time held
by the Servicer exceed the amount available under the Servicer Letter of Credit,
the Servicer shall deposit all such Collections in excess of the amount
available under the Servicer Letter of Credit into the Collection Account no
later than the second business day after the date of processing thereof.
In the event that either the unsecured short-term debt rating of the Letter
of Credit Bank is lowered below A-1+, P-1 or F-1+ by the applicable Rating
Agency, then within 35 days of notice to the Servicer of such event (or
immediately if such rating is reduced to or below A-2, P-2 or F-2 by the
applicable Rating Agency) or in the event that five business days or less remain
prior to the expiration of the Servicer Letter of Credit, Bridgestone/Firestone
shall either (i) commence depositing Collections into the Collection Account
within two business days of the date of processing thereof or (ii) deliver to
the Trustee an irrevocable letter of credit substantially identical to the
Servicer Letter of Credit (a 'Substitute Servicer Letter of Credit') issued by a
financial institution whose unsecured short-term debt is rated A-1+, P-1 or F-1+
by the applicable Rating Agency or (iii) only in the event that the unsecured
short-term debt rating of the Servicer Letter of Credit Bank is lowered below
A-1+, P-1, or F-1+ by the applicable Rating Agency, the Trustee shall draw on
the Servicer Letter of Credit in full and deposit the proceeds of such drawing
in a segregated trust account maintained for the benefit of the
certificateholders of all Series. Any amounts on deposit in such account shall
be invested in Permitted Investments. The Trustee shall withdraw funds from such
account under the same circumstances as it would have
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drawn under the Servicer Letter of Credit. Upon the earlier of (x) the delivery
to the Trustee of a Substitute Servicer Letter of Credit meeting the
requirements described in clause (ii) above or (y) the originally scheduled
expiration date of the Servicer Letter of Credit, the Trustee shall release to
the Letter of Credit Bank any funds on deposit in such account.
The Transferor Letter of Credit will be delivered to the Trustee on the
Closing Date. The Transferor Letter of Credit will be available, up to its
stated amount, to cover any shortfall in payments allocated to any Series and
required to be deposited into the Collection Account by the Transferor. The
Transferor Letter of Credit shall provide that the Trustee may make a demand
thereunder on any day on which the Transferor fails to make any required deposit
to the Collection Account in respect of Adjustment Payments (see '--Defaulted
Receivables; Recoveries; Rebates and Fraudulent Charges' below). The amount of
any such demand shall be the difference between the amount of any required
Adjustment Payment and the amount in respect thereof actually deposited into the
Collection Account. The Transferor Letter of Credit shall be issued by the
Letter of Credit Bank and shall have an initial stated amount of $15,000,000.
The proceeds of any drawing on the Transferor Letter of Credit will be allocated
among all outstanding Series of certificates (including the Series 1996-1
Interests issued by the Trust). Such allocations will be performed in much the
same manner as are allocations of Collections (generally speaking, such
allocations will be based on the ratio of the Invested Amount to the Aggregate
Receivables).
In the event that either the unsecured short-term debt rating of the Letter
of Credit Bank is lowered below A-1+, P-1 or F-1+ (the 'Required Rating') by the
applicable Rating Agency, then within 35 days of notice to the Servicer of such
event (or immediately if such rating is reduced to or below A-2, P-2 or F-2 by
the applicable Rating Agency) or in the event that five business days or less
remain prior to the expiration of the Transferor Letter of Credit, either (i)
there shall be delivered to the Trustee an irrevocable letter of credit
substantially similar to the Transferor Letter of Credit (a 'Substitute
Transferor Letter of Credit') issued by a financial institution whose unsecured
short-term debt is rated A-1+, P-1 or F-1+ by the applicable Rating Agency or
(ii) only in the event that the unsecured short-term debt rating of the Letter
of Credit Bank has been lowered below A-1+, P-1 or F-1+ by the applicable Rating
Agency, the Trustee shall draw on the Transferor Letter of Credit in full and
deposit the proceeds of such drawing in a segregated trust account maintained
for the benefit of the certificateholders of all Series. Any amounts on deposit
in such account shall be invested in Permitted Investments. The Trustee shall
withdraw funds from such account under the same circumstances as it would have
drawn under the Transferor Letter of Credit. Upon the earlier of (x) the
delivery to the Trustee of a Substitute Transferor Letter of Credit meeting the
requirements described in clause (i) above or (y) the originally scheduled
expiration date of the Transferor Letter of Credit, the Trustee shall release to
the Letter of Credit Bank any funds on deposit in such account. If the
Transferor Letter of Credit expires and is not replaced, an Amortization Event
may occur if the sum of the Transferor Amount and the B/F Amount does not equal
at least 7% of the aggregate invested amounts of the outstanding Series of
certificates issued by the Trust. See '--Amortization Events.'
The Letter of Credit Bank's unsecured short-term debt rating has been
reduced to A-1, which is below the Required Ratings and the full amount of the
proceeds from the Servicer Letter of Credit are currently held in a segregated
trust account available to the Trustee in the event Bridgestone/Firestone fails
to timely remit Collections to the Collection Account. In addition, the full
amount of the proceeds from the Transferor Letter of Credit are held in a
segregated trust account available to the Trustee to cover any shortfall in
payments required to be deposited in the Collection Account by the Transferor.
After any drawing under either the Servicer Letter of Credit or the
Transferor Letter of Credit for any reason other than a clerical error by the
Servicer or Transferor or a drawing resulting from a lowering of the Letter of
Credit Bank's short-term debt rating, then (i) Bridgestone/Firestone will begin
daily deposits of Collections into the Collection Account, (ii) the Letter of
Credit Bank may, at its option, terminate the Servicer Letter of Credit upon 21
days advance notice to the Servicer and (iii) the Transferor shall purchase
Class A REMARCs in order to increase the Transferor Amount to a level such that
the sum of the Transferor Amount and the B/F Amount equals at least 7% of the
aggregate invested amounts of the outstanding Series of certificates issued by
the Trust, after which time the Transferor Letter of Credit may be terminated.
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REALLOCATION OF CASH FLOWS
On each Determination Date, the Servicer will determine the Class A
Required Amount, the Class B Required Amount and the Collateral Interest
Required Amount. The 'Class A Required Amount' means the amount, if any, by
which the sum of Class A Monthly Interest, any overdue Class A Monthly Interest
(with interest thereon), the Class A Investor Default Amount and the Class A
Monthly Servicing Fee for such Collection Period exceeds the funds allocable to
the Class A Certificates to pay such amounts. The 'Class B Required Amount'
means the amount, if any, by which the sum of Class B Monthly Interest, any
overdue Class B Monthly Interest (with interest thereon) and the Class B Monthly
Servicing Fee for such Collection Period exceeds the funds allocable to the
Class B Certificates to pay such amounts. The 'Collateral Interest Required
Amount' means the amount, if any, by which the sum of Collateral Interest
Monthly Interest, any overdue Collateral Interest Monthly Interest (with
interest thereon) and the Collateral Interest Monthly Servicing Fee for such
Collection Period exceeds the funds allocable to the Collateral Interest to pay
such amounts. The 'Required Amount' shall equal the sum of the Class A, Class B
and Collateral Interest Required Amounts.
If Finance Charge Collections allocable to interest for any Collection
Period are insufficient to pay the Required Amount, Excess Finance Charge
Collections will be used to pay the Required Amount with respect to such
Distribution Date. See '--Excess Finance Charge Collections.' If such Excess
Finance Charge Collections are insufficient to pay the Required Amount,
Principal Collections allocable to the Subordinated Transferor Interest, the
Collateral Interest and the Class B Interest will then be used to fund the
remaining Required Amount. See '--Reallocated Principal Collections.' If
Reallocated Principal Collections with respect to any Collection Period are
insufficient to fund the remaining Required Amount for such Collection Period,
then a portion of the Subordinated Transferor Amount, the Collateral Interest
Invested Amount and the Class B Invested Amount, as applicable, may be reduced
for the benefit of interests senior to such interests. In the event of such
reductions, Excess Finance Charge Collections in subsequent periods, if any,
will be used to increase the Class B Invested Amount, Collateral Interest
Invested Amount and the Subordinated Transferor Amount, as applicable (but not
in excess of the initial invested amounts). See '--Additional Amounts Available
to Certificateholders.'
In certain instances, Principal Collections and certain other amounts
otherwise allocable to other Series, to the extent such collections are not
needed to make payments to the certificateholders of such other series, may be
applied to cover principal payments due to or for the benefit of the holders of
the Series 1996-1 Interests. See '--Shared Principal Collections.' In addition,
Finance Charge Collections in excess of the amounts necessary to make required
payments with respect to certificates of other outstanding series will be
applied to cover shortfalls with respect to Finance Charge Collections allocable
to the Series 1996-1 Interests. See '--Sharing of Excess Finance Charge
Collections.'
DISTRIBUTIONS FROM THE COLLECTION ACCOUNT
On any day on which the Servicer makes a deposit into the Collection
Account with respect to the Revolving Period, the Servicer will withdraw from
the Collection Account and pay to the Transferor an amount equal to the
aggregate amount of such deposits in respect of Principal Collections (other
than Reallocated Principal Collections used to pay Required Amounts due on the
Class A Certificates, Class B Certificates and the Collateral Interest), but not
exceeding the Transferor Interest on such day (after giving effect to any new
Receivables transferred to the Trust on such day). On any day on which the
Servicer makes a deposit into the Collection Account with respect to the
Controlled Amortization Period and any Rapid Amortization Period, the Servicer
will withdraw from the Collection Account and pay to the Transferor an amount
equal to the Transferor's Percentage of the amount of such deposits in respect
of Principal Collections, except that the amount of such payments with respect
to Principal Collections shall not exceed the amount of the Transferor Interest
on such day (after giving effect to any new Receivables transferred to the Trust
on such day). On any such day, the Servicer shall also withdraw from the
Collection Account and pay to Bridgestone/Firestone, as holder of the
Bridgestone/Firestone Certificate, the B/F Percentage of the aggregate amount of
such deposits in respect of Principal Collections and Finance Charge
Collections.
There will also be deposited into the Collection Account, Collections which
are not allocable to the Series 1996-1 Interests, the Bridgestone/Firestone
Certificate or the Transferor (i.e., such Collections will be allocable to other
Series, including the Series 1992-B Certificates). Such Collections will be
distributed as provided in the
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Supplement to the Agreement relating to such other Series and will not be
available for distribution to the Certificateholders.
The Servicer shall apply or shall cause the Trustee to apply the funds on
deposit in the Collection Account allocable to the Series 1996-1 Interests with
respect to each Distribution Date in the priority set forth below:
(a) An amount equal to the Class A Floating Allocation Percentage of
Finance Charge Collections deposited in the Collection Account for the
collection Period immediately preceding such Distribution Date will be
distributed in the following priority:
(i) an amount equal to the Class A Monthly Interest for such
Distribution Date, plus the amount of any Class A Monthly Interest
previously due but not paid on a prior Distribution Date, plus any
additional interest for such Distribution Date, plus the amount of any
additional interest with respect to interest amounts that were due but not
paid on a prior Distribution Date, will be distributed to the Class A
Certificateholders;
(ii) an amount equal to the aggregate Class A Investor Default Amount
for such Distribution Date will be distributed to the Transferor in respect
of the Transferor Interest on Distribution Dates with respect to the
Revolving Period (unless such amount has been previously netted against
deposits to the Collection Account), but not exceeding the Transferor
Interest (after giving effect to any new Receivable transferred to the
Trust on such date) and thereafter will be included in the funds available
to make principal payments;
(iii) an amount equal to the Class A Monthly Servicing Fee for such
Distribution Date will be distributed to the Servicer (unless such amount
has been previously netted against deposits to the Collection Account) (in
the event Bridgestone/Firestone is not the Servicer, amounts described in
this clause (iii) shall have priority over the amounts described in clause
(ii) above); and
(iv) the balance, if any, will constitute a portion of Excess Finance
Charge Collections and will be allocated and distributed as described under
'--Excess Finance Charge Collections.'
(b) An amount equal to the Class B Floating Allocation Percentage of
Finance Charge Collections deposited in the Collection Account for the
Collection Period immediately preceding such Distribution Date will be
distributed in the following priority:
(i) an amount equal to the Class B Monthly Interest for such
Distribution Date, plus the amount of any Class B Monthly Interest
previously due but not paid on a prior Distribution Date, plus any
additional interest for such Distribution Date, plus the amount of any
additional interest with respect to interest amounts that were due but not
paid on a prior Distribution Date, will be distributed to the Class B
Certificateholders;
(ii) an amount equal to the Class B Monthly Servicing Fee for such
Distribution Date will be distributed to the Servicer (unless such amount
has been previously netted against deposits to the Collection Account); and
(iii) the balance, if any, will constitute a portion of Excess Finance
Charge Collections and will be allocated and distributed as described under
'--Excess Finance Charge Collections.'
(c) An amount equal to the Collateral Interest Floating Allocation
Percentage of Finance Charge Collections deposited in the Collection Account for
the Collection Period immediately preceding such Distribution Date will be
distributed in the following priority:
(i) an amount equal to the Collateral Interest Monthly Interest for
such Distribution Date, plus the amount of any Collateral Interest Monthly
Interest previously due but not paid on a prior Distribution Date, plus any
additional interest for such Distribution Date, plus the amount of any
additional interest with respect to interest amounts that were due but not
paid on a prior Distribution Date, will be distributed to the Collateral
Interest Holders;
(ii) an amount equal to the Collateral Interest Monthly Servicing Fee
for such Distribution Date will be distributed to the Servicer (unless such
amount has been previously netted against deposits to the Collection
Account); and
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(iii) the balance, if any, will constitute a portion of Excess Finance
Charge Collections and will be allocated and distributed as described under
'--Excess Finance Charge Collections.'
(d) An amount equal to the Subordinated Transferor Floating Allocation
Percentage of Finance Charge Collections deposited in the Collection Account for
the Collection Period immediately preceding such Distribution Date will be
distributed in the following priority:
(i) an amount equal to the Subordinated Transferor Monthly Servicing
Fee for such Distribution Date will be distributed to the Servicer (unless
such amount has been previously netted against deposits to the Collection
Account); and
(ii) the balance, if any, will constitute a portion of Excess Finance
Charge Collections and will be allocated and distributed as described under
'--Excess Finance Charge Collections.'
(e) For each Distribution Date with respect to the Revolving Period, the
remaining funds on deposit in the Collection Account allocable to the Class A
and Class B Certificates, the Collateral Interest and the Subordinated
Transferor Certificate (other than certain Excess Finance Charge Collections and
Reallocated Principal Collections) will be applied as Shared Principal
Collections and the balance will be distributed to the Transferor in respect of
the Transferor Interest.
(f) For each Distribution Date with respect to the Controlled Amortization
Period or any Rapid Amortization Period, the remaining funds on deposit in the
Collection Account allocable to the Class A and Class B Certificates, the
Collateral Interest and the Subordinated Transferor Certificate (other than
certain Excess Finance Charge Collections and Reallocated Principal Collections)
will be distributed as follows:
(i) an amount equal to Class A Monthly Principal for such Distribution
Date will be distributed to the Class A Certificateholders until the Class
A Invested Amount is paid in full;
(ii) once the Class A Invested Amount is paid in full, the remaining
amount will be distributed to the Class B Certificateholders until the
Class B Invested Amount is paid in full;
(iii) once the Class B Invested Amount is paid in full, the remaining
amount will be distributed to the Collateral Interest Holder until the
Collateral Interest Invested Amount is paid in full;
(iv) once the Collateral Interest Invested Amount is paid in full, the
remaining amount will be distributed to the holder of the Subordinated
Transferor Certificate until the Subordinated Transferor Amount is paid in
full;
(v) an amount equal to the balance of any such remaining funds on
deposit in the Collection Account will be paid to the Transferor in respect
of the Transferor Interest up to the amount of the Transferor Interest; and
(vi) an amount equal to the balance will be applied as Shared
Principal Collections, to the extent necessary, and the remainder will be
distributed to the Transferor in respect of the Transferor Interest.
Class A Monthly Interest means, with respect to any Distribution Date, the
Class A Monthly Interest equals one-twelfth of the product of (i) the Class A
Certificate Rate and (ii) the outstanding principal balance of the Class A
Certificates as of the preceding Distribution Date (after subtracting therefrom
the aggregate amount of all distributions of principal made to the Class A
Certificateholders on such Distribution Date) or, with respect to the first
Distribution Date, the Initial Class A Invested Amount, provided, however, that
with respect to the initial Distribution Date, Class A Monthly Interest shall
equal $ .
Class B Monthly Interest means, with respect to any Distribution Date, the
Class B Monthly Interest equals one-twelfth of the product of (i) the Class B
Certificate Rate and (ii) the outstanding principal balance of the Class B
Certificates as of the preceding Distribution Date (after subtracting therefrom
the aggregate amount of all distributions of principal made to the Class B
Certificateholders on such Distribution Date) or, with respect to the first
Distribution Date, the Initial Class B Invested Amount, provided, however, that
with respect to the initial Distribution Date, Class B Monthly Interest shall
equal $ .
Collateral Interest Monthly Interest means, with respect to any
Distribution Date, the product of (i) the actual number of days in the related
Collateral Interest Accrual Period divided by 360, (ii) the Collateral Interest
Certificate Rate and (iii) the outstanding principal balance of the Collateral
Interest as of the preceding Distribution Date (after subtracting therefrom the
aggregate amount of all distributions of principal made to the
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Collateral Interest Holder on such Distribution Date) or, with respect to the
first Distribution Date, the Initial Collateral Interest Invested Amount.
Class A Investor Default Amount means, a portion of all Defaulted
Receivables which will be allocated to the Class A Certificateholders for each
Distribution Date in an amount equal to the product of the Class A Floating
Allocation Percentage applicable during the immediately preceding Collection
Period and the amount of Defaulted Receivables for such Collection Period.
Class B Investor Default Amount means, a portion of all Defaulted
Receivables which will be allocated to the Class B Certificateholders for each
Distribution Date in an amount equal to the product of the Class B Floating
Allocation Percentage applicable during the immediately preceding Collection
Period and the amount of Defaulted Receivables for such Collection Period.
Collateral Interest Investor Default Amount means, a portion of all
Defaulted Receivables which will be allocated to the Collateral Interest Holders
for each Distribution Date in an amount equal to the product of the Collateral
Interest Floating Allocation Percentage applicable during the immediately
preceding Collection Period and the amount of Defaulted Receivables for such
Collection Period.
Subordinated Transferor Default Amount means, a portion of all Defaulted
Receivables which will be allocated to the holder of the Subordinated Transferor
Certificate for each Distribution Date in an amount equal to the product of the
Subordinated Transferor Floating Allocation Percentage applicable during the
immediately preceding Collection Period and the amount of Defaulted Receivables
for such Collection Period.
Investor Default Amount shall equal the sum of the Class A Investor Default
Amount, Class B Investor Default Amount, Collateral Interest Investor Default
Amount and Subordinated Transferor Default Amount.
Monthly Servicing Fee means, with respect to any distribution date, the sum
of (a) the Class A Monthly Servicing Fee, the Class B Monthly Servicing Fee, the
Collateral Interest Monthly Servicing Fee and the Subordinated Transferor
Monthly Servicing Fee and (b) the Servicing Fee allocable to the Transferor
Amount and the B/F Amount.
The portion of the Servicing Fee allocable to the Class A Interest on each
Distribution Date (the 'Class A Monthly Servicing Fee'), to the Class B Interest
on each Distribution Date (the 'Class B Monthly Servicing Fee'), to the
Collateral Interest on each Distribution Date (the 'Collateral Interest Monthly
Servicing Fee') and to the Subordinated Transferor Interest on each Distribution
Date (the 'Subordinated Transferor Monthly Servicing Fee') generally will be
equal to one-twelfth of the product of 2.00% per annum and the amount of the
Class A Invested Amount, the Class B Invested Amount, the Collateral Interest
Invested Amount, or the Subordinated Transferor Amount, as the case may be, on
the last day of the second preceding Collection Period (in the case of the first
Distribution Date, the initial principal amount of the Class A Certificates,
Class B Certificates or the Collateral Interest, as the case may be).
Class A Monthly Principal with respect to any Distribution Date relating to
the Controlled Amortization Period or any Rapid Amortization Period will equal
the sum of (i) an amount equal to the Fixed Allocation Percentage of Principal
Collections received during the Collection Period immediately preceding such
Distribution Date (other than Reallocated Principal Collections used to pay the
Class A Required Amount), (ii) the amount of Shared Principal Collections
allocated to the Class A Certificates with respect to the preceding Collection
Period equal to the product of (a) a fraction, the numerator of which is the
Invested Amount and the denominator of which is the aggregate invested amounts
of all Series then accumulating or amortizing principal and (b) the amount, if
any, of Unallocated Principal Collections on deposit in the Collection Account
on such Distribution Date and (iii) the amount, if any, of Finance Charge
Collections and Excess Finance Charge Collections allocated and available on
such Distribution Date to (A) fund the Class A Investor Default Amount, the
Class B Investor Default Amount, the Collateral Interest Investor Default Amount
and the Subordinated Transferor Default Amount with respect to such Distribution
Date and (B) reimburse Class A Investor Charge-Offs and previous reductions in
the Class B Invested Amount, the Collateral Interest Invested Amount and the
Subordinated Transferor Invested Amount; provided, however, that for each
Distribution Date with respect to the Controlled Amortization Period (unless and
until an Amortization Event shall have occurred), Class A Monthly Principal may
not exceed the Controlled Distribution Amount for such Distribution Date; and
provided further, that with respect to any Termination Payment Date, Class A
Monthly Principal will be an amount equal to the Class A Invested Amount.
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Controlled Distribution Amount for any Distribution Date with respect to
the Controlled Amortization Period shall mean an amount equal to the sum of the
Controlled Amortization Amount and any existing Deficit Controlled Amortization
Amount.
Controlled Amortization Amount means $16,666,666.67.
Deficit Controlled Amortization Amount shall mean, on the first
Distribution Date with respect to the Controlled Amortization Period, the
excess, if any, of the Controlled Amortization Amount over the amount
distributed as Class A Monthly Principal for such Distribution Date and, on each
subsequent Distribution Date with respect to the Controlled Amortization Period,
the excess, if any, of the Controlled Amortization Amount and any then existing
Deficit Controlled Amortization Amount over the aggregate Class A Monthly
Principal distributed on such Distribution Date.
Excess Finance Charge Collections shall mean, with respect to any
Distribution Date, an amount equal to the sum of the amounts described in clause
(a)(iv), clause (b)(iii) and clause (c)(iii) under '--Distributions from the
Collection Account' above.
Termination Payment Date shall mean the earlier of the first Distribution
Date following the liquidation or sale of the Receivables as a result of an
insolvency event as described under '--Amortization Events' or the occurrence of
the Final Series 1996-1 Termination Date.
EXCESS FINANCE CHARGE COLLECTIONS
On each Distribution Date, the Servicer will apply or cause the Trustee to
apply Excess Finance Charge Collections with respect to the Collection Period
immediately preceding such Distribution Date, to make the following
distributions in the following priority:
(a) an amount equal to the Class A Required Amount, if any, with respect to
such Collection Period will be used to fund the Class A Required Amount;
(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 Distribution Date of certain other amounts applied for that purpose)
will be distributed to the Transferor in respect of the Transferor Interest on
Distribution Dates with respect to the Revolving Period, but not in an amount
exceeding the Transferor Interest (after giving effect to any new Receivables
transferred to the Trust on such date) and thereafter will be included in the
funds available to make principal payments;
(c) an amount equal to the Class B Required Amount, if any, with respect to
such Collection Period will be used to fund the Class B Required Amount;
(d) an amount equal to the aggregate Class B Investor Default Amount for
such Distribution Date will be distributed to the Transferor in respect of the
Transferor Interest on Distribution Dates with respect to the Revolving Period
(unless such amount has been previously netted against deposits to the
Collection Account), but not exceeding the Transferor Interest (after giving
effect to any new Receivable transferred to the Trust on such date) and
thereafter will be included in the funds available to make principal payments;
(e) an amount equal to the amount by which the Class B Invested Amount has
been reduced below the Initial Class B Invested Amount (for reasons other than
the payment of principal to the Class B Certificateholders), if any, for such
Distribution Date will be distributed to the Transferor in respect of the
Transferor Interest on Distribution Dates with respect to the Revolving Period,
but not in an amount exceeding the Transferor Interest (after giving effect to
any new Receivables transferred to the Trust on such date) and thereafter will
be included in the funds available to make principal payments;
(f) an amount equal to the Collateral Interest Required Amount, if any,
with respect to such Collection Period will be used to fund the Collateral
Interest Required Amount;
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(g) an amount equal to the aggregate Collateral Interest Investor Default
Amount for such Distribution Date will be distributed to the Transferor in
respect of the Transferor Interest on Distribution Dates with respect to the
Revolving Period (unless such amount has been previously netted against deposits
to the Collection Account), but not exceeding the Transferor Interest (after
giving effect to any new Receivable transferred to the Trust on such date) and
thereafter will be included in the funds available to make principal payments;
(h) an amount equal to the amount by which the Collateral Interest Invested
Amount has been reduced below the Initial Collateral Interest Invested Amount
(for reasons other than the payment of principal to the Collateral Interest
Holder) will be distributed to the Transferor on Distribution Dates with respect
to the Revolving Period, but not in an amount exceeding the Transferor Interest
in respect of the Transferor Interest on such day (after giving effect to any
new Receivables transferred to the Trust on such date) and thereafter will be
included in the funds available to make principal payments;
(i) any additional amounts required to be paid on such Distribution Date
pursuant to the terms of the Loan Agreement;
(j) an amount equal to the Subordinated Transferor Default Amount will be
distributed to the Transferor in respect of the Transferor Interest on
Distribution Dates with respect to the Revolving Period, but not in an amount
exceeding the Transferor Interest (after giving effect to any new Receivables
transferred to the Trust on such date) and thereafter will be included in the
funds available to make principal payments;
(k) an amount equal to the amount by which the Subordinated Transferor
Amount has been reduced below the initial Subordinated Transferor Amount (for
reasons other than the payment of principal to the holder of the Subordinated
Transferor Certificate) will be distributed to the Transferor in respect of the
Transferor Interest on Distribution Dates with respect to the Revolving Period,
but not in an amount exceeding the Transferor Interest on such day (after giving
effect to any new Receivables transferred to the Trust on such date) and
thereafter will be included in the funds available to make principal payments);
(l) the balance, if any, will be treated as Shared Excess Finance Charge
Collections to the extent necessary; and
(m) any remaining amounts not treated as Shared Excess Finance Charge
Collections will be treated as Shared Principal Collections.
REALLOCATED PRINCIPAL COLLECTIONS
If Excess Finance Charge Collections available with respect to such
Collection Period are less than the remaining Required Amount, Principal
Collections allocable to the Subordinated Transferor Interest, the Collateral
Interest and the Class B Interest with respect to a Collection Period will be
applied to the following Required Amounts, if any, in the following order of
priority:
(i) Subordinated Transferor Reallocated Principal Collections, first, to
the remaining components of the Class A Required Amount, if any, then to the
remaining components of the Class B Required Amount, if any, and then to the
remaining components of the Collateral Interest Required Amount, if any;
(ii) Collateral Interest Reallocated Principal Collections, first, to the
remaining components of the Class A Required Amount, if any, then to the
remaining components of the Class B Required Amount, if any; and
(iii) Class B Reallocated Principal Collections, to the remaining
components of the Class A Required Amount, if any.
Subordinated Transferor Reallocated Principal Collections means, with
respect to each Distribution Date, the Principal Collections allocable to the
Subordinated Transferor Certificate with respect to such Distribution Date
(equal to the Subordinated Transferor Floating Allocation Percentage of
Principal Collections for the related Collection Period for any such
Distribution Date during the Revolving Period or the Subordinated Transferor
Fixed Allocation Percentage of Principal Collections for any such Distribution
Date during the Controlled Amortization Period or Rapid Amortization Period) in
an amount equal to the Class A, Class B and Collateral Interest Required
Amounts, if any, with respect to such Distribution Date (after giving effect to
any payment of the Class A, Class B and Collateral Interest Required Amounts
from Excess Finance Charge Collections).
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Collateral Interest Reallocated Principal Collections means, with respect
to each Distribution Date, the Principal Collections allocable to the Collateral
Interest with respect to such Distribution Date (equal to the Collateral
Interest Floating Allocation Percentage of Principal Collections for the related
Collection Period for any such Distribution Date during the Revolving Period or
the Collateral Interest Fixed Allocation Percentage of Principal Collections for
any such Distribution Date during the Controlled Amortization Period or Rapid
Amortization Period) in an amount equal to the Class A and Class B Required
Amounts, if any, with respect to such Distribution Date (after giving effect to
any payment of the Class A and Class B Required Amounts from Excess Finance
Charge Collections and Subordinated Transferor Reallocated Principal
Collections).
Class B Reallocated Principal Collections means with respect to each
Distribution Date, the Principal Collections allocable to the Class B
Certificates with respect to such Distribution Date (equal to the Class B
Floating Allocation Percentage of Principal Collections for the related
Collection Period for any such Distribution Date during the Revolving Period or
the Class B Fixed Allocation Percentage of Principal Collections for any such
Distribution Date during the Controlled Amortization Period or Rapid
Amortization Period) in an amount equal to the Class A Required Amount, if any,
with respect to such Distribution Date (after giving effect to any payment of
the Class A Required Amount from Excess Finance Charge Collections, Subordinated
Transferor Reallocated Principal Collections and Collateral Interest Reallocated
Principal Collections).
Reallocated Principal Collections will equal the sum of Subordinated
Transferor Reallocated Principal Collections, Collateral Interest Reallocated
Principal Collections and Class B Reallocated Principal Collections.
Collections not applied in the foregoing manner (and therefore not
constituting Reallocated Principal Collections) will during the Revolving
Period, be applied as Shared Principal Collections and, during the Controlled
Amortization Period or any Rapid Amortization Period, will be included in the
funds available to make principal payments.
ADDITIONAL AMOUNTS AVAILABLE TO CERTIFICATEHOLDERS
Excess Finance Charge Collections will be applied to fund the Required
Amount, if any. If Excess Finance Charge Collections available for such
Collection Period are less than the remaining Required Amount, Principal
Collections for such Collection Period will then be used to fund the remaining
Required Amount.
If Reallocated Principal Collections with respect to any Collection Period
are insufficient to fund the remaining Class A Required Amount for such
Collection Period, then a portion of the Subordinated Transferor Amount (after
giving effect to reductions for any Subordinated Transferor Charge-Offs and
Subordinated Transferor Reallocated Principal Collections for such Collection
Period) equal to such insufficiency (but not in excess of the Class A Investor
Default Amount for such Distribution Date) will be allocated to the Class A
Certificates to avoid a charge-off with respect to the Class A Certificates, and
the Subordinated Transferor Amount will be reduced by such amount. If such
reduction would cause the Subordinated Transferor Amount to be negative, the
Subordinated Transferor Amount will be reduced to zero.
If the Subordinated Transferor Amount is reduced to zero, the Collateral
Interest Invested Amount (after giving effect to reductions for any Collateral
Interest Investor Charge-Offs and any Collateral Interest Reallocated Principal
Collections for such Collection Period for which the Subordinated Transferor
Amount was not reduced) will be reduced by the amount by which the Subordinated
Transferor Amount would have been reduced below zero (but not by more than the
excess of the Class A Investor Default Amount for such Distribution Date over
the amount of such reduction, if any, of the Subordinated Transferor Amount for
such Distribution Date) and such amount will be allocated to the Class A
Certificates to avoid a charge-off with respect to the Class A Certificates. If
such reduction would cause the Collateral Interest Invested Amount to be
negative, the Collateral Interest Invested Amount will be reduced to zero.
If the Collateral Interest Invested Amount is reduced to zero, the Class B
Invested Amount (after giving effect to reductions for any Class B Investor
Charge-Offs and any Class B Reallocated Principal Collections for such
Collection Period for which the Subordinated Transferor Amount and the
Collateral Interest Invested Amount were not reduced) will be reduced by the
amount by which the Collateral Interest Invested Amount would have been reduced
below zero (but not by more than the excess of the Class A Investor Default
Amount
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for such Distribution Date over the amount of such reduction, if any, of the
Subordinated Transferor Amount and the Collateral Interest Invested Amount for
such Distribution Date) and such amount will be allocated to the Class A
Certificates to avoid a charge-off with respect to the Class A Certificates. If
such reduction would cause the Class B Invested Amount to be negative, the Class
B Invested Amount will be reduced to zero.
If the Class B Invested Amount is reduced to zero, the Class A Invested
Amount will be reduced by the amount by which the Class B Invested Amount would
have been reduced below zero, but not by more than the excess of the Class A
Investor Default Amount for such Distribution Date over the reduction in the
Subordinated Transferor Amount, the Collateral Interest Invested Amount and the
Class B Invested Amount for such Collection Period (a 'Class A Investor
Charge-Off'); and the Class A Certificateholders will bear directly the credit
and other risks associated with their undivided interest in the Trust.
After payment of the Class A Required Amount, if Collateral Interest
Reallocated Principal Collections and Subordinated Transferor Reallocated
Principal Collections not required to fund the Class A Required Amount with
respect to any Collection Period are insufficient to fund the remaining Class B
Required Amount for such Collection Period, then a portion of the Subordinated
Transferor Amount (after giving effect to reductions for any Subordinated
Transferor Charge-Offs, Subordinated Transferor Reallocated Principal
Collections and any adjustments made thereto for the benefit of the Class A
Certificateholders) equal to such insufficiency (but not in excess of the Class
B Investor Default Amount for such Distribution Date) will be allocated to the
Class B Certificates to avoid a charge-off with respect to the Class B
Certificates, and the Subordinated Transferor Amount will be reduced by such
amount.
If the Subordinated Transferor Amount is reduced to zero, the Collateral
Interest Invested Amount (after giving effect to reductions for any Collateral
Interest Investor Charge-Offs, Collateral Interest Reallocated Principal
Collections and any adjustments made thereto for the benefit of the Class A
Certificateholders) will be reduced by the amount by which the Subordinated
Transferor Amount would have been reduced below zero (but not by more than the
excess of the Class B Investor Default Amount for such Distribution Date over
the amount of such reduction, if any, of the Subordinated Transferor Amount for
such Distribution Date) and such amount will be allocated to the Class B
Certificates to avoid a charge-off with respect to the Class B Certificates.
If the Collateral Interest Invested Amount is reduced to zero, the Class B
Invested Amount will be reduced by the amount by which the Collateral Interest
Invested Amount would have been reduced below zero, but not by more than the
excess of the Class B Investor Default Amount for such Distribution Date over
the reduction in the Subordinated Transferor Amount and the Collateral Interest
Invested Amount (a 'Class B Investor Charge-Off'); and the Class B
Certificateholders will bear directly the credit and other risks associated with
their undivided interest in the Trust.
After payment of the Class B Required Amount, if Subordinated Transferor
Reallocated Principal Collections with respect to any Collection Period are
insufficient to fund the remaining Collateral Interest Required Amount for such
Collection Period, then a portion of the Subordinated Transferor Amount (after
giving effect to reductions for any Subordinated Transferor Charge-Offs,
Subordinated Transferor Reallocated Principal Collections and any adjustments
made thereto for the benefit of the Class A and Class B Certificateholders)
equal to such insufficiency (but not in excess of the Collateral Interest
Investor Default Amount for such Distribution Date) will be allocated to the
Collateral Interest to avoid a charge-off with respect to the Collateral
Interest, and the Subordinated Transferor Amount will be reduced by such amount.
If the Subordinated Transferor Amount is reduced to zero, the Collateral
Interest Invested Amount will be reduced by the amount by which the Subordinated
Transferor Amount would have been reduced below zero, but not by more than the
excess of the Collateral Interest Investor Default Amount for such Distribution
Date over the reduction in the Subordinated Transferor Amount (a 'Collateral
Interest Investor Charge-Off'), and the Collateral Interest Holder will bear
directly the credit and other risks associated with their undivided interest in
the Trust.
On each Distribution Date, if the Subordinated Transferor Default Amount
for such Distribution Date exceeds the amount of Excess Finance Charge
Collections which is allocated and available to fund such amount as described
under 'Excess Finance Charge Collections', the Subordinated Transferor Amount
(after giving effect to reductions for Subordinated Transferor Reallocated
Principal Collections and the amount of any
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adjustments made thereto for the benefit of the Class A or Class B
Certificateholders or the Collateral Interest Holder) will be reduced but not in
excess of the Subordinated Transferor Default Amount (the 'Subordinated
Transferor Charge-Off').
In the event that any of the Subordinated Transferor Amount, the Collateral
Interest Invested Amount, the Class B Invested Amount or the Class A Invested
Amount is reduced, such amount will thereafter be increased (but not in excess
of the unpaid principal balance of the Subordinated Transferor Certificate,
Collateral Interest, the Class B Certificates or the Class A Certificates, as
applicable) on any Distribution Date by the amount of Excess Finance Charge
Collections allocated and available for that purpose as described under
'--Excess Finance Charge Collections.'
The 'Initial Subordinated Transferor Amount' will be equal to $18,205,129
and the 'Initial Collateral Interest Invested Amount' will be equal to
$10,000,000.
SHARED PRINCIPAL COLLECTIONS
To the extent that Principal Collections and other amounts that are
allocated to the interest of the holders of any class of any series (other than
the Transferor Interest) are not needed to make payments to the
certificateholders of such class, they may be applied to cover principal
payments due to or for the benefit of certificateholders of another Series
('Shared Principal Collections'). Any such reallocation will not result in a
reduction in the interest of the holders of the Series to which such Principal
Collections were initially allocated. In addition, Principal Collections and
certain other amounts otherwise allocable to other Series, to the extent such
collections are not needed to make payments to the certificateholders of such
other Series, may be applied to cover principal payments due to or for the
benefit of the holders of the Series 1996-1 Interests.
SHARING OF EXCESS FINANCE CHARGE COLLECTIONS
Finance Charge Collections on any business day in excess of the amounts
necessary to make required payments on such business day with respect to the
Series 1996-1 Interests will be applied to cover any shortfalls with respect to
amounts payable from Finance Charge Collections allocable to any other Series
then outstanding, pro rata based upon the amount of the shortfall, if any, with
respect to such other Series. In addition, Finance Charge Collections in excess
of the amounts necessary to make required payments on such business day with
respect to certificates of other outstanding Series will be applied to cover any
shortfalls with respect to Finance Charge Collections allocable to the Series
1996-1 Interests. Any Excess Finance Charge Collections remaining after covering
shortfalls with respect to all outstanding Series will be paid to the Transferor
in respect of the Transferor Interest.
DISTRIBUTIONS TO THE CERTIFICATEHOLDERS
Payments to the Certificateholders will be made from the Collection
Account. In addition to the amounts deposited in the Collection Account as
described above, the proceeds of any optional repurchase of the Series 1996-1
Interests by the Transferor will be deposited in the Collection Account on the
Distribution Date on which such repurchase occurs.
The Servicer shall instruct the Trustee or the Paying Agent to distribute
from the Collection Account on each Distribution Date the amounts described
under '--Distributions from the Collection Account' above.
The paying agent (the 'Paying Agent') shall initially be the Trustee. The
Paying Agent shall have the revocable power to withdraw funds from the
Collection Account for the purpose of making distributions to the
Certificateholders.
On each Distribution Date, the Servicer will pay to the Transferor any
investment earnings (net of losses and investment expenses) with respect to the
Collection Account.
Distribution Date shall mean December 2, 1996, and the first day of each
calendar month thereafter, or, if such first day is not a business day, the next
succeeding business day.
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DEFAULTED RECEIVABLES; RECOVERIES; REBATES AND FRAUDULENT CHARGES
'Defaulted Receivables' for any Collection Period are Receivables in any
Account which were written off as uncollectible in such Collection Period in
accordance with Servicer Guidelines. Receivables in any Account will be
considered charged off for the purposes of the Agreement on the earlier of (i)
the last day of the Collection Period immediately following the Collection
Period in which such Receivable becomes 180 days delinquent and (ii) the cycle
billing date on which such Account is charged off in accordance with the
customary and usual servicing procedures of the Servicer. The amount of
Defaulted Receivables for any Collection Period will be an amount equal to the
principal amount of the Receivables that became Defaulted Receivables in such
Collection Period less the full amount of any Defaulted Receivables for which
the Transferor or the Servicer becomes obligated to accept reassignment for such
Collection Period unless certain events of bankruptcy, insolvency or
receivership have occurred with respect to the Transferor or the Servicer. A
portion of all Defaulted Receivables will be allocated to the Class A
Certificateholders, the Class B Certificateholders, the Collateral Interest
Holder and the Subordinated Transferor Certificateholder. See '--Distributions
from the Collection Account.'
The term 'Recoveries,' with respect to any Collection Period, shall mean
all amounts or payments received by the Servicer with respect to Receivables
which have previously become Defaulted Receivables in a prior Collection Period,
net of reasonable expenses of the Servicer incurred and deducted from such
amounts or payments.
If the Servicer makes a downward adjustment of the amount of any Receivable
because of a rebate, refund, unauthorized charge, billing error or certain other
noncash items to a cardholder, or if the Servicer otherwise adjusts downward the
amount of any Receivable without receiving Collections therefor or without
charging off such amount as uncollectible, or any Receivable is discovered as
having been created through a fraudulent or counterfeit action the Transferor
will be obligated to make a deposit into the Collection Account in immediately
available funds in an amount equal to any such adjustment or principal amount of
the fraudulent or counterfeit Receivable. If the Transferor fails to make any
such deposit the Trustee shall make a drawing under the Transferor Letter of
Credit (any such payment or proceeds of a drawing under the Transferor Letter of
Credit, 'Adjustment Payments'). If funds are not available under the Transferor
Letter of Credit, the Transferor Amount will be reduced by the amount of the
adjustment or the principal amount of the fraudulent or counterfeit Receivable;
provided, however, that if such deduction would reduce the Transferor Amount
below zero or would otherwise not be permitted by law, the B/F Amount will be
reduced by the amount of any such adjustment or the principal amount of the
fraudulent or counterfeit Receivable. Any Adjustment Payments so paid by the
Transferor or the proceeds of any drawing under the Transferor Letter of Credit
in respect thereof shall be allocated in respect of Finance Charge Collections
and Principal Collections as provided in the Agreement.
DISCOUNT OPTION
The Agreement provides that the Transferor may at any time and from time to
time, but without any obligation to do so, designate a fixed percentage or a
variable percentage based on a formula (the 'Discount Percentage'), but in
either case not to exceed 6%, of Receivables giving rise to Principal
Collections ('Principal Receivables') that are charges for goods or services or
obligations for repayment of cash advances, part of which have not previously
been sold as Discount Option Receivables, arising from then on to be treated as
Receivables giving rise to Finance Charge Collections ('Finance Charge
Receivables'). Such Receivables will be designated 'Discount Option
Receivables.' After any such designation, pursuant to the Agreement, the
Transferor may, without notice to or consent of the Certificateholders, from
time to time increase, reduce or withdraw the Discount Percentage. Such
increase, reduction or withdrawal will become effective upon satisfaction of the
conditions in the Agreement, including written confirmation by each Rating
Agency.
On each Distribution Date on or after the date the exercise of the discount
option takes effect, the lower of (a) the product of the Discount Percentage
then in effect and Collections received during such Collection Period and (b)
the Discount Option Receivables outstanding at the end of such Collection Period
that otherwise would be Principal Receivables will be deemed collections of
Finance Charge Receivables and will be applied accordingly. Such feature is
intended to permit the Transferor to increase the Portfolio Yield and thereby
decrease the risk of the occurrence of an Amortization Event.
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On the Closing Date, the Transferor will designate an initial Discount
Percentage equal to 2.0%. Any increase, reduction or withdrawal of such Discount
Percentage will be made in accordance with the conditions described in the
Agreement.
FINAL PAYMENT OF PRINCIPAL; TERMINATION OF TRUST
The Series 1996-1 Interests will be subject to optional repurchase by the
Transferor on any Distribution Date on or after which the Class A, Class B and
Collateral Interest Invested Amount is reduced to an amount less than or equal
to $11,910,257 (5% of the Initial Class A, Initial Class B and Initial
Collateral Interest Invested Amount), unless certain events of bankruptcy,
insolvency or receivership have occurred with respect to the Transferor. The
repurchase price will be equal to the Invested Amount plus accrued and unpaid
interest on the Series 1996-1 Interests through the day preceding the
Distribution Date on which the repurchase occurs. After such date, neither the
Trust nor the Transferor will have any further obligation to pay principal or
interest of the Series 1996-1 Interests.
Subject to prior termination as provided above, the Agreement provides that
the final distribution of principal and interest on the Class A Certificates
will be made no later than the July, 2003 Distribution Date (the 'Final Class A
Termination Date') and the final payment of principal and interest on the Class
B Certificates will be made no later than the July, 2003 Distribution Date (the
'Final Class B Termination Date'). The final payment of principal and interest
with respect to the Other Interests will be no later than July, 2003 (the 'Final
Series 1996-1 Termination Date'). In the event that the Invested Amount of the
Series 1996-1 Interests is greater than zero on the Final Series 1996-1
Termination Date, the Trustee will sell or cause to be sold, and apply the
proceeds to the extent necessary to pay such remaining amounts to all
Certificateholders pro rata as final payment of the Series 1996-1 Interests, an
amount of Receivables at the close of business on such date, as provided in the
Agreement. The proceeds of any such sale will be treated as Collections on the
Receivables allocable to the Series 1996-1 Interests and applied as provided
above in '--Application of Collections.' Such proceeds will be allocated first
to pay amounts due to the Class A Certificateholders and then to pay amounts due
to the Class B Certificateholders.
Subject to laws of general applicability regarding trusts, unless the
Transferor instructs the Trustee otherwise, the Trust will only terminate on the
earlier to occur of: (a) the day after the Distribution Date following the date
on which funds shall have been deposited in the Collection Account for the
payment to certificateholders outstanding sufficient to pay in full the
aggregate investor interest of all Series outstanding plus interest thereon at
the applicable certificate rates to the next Distribution Date and (b) September
15, 2092 (the 'Final Trust Termination Date'). Upon the termination of the Trust
and the surrender of the Exchangeable Transferor Certificate, the Trustee shall
convey to the Transferor all right, title and interest of the Trust in and to
the Receivables and other funds of the Trust (other than amounts in the accounts
maintained by the Trust for the final payment of principal and interest to
Certificateholders).
AMORTIZATION EVENTS
The Revolving Period will continue through the end of the Collection Period
related to the November, 1999 Distribution Date and the Controlled Amortization
Period will begin at such time, unless an Amortization Event occurs. The Rapid
Amortization Period will commence on the day on which an Amortization Event
occurs or is deemed to occur. An 'Amortization Event' occurs, either
automatically, after specified notice or within a designated cure period, as
specified in the Agreement and refers to any of the following events:
(i) failure on the part of the Servicer or the Transferor to make any
payment or deposit required by the terms of the Agreement or before five
business days after the date such payment or deposit is required to be made
thereunder;
(ii) the failure on the part of the Servicer, the Originator or the
Transferor duly to observe or perform in any material respect certain
covenants or agreements set forth in the Agreement or the Purchase and Sale
Agreement which, in the case of certain of such covenants or agreements,
continues unremedied for a period of 60 days after the date on which
written notice of such failure requiring the same to be remedied shall have
been given to the Servicer, the Originator or the Transferor, as
applicable, provided, however, that an Amortization Event shall not be
deemed to occur if the Transferor has accepted the transfer of the related
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Receivable (or all of such Receivables, if applicable) during such period
(or such longer period as the Trustee may specify not to exceed an
additional 60 days) in accordance with the provisions of the Agreement or
the Purchase and Sale Agreement;
(iii) any representation or warranty made by the Servicer, the
Originator or the Transferor in the Agreement or the Purchase and Sale
Agreement or any information required to be delivered by the Transferor
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 Servicer,
the Originator or the Transferor, as applicable, and as a result of which
the interests of the certificateholders are materially and adversely
affected; provided, however, that such an Amortization Event shall not be
deemed to have occurred if the Transferor has accepted the transfer of the
related Receivable (or all of such Receivables, if applicable) during such
period (or such longer period as the Trustee may specify) in accordance
with the provisions of the Agreement;
(iv) certain events of insolvency, conservatorship, receivership or
bankruptcy with respect to the Originator, Bridgestone/Firestone or the
Transferor;
(v) the Portfolio Yield averaged over any three consecutive Collection
Periods is less than the Base Rate;
(vi) the Trust shall become an 'investment company' within the meaning
of the Investment Company Act of 1940, as amended;
(vii) the Transferor Amount (plus the amount available under the
Transferor Letter of Credit and the B/F Amount) is less than 7% of the
aggregate invested amount of all outstanding Series of certificates issued
by the Trust as of the last day of any Collection Period;
(viii) the sum of the Transferor Amount plus the B/F Amount plus the
Subordinated Transferor Amount (plus any subordinated class of certificates
of additional Series which, when issued, is retained by the Transferor and
with respect to which no legal opinion is delivered characterizing such
certificates as indebtedness) is less than 7% of the Aggregate Receivables
as of the last day of any Collection Period;
(ix) the Class A Invested Amount is not paid in full on the Class A
Expected Final Payment Date or the Class B Invested Amount is not paid in
full on the Class B Expected Final Payment Date;
(x) the Transferor becomes unable for any reason to transfer
Receivables to the Trust in accordance with the provisions of the
Agreement;
(xi) the Aggregate Receivables as of the last day of any Collection
Period are less than the sum of (a) the Transferor Amount (plus the amount
available under the Transferor Letter of Credit and the B/F Amount) and (b)
the aggregate initial invested amount of Series 1996-1; and
(xii) any Servicer Event of Default shall occur which would have a
material adverse effect on the Certificateholders.
The Rapid Amortization Period will commence on the day on which an Amortization
Event occurs or is deemed to occur. Monthly distributions of principal to the
Class A Certificateholders will begin (if they have not already) on the
Distribution Date with respect to the Collection Period in which an Amortization
Event occurs or is deemed to have occurred. Following the final principal
payment to the Class A Certificateholders, the Class B Certificateholders will
begin to receive monthly distributions of principal. Thus, Class A and Class B
Certificateholders may begin receiving distributions of principal earlier than
they otherwise would have, which may shorten the final maturity of the Class A
Certificates and Class B Certificates. If the only Amortization Event to occur
is either the insolvency of the Transferor or the appointment of a receiver or
bankruptcy trustee for the Transferor, the receiver or bankruptcy trustee for
the Transferor may have the power to delay or prevent commencement of the Rapid
Amortization Period.
In addition to the consequences of an Amortization Event discussed above,
if the Transferor or Bridgestone/Firestone voluntarily files a bankruptcy
petition or goes into liquidation or any person is appointed a receiver or
bankruptcy trustee of the Transferor or Bridgestone/Firestone, on the day of
such appointment the
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Transferor will immediately cease transferring Receivables to the Trust and
promptly give notice to the Trustee of such appointment. Within 15 days, the
Trustee will publish a notice of the liquidation or the appointment stating that
the Trustee intends to sell, dispose of or otherwise liquidate the Receivables
in a commercially reasonable manner and to the best of its ability. Unless
otherwise instructed within a specified period by the certificateholders
representing undivided interests aggregating more than 50% of the aggregate
principal amount of each Series (or in the case of a series having more than one
class of investor certificates, each class of such Series), 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 and such proceeds will be distributed to certificateholders. If the
portion of such proceeds allocable to the Certificateholders' Interest and the
proceeds of any Collections in the Collection Account are not sufficient to pay
in full the remaining amount due on the Class A and Class B Certificates, the
Class A and Class B Certificateholders will suffer a corresponding loss. See
'Certain Legal Aspects of the Receivables--Certain Matters Relating to
Bankruptcy.'
INDEMNIFICATION
The Agreement will provide that, subject to certain exceptions specified
therein, the Servicer will indemnify the Trust, for the benefit of
certificateholders, and the Trustee, including its officers, directors and
employees, from and against any loss (excluding any investment loss), liability,
expense, damage or injury suffered or sustained and arising out of activities of
the Trust or the Trustee (or such other Person) pursuant to the Agreement on any
supplement, including those arising out of the Servicer's actions or omissions
with respect to the Trust pursuant to the Agreement or any Supplement.
Under the Agreement, the Transferor and Bridgestone/Firestone will
indemnify an injured party for the entire amount of any losses, claims, damages
or liabilities arising out of or based on the Agreement or the actions of the
Servicer taken pursuant to the Agreement as though the Agreement created a
partnership under the Uniform Partnership Act. The Transferor and
Bridgestone/Firestone will also indemnify each certificateholder for any such
losses, claims, damages or liabilities (other than those incurred by a
certificateholder as a result of defaults on the Receivables) except to the
extent that they arise from any action by any certificateholder. In the event of
a Service Transfer (defined below), the successor Servicer will indemnify the
Transferor for any losses, claims, damages and liabilities of the Transferor as
described in this paragraph arising from the grossly negligent actions or
omissions of such successor Servicer.
The Agreement provides that none of the Transferor, the Servicer or any of
their directors, officers, employees or agents will be under any other liability
to the Trust, the Trustee, the certificateholders, any Enhancement provider or
any other person for any action taken, or for refraining from taking any action,
in good faith pursuant to the Agreement. However, none of the Transferor, the
Servicer or any of their directors, officers, employees or agents will be
protected against any liability which would otherwise be imposed by reason of
willful misfeasance, bad faith or gross negligence of any such person in the
performance of their duties or by reason of reckless disregard of their
obligations and duties thereunder.
In addition, the 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 Agreement. The Servicer
may, in its sole discretion, undertake any such legal action which it may deem
necessary or desirable for the benefit of certificateholders with respect to the
Agreement and the rights and duties of the parties thereto and the interest of
the certificateholders thereunder.
COLLECTION AND OTHER SERVICING PROCEDURES
Pursuant to the Agreement, the Servicer will be responsible for servicing,
collecting, enforcing and administering the Receivables in accordance with the
policies and procedures and the degree of skill and care applied or exercised
with respect to revolving credit receivables owned or serviced by the Servicer.
The Servicer will be required to maintain fidelity bond coverage insuring
against losses through wrongdoing of its officers and employees who are involved
in the servicing of receivables covering such actions and in such amounts as the
Servicer believes to be reasonable from time to time.
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Servicing activities performed by the Servicer with respect to the Accounts
include collecting and recording payments, communicating with cardholders,
investigating payment delinquencies, providing billing records to cardholders
and maintaining internal records. 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 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 Agreement provides that the Servicer may delegate its duties under that
agreement to any entity (a 'Subservicer') that agrees to conduct such duties in
accordance with the Agreement and the credit account guidelines set forth
therein. CFNA shall initially act as a Subservicer. Notwithstanding any such
delegation the Servicer will continue to be liable for all of its obligations
under the Agreement.
SERVICER COVENANTS
In the Agreement, the Servicer will covenant to the Certificateholders and
the Trustee as to each Receivable and related Account that: (i) it will duly
fulfill all obligations on its part to be fulfilled under or in connection with
the Receivable or Account, and will maintain in effect all qualifications
required in order to service the Receivable or Account and will comply with all
requirements of law in connection with servicing the Receivable and the Account
the failure to comply with which would have a material adverse effect on
Certificateholders; (ii) it will not permit any rescission or cancellation of
the Receivable, except as ordered by a court of competent jurisdiction and (iii)
it will do nothing to impair the rights of the Certificateholders in the
Receivables and will not reschedule, revise or defer payments due on any
Receivable, except in accordance with the Servicer's usual and customary
servicing practices.
Under the terms of the Agreement, the Servicer is obligated to accept the
transfer of any Receivable if it discovers, or receives written notice from the
Trustee, that (i) any covenant of the Servicer set forth above has not been
complied with, with respect to such Receivable or (ii) the Servicer has not
complied in all material respects with all requirements of law applicable to the
Receivable or Account, and in either case such noncompliance has not been cured
within 60 days thereafter and the Receivable has been charged off as
uncollectible or the proceeds of the Receivable are not available to the Trust.
Such assignment and transfer will be made when the Servicer deposits an amount
equal to the amount of such Receivable (including monthly finance charges
thereon through the end of the related Collection Period) in the Collection
Account on the business day preceding the Distribution Date following the
Collection Period during which such obligation arises. The amount of such
deposit shall be deemed a payment in respect of the related Receivable and will
be treated under the Agreement in the same manner as are payments received by
the Servicer from cardholders under the Accounts. Any amounts so paid by the
Servicer shall be allocated in respect of Finance Charge Collections and
Principal Collections as provided in the Agreement.
SERVICING COMPENSATION AND PAYMENT OF EXPENSES
The Servicer's compensation for its servicing activities is a monthly
servicing fee (the 'Servicing Fee') in an amount, on any Distribution Date,
equal to the sum of, with respect to all Series, one-twelfth of the sum for each
Series of the product of (a) the applicable servicing fee percentages with
respect to each Series and (b) the sum of an allocable portion of the amount of
the Transferor Amount and the B/F Amount and the aggregate invested amount with
respect to each Series on the last day of the second preceding Collection
Period. The Servicing Fee will be allocated among the Transferor Amount, the B/F
Amount, the Certificateholders and certificateholders of all of the other
Series. The portion of the Servicing Fee allocable to the Class A Interest on
each Distribution Date (the 'Class A Monthly Servicing Fee') to the Class B
Interest on each Distribution Date (the 'Class B Monthly Servicing Fee'), to the
Collateral Interest on each Distribution Date (the 'Collateral Interest Monthly
Servicing Fee') and to the Subordinated Transferor Interest on each Distribution
Date (the 'Subordinated Transferor Monthly Servicing Fee') generally will be
equal to one-twelfth of the product of 2.00% per annum and the amount of the
Class A Invested Amount, the Class B Invested Amount, the Collateral Interest
Invested Amount on the Subordinated Transferor Invested Amount, as the case may
be, on the last day of the second preceding Collection Period (in the case of
the first Distribution Date, the initial principal amount of the Class A
Certificates, Class B Certificates, the Collateral Interest or the Subordinated
Transferor Certificate, as
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the case may be). The remaining portion of the Servicing Fee will be allocable
to the Transferor Amount and the B/F Amount. The Class A Monthly Servicing Fee,
Class B Monthly Servicing Fee, the Collateral Interest Monthly Servicing Fee and
the Subordinated Transferor Monthly Servicing Fee will be paid with respect to
each Collection Period from the Collection Account (unless such amount has been
netted against deposits to the Collection Account) as described under
'Distributions from the Collection Account' above.
The Servicer may perform any of its obligations under the Agreement through
one or more subservicers. The Servicer shall remain liable for its servicing
duties and obligations as if the Servicer alone were servicing the Receivables.
The Servicer shall be responsible for the fees and expenses of any such
subservicer.
The Servicer will pay from its servicing compensation certain expenses
incurred in connection with servicing the Accounts and the Receivables
including, without limitation, expenses related to enforcement of the
Receivables, payment of fees and disbursements of the Trustee and independent
accountants, payment of fees and expenses of any subservicer and all other fees
and expenses which are not expressly stated in the 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 SERVICER
The Servicer may not resign from its obligations and duties under the
Agreement, except upon determination that such duties are no longer permissible
under applicable law or upon the appointment of a successor Servicer in the
business of servicing credit card receivables with a net worth of at least
$100,000,000 and delivery of written confirmation that the ratings of the Series
1996-1 Interests will not be withdrawn or reduced as a result of such Service
Transfer (defined below) and that there will not be a material adverse impact on
the Federal income tax characteristics of the Series 1996-1 Interests. 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
Agreement. Under circumstances described in '--Conveyance of Accounts' below,
the obligation of the Servicer may be transferred to a new servicer.
Any person into which, in accordance with the Agreement, the Transferor or
the Servicer may be merged or consolidated or any person resulting from any
merger or consolidation to which the Transferor or the Servicer is a party, or
any person succeeding to the business of the Transferor or the Servicer, will be
the successor to the Transferor or the Servicer, as the case may be, under the
Agreement.
SERVICER EVENTS OF DEFAULT
Pursuant to the terms of the Agreement, a 'Servicer Event of Default'
refers to any of the following events:
(i) failure by the Servicer to make any payment, transfer or deposit,
or to give instructions to the Trustee to make any withdrawal, on the date
the Servicer is required to do so under the Agreement or any Supplement (or
within a five business day grace period);
(ii) failure on the part of the Servicer to observe or perform any
other term, covenant, condition or agreement provided for in the Agreement
or any Supplement or breach by the Servicer of any representation or
warranty in the Agreement if such failure or breach has a material adverse
effect on the certificateholders, which continues unremedied for a period
of 60 days after the earlier of discovery by the Servicer or the date on
which written notice has been given and which continues to materially
adversely affect the rights of the certificateholders of any Series then
outstanding for such period, or the Servicer assigns its duties under the
Agreement, except as specifically permitted thereunder;
(iii) any representation, warranty or certification made by the
Servicer in the Agreement or any Supplement or in any certificate delivered
pursuant to the Agreement or any Supplement proves to have been incorrect
when made, which has a material adverse effect on the rights of the
certificateholders, and which material adverse effect continues for the
certificateholders for a period of 60 days after written notice and which
continues to materially adversely affect the rights of the
certificateholders of any Series then outstanding for such period; and
(iv) the occurrence of certain events of bankruptcy, insolvency or
receivership of the Servicer.
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In the event of any Servicer Event of Default, either the Trustee or
certificateholders evidencing undivided interests aggregating more than 50% of
the aggregate invested amount of all Series, 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, in its capacity as servicer under
the Agreement, to all of the Receivables held by the Trust with respect to all
Series, and the proceeds thereof, and appoint a new Servicer (a 'Service
Transfer'). The Transferor may grant to any Enhancement provider the right to
exercise such rights on behalf of any related Series. The Trustee shall as
promptly as possible appoint (with the consent of the Originator) a successor
Servicer and if no successor Servicer has been appointed by the Trustee and has
accepted such appointment by the time the Servicer ceases to act as Servicer,
all authority, power and obligations of the Servicer under the Agreement will
pass to, and be vested in, the Trustee. Prior to any Service Transfer, the
Trustee will seek to obtain bids from potential Servicers meeting certain
eligibility requirements set forth in the Agreement to serve as a successor
Servicer for servicing compensation not in excess of the Servicing Fee. In the
event that a successor Servicer has not been appointed and has not accepted its
appointment at the time when the Servicer ceases to act as Servicer, the Trustee
without further action will automatically be appointed the successor Servicer.
Notwithstanding the above, the Trustee will, if it is legally unable so to act,
petition a court of competent jurisdiction to appoint any established financial
institution having a net worth of not less than $100,000,000 and whose regular
business includes the servicing of credit card receivables as the successor
Servicer.
Upon its appointment, the successor Servicer shall be the successor in all
respects to the Servicer with respect to servicing functions under the Agreement
and shall be subject to all the responsibilities, duties and liabilities
relating thereto placed on the Servicer by the terms and provisions thereof, and
all references in the Agreement to the Servicer will be deemed to refer to the
successor Servicer. The successor Servicer shall expressly be authorized to
delegate any of its duties under the Agreement to the Servicer on and after the
date of any transfer of servicing pursuant to the Agreement.
In connection with such appointment and assumption, the successor Servicer
shall be entitled to servicing compensation not in excess of the Servicing Fee.
The Transferor and Bridgestone/Firestone have agreed that if a successor
Servicer shall be appointed, such successor Servicer may withhold from amounts
otherwise payable to the Transferor or Bridgestone/Firestone an amount equal to
the Monthly Servicing Fee with respect to the Transferor Interest and the B/F
Interest for such related Collection Period.
REPORTS TO CERTIFICATEHOLDERS
No later than the second business day prior to each Distribution Date, the
Servicer will forward to the Trustee a statement (the 'Monthly Servicer's
Certificate') prepared by the Servicer setting forth certain information with
respect to the Trust and the Series 1996-1 Interests, including, among other
things: (a) the aggregate amount of Collections, the aggregate amount of Finance
Charge Collections and the aggregate amount of Principal Collections processed
during the immediately preceding Collection Period; (b) the Class A Floating
Allocation Percentage, the Class B Floating Allocation Percentage, the
Collateral Interest Floating Allocation Percentage and the Subordinated
Transferor Floating Allocation Percentage for such Collection Period and, during
the Controlled Amortization Period and any Rapid Amortization Period, the Fixed
Allocation Percentage; (c) the aggregate outstanding balance of the Accounts
which were delinquent by 30 days to 60 days and by 61 days or more as of the end
of the immediately preceding Collection Period; (d) the Class A Investor Default
Amount, Class B Investor Default Amount, the Collateral Interest Investor
Default Amount and the Subordinated Transferor Investor Default Amount for such
Distribution Date; (e) the amount of Class A Investor Charge-Offs, Class B
Investor Charge-Offs, Collateral Interest Investor Charge-Offs and Subordinated
Transferor Investor Charge-Offs and the amount of reimbursements of each for
such Distribution Date; (f) the amount of the Class A Monthly Servicing Fee,
Class B Monthly Servicing Fee, Collateral Interest Monthly Servicing Fee and
Subordinated Transferor Monthly Servicing Fee for such Distribution Date; (g)
the existing Deficit Controlled Amortization Amount; (h) the Aggregate
Receivables at the close of business on the last day of the Collection Period
preceding such Distribution Date; (i) the Class A Invested Amount, the Class B
Invested Amount, the Collateral Interest Invested Amount and the Subordinated
Transferor Amount at the close of business on the last day of the Collection
Period immediately preceding such Distribution Date; and (j) the amount of Class
B Reallocated Principal Collections, Collateral Interest Reallocated Principal
Collections and Subordinated
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Transferor Reallocated Principal Collections for such Distribution Date. The
Trustee will make such statement available to the Certificateholders upon
request.
On each Distribution Date, the Paying Agent, on behalf of the Trustee, will
forward to each Class A Certificateholder and Class B Certificateholder of
record a statement (the 'Payment Date Statement') prepared by the Servicer
setting forth the information with respect to the Offered Certificates set forth
in the Monthly Servicer's Certificate supplied to the Trustee as described in
the preceding paragraph since the immediately preceding Distribution Date and
the following additional information (which, in the case of (a), (b) and (c)
below, will be stated on the basis of an original principal amount of $1,000 per
Class A Certificate or Class B Certificate, as applicable): (a) the total amount
distributed; (b) the amount of such distribution allocable to principal on the
Offered Certificates; (c) the amount of such distribution allocable to interest
on the Offered Certificates; (d) the amount, if any, by which the principal
balance of the Class A Certificates exceeds the Class A Invested Amount and the
Class B Certificates exceed the Class B Invested Amount as of the Record Date
with respect to such Distribution Date, as the case may be; and (e) the 'Class A
Pool Factor' and 'Class B Pool Factor' as of the end of the Record Date with
respect to such Distribution Date (consisting of an eight-digit decimal
expressing the Class A Invested Amount or Class B Invested Amount, as
applicable, as of such Record Date (determined after taking into account any
increase or decrease in the Class A Invested Amount or Class B Invested Amount,
as applicable, which will occur on the following Distribution Date) as a
proportion of the Class A Initial Invested Amount or Class B Initial Invested
Amount). The Payment Date Statement and the Monthly Servicer's Certificate will
be available to Certificate Owners, as described under 'Special
Considerations--Book Entry Registration' and 'Available Information.'
On or before January 31 of each calendar year, the Paying Agent, on behalf
of the Trustee, will furnish or cause to be furnished to each person who at any
time during the preceding calendar year was a Certificateholder of record (or,
if so provided in applicable Treasury regulations, made available to Certificate
Owners) a statement prepared by the Trustee containing the information required
to be provided by an issuer of indebtedness under the Code for such calendar
year or the applicable portion thereof during which such person was a
Certificateholder, together with such other customary information as the
Servicer deems necessary or desirable to enable the Certificateholders to
prepare their tax returns. See 'Federal Income Tax Consequences.'
EVIDENCE AS TO COMPLIANCE
The Agreement provides that on or before March 31 of each calendar year,
the Servicer will cause a firm of independent public accountants to furnish a
report to the effect that such firm has applied certain agreed-upon procedures
to certain documents and records relating to the servicing of the Receivables
and that, based upon such agreed-upon procedures, no matters came to their
attention that caused them to believe that such servicing was not conducted in
compliance with certain applicable terms and conditions set forth in the
Agreement except for such exceptions or errors as such firm shall believe to be
immaterial and such other exceptions as shall be set forth in such statement. In
addition, on or before March 31 of each calendar year such accountants will
compare the mathematical calculations of the amounts contained in the Monthly
Servicer's Certificates and other 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 certificate to the Trustee confirming that such amounts are in
agreement except for such exceptions as they believe to be immaterial and such
other exceptions which shall be set forth in such report.
The Agreement provides for delivery to the Trustee on or before March 31 of
each calendar year, of a statement signed by an officer of the Servicer to the
effect that the Servicer has, or has caused to be, fully performed its
obligations in all material respects under the Agreement throughout the
preceding year or, if there has been a default in the performance of any such
obligation, specifying the nature and status of the default.
Copies of all statements, certificates and reports furnished to the Trustee
may be obtained by a request in writing delivered to the Trustee.
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CONVEYANCE OF ACCOUNTS
Subject to the conditions set forth in the succeeding sentence, the
Originator may transfer or otherwise convey its interest in the Accounts,
including the Receivables in such Accounts (subject to the interest of the
Transferor and the Trustee on behalf of the certificateholders), in whole or in
part. The Originator will be permitted to convey Accounts only upon satisfaction
of the following conditions: (i) the acquiring person will (a) be organized and
existing under the laws of the United States of America or any state or the
District of Columbia, and be a bank or other entity that is not subject to the
Bankruptcy Code of 1978 which may be established by and owned by
Bridgestone/Firestone, and (b) expressly assume by an agreement supplemental to
the Purchase and Sale Agreement the performance of the Originator's obligations
with respect to such Accounts; (ii) the Transferor will deliver to the Trustee
opinions of counsel (a) stating that all conditions precedent to the conveyance
have been complied with and (b) to the effect that the conveyance will not
adversely affect the treatment of the Series 1996-1 Interests as debt for
Federal and applicable state income tax purposes or materially adversely impact
the Federal income tax consequences that affect any certificateholder and
generally to the effect that the transfer would not affect the Federal income
tax ownership of the Receivables; and (iii) the Transferor will obtain from each
Rating Agency a letter confirming that the rating of all outstanding Series of
certificates, after such conveyance, will not be lowered or withdrawn.
AMENDMENTS
The Agreement and any Supplement may be amended by the Transferor, 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 Agreement or any
Supplement which are not inconsistent with the provisions of the Agreement or
any Supplement; provided, however, that such action shall not, as evidenced by
an opinion of counsel, adversely affect in any material respect the interests of
any of the holders of certificates.
The Agreement and any Supplement may also be amended from time to time by
the Servicer, the Transferor and the Trustee, without the consent of any of the
certificateholders, for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of the Agreement, or of
modifying, in any manner the rights of the holders of certificates; provided
that (i) the Servicer will have provided an officer's certificate to the Trustee
and any Enhancement provider to the effect that such amendment will not
materially and adversely affect the interests of the certificateholders, (ii)
such amendment will not, as evidenced by an opinion of counsel, cause the Trust
to be characterized for Federal income tax purposes as an association taxable as
a corporation or otherwise have any material adverse impact on the Federal
income taxation of any outstanding Series of certificates or any Certificate
Owner and (iii) the Rating Agencies shall confirm that such amendment will not
cause a reduction or withdrawal of the rating of any outstanding Series of
certificates; provided, further, that such amendment will not reduce in any
manner the amount of, or delay the timing of, distributions which are required
to be made on any certificate of such Series without the consent of the related
certificateholder, change the definition of or the manner of calculating the
interest of any certificateholder of such Series without the consent of the
related certificateholder or reduce the percentage pursuant to the next
paragraph required to consent to any such amendment, in each case without the
consent of all such certificateholders; provided, further, that (x) the transfer
of the Accounts and/or the servicing functions with respect thereto as described
above under '--Conveyance of Accounts' and the appointment of an entity as
Servicer under the Agreement in connection with such transfer, (y) any
transaction effected in accordance with the merger and consolidations provisions
of the Agreement relating to the Servicer, (z) any other transactions related,
supplemental or incidental thereto will be deemed not to materially and
adversely affect the interests of the certificateholders and will not require
the delivery of an officer's certificate pursuant to clause (i) above.
The Agreement and any Supplement may be amended by the Transferor, the
Servicer and the Trustee with the consent of the holders of certificates
evidencing undivided interests aggregating not less than 66 2/3% of the
principal amount of all Series adversely affected, for the purpose of adding any
provisions to, changing in any manner or eliminating any of the provisions of
the Agreement or any Supplement or of modifying in any manner the rights of
certificateholders of any Series then issued and outstanding. No such amendment,
however, may (i) reduce in any manner the amount of, or delay the timing of,
distributions required to be made on such Series, (ii) change the definition or
the manner of calculating the interest of any certificateholder of such Series,
or
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(iii) reduce the aforesaid percentage of undivided interests the
certificateholders 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 Agreement or
any Supplement, the Trustee will furnish written notice of the substance of such
amendment to each certificateholder of all Series (or with respect to an
amendment of a Supplement, to the applicable Series).
Pursuant to the Series Supplement providing for the issuance of the Series
1992-B Certificates, the enhancement providers with respect to the Series 1992-B
Certificates (of which there are two providing unequal amounts of enhancement)
shall be entitled to vote as if such enhancement providers were
Certificateholders under the Agreement to the exclusion of the holders of the
Series 1992-B Certificates.
LIST OF CLASS A AND CLASS B CERTIFICATEHOLDERS
Upon written request of three or more Class A Certificateholders of record
or any Class A Certificateholder or group of Class A Certificateholders of
record representing undivided interests in the Trust aggregating not less than
5% of the Class A Invested Amount, the Trustee will afford such Class A
Certificateholders access during business hours to the current list of Class A
Certificateholders of the Trust for purposes of communicating with other Class A
Certificateholders with respect to their rights under the Agreement.
Upon written request of three or more Class B Certificateholders of record
or any Class B Certificateholder or group of Class B Certificateholders of
record representing undivided interests in the Trust aggregating not less than
5% of the Class B Invested Amount, the Trustee will afford such Class B
Certificateholders access during business hours to the current list of Class B
Certificateholders of the Trust for purposes of communicating with other Class B
Certificateholders with respect to their rights under the Agreement.
The Agreement does not provide for any annual or other meetings of Class A
and Class B Certificateholders.
THE TRUSTEE
The Fuji Bank and Trust Company is Trustee under the Agreement. The
Transferor, the Servicer and their respective affiliates may from time to time
enter into normal banking and trustee relationships with the Trustee and its
affiliates. The Trustee, the Transferor, the Servicer and any of their
respective affiliates may hold Certificates in their own names; however, any
Certificates so held shall not be entitled to participate in any decisions made
or instructions given to the Trustee by the Certificateholders as a group. The
Trustee's address is Two World Trade Center, 81st Floor, New York, New York
10048, Attention: Trust Administration Department.
For purposes of meeting the legal requirements of certain local
jurisdictions, the Trustee will have the power to appoint a co-trustee or
separate trustees of all or any part of the Trust. In the event of such
appointment, all rights, powers, duties and obligations conferred or imposed
upon the Trustee will be conferred or imposed upon and exercised or performed by
the Trustee and such separate trustee or co-trustee jointly, or, in any
jurisdiction in which the Trustee will be incompetent or unqualified to perform
certain acts, singly upon such separate trustee or co-trustee who shall exercise
and perform such rights, powers, duties and obligations solely at the direction
of the Trustee.
The Trustee may resign at any time, in which event the Transferor will be
obligated to appoint a successor Trustee. The Servicer may also remove the
Trustee, if the Trustee ceases to be eligible to continue as such under the
Agreement or if the Trustee becomes insolvent. In such circumstances, the
Servicer will be obligated to appoint a successor Trustee. Any resignation or
removal of the Trustee and appointment of a successor Trustee does not become
effective until acceptance of the appointment by the successor Trustee.
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DESCRIPTION OF THE PURCHASE AND SALE AGREEMENT
The Receivables originated under the Accounts established under the Credit
Card Program transferred to the Trust by the Transferor and existing as of the
Cut-off Date and Receivables originated under the Accounts established under the
Credit Card Program transferred to the Trust by the Transferor and originated
after the Cut-off Date have or will be purchased by the Transferor from the
Originator pursuant to the Purchase and Sale Agreement. Receivables originated
under Eligible Alternative Accounts will also be purchased by the Transferor
from the Originator pursuant to the Purchase and Sale Agreement. The following
summary describes certain terms of the Purchase and Sale Agreement.
SALE OF RECEIVABLES
Under the Purchase and Sale Agreement, the Originator has sold Receivables
originated on and before the Cut-off Date and, provided that the Transferor is
not in default thereunder and that no Servicer Event of Default shall have
occurred, for so long as any Series of certificates is outstanding, the
Originator will sell, as applicable, to the Transferor all its right, title and
interest in and to the Receivables originated under the Accounts existing on and
originated after the Cut-off Date. Pursuant to the Agreement, all such
Receivables will be transferred by the Transferor to the Trust, and the
Transferor will assign its rights in, to and under the Purchase and Sale
Agreement with respect to such Receivables to the Trust. The purchase price of
the purchased Receivables will be payable by the Transferor in cash. Pursuant to
the Purchase and Sale Agreement, on the first Transfer Date after the Closing
Date, CFNA shall transfer Merchant Fees in amount equal to $350,000. On each
Transfer Date thereafter, CFNA shall transfer Merchant Fees collected during the
calendar month preceding the related Transfer Date in an amount equal to the
lesser of (a) $350,000 and (b) the amount of Merchant Fees actually collected by
CFNA during such calendar month, to the Transferor. The Transferor will transfer
such Merchant Fees to the Trust.
The Purchase and Sale Agreement provides that the Originator may convey its
interest in the Accounts (subject to the interest of the Transferor and the
Trustee on behalf of certificateholders). See 'Description of the Offered
Certificates and the Agreement--Conveyance of Accounts' above.
In connection with the Purchase and Sale Agreement, the Originator has
indicated and will indicate in its records, including any computer files, that
the Receivables arising under the Accounts have been or will be sold to the
Transferor by the Originator and that such Receivables have been transferred by
the Transferor to the Trust. The records and agreements relating to such
Accounts and Receivables will not be segregated by Bridgestone/Firestone from
other documents and agreements relating to other charge accounts and receivables
and will not be stamped or marked to reflect the sale thereof to the Transferor.
The Originator has filed UCC financing statements meeting the requirements of
state law in Ohio with respect to such Receivables. See 'Risk Factors--Potential
Priority of Certain Liens' and 'Certain Legal Aspects of the Receivables.'
REPRESENTATIONS AND WARRANTIES
The Originator represents and warrants to the Transferor to the effect,
among other things, that as of the Closing Date: (a) the Originator is duly
organized and validly existing in good standing under the laws of the United
States as a national banking association, (b) the Purchase and Sale Agreement
constitutes a legal, valid and binding obligation of the Originator and (c) the
sale by the Originator of Receivables pursuant to the Purchase and Sale
Agreement and the performance of its obligations has been duly authorized by all
requisite corporate action.
The Originator has also agreed to indemnify the Transferor and to hold the
Transferor harmless from and against any and all losses, damages and expenses
(including reasonable attorneys' fees) suffered or incurred by the Transferor as
a result of the breach by the Originator of any representation, warranty,
covenant or agreement set forth in the Purchase and Sale Agreement.
In addition, the Originator expressly acknowledges and consents to the
Transferor's assignment of its rights relating to the interests sold by the
Originator under the Purchase and Sale Agreement to the Trustee for the benefit
of the Certificateholders.
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TERMINATION
If pursuant to certain provisions of Federal law, the Originator becomes
party to any insolvency or similar proceeding (other than as a claimant) and, if
such proceeding is not voluntary and it is not dismissed within 90 days of its
institution, or if a receiver is appointed for the Originator, the Originator
will immediately cease selling Receivables to the Transferor.
CERTAIN LEGAL ASPECTS OF THE RECEIVABLES
TRANSFER OF RECEIVABLES
At the time of the formation of the Trust, pursuant to the Purchase and
Sale Agreement, the Originator sold to the Transferor all its right, title and
interest in and to those Receivables existing under the Eligible Accounts as of
the Cut-off Date and, provided that the Transferor is not in default thereunder
and no Servicer Event of Default shall have occurred, its right, title and
interest to those Receivables arising under the Eligible Accounts from time to
time thereafter. The Transferor conveyed to the Trust, without recourse, all
Receivables existing under the Eligible Accounts, as of the Cut-off Date and
thereafter created. The Transferor has covenanted and warranted that such
transfer constitutes either a valid transfer and assignment to the Trust of all
right, title and interest of the Transferor in and to the Receivables, except
for the interest of the Transferor as holder of the Exchangeable Transferor
Certificate, or a grant of a security interest to the Trust in and to the
Receivables. The Transferor also covenanted and warranted to the Trust in the
Agreement that, in the event the transfer of Receivables by the Transferor to
the Trust is deemed to create a security interest under the UCC and assuming
that the Transferor is not at the time the subject of any insolvency
proceedings, there exists a valid, subsisting and enforceable first priority
perfected security interest in the Receivables in existence since 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 the Receivables
created thereafter and, with certain exceptions, and for certain limited time
periods, the proceeds thereof, in favor of the Trust on and after their
creation. For a discussion of the Trust's rights arising from these covenants
and warranties not being satisfied, see 'Description of the Offered Certificates
and the Agreement-- Covenants, Representations and Warranties.'
The Receivables are 'accounts' or 'general intangibles' as defined in
Article 9 of the UCC. To the extent the Receivables constitute accounts, both
the absolute transfer of such Receivables and the transfer of such Receivables
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, including the
filing of financing statements to perfect the Trust's security interest. To the
extent Receivables constitute general intangibles and the transfer of such
Receivables is deemed to be a transfer as security for an obligation, Article 9
of the UCC is applicable to the same extent as it is applicable to Receivables
constituting accounts. Financing statements covering the Receivables will be
filed under the UCC as in effect in Massachusetts to protect the Transferor and
the Trust. In the event the transfer by the Transferor to the Trust of any
general intangibles is deemed to be an absolute transfer, then the UCC is not
applicable, and no further action is required to perfect the Trustee's interest
in such Receivables from third-party claims.
There are certain limited circumstances under the UCC in which prior or
subsequent transferees of Receivables coming into existence after the Closing
Date could have an interest in such Receivables with priority over the Trust's
interest. A tax or other government lien on property of the Transferor arising
prior to the time a Receivable comes into existence may also have priority over
the interest of the Trust in such Receivables. In addition, under the Agreement,
the Transferor will covenant to accept the reassignment of the Receivables in
any Account containing a Receivable transferred to the Trust that is not free
and clear of the lien of any third-party, except certain permitted tax liens.
Furthermore, the Transferor covenants that it will not sell, pledge, assign,
transfer or grant any lien on any Receivable (or any interest therein) other
than to the Trust.
Unless continuation statements are filed within five years of the original
filings the time specified in the UCC in respect of the security interest of
either the Transferor or the Trust in the Receivables, the perfection of such
security interest will lapse. Pursuant to the Agreement, the Servicer will be
required to cause such statements to be filed.
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Because the Trust's interest in certain of the Receivables is dependent
upon the Transferor's interest in such Receivables, any adverse change in the
priority or perfection of the Transferor's security interest would
correspondingly affect the Trust's interest in the affected Receivables.
Collections of Receivables will, except in certain circumstances, be
available for use by the Servicer until deposited into the Collection Account on
the business day preceding each Distribution Date. In the event of insolvency or
receivership of the Servicer or, in certain circumstances, the lapse of certain
time periods, the Trust may not have a perfected interest in such cash
Collections.
CERTAIN MATTERS RELATING TO BANKRUPTCY
The Originator and the Transferor have treated and will treat the transfer
of Receivables under the Purchase and Sale Agreement as a sale. A court could
treat such transactions as assignments of collateral as security. To the extent
that the Originator has granted or will grant a security interest in the
Receivables to the Transferor and that security interest was validly perfected
before any insolvency of the Originator and was not granted or taken in or will
not be granted or taken in contemplation of insolvency or with the intent to
hinder, delay or defraud the Originator or its creditors, that security interest
should not be subject to avoidance in the event of the insolvency and
receivership of the Originator, and payments to the Transferor with respect to
the Receivables should not be subject to recovery by a conservator or receiver
for the Originator. If, however, the conservator or receiver were to assert a
contrary position, or were to require the Transferor to establish its rights to
those payments by submitting to and completing the administrative claims
procedure established under the Financial Institutions Reform, Recovery and
Enforcement Act of 1989 ('FIRREA'), or the conservator or receiver were to
request a stay of proceedings with respect to the Originator as provided under
FIRREA, delays in payments on the Offered Certificates and possible reductions
in the amount of such payments could occur. If a conservator or receiver is
appointed for the Originator, pursuant to the Purchase and Sale Agreement, new
Receivables would not be sold to the Transferor and an Amortization Event would
occur. Upon the occurrence of an Amortization Event, if a conservator or
receiver is appointed for the Originator and no other Amortization Event other
than such conservatorship, receivership or insolvency of the Originator exists,
the conservator or receiver may have the power to prevent the commencement of
the Rapid Amortization Period.
The Agreement provides that, upon the appointment of a receiver or
bankruptcy trustee for the Transferor or Bridgestone/Firestone, the Transferor
or Bridgestone/Firestone, respectively, will promptly give notice thereof to the
Trustee, and an Amortization Event with respect to all Series will occur. Under
the Agreement no new Receivables will be transferred to the Trust and, unless
otherwise instructed within a specified period by the holders of certificates
representing undivided interests aggregating more than 50% of the aggregate
principal amount of each Series or unless otherwise required by the receiver or
bankruptcy trustee for the Transferor, the Trustee will proceed to sell, dispose
of or otherwise liquidate the Receivables in a commercially reasonable manner
and on commercially reasonable terms. The proceeds from the sale of the
Receivables would then be treated by the Trustee as Collections on the
Receivables. If the only Amortization Event to occur is the appointment of a
receiver or bankruptcy trustee for the Transferor, such receiver or bankruptcy
trustee may have the power to continue to require the Transferor to continue to
transfer new Receivables to the Trust, as applicable, and to prevent the early
sale, liquidation or disposition of the Receivables and the commencement of a
Rapid Amortization Period. See 'Description of the Offered Certificates and the
Agreement--Amortization Events.'
CONSUMER PROTECTION AND BANKING LAWS
The relationship between the consumer and the provider of consumer credit
is extensively regulated by Federal and state consumer protection laws. With
respect to the credit cards issued under the Credit Card Program the most
significant Federal laws include the Federal Truth-In-Lending, Equal Credit
Opportunity Acts, Fair Credit Billing, Fair Credit Reporting, Fair Credit and
Charge Card Disclosure and Fair Debt Collection Practices Acts and state
consumer protection and retail installment sales laws. Such statutes may also
apply to the credit cards issued under Alternative Programs. These statutes
impose disclosure requirements before and when an Account is opened and at the
end of monthly billing cycles. In addition, cardholders are entitled under these
laws to have payments and credits applied to the account promptly and to require
billing errors to be resolved promptly. The Trust may be liable for certain
violations of consumer protection laws that apply to the Receivables, either as
assignee from the Transferor with respect to obligations arising before transfer
of the
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Receivables to the Trust or as the party directly responsible for obligations
arising after the transfer. In addition, cardholders may be entitled to assert
such violations by way of set off against the obligation to pay the amount of
Receivables owing. The Transferor has agreed to accept the transfer of all
Receivables that were not created in compliance in all material respects with
the requirements of such laws. The Servicer has also agreed in the Agreement to
indemnify the Trust, among other things, for any liability arising from such
violations. For a discussion of the Trust's rights if the Receivables were not
created in compliance in all material respects with applicable laws, see
'Description of the Offered Certificates and the Agreement--Covenants,
Representations and Warranties.'
Application of Federal and state bankruptcy and debtor relief laws would
affect the interests of the Certificateholders, if such laws result in any
Receivables being charged off as uncollectible in excess of the Class B Invested
Amount available to be allocated to the Class A Certificates and in excess of
the Collateral Interest Invested Amount available to be allocated to the Class B
Certificates. See 'Description of the Offered Certificates and the
Agreement--Defaulted Receivables; Recoveries; Rebates and Fraudulent Charges.'
The Originator, and the Originator's extension of credit under the Credit
Card Program, is extensively regulated under Federal law. Any change in such
laws, or in the rules, regulations and decisions (both judicial and
administrative) thereunder, could affect the Servicer's ability to collect the
Receivables or maintain previous levels of monthly finance and other charges.
PROPOSED LEGISLATION
Congress and the states may enact new laws and amendments to existing laws
to regulate further the consumer revolving credit industry or to reduce finance
charges or other fees or charges applicable to consumer revolving credit
accounts. The potential effect of any such legislation could be to reduce the
yield on the Accounts. If such yield is reduced, an Amortization Event could
occur, and the Rapid Amortization Period would commence. See 'Description of the
Offered Certificates--Amortization Events.'
LEGAL MATTERS AND LITIGATION
Pursuant to the Pooling and Servicing Agreement, if the interest of the
Certificateholders in a Receivable is materially adversely affected by the
failure of the Receivable to comply in all material respects with applicable
requirements of law, the interest of such Certificateholders in all Receivables
in the affected Account will be reassigned to the Transferor. On each Series
Closing Date, the Transferor will make certain other representations and
warranties relating to the validity and enforceability of the Accounts and the
Receivables. The sole remedy, if any such representation or warranty is breached
and such breach has a material adverse effect on the interest of
Certificateholders in any Receivable and continues beyond the applicable cure
period, is that the interest of the Certificateholders in the Receivables
affected thereby will be reassigned to the Transferor or assigned to the
Servicer, as the case may be. In addition, in the event of the breach of certain
representations and warranties, the Transferor may be obligated to accept the
reassignment of all of the Receivables in the Accounts in the Trust portfolio.
CLAIMS AND DEFENSES OF CARDHOLDERS AGAINST TRUST
The UCC provides that (a) unless an obligor has made an enforceable
agreement not to assert defenses or claims arising out of a sale, the rights of
the Trust, as assignee, are subject to all the terms of the contract between the
Originator and the obligor and any defense or claim arising therefrom and to any
other defense or claim of the obligor against the Originator which accrues
before the obligor receives notification of the assignment and (b) any obligor
is authorized to continue to pay the Originator until (i) the obligor 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
and (ii) if requested by the obligor, the Trustee has furnished reasonable proof
of the assignment.
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FEDERAL INCOME TAX CONSEQUENCES
GENERAL
Set forth below is a discussion of material income tax consequences to
Certificate Owners who are original owners of the Offered Certificates and hold
the Offered Certificates as capital assets under the Internal Revenue Code of
1986, as amended (the 'Code'). This discussion does not purport to be complete
or to deal with all aspects of Federal income taxation that may be relevant to
Certificate Owners in light of their particular circumstances, nor to certain
types of Certificate Owners subject to special treatment under the Federal
income tax laws (for example, banks and life insurance companies). This
discussion is based upon present provisions of the Code, the regulations
promulgated thereunder and judicial and ruling authorities, all of which are
subject to change, which change may be retroactive. PROSPECTIVE INVESTORS ARE
ADVISED TO CONSULT THEIR OWN TAX ADVISORS WITH REGARD TO THE FEDERAL TAX
CONSEQUENCES TO SPECIAL CATEGORIES OF INVESTORS IN THE OFFERED CERTIFICATES WITH
RESPECT TO THE PURCHASE, OWNERSHIP OR DISPOSITION OF INTERESTS IN THE OFFERED
CERTIFICATES, AS WELL AS THE TAX CONSEQUENCES ARISING UNDER THE LAWS OF ANY
STATE, FOREIGN COUNTRY OR OTHER TAXING JURISDICTION.
Characterization of the Offered Certificates as Indebtedness. The
Transferor, the Trustee, the Class A Certificateholders and the Class B
Certificateholders express in the Agreement their intent that, for tax purposes
the Offered Certificates will be indebtedness secured by the Receivables. The
Transferor, the Class A Certificateholders and the Class B Certificateholders,
by acquiring an interest in an Offered Certificate, agree to treat the Offered
Certificates as indebtedness for Federal, state and local tax purposes. However,
because different criteria are used to determine the non-tax accounting
characterization of the transaction, the Transferor will treat the transaction,
for financial accounting purposes, as a sale of an ownership interest in the
Receivables and not as the issuance of a debt obligation.
Based upon the application of existing law to the facts of the transaction
as set forth in the Agreement and other relevant documents, Brown & Wood LLP,
special tax counsel to the Transferor ('Tax Counsel'), has advised the
Transferor that, in its opinion, (i) the Offered Certificates will be treated
for Federal income tax purposes as indebtedness and (ii) the Trust will not be
treated as either an association or a publicly traded partnership taxable as a
corporation for Federal income tax purposes. However, opinions of counsel are
not binding on the Internal Revenue Service (the 'IRS'), and there can be no
assurance that the IRS could not successfully challenge this conclusion.
In general, the characterization of a transaction for Federal income tax
purposes is based upon economic substance, and the substance of the transaction
in which the Offered Certificates are issued is consistent with the treatment of
the Offered Certificates as debt for Federal income tax purposes. Although there
are certain judicial precedents holding that under appropriate circumstances a
taxpayer should be required to treat a transaction in accordance with the form
chosen by the taxpayer, regardless of the transaction's substance, the operative
provisions of the transaction and the Agreement are not inconsistent with
treating the Offered Certificates as debt and, accordingly, these authorities
would not be applied to require sale characterization.
Based on the foregoing, Tax Counsel has concluded that the characterization
of the Offered Certificates, for Federal income tax purposes, would be governed
by the substance of the transaction, which is the issuance of debt.
Other Characterizations of the Offered Certificates. If the Agreement does
not create a debt obligation for Federal income tax purposes, the arrangement
among the Transferor, the Class A Certificateholders and the Class B
Certificateholders could be classified, for Federal income tax purposes,
alternatively as a partnership, a publicly traded partnership taxable as a
corporation, or as an association taxable as a corporation. Because, in the
opinion of Tax Counsel, the Offered Certificates will be characterized as debt
for Federal income tax purposes, no attempt will be made to comply with any
reporting or tax payment requirements which might be applicable if the
arrangement between the Transferor and the Certificate Owners were treated as
creating a partnership or a corporation. No IRS ruling on the Federal income tax
characterization of the arrangement among the Transferor, the Class A
Certificateholders and the Class B Certificateholders will be sought.
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<PAGE>
If the arrangement created by the Agreement were characterized as a
partnership among the Transferor and the Certificate Owners, such a partnership
would not be subject to Federal income tax, but each item of income, gain, loss,
deduction and credit generated through the ownership of the Receivables by such
a partnership would generally be passed through to the Transferor and the
Certificate Owners as partners in such a partnership according to their
respective interests therein. The amount, timing, and character of income
reportable by the Certificate Owners as partners could differ materially from
the income reportable by the Certificate Owners if the Offered Certificates are
characterized as debt.
If the arrangement were treated as a publicly traded partnership taxable as
a corporation or as an association 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. Such a tax could result in reduced distributions
to Certificate Owners. Distributions to the Transferor and, unless the Offered
Certificates were treated as debt of the corporation if the arrangement were
treated as an association taxable as a corporation, to the Certificate Owners,
would not be deductible in computing the taxable income of the corporation. In
addition, if the Offered Certificates were not treated as debt of the
corporation, all or a portion of any such distributions would, to the extent of
the current and accumulated earnings and profits of such corporation, be treated
as dividend income to the Certificate Owners.
In addition, if the arrangement were treated as a publicly traded
partnership, any income allocated to a Certificate Owner that is a tax-exempt
entity will constitute 'unrelated business taxable income', at least where the
publicly traded partnership is taxed as a partnership.
TAXATION OF INTEREST AND DISCOUNT INCOME OF CERTIFICATE OWNERS
Assuming that the Certificate Owners are owners of debt obligations for
Federal income tax purposes, in the opinion of Tax Counsel, interest generally
will be taxable as ordinary income for Federal income tax purposes when received
by the Certificate Owners utilizing the cash method of accounting and when
accrued by Certificate Owners utilizing the accrual method of accounting.
Interest received on the Offered Certificates may also constitute 'investment
income' for purposes of certain limitations of the Code concerning the
deductibility of investment interest expense.
While it is not anticipated that the Offered Certificates will be issued at
a greater than de minimis discount, in the opinion of Tax Counsel, under the
Treasury regulations (the 'OID Regulations'), it is possible that the Offered
Certificates could nevertheless be deemed to have been issued with original
issue discount ('OID'). This could be the case, for example, if interest
payments were not deemed to be 'qualified stated interest payments.' If such
regulations were to apply, in general, all of the taxable income to be
recognized with respect to the Offered Certificates would be includible in
income of Certificate Owners as OID, but would not be includible again when the
interest is actually received. If the Offered Certificates are in fact issued at
a greater than de minimis discount or are treated as having been issued with OID
under the OID Regulations, the following general rules will apply.
The excess of the 'stated redemption price at maturity' of the Class A
Certificates or Class B Certificates, as applicable, (generally equal to their
principal amount as of the date of original issuance plus all interest other
than 'qualified stated interest payments' payable prior to or at maturity) over
the applicable original issue price (in this case, the initial offering price at
which a substantial amount of the Class A or Class B Certificates, as
applicable, are sold to the public) will constitute OID. A Certificate Owner
must include OID in income over the term of the Offered Certificates under a
constant yield method. In general, OID must be included in income in advance of
the receipt of cash representing that income. In the case of a debt instrument
as to which the repayment of principal may be accelerated as a result of the
prepayment of other obligations securing the debt instrument, the periodic
accrual of OID is determined by taking into account both the prepayment
assumptions used in pricing the debt instrument and the prepayment experience.
If this provision applies to the Offered Certificates, the amount of OID which
will accrue in any given 'accrual period' may either increase or decrease
depending upon the actual prepayment rate.
Certificate Owners should be aware that the resale of an Offered
Certificate may be affected by the market discount rules of the Code. These
rules generally provide that, subject to a de minimis exception, if a holder of
an Offered Certificate acquires it at a market discount (i.e., at a price below
its stated redemption price at maturity or
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its 'revised issue price' if it was issued with OID) and thereafter recognizes
gain upon a disposition of the Offered Certificate, the lesser of such gain or
the portion of the market discount that accrued while the Offered Certificate
was held by such holder will be treated as ordinary interest income realized at
the time of the disposition.
Each Certificate Owner should consult his own tax advisor regarding the
impact of the original issue discount and market discount rules.
SALES OR DEEMED SALES OF OFFERED CERTIFICATES
In the opinion of Tax Counsel, in general, a Certificate Owner will
recognize gain or loss upon the sale, exchange, redemption or other taxable
disposition of an Offered Certificate measured by the difference between (i) the
amount of cash and the fair market value of any property received (other than
amounts attributable to, and taxable as, accrued stated interest) and (ii) the
owner's tax basis in the Class A Certificate or Class B Certificate, as
applicable (as increased by any OID or market discount previously included in
income by the holder and decreased by any deductions previously allowed for
amortizable bond premium and by any payments reflecting principal or OID
received with respect to such Class A Certificate or Class B Certificate, as
applicable). Subject to the market discount rules discussed above and to the
one-year holding requirement for long-term capital gain treatment, any such gain
or loss generally will be long-term capital gain or loss, provided that the
Class A Certificate or Class B Certificate, as applicable was held as a capital
asset. The Federal income tax rates applicable to capital gains for taxpayers
other than individuals, estates and trusts are currently the same as those
applicable to ordinary income; however, the maximum ordinary income rate for
individuals, estates and trusts has increased to 39.6%, whereas the maximum
long-term capital gains rate for such taxpayers remains at 28%. Moreover,
capital losses generally may be used only to offset capital gains.
BACKUP WITHHOLDING
In the opinion of Tax Counsel, a Certificate Owner may be subject to backup
withholding at the rate of 31% with respect to interest paid on the Offered
Certificates if the Certificate Owner, upon issuance, fails to supply the
Trustee or his broker with his taxpayer identification number, fails to report
interest, dividends, or other 'reportable payments' (as defined in the Code)
properly, or under certain circumstances, fails to provide the Trustee or his
broker with a certified statement, under penalty of perjury, that he is not
subject to backup withholding. Information returns will be sent annually to the
IRS and to each Class A and Class B Certificateholder setting forth the amount
of interest paid on the Offered Certificates and the amount of tax withheld
thereon.
STATE, LOCAL AND FOREIGN TAXATION
The discussion above does not address the tax treatment of the Trust, the
Offered Certificates or the Certificate Owners under state and local tax laws or
foreign tax laws. Prospective investors are urged to consult their own tax
advisors regarding the state and local tax treatment of the Trust and the
Offered Certificates, and the consequences of purchase, ownership or disposition
of the Offered Certificates under any state or local tax law or any foreign tax
law, if applicable.
ERISA CONSIDERATIONS
The Employee Retirement Income Security Act of 1974, as amended ('ERISA')
imposes certain restrictions on employee benefit plans ('Plans') subject to
ERISA and persons who have certain specified relationships to such plans
('Parties-in-Interest'). ERISA also imposes certain duties on persons who are
fiduciaries of Plans subject to ERISA and prohibits certain transactions between
a plan and Parties-in-Interest with respect to such Plans. Under ERISA, any
person who exercises any authority or control respecting the management or
disposition of the assets of a Plan is considered to be a fiduciary of such Plan
(subject to certain exceptions not here relevant). In accordance with ERISA's
fiduciary standards, before purchasing the Offered Certificates a fiduciary
should determine whether such an investment is permitted under the documents and
instruments governing the plan and is appropriate for the plan in view of its
overall investment policy and the composition and diversification of its
investment portfolio.
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Section 406 of ERISA and Section 4975 of the Code prohibit a pension,
profit sharing or other employee benefit plan that is subject to such provisions
from engaging in certain transactions involving 'plan assets' with persons that
are 'parties in interest' under ERISA or 'disqualified persons' under the Code
with respect to the plan. A violation of these 'prohibited transaction' rules
may generate excise tax and other liabilities under ERISA and the Code for such
persons. In addition, investments by Benefit Plans (as defined below) are
subject to ERISA's general fiduciary requirements, including the requirements of
investment prudence and diversification and the requirement that a Benefit
Plan's investments be made in accordance with the documents governing the
Benefit Plan.
On November 13, 1986, the Department of Labor ('DOL') issued a final
regulation (the 'Final Regulation') concerning the definition of what
constitutes the 'plan assets' of an employee benefit plan subject to ERISA or
the Code or an individual retirement account (collectively referred to as
'Benefit Plans'). Under the Final Regulation the assets and properties of
certain entities in which a Benefit Plan makes an equity investment could be
deemed to be assets of the Benefit Plan in certain circumstances. Accordingly,
if Benefit Plans purchase the Offered Certificates, the Trust could be deemed to
hold Benefit Plan assets unless one of the exceptions under the Final Regulation
(or another statutory or administrative exemption) is applicable to the Trust.
The operations of the Trust could result in prohibited transactions if Benefit
Plans that purchase the Offered Certificates are deemed to own an interest in
the underlying assets of the Trust. There may also be an improper delegation of
the responsibility to manage plan assets if Benefit Plans that purchase the
Offered Certificates are deemed to own an interest in the underlying assets of
the Trust.
The Final Regulation only applies to the purchase by a Benefit Plan of an
'equity interest' in an entity. Assuming that the Offered Certificates are
equity interests, the Final Regulation contains an exception that provides that
if a Benefit Plan acquires a 'publicly-offered security' the issuer of the
security is not deemed to hold Benefit Plan assets. A 'publicly-offered
security' is a security that is (i) freely transferable, (ii) part of a class of
securities that is owned by 100 or more investors independent of the issuer and
of one another and (iii) either is (A) a part of a class of securities
registered under section 12(b) or 12(g) of the Securities Exchange Act of 1934,
or (B) sold to the plan as part of an offering of securities to the public
pursuant to an effective registration statement under the Securities Act of 1933
and the class of securities of which such security is a part is registered under
the Securities Exchange Act of 1934 within 120 days (or such later time as may
be allowed by the Commission) after the end of the fiscal year of the issuer
during which the offering of such securities to the public occurred.
It is anticipated that the Class A Certificates will meet the criteria of
publicly-offered securities as set forth above. The Underwriters (defined below)
expect (although no assurance can be given) that the Class A Certificates will
be held by at least 100 independent persons at the conclusion of the offering,
there are no restrictions imposed on the transfer of the Class A Certificates,
and the Class A Certificates will be sold as part of an offering pursuant to an
effective registration statement under the Securities Act of 1933, and then will
be timely registered under the Securities Exchange Act of 1934.
If the Class A Certificates fail to meet the criteria of publicly-offered
securities and the Trust's assets are deemed to include assets of Benefit Plans
that are Class A Certificateholders, transactions involving the Trust and
'parties in interest' or 'disqualified persons' with respect to such plans might
be prohibited under Section 406 of ERISA and Section 4975 of the Code unless an
exemption is applicable. Thus, for example, if a participant in any Benefit Plan
is a credit cardholder under the Credit Card Program, under DOL interpretations
the purchase of the Class A Certificates by such plan could constitute a
prohibited transaction. There are certain class exemptions issued by the DOL
that could apply in such event including DOL Prohibited Transaction Exemption
84-14 (Class Exemption for Plan Asset Transactions Determined by Independent
Qualified Professional Asset Managers), 96-23 (Class Exemption for Plan Asset
Transactions Determined by In-house Asset Managers), 91-38 (Class Exemption for
Certain Transactions Involving Bank Collective Investment Funds) and 90-1 (Class
Exemption for Certain Transactions Involving Insurance Company Pooled Separate
Accounts). There is no assurance that these exemptions, even if all of the
conditions specified therein are satisfied, will apply to all transactions
involving the Trust's assets.
In addition, the Transferor may be considered to be a party in interest or
a fiduciary with respect to some Benefit Plans. Accordingly, an investment by a
Benefit Plan in the Class A Certificates may be a prohibited
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transaction under ERISA and the Code unless such investment is subject to a
statutory or administrative exemption.
In light of the foregoing, fiduciaries of a Benefit Plan considering the
purchase of the Class A Certificates should consult their own counsel as to
whether the assets of the Trust which are represented by the Class A
Certificates would be considered plan assets, the consequences that would apply
if the Trust's assets were considered plan assets and the applicability of
exemptive relief from the prohibited transaction rules.
Moreover, each Benefit Plan fiduciary should determine whether, under the
general fiduciary standards of investment prudence and diversification, an
investment in the Class A Certificates is appropriate for the Benefit Plan,
taking into account the overall investment policy of the Benefit Plan and the
composition of the Benefit Plan's investment portfolio.
The Class B Certificates may not be purchased by any employee benefit plan
subject to the requirements of the fiduciary responsibility provisions of ERISA,
or the provisions of Section 4975 of the Internal Revenue Code of 1986, as
amended (the 'Code'), including any individual retirement accounts.
UNDERWRITING
Subject to the terms and conditions set forth in the Underwriting
Agreement, the Transferor has agreed to sell to Citicorp Securities, Inc. and
Chase Securities Inc. (the 'Underwriters') and the Underwriters have agreed to
purchase the principal amount of Offered Certificates set forth opposite its
name:
<TABLE>
<CAPTION>
AMOUNT AMOUNT
OF CLASS A OF CLASS B
UNDERWRITER CERTIFICATES CERTIFICATES
- ------------------------------------------------------------------------ ------------ ------------
<S> <C> <C>
Citicorp Securities, Inc................................................ $ $
Chase Securities Inc.................................................... $ $
------------ ------------
Total.............................................................. $200,000,000 $ 28,205,129
------------ ------------
------------ ------------
</TABLE>
In the Underwriting Agreement, the Underwriters have agreed, subject to the
terms and conditions set forth therein, to purchase all of the Offered
Certificates if any of the Offered Certificates are purchased.
The Underwriters propose initially to offer the Class A Certificates to the
public at the price set forth on the cover page hereof and to certain dealers at
such price less concessions not in excess of % of the principal amount of the
Class A Certificates. The 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
Underwriters.
The Underwriters named above propose initially to offer the Class B
Certificates to the public at the price set forth on the cover page hereof and
to certain dealers at such price less concessions not in excess of % of the
principal amount of the Class B Certificates. The Underwriters may allow, and
such dealers may reallow, concessions not in excess of % of the principal
amount of the Class B Certificates to certain brokers and dealers. After the
initial public offering, the public offering price and other selling terms may
be changed by the Underwriters.
The Underwriting Agreement provides that the Transferor and
Bridgestone/Firestone will indemnify the Underwriters against certain
liabilities, including liabilities under applicable securities laws, or
contribute to payments the Underwriters may be required to make in respect
thereof.
Each Underwriter has represented and agreed that: (a) it has not offered or
sold, and will not offer or sell any Offered 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 do not
constitute an offer to the public in the United Kingdom for the purposes of the
Public Offers Securities Regulations 1995, (b) it has complied and will comply
with all applicable provisions of the Financial Services Act 1986 of Great
Britain with respect to anything done by it in
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connection with the Offered Certificates in, from or otherwise involving the
United Kingdom and (c) it has only issued or passed on and will only issue or
pass on in the United Kingdom any document in connection with the issue of the
Offered Certificates to a person who is of a kind described in Article 11(3) of
the Financial Services Act 1986 (Investment Advertisements) (Exemptions) Order
1995 or to whom the document may otherwise be lawfully issued or be passed on.
LEGAL MATTERS
Certain legal matters relating to the issuance of the Offered Certificates
for the Transferor will be passed upon by Stroock & Stroock & Lavan, New York,
New York, special New York counsel to the Transferor. Certain legal matters
relating to the issuance of the Offered Certificates for the Underwriters will
be passed upon by Brown & Wood LLP, New York, New York. Certain legal matters
relating to the Federal income tax consequences of the issuance of the
Certificates will be passed upon for the Transferor by Brown & Wood LLP, New
York, New York.
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INDEX OF TERMS
<TABLE>
<CAPTION>
PAGE
-----------
<S> <C>
30/360 Basis........................................................................................ 14
Accounts............................................................................................ 5
Act................................................................................................. 3
Active Account...................................................................................... 46
Aggregate Certificateholders' Interest.............................................................. 9
Aggregate Receivables............................................................................... 7
Agreement........................................................................................... 4
Alternative Programs................................................................................ 1
Amortization Event.................................................................................. 29
Amortization Period................................................................................. 38
Average Delinquencies............................................................................... 45
Average Start-of-Month Receivables.................................................................. 45
Bank................................................................................................ 49
Bankrupt............................................................................................ 44
Base Rate........................................................................................... 31
Benefit Plans....................................................................................... 90
B/F Amount.......................................................................................... 9
B/F Interest........................................................................................ 9
B/F Percentage...................................................................................... 60
Bridgestone/Firestone............................................................................... 1
Bridgestone/Firestone Certificate................................................................... 2
Cede................................................................................................ 3
CEDEL............................................................................................... 13
Cedel Participants.................................................................................. 51
Certificateholders' Interest........................................................................ 9
Certificate Owners.................................................................................. 13
CFNA................................................................................................ 4
Chase............................................................................................... 13
Citibank............................................................................................ 13
Class A Certificateholders.......................................................................... 13
Class A Certificate Rate............................................................................ 2
Class A Certificates................................................................................ 1
Class A Expected Final Payment Date................................................................. 15
Class A Fixed Allocation Percentage................................................................. 16
Class A Floating Allocation Percentage.............................................................. 11
Class A Interest.................................................................................... 8
Class A Invested Amount............................................................................. 20
Class A Investor Charge-Off......................................................................... 26
Class A Investor Default Amount..................................................................... 19
Class A Monthly Interest............................................................................ 19
Class A Monthly Servicing Fee....................................................................... 20
Class A Pool Factor................................................................................. 80
Class A Required Amount............................................................................. 23
Class B Certificate Rate............................................................................ 2
Class B Certificateholders.......................................................................... 13
Class B Certificates................................................................................ 1
Class B Expected Final Payment Date................................................................. 16
Class B Fixed Allocation Percentage................................................................. 16
Class B Floating Allocation Percentage.............................................................. 11
Class B Interest.................................................................................... 8
Class B Invested Amount............................................................................. 21
Class B Investor Charge-Off......................................................................... 26
Class B Investor Default Amount..................................................................... 20
</TABLE>
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<TABLE>
<CAPTION>
PAGE
-----------
<S> <C>
Class B Monthly Interest............................................................................ 19
Class B Monthly Servicing Fee....................................................................... 20
Class B Pool Factor................................................................................. 80
Class B Reallocated Principal Collections........................................................... 24
Class B Required Amount............................................................................. 23
Closing Date........................................................................................ 1
Collateral Interest Floating Allocation Percentage.................................................. 11
Collateral Interest................................................................................. 2
Collateral Interest Accrual Period.................................................................. 19
Collateral Interest Fixed Allocation Percentage..................................................... 16
Collateral Interest Holder.......................................................................... 10
Collateral Interest Investor Default Amount......................................................... 20
Collateral Interest Invested Amount................................................................. 21
Collateral Interest Investor Charge-Off............................................................. 27
Collateral Interest Monthly Interest................................................................ 19
Collateral Interest Monthly Servicing Fee........................................................... 20
Collateral Interest Rate............................................................................ 10
Collateral Interest Reallocated Principal Collections............................................... 24
Collateral Interest Required Amount................................................................. 23
Code................................................................................................ 34
Collection Account.................................................................................. 32
Collection Period................................................................................... 7
Collections......................................................................................... 7
Commission.......................................................................................... 1
Contractual Past-Due Aging.......................................................................... 44
Controlled Amortization Amount...................................................................... 15
Controlled Amortization Period...................................................................... 15
Cooperative......................................................................................... 52
Credit Authorization................................................................................ 42
Credit Card Program................................................................................. 1
Credit Services..................................................................................... 41
Creditworthy account................................................................................ 46
Cut-off Date........................................................................................ 5
DTC................................................................................................. 13
Defaulted Receivables............................................................................... 6
Definitive Certificates............................................................................. 53
Depositaries........................................................................................ 51
Depository.......................................................................................... 50
Determination Date.................................................................................. 32
Disclosure Document................................................................................. 12
Discount Option Receivables......................................................................... 29
Discount Percentage................................................................................. 29
Distribution Date................................................................................... 2
DOL................................................................................................. 90
Eligible Account(s)................................................................................. 6
Eligible Alternative Account(s)..................................................................... 7
Eligible Receivable................................................................................. 57
Enhancement......................................................................................... 6
ERISA............................................................................................... 34
Euroclear........................................................................................... 13
Euroclear Operator.................................................................................. 52
Euroclear Participants.............................................................................. 52
European Depositories............................................................................... 13
Excess Finance Charge Collections................................................................... 21
Exchange............................................................................................ 12
</TABLE>
94
<PAGE>
<TABLE>
<CAPTION>
PAGE
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<S> <C>
Exchange Act........................................................................................ 3
Exchangeable Transferor Certificate................................................................. 9
Final Class A Termination Date...................................................................... 32
Final Class B Termination Date...................................................................... 32
Final Regulation.................................................................................... 90
Final Series 1996-1 Termination Date................................................................ 15
Final Trust Termination Date........................................................................ 74
Finance Charge Collections.......................................................................... 7
Finance Charge Receivables.......................................................................... 29
FIRREA.............................................................................................. 36
Fitch............................................................................................... 58
Fixed Allocation Percentage......................................................................... 16
Holders............................................................................................. 53
Ineligible Receivable............................................................................... 56
Initial Class A Invested Amount..................................................................... 13
Initial Class B Invested Amount..................................................................... 13
Initial Collateral Interest Invested Amount......................................................... 10
Initial Subordinated Transferor Amount.............................................................. 11
Invested Amount..................................................................................... 16
Invested Percentage................................................................................. 12
Investor Default Amount............................................................................. 20
IRS................................................................................................. 87
Loan Agreement...................................................................................... 10
Letter of Credit Bank............................................................................... 32
LIBOR............................................................................................... 10
Merchant Fees....................................................................................... 1
Monthly Payment Rates............................................................................... 48
Monthly Servicer's Certificate...................................................................... 79
Monthly Servicing Fee............................................................................... 20
Moody's............................................................................................. 34
No Payment for 90 Days.............................................................................. 43
Offered Certificateholders.......................................................................... 2
Offered Certificates................................................................................ 1
OID................................................................................................. 88
OID Regulations..................................................................................... 88
Originator.......................................................................................... 1
Other Interests..................................................................................... 4
Participants........................................................................................ 51
Participation Agreement............................................................................. 12
Parties-in-Interest................................................................................. 89
Paying Agent........................................................................................ 72
Payment Date Statement.............................................................................. 80
Permitted Investments............................................................................... 58
Plans............................................................................................... 89
Portfolio Yield..................................................................................... 30
Principal Collections............................................................................... 7
Principal Receivables............................................................................... 29
Principal Terms..................................................................................... 55
Purchase and Sale Agreement......................................................................... 6
Rapid Amortization Period........................................................................... 17
Rating Agency....................................................................................... 39
Reallocated Principal Collections................................................................... 24
Receivables......................................................................................... 1
Record Date......................................................................................... 50
Recoveries.......................................................................................... 6
</TABLE>
95
<PAGE>
<TABLE>
<CAPTION>
PAGE
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<S> <C>
Registration Statement.............................................................................. 3
Removed Accounts.................................................................................... 54
Required Amount..................................................................................... 23
Required Ratings.................................................................................... 33
Revolving Period.................................................................................... 15
Retail Establishments............................................................................... 41
S&P................................................................................................. 34
Series.............................................................................................. 2
Series 1992 Certificates............................................................................ 11
Series 1995-A Certificates.......................................................................... 11
Series 1996-1 Interests............................................................................. 2
Service Transfer.................................................................................... 79
Servicer............................................................................................ 1
Servicer Letter of Credit........................................................................... 32
Servicing Fee....................................................................................... 77
SNB................................................................................................. 41
Shared Principal Collections........................................................................ 28
Subordinated Floating Allocation Percentage......................................................... 11
Subordinated Transferor Certificate................................................................. 2
Subordinated Transferor Fixed Allocation Percentage................................................. 16
Subordinated Transferor Default Amount.............................................................. 20
Subordinated Transferor Monthly Servicing Fee....................................................... 20
Subordinated Transferor Amount...................................................................... 21
Subordinated Transferor Reallocated Principal Collections........................................... 23
Subordinated Transferor Charge-Off.................................................................. 27
Subservicer......................................................................................... 77
Substitute Servicer Letter of Credit................................................................ 62
Substitute Transferor Letter of Credit.............................................................. 63
Supplement.......................................................................................... 12
Tax Counsel......................................................................................... 87
Ten Percent Aggregate Test.......................................................................... 8
Ten Percent Number Test............................................................................. 8
Terms and Conditions................................................................................ 52
Transfer Date....................................................................................... 32
Transfer Deposit Amount............................................................................. 56
Transferor.......................................................................................... 1
Transferor Amount................................................................................... 9
Transferor Interest................................................................................. 9
Transferor Letter of Credit......................................................................... 33
Transferor Percentage............................................................................... 60
Trust............................................................................................... 1
Trust Assets........................................................................................ 1
Trustee............................................................................................. 1
UCC................................................................................................. 36
Unallocated Principal Collections................................................................... 62
Underwriters........................................................................................ 91
Union............................................................................................... 37
Weighted Average Certificate Rate................................................................... 31
</TABLE>
96
<PAGE>
ANNEX I
OUTSTANDING SERIES
The table below sets forth the principal characteristics of the other
Series previously issued by the Trust and currently outstanding as of September
30, 1996.
<TABLE>
<S> <C>
1. Series 1995-A Asset Backed Certificates*
Class A Invested Amount........................................................... $ 199,200,000
Class B Invested Amount**......................................................... $ 38,095,238
Servicing Fee Percentage.......................................................... 2.00%
Series Issuance Date.............................................................. June 5, 1995
2. Series 1992-B Certificates
Class A REMARCS................................................................... $ 149,695,000
Class B REMARCS................................................................... $ 29,157,394.14
Servicing Fee Percentage.......................................................... 2.00%
Series Issuance Date.............................................................. January 4, 1993
</TABLE>
- ------------------
* The proceeds from the issuance of the Series 1996-1 Asset Backed Certificates
will be used to retire the Series 1995-A Asset Backed Certificates.
** Issued pursuant to Series 1992-A Asset Backed Certificates.
AI-1
<PAGE>
ANNEX II
GLOBAL CLEARANCE, SETTLEMENT AND TAX DOCUMENTATION PROCEDURES
Except in certain limited circumstances, the globally Offered Certificates
(the 'Global Securities') will be available only in book-entry form. Investors
in the Global Securities may hold such Global Securities through any of DTC,
CEDEL or Euroclear. The Global Securities will be traceable as home market
instruments in both the European and U.S. domestic markets. Initial settlement
and all secondary trades will settle in same-day funds.
Secondary market trading between investors holding Global Securities
through CEDEL and Euroclear will be conducted in the ordinary way in accordance
with their normal rules and operating procedures and in accordance with
conventional eurobond practice (i.e., seven calendar day settlement).
Secondary market trading between investors holding Global Securities
through DTC will be conducted according to the rules and procedures applicable
to U.S. corporate debt obligations.
Secondary cross-market trading between CEDEL or Euroclear and DTC
Participants holding Offered Certificates will be effected on a
delivery-against-payment basis through the respective Depositaries of CEDEL and
Euroclear (in such capacity) and DTC Participants.
Non-U.S. holders (as described below) of Global Securities will be subject
to U.S. withholding taxes unless such holders meet certain requirements and
deliver appropriate U.S. tax documents to the securities clearing organizations
or their participants.
INITIAL SETTLEMENT
All Global Securities will be held in book-entry form by DTC in the name of
Cede & Co. as nominee of DTC. Investors' interests in the Global Securities will
be represented through financial institutions acting on their behalf as direct
and indirect Participants in DTC. As a result, CEDEL and Euroclear will hold
positions on behalf of their participants through their respective Depositaries,
which in turn will hold such positions in accounts as DTC Participants.
Investors electing to hold their Global Securities through DTC will follow
the settlement practices applicable to prior debt issues. Investors securities
custody accounts will be credited with their holdings against payment in
same-day funds on the settlement date.
Investors electing to hold their Global Securities through CEDEL or
Euroclear accounts will follow the settlement procedures applicable to
conventional eurobonds, except that there will be no temporary global security
and no 'lock-up' or restricted period. Global Securities will be credited to the
securities custody accounts on the settlement date against payments in same-day
funds.
SECONDARY MARKET TRADING
Since the purchaser determines the place of delivery, it is important to
establish at the time of the trade where both the purchaser's and seller's
accounts are located to ensure that settlement can be made on the desired value
date.
Trading between DTC Participants. Secondary market trading between DTC
Participants will be settled using the procedures applicable to book-entry
securities in same-day funds.
Trading between CEDEL and/or Euroclear Participants. Secondary market
trading between CEDEL Participants or Euroclear Participants will be settled
using the procedures applicable to conventional eurobonds in same-day funds.
Trading between DTC seller and CEDEL or Euroclear purchaser. When Global
Securities are to be transferred from the account of a DTC Participant to the
account of a CEDEL Participant or a Euroclear Participant, the purchaser will
send instructions to CEDEL or Euroclear through a CEDEL Participant or Euroclear
Participant at least one business day prior to settlement. CEDEL or Euroclear,
as applicable, will instruct its Depositary to receive the Global Securities
against payment. Payment will include interest accrued on
AII-1
<PAGE>
the Global Securities from and including the last coupon payment date to and
excluding the settlement date. Payment will then be made by such Depositary to
the DTC Participant's account against delivery of the Global Securities. After
settlement has been completed, the Global Securities will be credited to the
applicable clearing system and by the clearing system, in accordance with its
usual procedures, to the CEDEL Participant's or Euroclear Participant's account.
The Global Securities credit will appear the next day (European time) and the
cash debit will be back-valued to, and the interest on the Global Securities
will accrue from, the value date (which would be the preceding day when
settlement occurred in New York). If settlement is not completed on the intended
value date (i.e., the trade fails), the CEDEL or Euroclear cash debit will be
valued instead as of the actual settlement date.
CEDEL Participants and Euroclear Participants will need to make available
to the respective clearing systems the funds necessary to process same-day funds
settlement. The most direct means of doing so is to pre-position funds for
settlement, either from cash on hand or existing lines of credit, as they would
for any settlement occurring within CEDEL or Euroclear. Under this approach,
they may take on credit exposure to CEDEL or Euroclear until the Global
Securities are credited to their accounts one day later.
As an alternative, if CEDEL or Euroclear has extended a line of credit to
them, CEDEL Participants or Euroclear Participants can elect not to pre-position
funds and allow that credit line to be drawn upon the finance settlement. Under
this procedure, CEDEL Participants or Euroclear Participants purchasing Global
Securities would incur overdraft charges for one day, assuming they cleared the
overdraft when the Global Securities were credited to their accounts. However,
interest on the Global Securities would accrue from the value date. Therefore,
in many cases the investment income on the Global Securities earned during that
one-day period may substantially reduce or offset the amount of such overdraft
charges, although this result will depend on each CEDEL Participant's or
Euroclear Participant's particular cost of funds.
Since the settlement is taking place during New York business hours, DTC
Participants can employ their usual procedures for sending Global Securities to
the respective Depositary for the benefit of CEDEL Participants or Euroclear
Participants. The sale proceeds will be available to the DTC seller on the
settlement date. Thus, to the DTC Participant a cross-market transaction will
settle no differently than a trade between two DTC Participants.
Trading between CEDEL or Euroclear seller and DTC purchaser. Due to time
zone differences in their favor, CEDEL Participants and Euroclear Participants
may employ their customary procedures for transactions in which Global
Securities are to be transferred by the respective clearing systems, through
their respective Depositaries, to a DTC Participant. The seller will send
instructions to CEDEL or Euroclear through a CEDEL Participant or Euroclear
Participant at least one business day prior to settlement. In these cases, CEDEL
or Euroclear will instruct their respective Depositaries, as appropriate, to
deliver the bonds to the DTC Participant's account against payment. Payment will
include interest accrued on the Global Securities from and including the last
coupon payment date to and excluding the settlement date. The payment will then
be reflected in the account of the CEDEL Participant or Euroclear Participant
the following day, and receipt of the cash proceeds in the CEDEL Participant's
or Euroclear Participant's account would be back-valued to the value date (which
would be the preceding day, when settlement occurred in New York). Should the
CEDEL Participant or Euroclear Participant have a line of credit with its
clearing system and elect to be in debit in anticipation of receipt of the sale
proceeds in its account, the back-valuation will extinguish any overdraft
charges incurred over that one-day period. If settlement is not completed on the
intended value date (i.e., the trade fails), receipt of the cash proceeds in the
CEDEL Participant's or Euroclear Participant's account would instead be valued
as of the actual settlement date. Finally, day traders that use CEDEL or
Euroclear and that purchase Global Securities from DTC Participants for delivery
to CEDEL Participants or Euroclear Participants should note that these trades
would automatically fail on the sale side unless affirmative action were taken.
At least three techniques should be readily available to eliminate this
potential problem:
(a) borrowing through CEDEL or Euroclear for one day (until the
purchase side of the day trade is reflected in their CEDEL or Euroclear
accounts) in accordance with the clearing system's customary procedures;
AII-2
<PAGE>
(b) borrowing the Global Securities in the U.S. from a DTC Participant
no later than one day prior to settlement, which would give the Global
Securities sufficient time to be reflected in their CEDEL or Euroclear
account in order to settle the sale side of the trade; or
(c) staggering the value dates for the buy and sell sides of the trade
so that the value date for the purchase from the DTC Participant is at
least one day prior to the value date for the sale to the CEDEL Participant
or Euroclear Participant.
CERTAIN U.S. FEDERAL INCOME TAX DOCUMENTATION REQUIREMENTS
A beneficial owner of Global Securities holding securities through CEDEL or
Euroclear (or through DTC if the holder has an address outside the U.S.) will be
subject to the 30% U.S. withholding tax that generally applies to payments of
interest (including original issue discount) on registered debt issued by U.S.
Persons, unless (i) each clearing system, bank or other financial institution
that holds customers' securities in the ordinary course of its trade or business
in the chain of intermediaries between such beneficial owner and the U.S. entity
required to withhold tax complies with applicable certification requirements and
(ii) such beneficial owner takes one of the following steps to obtain an
exemption or reduced tax rate:
Exemption of non-U.S. Persons (Form W-8). Beneficial owners of Offered
Certificates that are non-U.S. Persons generally can obtain a complete exemption
from the withholding tax by filing a signed Form W-8 (Certificate of Foreign
Status). If the information shown on Form W-8 changes, a new Form W-8 must be
filed within 30 days of such change.
Exemption for non-U.S. Person with effectively connected income (Form
4224). A non-U.S. Person, including a non-U.S. corporation or bank with a U.S.
branch, for which the interest income is effectively connected with its conduct
of a trade or business in the United States can obtain an exemption from the
withholding tax by filing Form 4224 (Exemption from Withholding of Tax on Income
Effectively Connected with the Conduct of a Trade or Business in the United
States).
Exemption or reduced rate for non-U.S. Persons resident in treaty countries
(Form 1001). Non-U.S. Persons that are beneficial owners of Offered Certificates
residing in a country that has a tax treaty with the United States can obtain an
exemption or reduced tax rate (depending on the treaty terms) by filing Form
1001 (Ownership, Exemption or Reduced Rate Certificate). If the treaty provides
only for a reduced rate, withholding tax will be imposed at that rate unless the
filer alternatively files Form W-8. Form 1001 may be filed by the beneficial
owner of Offered Certificates or such owner's agent.
Exemption for U.S. Persons (Form W-9). U.S. Persons can obtain a complete
exemption from the withholding tax by filing Form W-9 (Payer's Request for
Taxpayer Identification Number and Certification).
U.S. Federal Income Tax Reporting Procedure. The beneficial owner of a
Global Security or, in the case of a Form 1001 or a Form 4224 filer, such
owner's agent, files by submitting the appropriate form to the person through
whom it holds the security (the clearing agency, in the case of persons holding
directly on the books of the clearing agency). Form W-8 and Form 1001 are
effective for three calendar years and Form 4224 is effective for one calendar
year.
The term 'U.S. Person' means (i) a citizen or resident of the United
States, (ii) a corporation or partnership organized in or under the laws of the
United States or any political subdivision thereof or (ii) an estate or trust
the income of which is includible in gross income for United States tax
purposes, regardless of its source. This summary does not deal with all aspects
of U.S. federal income tax withholding that may be relevant to foreign holders
of the Global Securities. Investors are advised to consult their own tax
advisors for specific tax advice concerning their holding and disposing of the
Global Securities.
AII-3
<PAGE>
- ------------------------------------------------------
- ------------------------------------------------------
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 in connection with this offer made
by this Prospectus and, if given or made, such information or representations
must not be relied upon as having been authorized by Bridgestone/Firestone,
Inc., Firestone Retail Credit Corporation or the Underwriter. Neither the
delivery of this Prospectus nor any sale made hereunder shall under any
circumstance create an implication that there has been no change in the affairs
of Bridgestone/Firestone, Inc., Firestone Retail Credit Corporation, or the
Receivables since the date thereof. This Prospectus does not constitute 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>
PAGE
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<S> <C>
Reports to Certificateholders.................. 3
Available Information.......................... 3
Summary of Terms............................... 4
Risk Factors................................... 35
Use of Proceeds................................ 40
The Transferor and Bridgestone/Firestone....... 40
The Credit Card Program........................ 41
Maturity Assumptions........................... 48
The Letter of Credit Bank...................... 49
Description of the Offered Certificates and the
Agreement.................................... 49
Description of the Purchase and Sale
Agreement.................................... 83
Certain Legal Aspects of the Receivables....... 84
Federal Income Tax Consequences................ 87
ERISA Considerations........................... 89
Underwriting................................... 91
Legal Matters.................................. 92
Index of Terms................................. 93
Annex I: Outstanding Series.................... AI-1
Annex II: Global Clearance, Settlement and Tax
Documentation Procedures..................... AII-1
</TABLE>
Until (90 days after the date of this Prospectus), all
dealers effecting transactions in the Offered Certificates, whether or not
participating in this distribution, may be required to deliver a Prospectus.
This delivery requirement is in addition to the obligation of dealers to deliver
a Prospectus when acting as an underwriter and with respect to their unsold
allotments or subscriptions.
------------------------------------------------------
------------------------------------------------------
$228,205,129
BRIDGESTONE/FIRESTONE
MASTER TRUST
$200,000,000 CLASS A ASSET BACKED
CERTIFICATES, SERIES 1996-1
$28,205,129 CLASS B ASSET BACKED
CERTIFICATES, SERIES 1996-1
FIRESTONE RETAIL
CREDIT CORPORATION
TRANSFEROR
BRIDGESTONE/FIRESTONE, INC.
SERVICER
------------------------
PROSPECTUS
CITICORP SECURITIES, INC.
CHASE SECURITIES INC.
DATED , 1996
------------------------------------------------------
------------------------------------------------------
<PAGE>
PART II
INFORMATION
NOT REQUIRED
IN PROSPECTUS
ITEM 13. Other Expenses of Issuance and Distribution.
The following table sets forth the estimated expenses in connection with
the offering of the Securities being registered under this Registration
Statement, other than underwriting discounts and commissions:
Registration Fee $ 69,153.08*
Printing and Engraving $ 12,000
Trustee's Fees $ 3,000
Legal Fees and Expenses $ 220,000
Blue Sky Fees and Expenses $ 15,000
Accountants' Fees and Expenses $ 55,000
Rating Agency Fees $ 131,000
Miscellaneous Fees $ 4,846.92
-------
Total $ 510,000
- -------------
*Actual
ITEM 14. Indemnification of Directors and Officers.
Chapter 156B Section 67 of the Business Corporations Law of Massachusetts
provides that:
"Indemnification of directors, officers, employees and other agents of a
corporation, and persons who serve at its request as directors, officers,
employees or other agents of another organization, or who serve at its request
in any capacity with respect to any employee benefit plan, may be provided by
it to whatever extent shall be specified in or authorized by (i) the articles
of organization or (ii) a by-law adopted by the stockholders or (iii) a vote
adopted by the holders of a majority of the shares of stock entitled to vote on
the election of directors. Except as the articles of organization or by-laws
otherwise require, indemnification of any persons referred to in the preceding
sentence who are not directors of the corporation may be provided by it to the
extent authorized by the directors. Such indemnification may include payment by
the corporation of expenses incurred in defending a civil or criminal action or
proceeding in advance of the final disposition of such action or proceeding,
upon receipt of an undertaking by the person indemnified to repay such payment
if he shall be adjudicated to be not entitled to indemnification under this
section which undertaking may be accepted without reference to the financial
ability of such person to make repayment. Any such indemnification may be
provided although the person to be indemnified is no longer an officer,
director, employee or agent of the corporation or of such other organization or
no longer serves with respect to any such employee benefit plan.
No indemnification shall be provided for any person with respect to any
matter as to which he shall have been adjudicated in any proceeding not to have
acted in good faith in the reasonable belief that his action was in the best
interest of the corporation or to the extent that such matter relates to
service with respect to any employee benefit plan, in the best interests of the
participants or beneficiaries of such employee benefit plan.
The absence of any express provision for indemnification shall not limit
any right of indemnification existing independently of this section.
A corporation shall have power to purchase and maintain insurance on
behalf of any person who is or was a director, officer, employee or other agent
of the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or other agent of another organization or with
respect to any employee benefit plan, against any liability incurred by him in
any such capacity, or arising out of his status as such, whether or not the
corporation would have the power to indemnify him against such liability."
Section 8a of the Amended and Restated By-Laws of the Registrant provides
that:
"The corporation shall, to the extent legally possible, indemnify
each of its directors and officers (including persons who serve at its request
as directors, officers or trustees of another organization, or in any capacity
with respect to any employee benefit plan) against all liabilities and
expenses, including amounts paid in satisfaction of judgments, in compromise or
as fines and penalties, and counsel fees, reasonably incurred by him in
connection with the defense or disposition of any action, suit or other
proceeding, whether civil or criminal, in which he may be involved or with
which he may be threatened, while in office or thereafter, by reason of his
being or having been such a director or officer, except with respect to any
matter as to which he shall have been adjudicated in any proceeding not to have
acted in good faith in the reasonable belief that his action was in the best
interest of the corporation (any person serving another organization in one or
more of the indicated capacities at the request of the corporation who shall
have acted in good faith in the reasonable belief that his action was in the
best interest of such organization to be deemed as having acted in such manner
with respect
II-1
<PAGE>
to the organization) or, to the extent that such matter relates to service with
respect to any employee benefit plan, in the best interest of the participants
or beneficiaries of such employee benefit plan; provided, however, that as to
any matter disposed of by a compromise payment by such director or officer,
pursuant to a consent decree or otherwise, no indemnification either for said
payment or for any other expenses shall be provided unless such compromise
shall be approved as in the best interest of the corporation, after notice that
it involves such indemnification: (a) by a disinterested majority of the
directors then in office; or (b) by a majority of the disinterested directors
then in office, provided that there has been obtained an opinion in writing of
independent legal counsel to the effect that such director or officer appears
to have acted in good faith in the reasonable belief that his action was in the
best interest of the corporation; or (c) by the holders of a majority of the
outstanding stock at the time entitled to vote for directors, voting as a
single class, exclusive of any stock owned by any interested director or
officer. Expenses, including counsel fees, reasonably incurred by any director
or officer in connection with the defense or disposition of any such action,
suit or other proceeding may be paid from time to time by the corporation in
advance of the final disposition thereof upon receipt of an undertaking by such
director or officer to repay the amounts so paid to the corporation if it is
ultimately determined that indemnification for such expenses is not authorized
under this section. The right of indemnification hereby provided shall not be
exclusive of or affect any other rights to which any director or officer may be
entitled. As used in this section, the terms "director" and "officer" include
the relevant individual's heirs, executors and administrators, and an
"interested" director or officer is one against whom in such capacity the
proceedings in question or another proceeding on the same or similar grounds is
then pending. Nothing contained in this section shall affect any rights to
indemnification to which corporate personnel other than directors and officers
may be entitled by contract or otherwise under law."
Bridgestone/Firestone, Inc. has agreed to indemnity the officers and
directors of the Registrant with respect to certain liabilities, including
liabilities under the Securities Act of 1933, as amended.
The Underwriter has agreed to indemnify the Registrant and its officers
and directors against liabilities under the Securities Act of 1933, as amended,
in respect of written material provided by the Underwriter to the Registrant
specifically for use in the prospectus filed as part of this Registration
Statement.
ITEM 15. Recent Sales of Unregistered Securities.
Series 1995-A Asset Backed Certificates
- Series Issuance Date: June 5, 1995
- Class A Invested Amount: $199,200,000
- Class B Invested Amount: $38,095,238
- Proceeds from issuance of Series 1996-1 Asset Backed
Certificates will be used to retire Series 1995-A Asset Backed
Certificates.
ITEM 16. Exhibits and Financial Statements.
(a) Exhibits
1.1 - Form of Underwriting Agreement.
3.1 - Certificate of Incorporation of the Registrant, as currently in effect.
3.2 - Amended and Restated By-Laws of the Registrant, as currently in effect.
4.1 - Form of Pooling and Servicing Agreement.
4.2 - Form of Series 1996-1 Supplement, including form of Series 1996-1
Certificates.
4.3 - Form of Amended Purchase and Sale Agreement.
4.4 - Form of Amended and Restated Participation Agreement.
4.5 - Form of Servicer Letter of Credit, as amended.
4.6 - Form of Transferor Letter of Credit, as amended.
5.1 - Opinion of Stroock & Stroock & Lavan with respect to legality.
8.1 - Opinion of Brown & Wood with respect to tax matters.
23.1 - Consent of Stroock & Stroock & Lavan (included in its opinion filed
as Exhibit 5.1).
23.3 - Consent of Brown & Wood (included in its
opinion filed as Exhibit 8.1).
---------------------
(b) Financial Statements Inapplicable.
ITEM 17. Undertakings.
The undersigned registrant hereby undertakes that:
(1) 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 shall be deemed to be part of this registration
statement as of the time it was declared effective.
II-2
<PAGE>
(2) 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.
(3) 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 foregoing provisions or otherwise,
the Registrant has been advised in the opinion of the Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the questions whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
(4) 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.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to the 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 to such information 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 in the information set forth in the registration statement;
(2) That, for the purpose of determining any liability under the Securities Act
of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any of
the securities being registered which remain unsold at the termination of the
offering.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
Firestone Retail Credit Corporation has duly caused this Amendment No. 4 to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Boston, the Commonwealth of Massachusetts on October 30, 1996.
FIRESTONE RETAIL CREDIT CORPORATION
/s/ Nancy D. Smith
-----------------------------------
Nancy D. Smith, President
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Amendment No. 4 has been signed below by the following persons in the
capacities indicated on October 30, 1996.
<TABLE>
<S> <C> <C>
/s/ Nancy D. Smith President and Director October 30, 1996
- --------------------------------------------
Nancy D. Smith (principal executive
officer)
/s/ R. Douglas Donaldson Treasurer October 30, 1996
- --------------------------------------------
R. Douglas Donaldson (principal financial
officer and principal
accounting officer)
/s/ Louise E. Colby Director and Secretary October 30, 1996
- --------------------------------------------
Louise E. Colby
</TABLE>
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBITS
- --------
<S> <C>
1.1 - Form of Underwriting Agreement.
3.1 - Certificate of Incorporation of the Registrant.
3.2 - Amended and Restated By-Laws of the Registrant.
4.1 - Form of Pooling and Servicing Agreement.
4.2 - Form of Series 1996-1 Supplement, including form of Series 1996-1
Certificates.
4.3 - Form of Amended and Restated Purchase and Sale Agreement.
4.4 - Form of Amended and Restated Participation Agreement.
4.5 - Form of Servicer Letter of Credit, as amended.
4.6 - Form of Transferor Letter of Credit, as amended.
5.1 - Opinion of Stroock & Stroock & Lavan with respect to legality.
8.1 - Opinion of Brown & Wood with respect to tax matters.
23.1 - Consent of Stroock & Stroock & Lavan (included in its opinion filed
as Exhibit 5.1).
23.3 - Consent of Brown & Wood (included in its opinion
filed as Exhibit 8.1).
</TABLE>
EXHIBIT 1.1
DRAFT 10/26/96
CITICORP SECURITIES, INC.
CHASE SECURITIES INC.
BRIDGESTONE/FIRESTONE MASTER TRUST
$200,000,000 CLASS A ASSET BACKED CERTIFICATES, SERIES 1996-1
$ 28,205,129 CLASS B ASSET BACKED CERTIFICATES, SERIES 1996-1
UNDERWRITING AGREEMENT
November __, 1996
Citicorp Securities, Inc.,
as Underwriter
399 Park Avenue
New York, New York 10043
Chase Securities Inc.,
as Underwriter
270 Park Avenue
New York, New York 10017-2070
Ladies and Gentlemen:
Firestone Retail Credit Corporation (the "Transferor"), on behalf of
Bridgestone/Firestone Master Trust (the "Trust"), has filed a Registration
Statement relating to the issuance and sale of Bridgestone/Firestone Master
Trust Asset Backed Certificates, Series 1996-1, Class A and Class B (the
"Offered Certificates"), having the principal amounts set forth above. The
Bridgestone/ Firestone Master Trust, Series 1996-1, Collateral Interest (the
"Collateral Interest") and Subordinated Transferor Certificate (the "Other
Interests") will also be issued but will not be offered hereby. The Offered
Certificates and the Other Interests are collectively known as the Series
1996-1 Certificates.
The Transferor, as purchaser, and Credit First National Association
("CFNA"), as originator and seller, entered into a Purchase and Sale
Agreement and several amendments thereto (the "Original Purchase Agreement")
with Bridgestone/Firestone, Inc. ("Bridgestone/Firestone"). Pursuant to the
Original Purchase Agreement, CFNA sold to the Transferor all of its right,
title and interest in and to all Receivables existing as of the date of such
Original Purchase Agreement and agreed to sell all of its
<PAGE>
right, title and interest in and to all future Receivables created from time
to time until the Final Trust Termination Date. The Transferor in turn
transferred the Receivables to the Trust pursuant to a Pooling and Servicing
Agreement, dated November 1, 1992 (the "Original Pooling Agreement"), by and
among the Transferor, Bridgestone/Firestone, as servicer, and The Fuji Bank
and Trust Company, as trustee (the "Trustee").
In connection with the issuance of the Series 1996-1 Certificates, the
Transferor, CFNA and Bridgestone/Firestone will enter into a Restated
Purchase and Sale Agreement, dated as of October ___, 1996 (the "Purchase
Agreement"). The Series 1996-1 Certificates will be issued pursuant to a
Restated and Amended Pooling and Servicing Agreement, dated October ___, 1996
(the "PSA") and a Series 1996-1 Series Supplement, dated as of October ___,
1996 (the "Supplement"), each by and among the Transferor,
Bridgestone/Firestone and the Trustee. The PSA and the Supplement are
collectively referred to as the "Pooling and Servicing Agreement."
The Series 1996-1 Certificates are entitled to the benefit of two
letters of credit for the benefit of the holders of the Series 1996-1
Certificates and of other series of certificates issued by the Trust (an
"Enhancement"). With respect to such Enhancement, the Transferor and
Bridgestone/Firestone has entered into an agreement, as amended (the
"Enhancement Agreement") by and between the Transferor, Bridgestone/Firestone
and The Sumitomo Bank, Limited acting through its New York Branch (the
"Enhancement Provider").
In connection with the issuance of the Series 1996-1 Certificates, the
Collateral Interest will be sold to the Collateral Interest Holder pursuant
to a Loan Agreement, dated as of the Closing Date (the "Loan Agreement"), by
and among the Transferor, the Servicer, the Trustee and the Collateral
Interest Holder.
Upon the issuance of the Series 1996-1 Certificates, the Trust will
transfer the Series 1996-1 Certificates to the Transferor. The Transferor
proposes to sell the Offered Certificates to Citicorp Securities, Inc. and
Chase Securities Inc. (the "Underwriters"). The Series 1996-1 Certificates
will represent an undivided interest in certain assets of the Trust and the
Offered Certificates will be sold pursuant to this Agreement.
Capitalized terms used herein without definition shall have the meanings
set forth in the Pooling and Servicing Agreement.
Section 1. Representations and Warranties of the Transferor and
----------------------------------------------------
Bridgestone/Firestone. (a) The Transferor represents and warrants to, and
- ---------------------
agrees with, the Underwriters as set forth in this Section 1(a). Certain
terms used in this Section 1 are defined in paragraph (i) below.
(i) The Transferor has filed with the Securities and Exchange
Commission (the "Commission") a registration statement (Registration No.
333-07185) on Form S-1 under the Securities Act of 1933, as amended (the
"Act"), including a related preliminary prospectus, for registration
under the Act of the Offered Certificates. The Transferor may have
filed one or more amendments to such registration statement, including
the related preliminary prospectus, each of which amendments has
previously been furnished to you. The Transferor will next file with
the Commission either (A) prior to the effectiveness of such
registration statement, a further amendment thereto (including the form
of final prospectus) or (B) after the effectiveness of such registration
statement, a final prospectus in accordance with Rules 430A and
424(b)(1) or (4) under the Act. In the case of clause (B), the
Transferor has included in such registration statement, as amended at
the Effective Date, all information (other than Rule 430A Information)
required by the Act and the rules thereunder to be included in the
Prospectus with respect to issuance, offering and sale of the Offered
Certificates. As filed, such amendment and form of final prospectus
shall include all Rule 430A Information, together with all other such
required information with respect to the issuance, offering and sale of
the Offered Certificates and, except to the extent the Underwriters
shall agree in writing to a modification, shall be in all substantive
respects in the form furnished to you prior to the Execution Time or, to
the extent not completed at the Execution Time, shall contain only such
specific additional information and other changes (beyond that contained
in the latest preliminary prospectus that has previously been furnished
to you) as the Transferor has advised you, prior to the Execution Time,
will be included or made therein.
The terms that follow, when used in this Agreement, shall have the
meanings indicated. The term "Effective Date" shall mean each date that the
Registration Statement and any post-effective amendment or amendments thereto
became or become effective. "Execution Time" shall mean the date and time
that this Agreement is executed and delivered by the parties hereto.
"Preliminary Prospectus" shall mean any preliminary prospectus referred to in
the preceding paragraph and any preliminary prospectus included in the
Registration Statement at the Effective Date that omits Rule 430A
Information. "Prospectus" shall mean the prospectus relating to the Offered
Certificates that is first filed pursuant to Rule 424(b) after the Execution
Time or, if no filing pursuant to Rule 424(b) is required, shall mean the
prospectus relating to the Offered Certificates included in the Registration
Statement at the Effective Date.
"Registration Statement" shall mean the registration statement referred to in
the preceding paragraph and any registration statement required to be filed
under the Act or rules thereunder, including incorporated documents, exhibits
and financial statements, in the form in which it has or shall become
effective and, in the event any post-effective amendment thereto becomes
effective prior to the Closing Date, shall also mean such registration
statement as so amended. Such term shall include Rule 430A Information
deemed to be included therein at the Effective Date as provided by Rule 430A.
"Rule 424", "Rule 430A" and "Regulation S-K" refer to such rules or
regulations under the Act. "Rule 430A Information" means information with
respect to the Offered Certificates and the offering thereof permitted to be
omitted from the Registration Statement when it becomes effective pursuant to
Rule 430A.
(ii) On the Effective Date, the Registration Statement did or will
comply in all material respects with the applicable requirements of the
Act and the rules thereunder; on the Effective Date and when the
Prospectus is first filed (if required) in accordance with Rule 424(b)
and on the Closing Date, the Prospectus (as amended and together with
any supplements thereto) will comply in all material respects with the
applicable requirements of the Act and the rules thereunder; on the
Effective Date, the Registration Statement did not or will not contain
any untrue statement of a material fact and did not and will not omit to
state any material fact therein not misleading; and, on the Effective
Date, the Prospectus, if not filed pursuant to Rule 424(b), did not or
will not, and on the date of any filing pursuant to Rule 424(b) and on
the Closing Date, the Prospectus (as amended and together with any
supplements thereto) will not, include any untrue statement of a
material fact or omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading; provided, however, that the
Transferor makes no representations or warranties as to the information
contained in or omitted from the Registration Statement or the
Prospectus (or any supplements thereto) in reliance upon and in
conformity with information furnished in writing to the Transferor by or
on behalf of the Underwriters specifically for use in connection with
the preparation of the Registration Statement or the Prospectus (or any
supplements thereto).
(iii) As of the Closing Date, the representations and warranties of the
Transferor in the Pooling and Servicing Agreement will be true and
correct in all material respects.
(iv) The Transferor is duly organized and validly existing as a
corporation in good standing under the laws of the State of
Massachusetts, has all requisite power and authority (corporate
and other) to own its properties and conduct its business as presently
conducted and to execute, deliver and perform this Agreement and to
consummate the transactions contemplated hereby.
(v) The execution, delivery and performance by the Transferor of the
Pooling and Servicing Agreement, the Purchase Agreement, the
Participation Agreement, the Loan Agreement and the issuance of the
Series 1996-1 Certificates and the consummation of the transactions
contemplated hereby and thereby have been duly and validly authorized by
all necessary actions or proceedings and are legal, valid and binding
obligations of the Transferor, enforceable against the Transferor except
(y) the enforceability thereof may be subject to bankruptcy, fraudulent
transfer, insolvency, reorganization, moratorium or other similar laws
now or hereafter in effect related to creditors' rights generally and
(z) as to enforceability, to general principles of equity (whether
considered in a suit at law or in equity).
(vi) This Agreement has been duly authorized, executed and delivered by
the Transferor and constitutes a legal, valid and binding agreement of
the Transferor, enforceable against the Transferor in accordance with
its terms, subject (x) to applicable bankruptcy, reorganization,
insolvency, fraudulent transfer, moratorium or other similar laws now
and hereafter in effect affecting creditors' rights generally, (y) as to
enforceability, to general principles of equity (whether considered in a
suit at law or in equity), and (z) as to enforceability may be limited
under certain circumstances with respect to provisions indemnifying a
party against liability where such indemnification is contrary to public
policy under applicable securities laws.
(vii) The performance by the Transferor of all of the provisions of its
obligations under the Pooling and Servicing Agreement, the Purchase
Agreement, the Participation Agreement, the Loan Agreement, the
Enhancement Agreement and this Agreement and the consummation of the
transactions herein and therein contemplated will not conflict with or
result in a breach of any terms or provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, loan agreement or
other material agreement or instrument to which it is a party or by
which it is bound or any order, decree or regulation applicable to the
Transferor of any Federal or state court, regulatory board or body or
administrative agency having jurisdiction over the Transferor or its
property, nor will any such action result in any violation of the
provisions of the certificate of incorporation or by-laws of the
Transferor.
(viii) On the Closing Date, with respect to Receivables created on or
prior to, and outstanding on, such date the Transferor (i) had good and
marketable title to the Receivables transferred by it to the Trustee
pursuant to the Original Pooling Agreement, free and clear of any Lien,
except to the extent permitted in the Original Pooling Agreement, (ii)
did not assign to any person any of its right, title or interest in such
Receivables or in the Original Pooling Agreement, except (x) for its
right, title and interest heretofore transferred to the Trustee pursuant
to the Original Pooling Agreement and (y) for the rights transferred to
Bridgestone/Firestone pursuant to the Participation Agreement and (iii)
had the power and authority to transfer the Receivables to the Trust,
and upon execution and delivery of the Original Pooling Agreement by the
Trustee, the Trust obtained good and marketable title to, or a perfected
first priority security interest in, the Receivables, free of Liens
other than any Lien permitted under the Original Pooling Agreement. On
any date on which any Receivables are created and transferred to the
Transferor and transferred by the Transferor to the Trustee after the
Closing Date, the Transferor shall be deemed to represent and warrant
that it (i) will have good and marketable title to the Receivables being
transferred by it to the Trustee pursuant to the Pooling and Servicing
Agreement, free and clear of any Lien, except to the extent permitted in
the Pooling and Servicing Agreement, (ii) will not have assigned to any
person any of its right, title or interest in such Receivables or in the
Pooling and Servicing Agreement, except for its right, title and
interest heretofore transferred to the Trustee pursuant to the Pooling
and Servicing Agreement and except for the rights transferred to
Bridgestone/Firestone pursuant to the Participation Agreement and (iii)
will have the power and authority to transfer such Receivables to the
Trust, and the Trust will have good and marketable title to, or a
perfected first priority security interest in, the Receivables, free of
Liens other than any Lien permitted under the Pooling and Servicing
Agreement.
(ix) No consent, approval, authorization, order, registration or
qualification of or with any court or governmental agency or body is
required for the execution, delivery or performance of this Agreement,
the Pooling and Servicing Agreement, the Purchase Agreement, the Loan
Agreement and the Series 1996-1 Certificates by the Transferor or the
consummation by the Transferor of the transactions contemplated hereby
and thereby, except such as have been obtained under the Act and such as
may be required under the Securities Exchange Act of 1934 ("Exchange
Act") and state securities or blue sky laws in connection with the
purchase and distribution of the Offered Certificates by the
Underwriters.
(x) There is no action, suit or proceeding pending against or, to the
knowledge of the Transferor, threatened against or affecting, the
Transferor before any governmental body, agency or official in which
there is a reasonable possibility of an adverse decision which (a) is
reasonably likely to materially adversely affect the business, financial
position or results of operations of the Transferor, or (b) which is
reasonably likely to result in any material provisions of this
Agreement, the Pooling and Servicing Agreement, the Purchase Agreement,
the Loan Agreement, the Enhancement Agreement or the Series 1996-1
Certificates becoming invalid.
(xi) The Transferor has authorized the purchase and conveyance of the
Receivables to the Trust, and the Transferor has authorized the sale of
the Offered Certificates to the Underwriters.
(xii) Any taxes, fees and other governmental charges owed by the
Transferor in connection with the execution, delivery and performance of
this Agreement, the Pooling and Servicing Agreement, the Enhancement
Agreement, the Purchase Agreement and the Loan Agreement and the Series
1996-1 Certificates shall have been paid or will be paid by the
Transferor (or by Bridgestone/Firestone on behalf of the Transferor) at
or prior to the Closing Date to the extent then due.
(xiii) The direction of the Transferor to the Trustee to authenticate
the Series 1996-1 Certificates has been duly authorized by the
Transferor, and when the Series 1996-1 Certificates have been duly and
validly executed, authenticated and delivered by the Trustee in
accordance with the Pooling and Servicing Agreement and when the Offered
Certificates have been sold to the Underwriters as provided herein, the
Series 1996-1 Certificates will conform in all material respects to the
descriptions thereof contained in the Prospectus and will be validly
issued and outstanding and entitled to the benefits and security
provided by the Pooling and Servicing Agreement.
(xiv) This Agreement, the Pooling and Servicing Agreement, the Purchase
Agreement, the Loan Agreement, the Enhancement Agreement and the Series
1996-1 Certificates will conform in all material respects to the
descriptions thereof in the Prospectus.
(xv) Neither the Transferor nor the Trust will be subject to
registration as an "investment company" under the Investment Company Act
of 1940, as amended (the "1940 Act").
(xvi) Except as described in or contemplated by the Prospectus,
subsequent to October __, 1996, there has not been any change in the
capital stock of the Transferor, or any material adverse change, or any
development involving a prospective material adverse change, which is
reasonably likely to materially adversely affect the ability of the
Transferor to perform its obligations under the Pooling and Servicing
Agreement, the Purchase Agreement, the Loan Agreement or this Agreement.
(b) Bridgestone/Firestone represents and warrants to, and agrees with,
the Underwriters as set forth in this Section 1(b).
(i) Bridgestone/Firestone is duly organized and validly existing as a
corporation in good standing under the laws of the State of Ohio, and
has all requisite power and authority to own its properties and conduct
its business as presently conducted and to execute, deliver and perform
this Agreement and to consummate the transactions contemplated hereby
and is duly qualified to transact business as a foreign corporation in
good standing under the laws of each jurisdiction where the ownership or
leasing of its properties or the conduct of its business requires such
qualification and where the failure to be so qualified is reasonably
likely to have a material adverse effect on the ability of
Bridgestone/Firestone to perform its obligations under this Agreement,
the Pooling and Servicing Agreement, the Participation Agreement or the
Loan Agreement.
(ii) As of the Closing Date, the representations and warranties of
Bridgestone/Firestone in the Pooling and Servicing Agreement will be
true and correct.
(iii) The execution, delivery and performance by Bridgestone/Firestone
of the Pooling and Servicing Agreement, the Purchase Agreement and the
Loan Agreement and the issuance of the Series 1996-1 Certificates and
the consummation of the transactions contemplated hereby and thereby
have been duly and validly authorized by all necessary action or
proceedings and are legal, valid and binding obligations of
Bridgestone/Firestone, enforceable against Bridgestone/Firestone except
(y) the enforceability thereof may be subject to bankruptcy, fraudulent
transfer, insolvency, reorganization, moratorium or other similar laws
now or hereafter in effect related to creditors' rights generally and
(z) as to enforceability, to general principles of equity (whether
considered in a suit at law or equity).
(iv) This Agreement has been duly authorized, executed and delivered by
Bridgestone/Firestone and constitutes a legal, valid and binding
agreement of Bridgestone/Firestone, enforceable against
Bridgestone/Firestone in accordance with its terms, subject (x) to
applicable bankruptcy, reorganization, insolvency, fraudulent transfer,
moratorium or other similar laws now and hereafter in effect affecting
creditors' rights generally, (y) as to enforceability, to general
principles of equity (whether considered in a suit at law or in equity),
and (z) as to enforceability may be limited under certain circumstances
with respect to provisions indemnifying a party against liability where
such indemnification is contrary to public policy under applicable
securities laws.
(v) The performance by Bridgestone/Firestone of all of the provisions of
its obligations under the Pooling and Servicing Agreement, the Purchase
Agreement, the Loan Agreement, the Enhancement Agreement and this
Agreement and the consummation of the transactions herein and therein
contemplated will not conflict with or result in a breach of any terms
or provisions of, or constitute a default under, any material indenture,
mortgage, deed of trust, loan agreement or other material agreement or
instrument to which Bridgestone/Firestone is a party or by which
Bridgestone/Firestone is bound or to which any of its property or assets
is subject, or any order, decree or regulation applicable to
Bridgestone/Firestone of any Federal or state court, regulatory board or
body or administrative agency having jurisdiction over
Bridgestone/Firestone or its property, nor will any such action result
in any violation of the provisions of the certificate of incorporation
or by-laws of Bridgestone/Firestone.
(vi) No consent, approval, authorization, order, registration or
qualification of or with any court or governmental agency or body is
required for the execution, delivery or performance of this Agreement,
the Pooling and Servicing Agreement, the Participation Agreement, the
Loan Agreement, the Enhancement Agreement and the Certificates by
Bridgestone/Firestone or the consummation by Bridgestone/Firestone of
the transactions contemplated hereby and thereby, except such as have
been obtained under the Act and such as may be required under the
Exchange Act and state securities or blue sky laws in connection with
the purchase and distribution of the Offered Certificates by the
Underwriters.
(vii) Except as described or referred to in the Prospectus, there is no
action, suit or proceeding pending against or, to the knowledge of
Bridgestone/Firestone, threatened against or affecting, Bridgestone/
Firestone before any governmental body, agency or official in which
there is a reasonable possibility of an adverse decision which
(a) is reasonably likely to materially adversely affect the business,
financial position or results of operations of Bridgestone/
Firestone, or (b) is reasonably likely to result in any
material provisions of this Agreement, the Pooling and Servicing
Agreement, the Purchase Agreement, the Participation Agreement, the Loan
Agreement, the Enhancement Agreement or the Series 1996-1 Certificates
becoming invalid.
(viii) Any taxes, fees and other governmental charges owed by
Bridgestone/Firestone in connection with the execution, delivery and
performance of this Agreement, the Pooling and Servicing Agreement, the
Purchase Agreement, the Participation Agreement, the Loan Agreement and
the Enhancement Agreement shall have been paid or will be paid by
Bridgestone/Firestone at or prior to the Closing Date to the extent then
due.
(ix) The Series 1996-1 Certificates will be duly and validly
authorized, and when duly and validly executed, authenticated and
delivered in accordance with the Pooling and Servicing Agreement, will
conform in all material respects to the descriptions thereof contained
in the Prospectus and will be validly issued and outstanding and
entitled to the benefits and security provided by the Pooling and
Servicing Agreement.
(x) This Agreement, the Pooling and Servicing Agreement, the Purchase
Agreement, the Loan Agreement, the Enhancement Agreement and the Series
1996-1 Certificates will conform in all material respects to the
descriptions thereof in the Prospectus.
(xi) The Trust will not be subject to registration as an "investment
company" under the 1940 Act.
(xiv) Except as described in or contemplated by the Prospectus,
subsequent to October __, 1996, there has not been any material adverse
change, or any development involving a prospective material adverse
change, which is reasonably likely to materially adversely affect the
business, management, financial position, net worth, results of
operations or prospects of Bridgestone/Firestone.
Section 2. Purchase and Sale. Subject to the terms and conditions and
-----------------
in reliance upon the covenants, representations and warranties herein set
forth, the Transferor agrees to sell to the Underwriters, and each of the
Underwriters, severally and not jointly, agree to purchase from the
Transferor, at the purchase price described herein, the respective principal
amount of the Offered Certificates set forth opposite the name of each
Underwriter on Schedule A hereto. The purchase price for the Class A
Certificates shall be equal to _______% of the aggregate initial principal
amount thereof. The purchase price for the Class B Certificates shall be
equal to ______% of the aggregate initial principal amount thereof. There
will be added to the purchase price of the Offered Certificates an amount
equal to interest accrued thereon pursuant to the terms thereof from _______,
1996.
Section 3. Delivery and Payment. Delivery of and payment for the
--------------------
Offered Certificates shall be made at the offices of Brown & Wood LLP on
November __, 1996, or at such later date as the Underwriters shall designate,
which date and time may be postponed by agreement between the Underwriters,
the Transferor and Bridgestone/Firestone (such date and time of delivery and
payment for the Offered Certificates being hereinafter referred to as the
"Closing Date"). Delivery of the Offered Certificates shall be made against
payment by the Underwriters of the purchase price therefor to or upon the
order of the Transferor by one or more wire transfers or checks in Federal
(same day) Funds. The Offered Certificates to be so delivered will initially
be represented by one or more Offered Certificates registered in the name of
Cede & Co., as nominee for The Depository Trust Company ("DTC"). The
interests of beneficial owners of the Offered Certificates will be
represented by book entries on the records of DTC and participating members
thereof. Definitive Certificates representing the Offered Certificates will
be available only under limited circumstances.
Section 4. Offering by Underwriters. It is understood that you propose
------------------------
to offer the Offered Certificates for sale to the public as set forth in the
Prospectus.
Section 5. Agreements. (a) The Transferor covenants and agrees with
----------
the Underwriters that:
(i) The Transferor will use its best efforts to cause the Registration
Statement, and any amendment thereto, if not effective at the Execution
Time, to become effective. If the Registration Statement has become or
becomes effective pursuant to Rule 430A, or filing of the Prospectus is
otherwise required under Rule 424(b), the Transferor will file the
Prospectus, properly completed, pursuant to Rule 424(b) within the time
period prescribed and will promptly notify the Underwriters of such
timely filing. The Transferor will promptly advise the Underwriters (A)
when the Registration Statement, and any amendment thereto, shall have
become effective, (B) when the Prospectus, and any supplement thereto,
shall have been filed with the Commission pursuant to Rule 424(b),
(C) of any request by the Commission for any amendment of or supplement
to the Registration Statement or the Prospectus or for any additional
information and (D) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or
the institution or threat of any proceeding for that purpose. The
Transferor will not file any amendment of the Registration Statement
or supplement to the Prospectus unless a copy of the proposed amendment
or supplement has been furnished to you a reasonable time in advance of
such filing, and it will not file any such amendment or supplement to
which the Underwriters or their counsel shall reasonably object. The
Transferor will promptly advise the Underwriters of the institution by
the Commission of any stop order proceeding with respect to the
Registration Statement and will use its reasonable
efforts to prevent the issuance of any such stop order and, if issued,
to obtain as soon as possible the withdrawal thereof.
(ii) If, at any time when a Prospectus relating to the Offered
Certificates is required to be delivered under the Act, any event occurs
as a result of which such Prospectus as then supplemented would include
any untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it shall
be necessary to supplement such Prospectus to comply with the Act or the
rules thereunder, the Transferor promptly will prepare and file with the
Commission, subject to paragraph (i) of this Section 5, a supplement
that will correct such statement or omission or an amendment that will
effect such compliance. Consent by the Underwriters to any such
supplement or amendment shall not constitute a waiver of any of the
conditions set forth in Section 6 hereof.
(iii) As soon as practicable, the Transferor will make generally
available to Certificateholders and to you all financial reports and
information required to be provided to Certificateholders pursuant to
the terms of the Pooling and Servicing Agreement.
(iv) The Transferor will furnish to the Underwriters and counsel for
the Underwriters, without charge, a signed copy of the Registration
Statement (including exhibits thereto) and, so long as delivery of a
prospectus by the Underwriters may be required by the Act, as many
copies of each Preliminary Prospectus and the Prospectus and any
supplement thereto as the Underwriters may reasonably request. If
necessary, the Transferor will furnish or cause to be furnished to you
copies of all reports on Form SR required by Rule 463 under the Act.
(v) The Transferor will arrange or cooperate in the arrangements for
the qualification of the Offered Certificates for sale under the blue
sky laws of such jurisdictions as you may designate, will maintain such
qualifications in effect so long as the Prospectus is required to be
delivered under the Act; provided that the Transferor shall not be
required to qualify as a foreign corporation in any jurisdiction or
shall not be required to consent to service of process in any
jurisdiction other than with respect to a claim arising out of or in
connection with the offering or sale of the Offered Certificates.
(vi) For so long as the Offered Certificates are outstanding, the
Transferor will furnish to you (A) as soon as practicable after the end
of each fiscal year, all documents required to be distributed to
Certificateholders or filed with the Commission and (B) as soon as
practicable after filing, such other publicly available document
concerning the Transferor filed by the Transferor with any government or
regulatory authority, as you may reasonably request. If required by
Section 12(g) of the Securities Exchange Act of 1934, the Transferor
will register the Offered Certificates under the Exchange Act within 120
days after the end of the fiscal year of the Trust during which the
offering of the Offered Certificates to the public occurred.
(vii) To the extent, if any, that any rating provided with respect to
the Offered Certificates set forth in Section 6(p) hereof is conditional
upon the furnishing of documents reasonably available to the Transferor,
the Transferor shall furnish such documents.
(b) Bridgestone/Firestone covenant and agree with the Underwriters,
with respect to the Series 1996-1 Certificates, that:
(i) Bridgestone/Firestone will use its best efforts to cause the
Registration Statement, and any amendment thereto, if not effective at
the Execution Time, to become effective. If the Registration Statement
has become or becomes effective pursuant to Rule 430A, or filing of the
Prospectus is otherwise required under Rule 424(b), Bridgestone/
Firestone will cause the Prospectus to be filed, properly completed,
pursuant to Rule 424(b) within the time period prescribed and will
promptly notify the Underwriters of such timely filing.
Bridgestone/Firestone will promptly advise the Underwriters (A) when the
Registration Statement, and any amendment thereto, shall have become
effective, (B) when the Prospectus, and any supplement thereto, shall
have been filed with the Commission pursuant to Rule 424(b), (C) of any
request by the Commission for any amendment of or supplement to the
Registration Statement or the Prospectus or for any additional
information and (D) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or
the institution or threat of any proceeding for that purpose.
Bridgestone/Firestone will not cause any amendment of the Registration
Statement or supplement to the Prospectus to be filed unless a copy has
been furnished to you a reasonable time in advance of such filing, and
will not file any such amendment or supplement to which the Underwriters
or their counsel shall reasonably object. Bridgestone/Firestone will
promptly advise the Underwriters of the institution by the Commission of
any stop order proceeding with respect to the Registration Statement of
which it has knowledge and use its reasonable efforts to prevent the
issuance of any such stop order and, if issued, to obtain as soon as
possible the withdrawal thereof.
(ii) If, at any time when a Prospectus relating to the Offered
Certificates is required to be delivered under the Act, any event occurs
with respect to the Series 1996-1 Certificates, as a result of which
such Prospectus as then supplemented would include any untrue statement
of a material fact or omit to state any material fact necessary to make
the statements therein in the light of the circumstances under which
they were made not misleading, or if it shall be necessary to supplement
such Prospectus to comply with the Act or the rules thereunder,
Bridgestone/Firestone promptly will prepare and use its best efforts to
cause to be filed with the Commission, subject to paragraph (i) of this
Section 5(b), a supplement that will correct such statement or omission
or an amendment that will effect such compliance.
(iii) If the Transferor has not done so, Bridgestone/Firestone will
furnish to the Underwriters and counsel for the Underwriters, without
charge, a signed copy of the Registration Statement (including exhibits
thereto) and, so long as delivery of a prospectus by the Underwriters
may be required by the Act, as many copies of each Preliminary
Prospectus and the Prospectus and any supplement thereto as the
Underwriters may reasonably request. If necessary,
Bridgestone/Firestone will furnish or cause to be furnished to you
copies of all reports on Form SR required by Rule 463 under the Act.
(iv) To the extent, if any, that any rating provided with respect to the
Offered Certificates set forth in Section 6(p) hereof is conditional
upon the furnishing of documents reasonably available to
Bridgestone/Firestone, Bridgestone/Firestone shall furnish such
documents.
Section 6. Conditions of Underwriters' Obligation. The obligation of
--------------------------------------
the Underwriters to purchase and pay for the Offered Certificates on the
Closing Date shall be subject to the accuracy of the representations and
warranties of the Transferor and Bridgestone/Firestone contained herein as of
the Execution Time and the Closing Date, to the performance by the Transferor
and Bridgestone/Firestone of their obligations hereunder and to the following
additional conditions:
(a) If the Registration Statement has not become effective prior to the
Execution Time, unless the Underwriters agree in writing to a later time, the
Registration Statement shall have become effective not later than (i) 6:00
p.m., New York City time, on the date of determination of the public offering
price, if such determination occurs at or prior to 3:00 p.m., New York City
time, on such date or (ii) 12:00 noon on the business day following the day
on which the public offering price was determined, if such determination
occurs after 3:00 p.m., New York City time, on such date; if filing of the
Prospectus, or any supplements thereto, is required pursuant to Rule 424(b),
the Prospectus, and any supplements thereto, shall have been filed in the
manner and within the time period required by Rule 424(b); and no stop order
suspending the effectiveness of the Registration Statement shall have been
issued and no proceedings for that purpose shall have been instituted or, to
the knowledge of the Transferor or Bridgestone/Firestone, threatened by the
Commission.
(b) The Transferor shall have delivered to you a certificate, dated the
Closing Date, signed by an authorized signatory to the effect that the signer
of such certificate has carefully examined the Underwriting Agreement, the
Pooling and Servicing Agreement, the Purchase Agreement, the Participation
Agreement, the Loan Agreement, the Enhancement Agreement and any other
documents to which the Transferor is a party, the Prospectus (and any
supplements thereto) and the Registration Statement and that:
(i) the representations and warranties of the Transferor in this
Agreement are true and correct at and as of the Closing Date as if made
on and as of the Closing Date (except to the extent they expressly
relate to an earlier date, in which case the representations and
warranties of the Transferor are true and correct as of such earlier
date);
(ii) the Transferor has complied with all the agreements and satisfied
all the conditions on its part to be performed or satisfied under this
Agreement at or prior to the Closing Date; and
(iii) no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
instituted or, to the knowledge of the signer, threatened by the
Commission.
(c) Bridgestone/Firestone shall have delivered to you a certificate,
dated the Closing Date, signed by an authorized signatory to the effect that
the signer of such certificate has carefully examined the Underwriting
Agreement, the Pooling and Servicing Agreement, the Purchase Agreement, the
Loan Agreement, the Enhancement Agreement and any other documents to which it
is a party, the Prospectus (and any supplements thereto) and the Registration
Statement and that:
(i) the representations and warranties of Bridgestone/Firestone in this
Agreement are true and correct at and as of the Closing Date as if made
on and as of the Closing Date (except to the extent they expressly
relate to an earlier date, in which case the representations and
warranties of Bridgestone/Firestone are true and correct as of such
earlier date);
(ii) Bridgestone/Firestone has complied with all the agreements and
satisfied all the conditions on its part to be performed or satisfied
under this Agreement at or prior to the Closing Date; and
(iii) no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
instituted or, to the knowledge of the signer, threatened by the
Commission.
(d) CFNA shall have delivered to you a certificate, dated the Closing
Date, signed by an authorized signatory to the effect that the signer of such
certificate has carefully examined the Underwriting Agreement and the
Purchase Agreement and any other documents to which it is a party, the
Prospectus (and any supplements thereto) and the Registration Statement and
that the representations and warranties of CFNA in the Purchase Agreement are
true and correct at and as of the Closing Date as if made on and as of the
Closing Date (except to the extent they expressly relate to an earlier date,
in which case the representations and warranties of CFNA are true and correct
as of such earlier date);
(e) The Underwriters shall have received an opinion of Stroock &
Stroock & Lavan, special counsel to Bridgestone/Firestone, dated the Closing
Date and satisfactory in form and substance to the Underwriters and counsel
for the Underwriters, substantially to the effect that:
(i) Each of the Pooling and Servicing Agreement, the Purchase
Agreement, the Participation Agreement, the Loan Agreement and this
Agreement is a valid and binding obligation of the Transferor and
Bridgestone/Firestone enforceable against each of the Transferor and
Bridgestone/Firestone in accordance with its terms, subject to
(I) bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium or other similar laws now or hereafter in effect relating
to creditors' rights generally and court decisions with respect thereto;
(II) to the understanding that no opinion is expressed as to the
application of equitable principles in any proceeding, whether at law or
in equity; (III) to limitations or public policy under applicable
securities laws as to rights of indemnity and contributions thereunder.
(ii) The Series 1996-1 Certificates, when executed and authenticated as
specified in the Pooling and Servicing Agreement and delivered and paid
for pursuant to this Agreement, will be validly issued and entitled to
the benefits of the Pooling and Servicing Agreement.
(iii) The Pooling and Servicing Agreement creates a valid security
interest in favor of the Trustee in the Receivables and other property
included in the Trust on the date hereof, which security interest of the
Trustee in the Receivables and the Trust will be perfected and will
constitute a first perfected security interest upon the filing of the
UCC-1 financing statement (the "Financing Statement") in respect of the
Receivables in the offices of the (Secretary of State) of Massachusetts
(and the timely filing of continuation statements with respect to such
Financing Statement); provided, however, that such counsel may take
customary exceptions acceptable to you.
(iv) No consent, approval, authorization or order of, or filing with,
any New York (or Massachusetts) governmental agency or body having
jurisdiction over the Transferor is required for the valid
authorization, issuance and sale of the Series 1996-1 Certificates,
except for (a) filings of Uniform Commercial Code financing statements
with respect to the transfer of the Receivables from the Transferor to
the Trust pursuant to the Pooling and Servicing Agreement; (b) such
other consents, approvals, authorizations, order or filings as have been
obtained, and (c) such consents, approvals, authorizations, order or
filings as may be required under the securities or blue sky laws of any
jurisdiction, as to which no opinion need be expressed.
(v) The Registration Statement has become effective under the Act. To
the best of our knowledge, no stop order suspending the effectiveness of
the Registration Statement has been issued under the Act and no
proceedings therefore have been initiated or threatened by the
Commission.
(vi) The Pooling and Servicing Agreement is not required to be qualified
under the Trust Indenture Act of 1939, as amended.
(vii) The Trust created by the Pooling and Servicing Agreement is not,
and will not solely as a result of the offer and sale of the Offered
Certificates as contemplated in the Prospectus and in this Agreement
become, an "investment company" as such term is defined in the 1940 Act.
(viii) The statements in the Prospectus under the caption "Description
of the Offered Certificates and the Agreement," insofar as such
statements purport to summarize certain provisions of the Offered
Certificates and the Pooling and Servicing Agreement, fairly summarize
such provisions.
(ix) The Registration Statement and the Prospectus (other than the
financial statements and other financial, statistical and numerical
information included or incorporated by reference therein, in each case
as to which no opinion need be rendered) as of their respective
effective or issue dates, complied as to form in all material respects
with the requirements of the Act and the Regulations thereunder.
Such counsel shall deliver to you such additional opinions addressing
the transfer of the Receivables by the Transferor to the Trustee of its
right, title and interest in and to the Receivables and other property
included in the Trust on the Closing Date as may be required by each Rating
Agency rating the Series 1996-1 Certificates.
Such counsel shall state that it has participated in conferences with
representatives of Bridgestone/Firestone, CFNA and with your representatives,
at which the contents of the Registration Statement, the Prospectus and
related matters were discussed and, although it is no passing upon and do not
assume any responsibility for the accuracy, completeness or fairness of the
statements contained in the Registration Statement and the Prospectus (except
to the extent set forth in paragraph (viii) above), on the basis of the
foregoing (relying as to materiality to a large extent upon the opinions of
officers and other representatives of Bridgestone/Firestone and CFNA), no
facts have come to its attention which would lead it to believe that the
Registration Statement at the time it became effective, contained an untrue
statement of a material fact or omitted to state a material fact required to
be stated therein or necessary to make the statements therein not misleading
or that the Prospectus, on the date hereof, contains any untrue statement of
a material fact necessary or omitted or omits to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except that such
counsel need express no view with respect to the financial statements and
other financial and statistical information contained in or incorporated by
reference into the Registration Statement or the Prospectus.
(f) the Underwriters shall receive an opinion of Saul Solomon, General
Counsel to Bridgestone/Firestone dated the Closing Date and satisfactory in
form and in substance to the Underwriters and counsel to the Underwriters
substantially to the effect that:
(i) Bridgestone/Firestone has been duly organized and is validly
existing as a corporation in good standing under the laws of the state
of Ohio.
(ii) Bridgestone/Firestone has the corporate power and corporate
authority to carry on its business as described in the Prospectus and to
own and operate its properties in connection therewith, and had at all
relevant times and now has, the power, authority and legal right to
service the Receivables.
(iii) Bridgestone/Firestone is qualified to do business, and is in good
standing, as a foreign corporation in the State of Tennessee.
(iv) Each of the Pooling and Servicing Agreement, the Participation
Agreement, the Purchase Agreement and the Loan Agreement has been duly
authorized, executed and delivered by Bridgestone/ Firestone.
(v) The execution and delivery by Bridgestone/Firestone of the Pooling
and Servicing Agreement, the Participation Agreement, the Purchase
Agreement and the Loan Agreement and the signing of the Registration
Statement are within the corporate power of Bridgestone/Firestone and
have been duly authorized by all necessary corporate action on the part
of Bridgestone/Firestone; neither the issue and sale of the Series 1996-
1 Certificates nor the consummation of the transactions contemplated
herein nor the fulfillment of the terms hereof will, to the best of my
knowledge, conflict with or constitute a breach of, or default under,
or, other than the security interest created by the Purchase Agreement
or the Pooling and Servicing Agreement, result in the creation or
imposition of any lien, charge or encumbrance upon any property or
assets of Bridgestone/ Firestone pursuant to any material contract,
indenture, mortgage, loan agreement, note, lease or other instruments to
which Bridgestone/Firestone is a party or by which it is bound or to
which the property or assets of Bridgestone/ Firestone are subject
(which contracts, indentures, mortgages, loan agreements, notes, leases
and other such instruments have been identified by Bridgestone/
Firestone to such counsel), nor will such action result in any violation
of the provisions of the certificate of incorporation or by-laws of
Bridgestone/Firestone or, to the best of such counsel's knowledge, any
administrative or court decree.
Such counsel shall also state that in connection with the preparation of
Registration Statement No. 33-07185 (the "Registration Statement") and the
Prospectus (the "Prospectus") contained therein, he has participated in
conferences with representatives of CFNA, the Underwriter and counsel to the
Underwriter at which the contents of the Registration Statement and the
Prospectus were discussed. In such discussion, nothing has come to my
attention which would lead me to believe that either the Registration
Statement, as of its effective date or the Prospectus, as of the date hereof,
contained an untrue statement of a material fact or omitted to state a
material fact necessary in order to make the statements therein, in light of
the circumstances under which they have made, not misleading. In making the
above statements, I assume no responsibility for factual accuracy,
completeness or fairness of the statements contained in the Registration
Statement or in the Prospectus and I have made no independent check or
verification for the purpose of expressing such statements. Furthermore, I
am not expressing any view whatsoever with respect to the financial and
statistical data included in the Registration Statement and Prospectus.
(g) The Underwriters shall receive an opinion of Ropes & Grey, counsel
to the Transferor dated the Closing Date and satisfactory in form an in
substances to the Underwriters and counsel to the Underwriters substantially
to the effect that:
(i) The Transferor has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of
Massachusetts.
(ii) The Transferor has all the requisite corporate power and authority
to carry on its business as described in the Prospectus and to own and
operate its properties in connection therewith, and had at all relevant
times and now has, the power and authority to acquire and own the
Receivables.
(iii) Each of the Pooling and Servicing Agreement, the Purchase
Agreement, the Participation Agreement, the Loan Agreement and this
Agreement has been duly authorized, executed and delivered by the
Transferor.
(iv) The execution and delivery by the Transferor of this Agreement,
the Pooling and Servicing Agreement, the Participation Agreement, the
Purchase Agreement and the Loan Agreement and the signing of the
Registration Statement by the Transferor are within the corporate
power of the Transferor and have been duly authorized by all necessary
corporate action on the part of the Transferor; and neither the
issue and sale of the Series 1996-1 Certificates, nor the
consummation of the transactions contemplated herein nor the fulfillment
of the terms hereof will, to the best of such counsel's knowledge,
conflict with or constitute a breach of, or default under, or other than
the security interest created by the Purchase Agreement or the Pooling
and Servicing Agreement, result in the crease or imposition of any lien,
charge or encumbrance upon any property or assets of the Transferor
pursuant to any contract, indenture, mortgage, loan agreement, note,
lease or other instrument to which the Transferor is bound or to which
the property or assets of the Transferor are subject (which contracts,
indentures, mortgages, loan agreements, notes, leases and other such
instruments have been identified by the Transferor to such counsel),
nor will such action result in any violation of the provisions of
the certificate of incorporation or by-laws of the Transferor
or, to the best of such counsel's knowledge, any administrative or court
decree.
(v) The Series 1996-1 Certificates have been duly authorized by the
Transferor.
(h) The Underwriters shall receive an opinion of (counsel to CFNA),
dated the Closing Date and satisfactory in form and in substance to the
Underwriters and counsel to the Underwriters, substantially to the effect
that:
(i) CFNA has been duly organized and is validly existing as a (national
banking association).
(ii) CFNA has the corporate power and corporate authority to carry on
its business as described in the Prospectus and to own and operate its
properties in connection therewith, and had at all relevant times and
now has, the power, authority and legal right to create and own the
Receivables.
(iii) The Purchase Agreement has been duly authorized, executed and
delivered by CFNA, and is a valid and binding obligation of CFNA
enforceable against CFNA in accordance with its terms, except for (a)
filings of Uniform Commercial Code financing statements with respect to
the transfer of the Receivables from CFNA to the Transferor pursuant to
the Purchase Agreement; (b) such other consents, approvals,
authorizations, order or filings as have been obtained, and (c) such
consents, approvals, authorizations, order or filings as may be required
under the securities or blue sky laws of any jurisdiction, as to which
no opinion need be expressed.
(iv) The execution and delivery by CFNA of the Purchase Agreement is
within the corporate power of CFNA and have been duly authorized by all
necessary corporate action on the part of CFNA; will not, to the best of
our knowledge, conflict with or constitute a breach of, or default
under, or, other than the security interest created by the Purchase
Agreement result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of CFNA pursuant to any material
contract, indenture, mortgage, loan agreement, note, lease or other
instruments to which CFNA is a party or by which it is bound or to which
the property or assets of CFNA are subject (which such contracts,
indentures, mortgages, loan agreements, notes, leases and other such
instruments have been identified by CFNA to us), nor will such action
result in any violation of the provisions of the certificate of
incorporation or by-laws of CFNA or, to the best of such counsel's
knowledge, any administrative or court decree.
Such counsel shall deliver to you such additional opinions addressing
the transfers of the Receivables by CFNA to the Transferor of its right,
title and interest and to the Receivables and other property transferred to
the Transferor on the Closing Date as may be required by each Rating Agency
rating the Series 1996-1 Certificates.
(i) The Underwriters shall have received from Brown & Wood LLP, in its
capacity as counsel for the Underwriters, a favorable opinion dated the
Closing Date, with respect to the issuance and sale of the Offered
Certificates, the Pooling and Servicing Agreement, the Registration
Statement, the Prospectus and such other related matters as the Underwriters
may reasonably require, including:
(i) The Registration Statement has become effective under the Act and,
to the best knowledge of such counsel, no stop order suspending the
effectiveness of the Registration Statement has been issued and no
proceedings for that purpose have been instituted or threatened; and the
Registration Statement and the Prospectus (other than financial,
numerical and statistical information contained therein as to which such
counsel need express no opinion), at the time the Registration Statement
became effective, complied as to form in all material respects with the
applicable requirements of the Act and the rules thereunder.
(ii) The Pooling and Servicing Agreement is not required to be
qualified under the Trust Indenture Act of 1939, as amended.
(iii) The Trust is not now, and following the sale of the Series 1996-1
Certificates to the Underwriters will not be, required to be registered
under the Investment Company Act of 1940, as amended.
In giving its opinion, Brown & Wood LLP may rely as to matters involving
the application of laws of any jurisdiction other than the State of New York,
the United States or the General Corporation Law of the State of Delaware, to
the extent deemed proper and specified in such opinion, upon the opinion of
other counsel of good standing believed to be reliable, and as to matters of
fact, to the extent deemed proper and as stated therein on certificates of
responsible officers of the Trust, Transferor, Bridgestone/Firestone,
Citicorp and public officials. References to the Prospectus in this
paragraph (h) include any supplements thereto.
(j) The Underwriters shall have received an opinion or opinions of
_________________, special counsel for the Transferor, dated the Closing
Date, in form and substance satisfactory to the Underwriters and their
counsel, with respect to certain matters relating to the transfer of the
Receivables to the Trust, with respect to the perfection of the Trust's
interest in the Receivables and certain other matters relating to the
applicable Enhancement, if any, in a form previously approved by you and your
counsel. In addition, the Underwriters shall have received a reliance letter
with respect to any opinion that the Transferor is required to deliver to the
Rating Agency.
(k) The Underwriters shall have received an opinion from Brown & Wood
LLP, special tax counsel to the Transferor, with respect to the Federal
income tax treatment of the Certificates in form and substance satisfactory
to the Underwriters. The Underwriters shall have also received an opinion of
Jones, Day, Reavis & Pogue, special Ohio tax counsel to the Transferor, with
respect to treatment of the Certificates under the Ohio corporation franchise
tax measured by net income in form and substance satisfactory to the
Underwriters.
(l) The Underwriters, Transferor and Bridgestone/Firestone shall have
received an opinion of Shearman and Sterling, counsel to the Trustee, dated
the Closing Date and satisfactory in form and substance to the Underwriters
and counsel for the Underwriters and to the Transferor and
Bridgestone/Firestone and their 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 (corporate and other) to enter into, and to take all
action required of it under the Pooling and Servicing Agreement.
(ii) The Pooling and Servicing Agreement has been duly authorized,
executed and delivered by the Trustee and each of the documents
comprising the Pooling and Servicing Agreement constitutes a legal,
valid and binding agreement of the Trustee, enforceable in accordance
with its terms, except as such enforceability may be limited by
bankruptcy, insolvency, fraudulent transfer, liquidation,
reorganization, moratorium or other similar laws affecting the enforce-
ment of rights of creditors against the Trustee generally, as such laws
would apply in the event of bankruptcy, insolvency, fraudulent transfer,
liquidation or reorganization or any moratorium or similar occurrence
affecting the Trustee, and the application of general principles of
equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law).
(iii) The Series 1996-1 Certificates have been duly authenticated and
delivered by the Trustee.
(iv) The execution and delivery of the Pooling and Servicing Agreement
by the Trustee and the performance by the Trustee of the terms of each
do not conflict with or result in a violation of (A) any law of the
United States of America or the State of New York or any regulation
governing the banking or trust powers of the Trustee, or (B) the
Organization Certificate or by-laws of the Trustee.
(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 its execution and delivery of the
Pooling and Servicing Agreement or the performance by the Trustee of the
terms of the Pooling and Servicing Agreement.
(m) The applicable rating agencies shall have affirmed the rating of
the Bridgestone/Firestone Master Trust, Series 1992-B Certificates.
(n) The Class A Certificates shall be rated at least "AAA" by Standard
& Poor's Ratings Services, a division of The McGraw-Hill Companies, Inc.
("S&P") and "Aaa" by Moody's Investors Service, Inc. ("Moody's"). The Class
B Certificates shall be rated at least "A" by S&P and "A3" by Moody's.
Neither S&P nor Moody's shall have placed the Offered Certificates under
review with possible negative implications.
(o) You shall have received from Deloitte & Touche or other independent
certified public accountants acceptable to you, a letter, dated as of the
date hereof and as of the applicable Closing Date, delivered at such times,
in the form heretofore agreed to.
(p) Subsequent to the respective dates as of which information is given
in the Registration Statement and the Prospectus, there shall not have been
any change, or any development involving a prospective change, in or
affecting the business or properties of the Trust, the Transferor or
Bridgestone/Firestone, the effect of which, in any case referred to above,
taken as a whole from that set forth in or contemplated by the Registration
Statement or the Prospectus (as amended to the date hereof), which is, in the
reasonable judgment of the Underwriters (after consultation with the
Transferor and Bridgestone/Firestone), so material and adverse as to make it
impractical or inadvisable to proceed with the offering or the delivery of
the Offered Certificates as contemplated by the Registration Statement and
the Prospectus (and any supplements thereto).
(q) The Underwriters and counsel for the Underwriters shall have
received such information, opinions, certificates and documents as the
Underwriters or counsel for the Underwriters may reasonably request.
If any of the conditions specified in this Section 6 shall not have been
fulfilled in all material respects when and as provided in this Agreement, or
if any of the opinions or certificates mentioned above or elsewhere in this
Agreement shall not be in all material respects reasonably satisfactory in
form and substance to the Underwriters and counsel for the Underwriters, this
Agreement and all your obligations hereunder may be canceled at, or at any
time prior to, the Closing Date by you. Notice of such cancellation shall be
given to the Trust, the Transferor and Bridgestone/Firestone in writing or by
telephone or telegraph confirmed in writing.
Section 7. Expenses; Reimbursement of Expenses. (a) The Transferor
-----------------------------------
will pay all expenses incidental to the performance of the obligations under
this Agreement, including, without limitation, (i) the filing of the
Registration Statement and all amendments thereto, (ii) the printing and
delivery to the Underwriters, in such quantities as you may reasonably
request, of copies of this Agreement, (iii) any fees charged by any rating
agency for the rating of the Series 1996-1 Certificates, (iv) any expenses
(not including fees and disbursements of counsel) incurred by the
Underwriters in connection with qualification of the Series 1996-1
Certificates for sale under the laws of such jurisdictions as the
Underwriters designates, (v) the fees and expenses of the Trustee and its
counsel and (vi) the fees and expenses of Brown & Wood LLP, as special
federal income tax counsel to the Transferor (it being understood that,
except as provided in Sections 7 and 8 hereof, the Underwriters will pay
its own expenses, the fees and expenses of Brown & Wood LLP in its role as
counsel for the Underwriters).
(b) If the sale of the Offered Certificates provided for herein is not
consummated because any condition to your obligations set forth in Section 6
hereof is not satisfied, or because of any refusal, inability or failure on
the part of the Transferor or Bridgestone/Firestone to perform any agreement
herein or to comply with any provision hereof other than by reason of a
default by any of the Underwriters, the Transferor and Bridgestone/Firestone,
jointly and severally, will reimburse the Underwriters upon demand for all
out-of-pocket expenses (including reasonable fees and disbursements of
counsel) that shall have been incurred by it in connection with the proposed
purchase and sale of the Series 1996-1 Certificates.
Section 8. Indemnification and Contribution. (a) The Transferor and
--------------------------------
Bridgestone/Firestone, jointly and severally, agree to indemnify and hold
harmless the Underwriters and each person who controls the Underwriters
within the meaning of the Act against any and all losses, claims, damages or
liabilities to which it may become subject under the Act, the Exchange Act or
other Federal or state statutory law or regulation, at common law 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 a material fact, with respect to the Transferor
and Bridgestone/Firestone contained in the Registration Statement for the
registration of the Offered Certificates as originally filed or in any
amendment thereof, or in any Preliminary Prospectus or the Prospectus, or in
any amendment thereof or supplement thereto, 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 agree to reimburse each such indemnified party, as incurred,
for any legal or other expenses reasonably incurred by them in connection
with investigating or defending any such loss, claim, damage, liability or
action; provided, however, that (i) neither the Transferor, nor
-------- -------
Bridgestone/Firestone will 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 or omission or alleged omission
made therein in reliance upon and in conformity with written information
furnished to the Transferor or Bridgestone/Firestone by or on behalf of the
Underwriters specifically for use in connection with the preparation thereof,
and (ii) such indemnity with respect to any untrue statement or omission in
any Preliminary Prospectus or the Prospectus shall not inure to the benefit
of the Underwriters (or any person controlling any of the Underwriters) from
whom the person asserting any such loss, claim, damage or liability purchased
the Offered Certificates which is the subject thereof if such person did not
receive a copy of the Prospectus (or the Prospectus as supplemented),
excluding documents incorporated therein by reference at or prior to the
confirmation of the sale of the Offered Certificates to such person in any
case where such delivery is required by the Act and the untrue statement
or omission of a material fact contained in any Preliminary Prospectus
was corrected in the Prospectus (or the Prospectus as supplemented). This
indemnity agreement is independent of any liability which the Transferor
or Bridgestone/Firestone may otherwise have.
(b) Each Underwriter severally agrees to indemnify and hold harmless
the Transferor or Bridgestone/Firestone, each of their respective directors,
each of the officers who signs the Registration Statement, and each person
who controls either the Transferor or Bridgestone/Firestone within the
meaning of the Act, to the same extent as the foregoing indemnities from the
Transferor and Bridgestone/Firestone to the Underwriters, including the
reimbursement of each indemnified party, as incurred, for any legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action, but only with
reference to written information relating to such Underwriter furnished to
the Transferor or Bridgestone/Firestone by or on behalf of such Underwriter
specifically for use in the preparation of the documents referred to in the
foregoing indemnity. This indemnity agreement will be in addition to any
liability which the Underwriters may otherwise have. The Transferor and
Bridgestone/Firestone each acknowledge that the statements relating to the
Underwriters and this Agreement set forth in the (last paragraph of the cover
page), and the statements under the heading "Underwriting" in any Preliminary
Prospectus and the Prospectus constitute the only information furnished in
writing by or on behalf of any Underwriters for inclusion in any Preliminary
Prospectus or the Prospectus, and the Underwriters confirm that such
statements are correct.
(c) Promptly after receipt by an indemnified party under this Section 8
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 8, notify the indemnifying party in writing of the commencement
thereof, but the omission so to notify the indemnifying party will not
relieve it from any liability which it may have to any indemnified party
otherwise than under this Section 8. In case any such action is brought
against any indemnified party, and it notifies the indemnifying party of the
commencement thereof, the indemnifying party will be entitled, jointly with
any other indemnifying party similarly notified, to appoint counsel
reasonably satisfactory to such indemnified party to represent the
indemnified party in such action; provided, however, that if the defendants
-------- -------
in any such 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
which are different from or additional in any material respect 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. After notice from the
indemnifying party to such indemnified party of its election so to appoint
counsel to defend such action and approval by the indemnified party of
such counsel, the indemnifying party will not be liable to such
indemnified party under this Section 8 for any legal or other
expenses subsequently incurred by such indemnified party in connection
with the defense thereof unless (i) the indemnified party shall have
employed separate counsel in connection with the assertion of legal defenses
in accordance with the proviso to the next preceding sentence or (ii) the
indemnifying party has authorized the employment of counsel for the
indemnified party at the expense of the indemnifying party; and except that
such liability shall be only in respect of the counsel referred to in
such clause (i) or (ii). It is understood, however, that the
indemnifying party shall not be liable for the expenses of more than one
separate counsel, approved by the Underwriters in the case of paragraph
(a) of this Section 8, representing the indemnified parties under such
paragraph (a) who are parties to such action.
(d) To provide for just and equitable contribution in circumstances in
which the indemnification provided for in paragraphs (a) and (b) of this
Section 8 is due in accordance with its terms but is for any reason held by a
court to be unavailable on grounds of policy or otherwise, the Transferor and
Bridgestone/Firestone, on the one hand, and the Underwriters, on the other,
shall contribute to the losses, claims, damages and liabilities (including
legal or other expenses reasonably incurred in connection with investigating
or defending same) to which the Transferor and Bridgestone/Firestone and the
Underwriters may be subject in such proportion so that the Underwriters are
responsible for that portion represented by the percentage that the
underwriting discount appearing on the cover page of the Prospectus bears to
the public offering price appearing thereon and the Transferor and
Bridgestone/Firestone are jointly and severally responsible for the balance;
provided, however, that (i) in no case shall the Underwriters be responsible
- -------- -------
for any amount in excess of the underwriting discount applicable to the
Offered Certificates purchased by the Underwriters hereunder and (ii) no
person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. For
purposes of this Section 8, each person who controls the Underwriters
within the meaning of the Act shall have the same rights to
contribution as the Underwriters, and each person who controls each of the
Transferor and Bridgestone/Firestone within the meaning of the Act,
each officer of each of the Transferor and Bridgestone/Firestone who
shall have signed the Registration Statement and each director of each of
the Transferor and Bridgestone/Firestone shall have the same rights to
contribution as each of the Transferor and Bridgestone/Firestone, as the
case may be, subject in each case to clauses (i) and (ii) of this paragraph
(d). Any party entitled to contribution will, promptly after receipt of
notice of commencement of any action, suit or proceeding against such party
in respect of which a claim for contribution may be made against any
other party or parties under this paragraph (d), notify such party or
parties from whom contribution may be sought, but the omission to so
notify such party or parties shall not relieve the party or parties from
whom contribution may be sought from any other obligation it or they
may have hereunder or otherwise than under this paragraph (d).
Section 9. Termination. This Agreement shall be subject to termination
-----------
in the absolute discretion of the Underwriters, by notice given to the
Transferor and Bridgestone/Firestone prior to delivery of and payment for the
Offered Certificates, if prior to such time (i) trading in securities
generally on the New York Stock Exchange shall have been suspended or limited
or minimum prices shall have been established on such Exchange, (ii) a
banking moratorium shall have been declared by Federal or New York State
authorities or (iii) there shall have occurred any outbreak or material
escalation of hostilities or other calamity or crisis the effect of which on
the financial markets of the United States of America is such as to make it,
in the reasonable judgment of the Underwriters, impractical or inadvisable to
market the Offered Certificates.
Section 10. Default by One or More of the Underwriters. If one or more
------------------------------------------
of the Underwriters shall fail at the applicable Closing Time to purchase the
Offered Certificates which it or they are obligated to purchase hereunder
(the "Defaulted Certificates"), then such of you as are named herein shall
have the right, within 24 hours thereafter, to make arrangements for one or
more of the non-defaulting Underwriters, or any other underwriters, to
purchase all, but not less than all, of the Defaulted Certificates in such
amounts as may be agreed upon and upon the terms herein set forth. If,
however, you have not completed such arrangements within such 24-hour period,
then:
(a) if the aggregate principal amount of Defaulted Certificates does
not exceed 10% of the aggregate principal amount of the Offered Certificates
to be purchased hereunder, the non-defaulting Underwriters named hereunder
shall be obligated to purchase the full amount thereof in the proportions
that their respective underwriting obligations hereunder bear to the
underwriting obligations of all such non-defaulting Underwriters, or
(b) if the aggregate principal amount of Defaulted Certificates exceeds
10% of the aggregate principal amount of the Offered Certificates to be
purchased hereunder, this Agreement shall terminate, without any liability on
the part of any non-defaulting Underwriters.
No action taken pursuant to this Section shall relieve any defaulting
Underwriters from liability with respect to any default of such Underwriters
under this Agreement.
In the event of a default by any Underwriters as set forth in this
Section, either you or the Transferor shall have the right to postpone the
applicable Closing Time for a period of time not exceeding seven days in
order that any required changes in the Registration Statement or Prospectus
or in any other documents or arrangements may be effected.
Section 11. Representations and Indemnities To Survive. The respective
------------------------------------------
agreements, representations, warranties, indemnities and other statements of
the Transferor and Bridgestone/Firestone or the officers of any of them and
of the Underwriters set forth in or made pursuant to this Agreement will
remain in full force and effect, regardless of any investigation made by or
on behalf of you or the Trust, the Transferor and Bridgestone/Firestone or
any of the officers, directors or controlling persons referred to in Section
8 hereof, and will survive delivery of and payment for the Series 1996-1
Certificates. The provisions of Sections 7 and 8 hereof shall survive the
termination or cancellation of this Agreement.
Section 12. Notices. All communications hereunder shall be in writing
-------
and effective only on receipt, and, if sent to the Underwriters, will be
mailed, delivered or telegraphed and confirmed to it at: c/o Citibank, N.A.,
399 Park Avenue, New York, New York 10043, Attention: __________; if sent to
the Transferor, will be mailed, delivered or telegraphed and confirmed to it
at: c/o JH Management Corporation, One International Place Suite 520,
Boston, Massachusetts 02110; if sent to Bridgestone/Firestone, will be
mailed, delivered or telegraphed and confirmed to it at:
Bridgestone/Firestone, Inc., 50 Century Boulevard, Nashville, Tennessee
37214, Attention: Saul Soloman.
Section 13. Applicable Law. This Agreement will be governed by and
--------------
construed in accordance with the laws of the State of New York. This
Agreement supersedes all prior agreements and understandings relating to the
subject matter hereof.
Section 14. Successors. This Agreement will inure to the benefit of
----------
and be binding upon the parties hereto and their respective successors
and the officers, directors and controlling persons referred to in
Section 8 hereof, and no other person will have any right or obligation
hereunder.
Section 15. Execution in Counterpart. This Agreement may be executed
------------------------
in any number of counterparts, each of which shall be deemed to be an
original, but all such counterparts shall together constitute one and the
same instrument.
Section 16. No Bankruptcy Action Against the Transferor. The
-------------------------------------------
Transferor hereby agrees not to take any voluntary action to seek bankruptcy
protection unless there are no Series 1996-1 Certificates outstanding.
Bridgestone/Firestone and each Underwriter hereby agree not to take any
action to commence or participate in any involuntary bankruptcy action
against the Transferor unless there are no Series 1996-1 Certificates
outstanding.
Section 17. Miscellaneous. Neither this Agreement nor any term hereof
-------------
may be changed, waived, discharged or terminated orally, but only by an
instrument in writing signed by the party against whom enforcement of the
change, waiver, discharge or termination is sought. The headings in this
Agreement are for purposes of reference only and shall not limit or otherwise
affect the meaning hereof.
If you are in agreement with the foregoing, please sign and return a
counterpart hereof to the Transferor and Bridgestone/Firestone, whereupon
this letter along with all counterparts shall become a binding agreement
among the Transferor, Bridgestone/Firestone and the Underwriters in
accordance with its terms.
Very truly yours,
FIRESTONE RETAIL CREDIT CORPORATION
by
____________________________________________
Name:
Title:
BRIDGESTONE/FIRESTONE, INC.
by
___________________________________________
Name:
Title:
ACCEPTED AND AGREED AS OF
THE DATE FIRST ABOVE WRITTEN:
CITICORP SECURITIES, INC.
by
_________________________
Name:
Title:
CHASE SECURITIES INC.
by
_________________________
Name:
Title:
SCHEDULE A
----------
<TABLE>
<CAPTION>
Purchase Price as a Percentage of the
Aggregate Principal Aggregate Original
Amount Class A Principal Amount of the
Certificates to be Class A
Underwriter Purchased Certificates
- ----------- ---------------------- -----------------------
<S> <C> <C>
Citicorp Securities, Inc. . . . . . . . . . . . . . $__________ _____%
Chase Securities Inc.. . . . . . . . . . . . . . . $__________ _____%
Total . . . . . . . . . . . . . . . . . . $200,000,000
</TABLE>
<TABLE>
<CAPTION>
Purchase Price as a
Percentage of the
Aggregate Principal Aggregate Original
Amount Class B Principal Amount of the
Certificates to be Class B
Underwriter Purchased Certificates
- ----------- -------------------- ------------------------
<S> <C> <C>
Citicorp Securities, Inc. . . . . . . . . . . . . . $_________ _________%
Chase Securities Inc.. . . . . . . . . . . . . . . $_________ _________%
Total . . . . . . . . . . . . . . . . . . $28,205,129
</TABLE>
EXHIBIT 3.1
The Commonwealth of Massachusetts
OFFICE OF THE MASSACHUSETTS SECRETARY OF STATE
MICHAEL JOSEPH CONNOLLY, SECRETARY
ONE ASHBURTON PLACE, BOSTON, MASS. 02108
ARTICLES OF ORGANIZATION
(UNDER G.L. CH. 156B)
INCORPORATORS
NAME POST OFFICE ADDRESS
----- -------------------
Include given name in full in case of natural persons; in case of a
corporation, give state of incorporation.
Louise E. Colby Suite 2300
225 Franklin Street
Boston, MA 02110
The above-named incorporator(s) do hereby associate (themselves) with
the intention of forming a corporation under the provisions of General
Laws, Chapter 156B and hereby state(s):
1. The name by which the corporation shall be known is:
1200 Capital Corporation
2. The purpose for which the corporation is formed is as follows:
(a) To purchase and sell accounts receivable, commercial paper and
other securities.
(b) To carry on any manufacturing, mercantile, selling, management,
service or other business, operation or activity which may be
lawfully carried on by a corporation organized under the Business
Corporation Law of The Commonwealth of Massachusetts, whether or
not related to those referred to in the foregoing paragraph.
Note: If the space provided under any article or item on this form is
insufficient, additions shall be set forth on separate 8 1/2 x 11 sheets of
paper leaving a left hand margin of at least 1 inch for binding. Additions
to more than one article may be continued on a single sheet so long as each
article requiring each such addition is clearly indicated.
3. The total number of shares and the par value, if any, of each class of
stock within the corporation is authorized as follows:
<TABLE>
<CAPTION>
WITHOUT PAR VALUE WITH PAR VALUE
CLASS OF STOCK NUMBER OF SHARES NUMBER OF SHARES PAR VALUE AMOUNT
-------------- ---------------- ---------------- --------- ------
<S> <C> <C> <C>
PREFERRED $
COMMON 250,000 1.00 $250,000
</TABLE>
*4. If more than one class is authorized, a description of each of the
different classes of stock with, if any, the preferences, voting powers,
qualifications, special or relative rights or privileges as to each class
thereof and any series now established:
Not Applicable
*5. The restrictions, if any, imposed by the Articles of Organization
upon the transfer of shares of stock of any class are as follows:
None
*6. Other lawful provisions, if any, for the conduct and regulation of
business and affairs of the corporation, for its voluntary dissolution, or
for limiting, defining, or regulating the powers of the corporation, or of
its directors or stockholders, or of any class of stockholders:
See Attached
*If there are no provisions state "None".
Article 6
- -----------------------
Other Lawful Provisions
(a) The corporation may carry on any business, operation or activity
referred to in Article 2 to the same extent as might an individual,
whether as principal, agent, contractor or otherwise, and either alone or
in conjunction or a joint venture or other arrangement with any
corporation, association, trust, firm or individual.
(b) The corporation may carry on any business, operation or activity
through a wholly or partly owned subsidiary.
(c) The corporation may be a partner in any business enterprise which
it would have power to conduct by itself.
(d) The directors may make, amend or repeal the bylaws in whole or in
part, except with respect to any provision thereof which by law or the
bylaws requires action by the stockholders.
(e) Meetings of the stockholders may be held anywhere in the United
States.
(f) No stockholder shall have any right to examine any property or
any books, accounts or other writings of the corporation if there is
reasonable ground for belief that such examination will for any reason be
adverse to the interests of the corporation, and a vote of the directors
refusing permission to make such examination and setting forth that in the
opinion of the directors such examination would be adverse to the
interests of the corporation shall be prima facie evidence that such
examination would be adverse to the interests of the corporation. Every
such examination shall be subject to such reasonable regulations as the
directors may establish in regard thereto.
(g) The directors may specify the manner in which the accounts of the
corporation shall be kept and may determine what constitutes net earnings,
profits and surplus, what amounts, if any, shall be reserved for any
corporate purpose, and what amounts, if any, shall be declared as
dividends. Unless the board of directors otherwise specifies, the excess
of the consideration for any share of its capital stock with par value
issued by it over such par value shall be paid-in surplus. The board of
directors may allocate to capital stock less than all of the consideration
for any share of its capital stock without par value issued by it, in
which case the balance of such consideration shall be paid-in surplus.
All surplus shall be available for any corporate purpose, including the
payment of dividends.
(h) The purchase or other acquisition or retention by the corporation
of shares of its own capital stock shall not be deemed a reduction of its
capital stock. Upon any reduction of capital or capital stock, no stock-
holder shall have any right to demand any distribution from the corporation,
except as and to the extent that the stockholders shall have provided at the
time of authorizing such reduction.
(i) The directors shall have the power to fix from time to time their
compensation. No person shall be disqualified from holding any office by
reason of any interest. In the absence of fraud, any director, officer or
stockholder of this corporation individually, or any individual having any
interest in any concern which is a stockholder of this corporation, or any
concern in which any of such directors, officers, stockholders or
individuals has any interest, may be a party to, or may be pecuniarily or
otherwise interested in, any contract, transaction or other act of this
corporation, and
(1) such contract, transaction or act shall not be in any way
invalidated or otherwise affected by that fact;
(2) no such director, officer, stockholder or individual shall be
liable to account to this corporation for any profit or benefit realized
through any such contract, transaction or act; and
(3) any such director of this corporation may be counted in
determining the existence of a quorum at any meeting of the directors or of
any committee thereof which shall authorize any such contract, transaction or
act, and may vote to authorize the same;
provided, however, that any contract, transaction or act in which any
director or officer of this corporation is so interested individually or
as a director, officer, trustee or member of any concern which is not a
subsidiary or affiliate of this corporation, or in which any directors or
officers are so interested as holders, collectively, of a majority of
shares of capital stock or other beneficial interest at the time
outstanding in any concern which is not a subsidiary or affiliate of this
corporation, shall be duly authorized or ratified by a majority of the
directors who are not so interested, to whom the nature of such interest
has been disclosed and who have made any findings required by law;
the term "interest" including personal interest and interest as a
director, officer, stockholder, shareholder, trustee, member or
beneficiary of any concern;
the term "concern" meaning any corporation, association, trust,
partnership, firm, person or other entity other than this corporation;
and
the phrase "subsidiary or affiliate" meaning a concern in which a
majority of the directors, trustees, partners or controlling persons is
elected or appointed by the directors of this corporation, or is
constituted of the directors or officers of this corporation.
To the extent permitted by law, the authorizing or ratifying vote of the
holders of a majority of the shares of each class of the capital stock of
this corporation outstanding and entitled to vote for directors at any
annual meeting or a special meeting duly called for the purpose (whether
such vote is passed before or after judgment rendered in a suit with
respect to such contract, transaction or act) shall validate any contract,
transaction or act of this corporation, or of the board of directors or
any committee thereof, with regard to all stockholders of this
corporation, whether or not of record at the time of such vote, and with
regard to all creditors and other claimants under this corporation;
provided, however, that
A. with respect to the authorization or ratification of contracts,
transactions or acts in which any of the directors, officers or
stockholders of this corporation have an interest, the nature of
such contracts, transactions or acts and the interest of any
director, officer or stockholder therein shall be summarized in
the notice of any such annual or special meeting, or in a state-
ment or letter accompanying such notice, and shall be fully
disclosed at any such meeting;
B. the stockholders so voting shall have made any findings required
by law;
C. stockholders so interested may vote at any such meeting except
to the extent otherwise provided by law; and
D. any failure of the stockholders to authorize or ratify such
contract, transaction or act shall not be deemed in any way to
invalidate the same or to deprive this corporation, its directors,
officers or employees of its or their right to proceed with such
contract, transaction or act.
No contract, transaction or act shall be avoided by reason of any
provision of this paragraph (i) which would be valid but for such
provision or provisions.
(j) The corporation shall have all powers granted to corporations by
the laws of The Commonwealth of Massachusetts, provided that no such power
shall include any activity inconsistent with the Business Corporation Law
or the general laws of said Commonwealth.
7. By-laws of the corporation have been duly adopted and the initial
directors, president, treasurer and clerk, whose names are set out
below, have been duly elected.
8. The effective date of organization of the corporation shall be the
date of filing with the Secretary of the Commonwealth or if later date
is desired, specify date (not more than 30 days after the date of
filing.)
9. The following information shall not for any purpose be treated as a
permanent part of the Articles of Organization of the corporation.
a. The post office address of the initial principal office of the
corporation of Massachusetts is:
Suite 230, 225 Franklin Street, Boston, MA 02110
b. The name, residence, and post office address of each of the
initial directors and following officers of the corporation are
as follows:
NAME RESIDENCE POST OFFICE ADDRESS
PRESIDENT:
Louise E. Colby 11 Cazenove Street Suite 2300, 225 Franklin St.
Boston, MA 02116 Boston, MA 02110
TREASURER:
Judith L Stevens 19 St. Germain Street Suite 2300, 225 Franklin St.
Quincy, MA 02169 Boston, MA 02110
CLERK:
Judith L. Stevens Above Above
DIRECTORS:
Louise E. Colby Above Above
Judith L. Stevens Above Above
c. The date initially adopted on which the corporation's fiscal
year ends is:
September 30
d. The date initially fixed in the by-laws for the annual meeting
of stockholders of the corporation is:
first Tuesday of March
e. The name and business address of the resident agent, if any, of
the corporation is: Not Applicable
IN WITNESS WHEREOF and under the penalties of perjury and INCORPORATOR(S)
sign(s) these Articles of Organization this 20th day of October 1983.
/s/ Louise E. Colby
-------------------------------------------------------------
-------------------------------------------------------------
-------------------------------------------------------------
The signature of each incorporator which is not a natural person must be
an individual who shall show the capacity in which he acts and by signing
shall represent under the penalties of perjury that he is duly authorized
on its behalf to sign these Articles of Organization.
THE COMMONWEALTH OF MASSACHUSETTS
ARTICLES OF ORGANIZATION
GENERAL LAWS, CHAPTER 156B, SECTION 12
--------------------------------------
--------------------------------------
I hereby certify that, upon an examination of
the within-written articles of organization, duly
submitted to me, it appears that the provisions of
the General Laws relative to the organization of
corporations have been complied with, and I hereby
approve said articles; and the filing fee in the
amount of $150.00 having been paid, said articles
are deemed to have been filed with me this 24th
day of October 1983.
Effective date
/s/ Michael Joseph Conolly
MICHAEL JOSEPH CONNOLLY
Secretary of State
PHOTO COPY OF ARTICLES OF ORGANIZATION TO BE SENT
TO BE FILLED IN BY CORPORATION
TO:
David M. Donaldson, Esq.
Ropes & Gray
225 Franklin Street
Boston, MA 02110
Telephone:(617) 423-6100
FILING FEE: 1/20 of 1% of the total
amount of the authorized capital stock
with par value, and one cent a share for
all authorized shares without par value,
but not less than $125. General Laws,
Chapter 156B. Shares of stock with a par
value less than one dollar shall be
deemed to have par value of one dollar
per share.
Copy Mailed
THE COMMONWEALTH OF MASSACHUSETTS
OFFICE OF THE MASSACHUSETTS SECRETARY OF STATE
MICHAEL JOSEPH CONNOLLY, SECRETARY
ONE ASHBURTON PLACE, BOSTON, MASS. 02108
FEDERAL IDENTIFICATION
NO. 04-2804883
------------------
ARTICLES OF AMENDMENT
General Laws, Chapter 156B, Section 72
This certificate must be submitted to the Secretary of the Commonwealth
within sixty days after the date of the vote of stockholders adopting the
amendment. The fee for filing this certificate is prescribed by General
Laws, Chapter 156B, Section 114. Make check payable to the Commonwealth of
Massachusetts.
--------------------
We, Louise E. Colby , President and
Alice Rettagliati , Clerk of
1200 Capital Corporation
- ------------------------------------------------------------------------------
(Name of Corporation)
located at Suite 2300, 225 Franklin Street, Boston, MA 02110 do hereby
certify that the following amendment to the articles of organization of the
corporation was duly adopted at a meeting held on July 24, 1986, by a vote
of
1000 shares of Common Stock out of 1000 shares outstanding,
- ---------- ---------------- -----------
(Class of Stock)
shares of out of shares outstanding, and
- ------- ---------------- -----
(Class of Stock)
shares of out of shares outstanding,
- ---------- ---------------- -----------
(Class of Stock)
being at least a majority of each class outstanding and entitled
to vote thereon:1
1 For amendments adopted pursuant to Chapter 156B, Section 70.
Note: if the space provided under any Amendment or item on this form is
insufficient, additions shall be set forth on separate 8 1/2 x 11 sheets of
paper leaving a left hand margin of at least 1 inch for binding. Additions
to more than one Amendment may be continued on a single sheet so long as each
Amendment requiring each such addition is clearly indicated.
TO CHANGE the number of shares and the par value, if any, of each class of
stock within the corporation fill in the following:
The total presently authorized is:
<TABLE>
<CAPTION>
NO PAR VALUE WITH PAR VALUE PAR
KIND OF STOCK NUMBER OF SHARES NUMBER OF SHARES VALUE
<S> <C> <C>
COMMON
PREFERRED
</TABLE>
CHANGE the total to:
<TABLE>
<CAPTION>
NO PAR VALUE WITH PAR VALUE PAR
KIND OF STOCK NUMBER OF SHARES NUMBER OF SHARES VALUE
<S> <C> <C>
COMMON
PREFERRED
</TABLE>
Article I of the Articles of Organization of 1200 Capital Corporation
is hereby amended so that it reads in its entirety as follows:
"The name by which the corporation shall be known is Firestone
Consumer Funding Corporation."
The foregoing amendment will become effective when these articles of
amendment are filed in accordance with Chapter 156B, Section 6 of The
General Laws unless these articles specify, in accordance with the vote
adopting the amendment, a later effective date not more than thirty days
after such filing, in which event the amendment will become effective on
such later date.
IN WITNESS WHEREOF AND UNDER THE PENALTIES OF PERJURY, we have hereto
signed our names this 24th day of July, in the year 1986
/s/ Louise E. Colby President
- ---------------------------------------------------
/s/ Alice Rettagletti Clerk
- ---------------------------------------------------
THE COMMONWEALTH OF MASSACHUSETTS
ARTICLES OF AMENDMENT
(General Laws, Chapter 156B, Section 72)
I hereby approve the within articles of
amendment and, the filing fee in the amount
of $75.00 having been paid, said articles are
deemed to have been filed with me this 24th
day of July, 1986.
/s/ Michael Joseph Conolly
MICHAEL JOSEPH CONNOLLY
Secretary of State
TO BE FILLED IN BY CORPORATION
PHOTO COPY OF AMENDMENT TO BE SENT
TO:
David M. Donaldson, Esq.
Ropes & Gray
225 Franklin Street
Boston, MA 02110
Telephone:(617) 423-6100
COPY MAILED
THE COMMONWEALTH OF MASSACHUSETTS
FEDERAL IDENTIFICATION
NO.
------------------
MICHAEL JOSEPH CONNOLLY
Secretary of State
ONE ASHBURTON PLACE
BOSTON, MASS. 02108
FEDERAL IDENTIFICATION
NO.
------------------
ARTICLES OF MERGER
Pursuant to General Laws, Chapter 156B, Section 79
The fee for filing this certificate is prescribed by General Laws, Chapter
156B, Section 114. Make checks payable to the Commonwealth
of Massachusetts.
* * * *
MERGER OF #042804883
Firestone Consumer Funding Corporation
#133205598
Firestone Retail Credit Corporation
the constituent corporations
into
Firestone Consumer Funding Corporation
the surviving corporation organized under the laws of Massachusetts as
specified in the agreement referred to in Paragraph 1 below.
The undersigned officers of each of the constituent corporations
certify under the penalties of perjury as follows:
1. An agreement of merger has been duly adopted in compliance with the
requirements of subsections (b) and (c) of General Laws, Chapter 156B,
Section 79, and will be kept as provided by subsection (c) thereof. The
surviving corporation will furnish a copy of said agreement to any of its
stockholders, or to any person who was a stockholder of any constituent
corporation, upon written request and without charge.
2. The effective date of the merger determined pursuant to the
agreement referred to in paragraph 1 shall be October 3, 1989 (12:05 EDST)
3. (For a merger)
* The following amendments to the articles of organization of the
SURVIVING corporation to be effected pursuant to the agreement of merger
referred to in paragraph 1 are as follows: Article I of the Articles of
Organization of the SURVIVING corporation is hereby amended so that it reads
in its entirety as follows:
"The name by which the corporation shall be known is "Firestone
Retail Credit Corporation".
* If there are no provisions state "NONE".
Note: If the space provided under article 3 is insufficient, additions
shall be set forth on separate 8 1/2 x 11 inch sheets of paper,
leaving a left hand margin of at least 1 inch for binding.
Additions to more than one article may be continued on a single
sheet so long as each article requiring each such addition is
clearly indicated.
(b) The total number of shares and the par value, if any, of each
class of stock which the resulting corporation is authorized is as
follows:
<TABLE>
<CAPTION>
WITHOUT PAR VALUE WITH PAR VALUE
CLASS OF STOCK NUMBER OF SHARES NUMBER OF SHARES PAR VALUE AMOUNT
<S> <C> <C> <C>
Preferred $
Common
</TABLE>
*(c) If more than one class is authorized, a description of each of
the different classes of stock with, if any, the preferences, voting powers,
qualifications, special or relative rights or privileges as to each class
thereof and any series now established.
None
*(d) Other lawful provisions, if any, for the conduct and regulation
of the business and affairs of the corporation, for its voluntary
dissolution, for restrictions upon the transfer of shares of stock of any
class, or for limiting, defining, or regulating the powers of the
corporation, or of its directors or stockholders, or of any class of
stockholders:
None
4. (This paragraph 4 may be deleted if the surviving corporation is
organized under the laws of a state other than Massachusetts.)
The following information shall not for any purpose be treated as a permanent
part of the articles of organization of the surviving corporation.
(a) The post office address of the principal office of the surviving
corporation in Massachusetts is:
Room 3434, One International Place, Boston, MA 02110-2624
(b) The name, residence and post office address of each of the
directors and President, Treasurer and Clerk of the surviving corporation is
as follows:
<TABLE>
<CAPTION>
Name Residence Post Office Address
<S> <C> <C> <C>
President Steven M. Loring 151 Tremont St., Boston, MA Same
Treasurer Ilene T. Johnson 8 Milford St., Boston, MA Same
Clerk Ilene T. Johnson 8 Milford St., Boston, MA Same
Directors Steven M. Loring 151 Tremont St., Boston, MA Same
Ilene T. Johnson 8 Milford St., Boston, MA Same
Nancy I. DePasquale 0 Buttonwood Lane, Peabody, MA Same
(Smith)
</TABLE>
(c) The date adopted on which the fiscal year of the surviving
corporation ends is: September 30
------------
(d) The date fixed in the by-laws for the Annual Meeting of
stockholders of the surviving corporation is: first Tuesday in March
*If there are no provisions state "None."
Note: If the space provided under article 3 is insufficient, additions
shall be set forth on separate 8 1/2 x 11 inch sheets of paper, leaving a
left hand margin of at least 1 inch for binding. Additions to more than one
article may be continued on a single sheet so long as each article requiring
each such addition is clearly indicated.
5. DELETED (This paragraph 5 may be deleted if the surviving corporation
is organized under the laws of Massachusetts)
FOR MASSACHUSETTS CORPORATIONS
The undersigned President and Clerk of Firestone Consumer Funding
Corporation a corporation organized under the laws of Massachusetts further
state under the penalties of perjury that the agreement of merger referred
to in paragraph 1 has been duly executed on behalf of such corporation and
duly approved in the manner required by General Laws, Chapter 156B, Section
79.
/s/ Steven M. Laring
--------------------------------------------------- President
(signature of officer)
--------------------------------------------------- Clerk
FOR CORPORATIONS ORGANIZED OTHER THAN IN MASSACHUSETTS
The undersigned Vice President + and Secretary ++ of
---------------------- -----------------
Firestone Retail Credit Corporation a corporation organized under the
- ---------------------------------------
laws of Delaware further state under the penalties of perjury that
----------------
the agreement of merger referred to in paragraph 1, has been duly adopted
by such corporation in the manner required by the laws of Delaware
--------
(signature of officer) Vice President
----------------------------------------
( ) Secretary
----------------------------------------
+ Specify the officer having powers and duties corresponding to those
of the President or Vice President of a Massachusetts corporation
organized under General Laws, Chapter 156B.
++ Specify the officer having power and duties corresponding to the
Clerk or Assistant Clerk of such a Massachusetts corporation.
THE COMMONWEALTH OF MASSACHUSETTS
ARTICLES OF MERGER
(General Laws, Chapter 156B, Section 79)
I hereby approve the within articles of merger and, the filing fee in
the amount of $250.00 having been paid, said articles are deemed to have
been filed with me this 2nd day of October, 1989.
Effective Date October 3rd, 1989
MICHAEL JOSEPH CONNOLLY
Secretary of State
TO BE FILLED IN BY CORPORATION
Photocopy of Articles of Merger To Be Sent
TO:
Thomas B. Draper, Esq.
Ropes & Gray
One International Place
Boston, MA 02110-2624
Telephone:(617) 951-7000
COPY MAILED
EXHIBIT 3.2
AMENDED AND RESTATED BY-LAWS
OF
FIRESTONE RETAIL CREDIT CORPORATION
-------------------------------
Section 1. LAW, CERTIFICATE OF INCORPORATION AND BY-LAWS
1.1. These by-laws are subject to the certificate of incorporation of
the corporation. In these by-laws, references to law, the certificate of
incorporation and by-laws mean the law, the provisions of the certificate of
incorporation and the by-laws as from time to time in effect.
Section 2. STOCKHOLDERS
2.1. Annual Meeting. The annual meeting of stockholders shall be held
--------------
at five o'clock in the afternoon on the first Tuesday in May in each year,
unless that day be a legal holiday at the place where the meeting is to be
held, in which case the meeting shall be held at the same hour on the next
succeeding day not a legal holiday, or at such other date and time as shall
be designated from time to time by the board of directors and stated in the
notice of the meeting, at which they shall elect a board of directors and
transact such other business as may be required by law or these by-laws or
as may properly come before the meeting.
2.2. Special Meetings. A special meeting of the stockholders may be
----------------
called at any time by the chairman of the board, if any, the president or the
board of directors. A special meeting of the stockholders shall be called
by the secretary, or in the case of the death, absence, incapacity or refusal
of the secretary, by an assistant secretary or some other officer, upon
application of a majority of the directors. Any such application shall state
the purpose or purposes of the proposed meeting. Any such call shall state
the place, date, hour, and purposes of the meeting.
2.3. Place of Meeting. All meetings of the stockholders for the
----------------
election of directors or for any other purpose shall be held at such place
within or without the State of Delaware as may be determined from time to
time by the chairman of the board, if any, the president or the board of
directors. Any adjourned session of any meeting of the stockholders shall
be held at the place designated in the vote of adjournment.
2.4. Notice of Meetings. Except as otherwise provided by law, a
------------------
written notice of each meeting of stockholders stating the place, day and
hour thereof and, in the case of a special meeting, the purposes for which
the meeting is called, shall be given not less than ten nor more than sixty
days before the meeting, to each stockholder entitled to vote thereat, and
to each stockholder who, by law, by the certificate of incorporation or by
these by-laws, is entitled to notice, by leaving such notice with him or at
his residence or usual place of business, or by depositing it in the United
States mail, postage prepaid, and addressed to such stockholder at his
address as it appears in the records of the corporation. Such notice shall
be given by the secretary, or by an officer or person designated by the board
of directors, or in the case of a special meeting by the officer calling the
meeting. As to any adjourned session of any meeting of stockholders, notice
of the adjourned meeting need not be given if the time and place thereof are
announced at the meeting at which the adjournment was taken except that if
the adjournment is for more than thirty days or if after the adjournment a
new record date is set for the adjourned session, notice of any such
adjourned session of the meeting shall be given in the manner heretofore
described. No notice of any meeting of stockholders or any adjourned session
thereof need be given to a stockholder if a written waiver of notice,
executed before or after the meeting or such adjourned session by such
stockholder, is filed with the records of the meeting or if the stockholder
attends such meeting without objecting at the beginning of the meeting to the
transaction of any business because the meeting is not lawfully called or
convened. Neither the business to be transacted at, nor the purpose of, any
meeting of the stockholders or any adjourned session thereof need be
specified in any written waiver of notice.
2.5. Quorum of Stockholders. At any meeting of the stockholders a
----------------------
quorum as to any matter shall consist of a majority of the votes entitled to
be cast on the matter, except where a larger quorum is required by law, by
the certificate of incorporation or by these by-laws. Any meeting may be
adjourned from time to time by a majority of the votes properly cast upon the
question, whether or not a quorum is present. If a quorum is present at an
original meeting, a quorum need not be present at an adjourned session of
that meeting. Shares of its own stock belonging to the corporation or to
another corporation, if a majority of the shares entitled to vote in the
election of directors of such other corporation is held, directly or
indirectly, by the corporation, shall neither be entitled to vote nor be
counted for quorum purposes; provided, however, that the foregoing shall not
limit the right of any corporation to vote stock, including but not limited
to its own stock, held by it in a fiduciary capacity.
2.6. Action by Vote. When a quorum is present at any meeting, a
--------------
plurality of the votes properly cast for election to any office shall elect
to such office and a majority of the votes properly cast upon any question
other than an election to an office shall decide the question, except when
a larger vote is required by law, by the certificate of incorporation or by
these by-laws. No ballot shall be required for any election unless
requested by a stockholder present or represented at the meeting and
entitled to vote in the election.
2.7. Action without Meetings. Unless otherwise provided in the
-----------------------
certificate of incorporation, any action required or permitted to be taken
by stockholders for or in connection with any corporate action may be taken
without a meeting, without prior notice and without a vote, if a consent or
consents in writing, setting forth the action so taken, shall be signed by
the holders of outstanding stock having not less than the minimum number of
votes that would be necessary to authorize or take such action at a meeting
at which all shares entitled to vote thereon were present and voted and shall
be delivered to the corporation by delivery to its registered office in
Delaware by hand or certified or registered mail, return receipt requested,
to its principal place of business or to an officer or agent of the
corporation having custody of the book in which proceedings of meetings of
stockholders are recorded. Each such written consent shall bear the date of
signature of each stockholder who signs the consent. No written consent
shall be effective to take the corporate action referred to therein unless
written consents signed by a number of stockholders sufficient to take such
action are delivered to the corporation in the manner specified in this
paragraph within sixty days of the earliest dated consent so delivered.
If action is taken by consent of stockholders and in accordance with the
foregoing, there shall be filed with the records of the meetings of
stockholders the writing or writings comprising such consent.
If action is taken by less than unanimous consent of stockholders,
prompt notice of the taking of such action without a meeting shall be given
to those who have not consented in writing and a certificate signed and
attested to by the secretary that such notice was given shall be filed with
the records of the meetings of stockholders.
In the event that the action which is consented to is such as would have
required the filing of a certificate under any provision of the General
Corporation Law of the State of Delaware, if such action had been voted upon
by the stockholders at a meeting thereof, the certificate filed under such
provision shall state, in lieu of any statement required by such provision
concerning a vote of stockholders, that written consent has been given under
Section 228 of said General Corporation Law and that written notice has been
given as provided in such Section 228.
2.8. Proxy Representation. Every stockholder may authorize another
--------------------
person or persons to act for him by proxy in all matters in which a
stockholder is entitled to participate, whether by waiving notice of any
meeting, objecting to or voting or participating at a meeting, or expressing
consent or dissent without a meeting. Every proxy must be signed by the
stockholder or by his attorney-in-fact. No proxy shall be voted or acted
upon after three years from its date unless such proxy provides for a longer
period. A duly executed proxy shall be irrevocable if it states that it is
irrevocable and, if, and only as long as, it is coupled with an interest
sufficient in law to support an irrevocable power. A proxy may be made
irrevocable regardless of whether the interest with which it is coupled is
an interest in the stock itself or an interest in the corporation generally.
The authorization of a proxy may but need not be limited to specified action,
provided, however, that if a proxy limits its authorization to a meeting or
meetings of stockholders, unless otherwise specifically provided such proxy
shall entitle the holder thereof to vote at any adjourned session but shall
not be valid after the final adjournment thereof.
2.9. Inspectors. The directors or the person presiding at the meeting
----------
may, but need not, appoint one or more inspectors of election and any
substitute inspectors to act at the meeting or any adjournment thereof. Each
inspector, before entering upon the discharge of his duties, shall take and
sign an oath faithfully to execute the duties of inspector at such meeting
with strict impartiality and according to the best of his ability. The
inspectors, if any, shall determine the number of shares of stock outstanding
and the voting power of each, the shares of stock represented at the meeting,
the existence of a quorum, the validity and effect of proxies, and shall
receive votes, ballots or consents, hear and determine all challenges and
questions arising in connection with the right to vote, count and tabulate
all votes, ballots or consents, determine the result, and do such acts as are
proper to conduct the election or vote with fairness to all stockholders.
On request of the person presiding at the meeting, the inspectors shall make
a report in writing of any challenge, question or matter determined by them
and execute a certificate of any fact found by them.
2.10. List of Stockholders. The secretary shall prepare and make, at
--------------------
least ten days before every meeting of stockholders, a complete list of the
stockholders entitled to vote at such meeting, arranged in alphabetical order
and showing the address of each stockholder and the number of shares
registered in his name. The stock ledger shall be the only evidence as to
who are stockholders entitled to examine such list or to vote in person or
by proxy at such meeting.
Section 3. BOARD OF DIRECTORS
3.1. Number. The number of directors which shall constitute the whole
------
board shall not be less than two nor more than six in number. Thereafter,
within the foregoing limits, the stockholders at the annual meeting shall
determine the number of directors and shall elect the number of directors as
determined. Within the foregoing limits, the number of directors may be
increased at any time or from time to time by the stockholders or by the
directors by vote of a majority of the directors then in office. The number
of directors may be decreased to any number permitted by the foregoing at any
time either by the stockholders or by the directors by vote of a majority of
the directors then in office, but only to eliminate vacancies existing by
reason of the death, resignation or removal of one or more directors.
Directors need not be stockholders.
3.2. Tenure. Except as otherwise provided by law, by the certificate
------
of incorporation or by these by-laws, each director shall hold office until
the next annual meeting and until his successor is elected and qualified, or
until he sooner dies, resigns, is removed or becomes disqualified.
3.3. Powers. The business and affairs of the corporation shall be
------
managed by or under the direction of the board of directors who shall have
and may exercise all the powers of the corporation and do all such lawful
acts and things as are not by law, the certificate of incorporation or these
by-laws directed or required to be exercised or done by the stockholders.
3.4. Vacancies. Vacancies and any newly created directorships
---------
resulting from any increase in the number of directors may be filled by vote
of the stockholders at a meeting called for the purpose, or by a majority of
the directors then in office, although less than a quorum, or by a sole
remaining director. When one or more directors shall resign from the board,
effective at a future date, a majority of the directors then in office,
including those who have resigned, shall have power to fill such vacancy or
vacancies, the vote or action by writing thereon to take effect when such
resignation or resignations shall become effective. The directors shall have
and may exercise all their powers notwithstanding the existence of one or
more vacancies in their number, subject to any requirements of law or of the
certificate of incorporation or of these by-laws as to the number of
directors required for a quorum or for any vote or other actions.
3.5. Committees. The board of directors may, by vote of a majority of
----------
the whole board, (a) designate, change the membership of or terminate the
existence of any committee or committees, each committee to consist of
one or more of the directors; (b) designate one or more directors
as alternate members of any such committee who may replace any
absent or disqualified member at any meeting of the committee; and (c)
determine the extent to which each such committee shall have and may exercise
the powers of the board of directors in the management of the business and
affairs of the corporation, including the power to authorize the seal of the
corporation to be affixed to all papers which require it and the power and
authority to declare dividends or to authorize the issuance of stock;
excepting, however, such powers which by law, by the certificate of
incorporation or by these by-laws they are prohibited from so delegating.
In the absence or disqualification of any member of such committee and his
alternate, if any, the member or members thereof present at any meeting and
not disqualified from voting, whether or not constituting a quorum, may
unanimously appoint another member of the board of directors to act at the
meeting in the place of any such absent or disqualified member. Except as
the board of directors may otherwise determine, any committee may make rules
for the conduct of its business, but unless otherwise provided by the board
or such rules, its business shall be conducted as nearly as may be in the
same manner as is provided by these by-laws for the conduct of business by
the board of directors. Each committee shall keep regular minutes of its
meetings and report the same to the board of directors upon request.
3.6. Regular Meetings. Regular meetings of the board of directors may
----------------
be held without call or notice at such places within or without the State of
Delaware and at such times as the board may from time to time determine,
provided that notice of the first regular meeting following any such
determination shall be given to absent directors. A regular meeting of the
directors may be held without call or notice immediately after and at the
same place as the annual meeting of stockholders.
3.7. Special Meetings. Special meetings of the board of directors may
----------------
be held at any time and at any place within or without the State of Delaware
designated in the notice of the meeting, when called by the chairman of the
board, if any, the president, or by one-third or more in number of the
directors, reasonable notice thereof being given to each director by the
secretary or by the chairman of the board, if any, the president or any one
of the directors calling the meeting.
3.8. Notice. It shall be reasonable and sufficient notice to a
------
director to send notice by mail at least forty-eight hours or by telegram at
least twenty-four hours before the meeting addressed to him at his usual or
last known business or residence address or to give notice to him in person
or by telephone at least twenty-four hours before the meeting. Notice of a
meeting need not be given to any director if a written waiver of notice,
executed by him before or after the meeting, is filed with the records of
the meeting, or to any director who attends the meeting without protesting
prior thereto or at its commencement the lack of notice to him. Neither
notice of a meeting nor a waiver of a notice need specify the purposes of
the meeting.
3.9. Quorum. Except as may be otherwise provided by law, by the
------
certificate of incorporation or by these by-laws, at any meeting of the
directors a majority of the directors then in office shall constitute a
quorum; a quorum shall not in any case be less than one-third of the total
number of directors constituting the whole board. Any meeting may be
adjourned from time to time by a majority of the votes cast upon the
question, whether or not a quorum is present, and the meeting may be held as
adjourned without further notice.
3.10. Action by Vote. Except as may be otherwise provided by law, by
--------------
the certificate of incorporation or by these by-laws, when a quorum is
present at any meeting the vote of a majority of the directors present shall
be the act of the board of directors.
3.11. Action Without a Meeting. Any action required or permitted to
------------------------
be taken at any meeting of the board of directors or a committee thereof may
be taken without a meeting if all the members of the board or of such
committee, as the case may be, consent thereto in writing, and such writing
or writings are filed with the records of the meetings of the board or of
such committee. Such consent shall be treated for all purposes as the act
of the board or of such committee, as the case may be.
3.12. Participation in Meetings by Conference Telephone. Members of
-------------------------------------------------
the board of directors, or any committee designated by such board, may
participate in a meeting of such board or committee by means of conference
telephone or similar communications equipment by means of which all persons
participating in the meeting can hear each other or by any other means
permitted by law. Such participation shall constitute presence in person at
such meeting.
3.13. Interested Directors and Officers.
---------------------------------
(a) No contract or transaction between the corporation and one or more
of its directors or officers, or between the corporation and any other
corporation, partnership, association, or other organization in which one or
more of the corporation's directors or officers are directors or officers,
or have a financial interest, shall be void or voidable solely for this
reason, or solely because the director or officer is present at
or participates in the meeting of the board or committee thereof which
authorizes the contract or transaction, or solely because his or their votes
are counted for such purpose, if:
(1) The material facts as to his relationship or interest and as
to the contract or transaction are disclosed or are known to the board of
directors or the committee, and the board or committee in good faith
authorizes the contract or transaction by the affirmative votes of a majority
of the disinterested directors, even though the disinterested directors be
less than a quorum; or
(2) The material facts as to his relationship or interest and as
to the contract or transaction are disclosed or are known to the stockholders
entitled to vote thereon, and the contract or transaction is specifically
approved in good faith by vote of the stockholders; or
(3) The contract or transaction is fair as to the corporation as
of the time it is authorized, approved or ratified, by the board of
directors, a committee thereof, or the stockholders.
(b) Common or interested directors may be counted in determining the
presence of a quorum at a meeting of the board of directors or of a committee
which authorizes the contract or transaction.
Section 4. OFFICERS AND AGENTS
4.1. Enumeration; Qualification. The officers of the corporation shall
--------------------------
be a president, a treasurer, a secretary and such other officers, if any, as
the board of directors from time to time may in its discretion elect or
appoint including without limitation a chairman of the board, one or more
vice presidents and a controller. The corporation may also have such agents,
if any, as the board of directors from time to time may in its discretion
choose. Any officer may be but none need be a director or stockholder. Any
two or more offices may be held by the same person. Any officer may be
required by the board of directors to secure the faithful performance of his
duties to the corporation by giving bond in such amount and with sureties or
otherwise as the board of directors may determine.
4.2. Powers. Subject to law, to the certificate of incorporation and
------
to the other provisions of these by-laws, each officer shall have, in
addition to the duties and powers herein set forth, such duties and powers
as are commonly incident to his office and such additional duties and powers
as the board of directors may from time to time designate.
4.3. Election. The officers may be elected by the board of directors
--------
at their first meeting following the annual meeting of the stockholders or
at any other time. At any time or from time to time the directors may
delegate to any officer their power to elect or appoint any other officer or
any agents.
4.4. Tenure. Each officer shall hold office until the first meeting
------
of the board of directors following the next annual meeting of the
stockholders and until his respective successor is chosen and qualified
unless a shorter period shall have been specified by the terms of his
election or appointment, or in each case until he sooner dies, resigns, is
removed or becomes disqualified. Each agent shall retain his authority at
the pleasure of the directors, or the officer by whom he was appointed or by
the officer who then holds agent appointive power.
4.5. Chairman of the Board of Directors, President and Vice President.
----------------------------------------------------------------
The chairman of the board, if any, shall have such duties and powers as shall
be designated from time to time by the board of directors. Unless the board
of directors otherwise specifies, the chairman of the board, or if there is
none the chief executive officer, shall preside, or designate the person who
shall preside, at all meetings of the stockholders and of the board of
directors.
Unless the board of directors otherwise specifies, the president shall
be the chief executive officer and shall have direct charge of all business
operations of the corporation and, subject to the control of the directors,
shall have general charge and supervision of the business of the corporation.
Any vice presidents shall have such duties and powers as shall be set
forth in these by-laws or as shall be designated from time to time by the
board of directors or by the president.
4.6. Treasurer and Assistant Treasurers. Unless the board of directors
----------------------------------
otherwise specifies, the treasurer shall be the chief financial officer of
the corporation and shall be in charge of its funds and valuable papers, and
shall have such other duties and powers as may be designated from time to
time by the board of directors or by the president. If no controller is
elected, the treasurer shall, unless the board of directors otherwise
specifies, also have the duties and powers of the controller.
Any assistant treasurers shall have such duties and powers as shall be
designated from time to time by the board of directors, the president or the
treasurer.
4.7. Controller and Assistant Controllers. If a controller is elected,
------------------------------------
he shall, unless the board of directors otherwise specifies, be the chief
accounting officer of the corporation and be in charge of its books of
account and accounting records, and of its accounting procedures. He shall
have such other duties and powers as may be designated from time to time by
the board of directors, the president or the treasurer.
Any assistant controller shall have such duties and powers as shall be
designated from time to time by the board of directors, the president, the
treasurer or the controller.
4.8. Secretary and Assistant Secretaries. The secretary shall record
-----------------------------------
all proceedings of the stockholders, of the board of directors and of
committees of the board of directors in a book or series of books to be kept
therefor and shall file therein all actions by written consent of
stockholders or directors. In the absence of the secretary from any meeting,
an assistant secretary, or if there be none or he is absent, a temporary
secretary chosen at the meeting, shall record the proceedings thereof.
Unless a transfer agent has been appointed the secretary shall keep or cause
to be kept the stock and transfer records of the corporation, which shall
contain the names and record addresses of all stockholders and the number of
shares registered in the name of each stockholder. He shall have such other
duties and powers as may from time to time be designated by the board of
directors or the president.
Any assistant secretaries shall have such duties and powers as shall be
designated from time to time by the board of directors, the president or the
secretary.
Section 5. RESIGNATIONS AND REMOVALS
5.1. Any director or officer may resign at any time by delivering his
resignation in writing to the chairman of the board, if any, the president,
or the secretary or to a meeting of the board of directors. Such resignation
shall be effective upon receipt unless specified to be effective at some
other time, and without in either case the necessity of its being accepted
unless the resignation shall so state. A director (including persons elected
by directors to fill vacancies in the board) may be removed from office with
or without cause by the vote of the holders of a majority of the shares
issued and outstanding and entitled to vote in the election of directors.
The board of directors may at any time remove any officer either with or
without cause. The board of directors may at any time terminate or modify
the authority of any agent. No director or officer resigning and (except
where a right to receive compensation shall be expressly provided in a duly
authorized written agreement with the corporation) no director or officer
removed shall have any right to any compensation as such director or officer
for any period following his resignation or removal, or any right to damages
on account of such removal, whether his compensation be by the month or by
the year or otherwise; unless, in the case of a resignation, the directors,
or, in the case of removal, the body acting on the removal, shall in their
or its discretion provide for compensation.
Section 6. VACANCIES
6.1. If the office of the president or the treasurer or the secretary
becomes vacant, the directors may elect a successor by vote of a majority of
the directors then in office. If the office of any other officer becomes
vacant, any person or body empowered to elect or appoint that officer may
choose a successor. Each such successor shall hold office for the unexpired
term, and in the case of the president, the treasurer and the secretary until
his successor is chosen and qualified or in each case until he sooner dies,
resigns, is removed or becomes disqualified. Any vacancy of a directorship
shall be filled as specified in Section 3.4 of these by-laws.
Section 7. CAPITAL STOCK
7.1. Stock Certificates. Each stockholder shall be entitled to a
------------------
certificate stating the number and the class and the designation of the
series, if any, of the shares held by him, in such form as shall, in
conformity to law, the certificate of incorporation and the by-laws, be
prescribed from time to time by the board of directors. Such certificate
shall be signed by the chairman or vice chairman of the board, if any, or the
president or a vice president and by the treasurer or an assistant treasurer
or by the secretary or an assistant secretary. Any of or all the signatures
on the certificate may be a facsimile. In case an officer, transfer agent,
or registrar who has signed or whose facsimile signature has been placed on
such certificate shall have ceased to be such officer, transfer agent, or
registrar before such certificate is issued, it may be issued by the
corporation with the same effect as if he were such officer, transfer agent,
or registrar at the time of its issue.
7.2. Loss of Certificates. In the case of the alleged theft, loss,
--------------------
destruction or mutilation of a certificate of stock, a duplicate certificate
may be issued in place thereof, upon such terms, including receipt of a bond
sufficient to indemnify the corporation against any claim on account thereof,
as the board of directors may prescribe.
Section 8. TRANSFER OF SHARES OF STOCK
8.1. Transfer on Books. Subject to the restrictions, if any, stated
-----------------
or noted on the stock certificate, shares of stock may be transferred on the
books of the corporation by the surrender to the corporation or its transfer
agent of the certificate therefor properly endorsed or accompanied by a
written assignment and power of attorney properly executed, with necessary
transfer stamps affixed, and with such proof of the authenticity of signature
as the board of directors or the transfer agent of the corporation may
reasonably require. Except as may be otherwise required by law, by the
certificate of incorporation or by these by-laws, the corporation shall be
entitled to treat the record holder of stock as shown on its books as the
owner of such stock for all purposes, including the payment of dividends and
the right to receive notice and to vote or to give any consent with respect
thereto and to be held liable for such calls and assessments, if any, as may
lawfully be made thereon, regardless of any transfer, pledge or other
disposition of such stock until the shares have been properly transferred on
the books of the corporation.
It shall be the duty of each stockholder to notify the corporation of
his post office address.
8.2. Record Date and Closing Transfer Books. In order that the
--------------------------------------
corporation may determine the stockholders entitled to notice of or to vote
at any meeting of stockholders or any adjournment thereof, the board of
directors may fix a record date, which record date shall not precede the date
upon which the resolution fixing the record date is adopted by the board of
directors, and which record date shall not be more than sixty nor less than
ten days before the date of such meeting. If no such record date is fixed
by the board of directors, the record date for determining the stockholders
entitled to notice of or to vote at a meeting of stockholders shall be at the
close of business on the day next preceding the day on which notice is given,
or, if notice is waived, at the close of business on the day next preceding
the day on which the meeting is held. A determination of stockholders of
record entitled to notice of or to vote at a meeting of stockholders shall
apply to any adjournment of the meeting; provided, however, that the board
of directors may fix a new record date for the adjourned meeting.
In order that the corporation may determine the stockholders entitled
to consent to corporate action in writing without a meeting, the board of
directors may fix a record date, which record date shall not precede the
date upon which the resolution fixing the record date is adopted by the
board of directors, and which date shall not be more than ten days after
the date upon which the resolution fixing the record date is adopted
by the board of directors. If no such record date has been fixed by
the board of directors, the record date for determining stockholders entitled
to consent to corporate action in writing without a meeting, when no prior
action by the board of directors is required by the General Corporation Law
of the State of Delaware, shall be the first date on which a signed written
consent setting forth the action taken or proposed to be taken is delivered
to the corporation by delivery to its registered office in Delaware by hand
or certified or registered mail, return receipt requested, to its principal
place of business or to an officer or agent of the corporation having custody
of the book in which proceedings of meetings of stockholders are recorded.
If no record date has been fixed by the board of directors and prior action
by the board of directors is required by the General Corporation Law of the
State of Delaware, the record date for determining stockholders entitled to
consent to corporate action in writing without a meeting shall be at the
close of business on the day on which the board of directors adopts the
resolution taking such prior action.
In order that the corporation may determine the stockholders entitled
to receive payment of any dividend or other distribution or allotment of any
rights or to exercise any rights in respect of any change, conversion or
exchange of stock, or for the purpose of any other lawful action, the board
of directors may fix a record date, which record date shall not precede the
date upon which the resolution fixing the record date is adopted, and which
record date shall be not more than sixty days prior to such payment, exercise
or other action. If no such record date is fixed, the record date for
determining stockholders for any such purpose shall be at the close of
business on the day on which the board of directors adopts the resolution
relating thereto.
Section 8a. INDEMNIFICATION OF DIRECTORS AND OFFICERS
8.1. The corporation shall, to the extent legally possible, indemnify
each of its directors and officers (including persons who serve at its
request as directors, officers or trustees of another organization, or in any
capacity with respect to any employee benefit plan) against all liabilities
and expenses, including amounts paid in satisfaction of judgements, in
compromise or as fines and penalties, and counsel fees, reasonably incurred
by him in connection with the defense or disposition of any action, suit or
other proceeding, whether civil or criminal, in which he may be involved or
with which he may be threatened, while in office or thereafter, by reason
of his being or having been such a director or officer, except with respect
to any matter as to which he shall have been adjudicated in any proceeding
not to have acted in good faith in the reasonable belief that his action
was in the best interest of the corporation (any person serving another
organization in one or more of the indicated capacities at the request of
the corporation who shall have acted in good faith in the reasonable belief
that his action was in the best interest of such organization to be deemed
as having acted in such manner with respect to the organization) or, to the
extent that such matter relates to service with respect to any employee
benefit plan, in the best interest of the participants or beneficiaries of
such employee benefit plan; provided, however, that as to any matter
disposed of by a compromise payment by such director or officer, pursuant
to a consent decree or otherwise, no indemnification either for said payment
or for any other expenses shall be provided unless such compromise shall
be approved as in the best interest of the corporation, after notice that
it involves such indemnification: (a) by a disinterested majority of the
directors then in office; or (b) by a majority of the disinterested directors
then in office, provided that there has been obtained an opinion in writing
of independent legal counsel to the effect that such director or officer
appears to have acted in good faith in the reasonable belief that his
action was in the best interest of the corporation; or (c) by the holders
of a majority of the outstanding stock at the time entitled to vote for
directors, voting as a single class, exclusive of any stock owned by any
interested director or officer. Expenses, including counsel fees, reasonably
incurred by any director or officer in connection with the defense or
disposition of any such action, suit or other proceeding may be paid from
time to time by the corporation in advance of the final disposition thereof
upon receipt of an undertaking by such director or officer to repay the
amounts so paid to the corporation if it is ultimately determined that
indemnification for such expenses is not authorized under this section.
The right of indemnification hereby provided shall not be exclusive of or
affect any other rights to which any director or officer may be entitled.
As used in this section, the terms "director" and "officer" include the
relevant individual's heirs, executors and administrators, and an
"interested" director or officer is one against whom in such capacity the
proceedings in question or another proceeding on the same or similar
grounds is then pending. Nothing contained in this section shall affect
any rights to indemnification to which corporate personnel other than
directors and officers may be entitled by contract or otherwise under law.
Section 9. CORPORATE SEAL
9.1. Subject to alteration by the directors, the seal of the
corporation shall consist of a flat-faced circular die with the word
"Delaware" and the name of the corporation cut or engraved thereon, together
with such other words, dates or images as may be approved from time to time
by the directors.
Section 10. EXECUTION OF PAPERS
10.1. Except as the board of directors may generally or in particular
cases authorize the execution thereof in some other manner, all deeds,
leases, transfers, contracts, bonds, notes, checks, drafts or other
obligations made, accepted or endorsed by the corporation shall be signed by
the chairman of the board, if any, the president, a vice president or the
treasurer.
Section 11. FISCAL YEAR
11.1. The fiscal year of the corporation shall end on September 30.
Section 12. AMENDMENTS
12.1. These by-laws may be adopted, amended or repealed by vote of a
majority of the directors then in office or by vote of a majority of the
stock outstanding and entitled to vote. Any by-law, whether adopted, amended
or repealed by the stockholders or directors, may be amended or reinstated
by the stockholders or the directors.
EXHIBIT 4.1
Brown & Wood
Draft 10/14/96
- --------------------------------------------------------------------------
FIRESTONE RETAIL CREDIT CORPORATION,
Transferor,
BRIDGESTONE/FIRESTONE, INC.
and
THE FUJI BANK AND TRUST COMPANY,
Trustee
on behalf of the Certificateholders
BRIDGESTONE/FIRESTONE MASTER TRUST
AMENDED AND RESTATED POOLING AND SERVICING AGREEMENT
Dated as of __________, 1996
- --------------------------------------------------------------------------
TABLE OF CONTENTS
Page
----
ARTICLE I DEFINITIONS
Section 1.01 Definitions . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.02 Other Definitional Provisions . . . . . . . . . . . . . . 21
ARTICLE II CONVEYANCE; ISSUANCE OF CERTIFICATES
Section 2.01 Conveyance . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 2.02 Acceptance by Trustee . . . . . . . . . . . . . . . . . . 24
Section 2.03 Representations and Warranties of the
Transferor Relating to the Transferor . . . . . . . . . 25
Section 2.04 Representations and Warranties Relating to
the Agreement and the Receivables . . . . . . . . . . . 27
Section 2.05 Addition of Accounts . . . . . . . . . . . . . . . . . . . 29
Section 2.06 Transfer of Ineligible Receivables . . . . . . . . . . . . 31
Section 2.07 Purchase of Certificates . . . . . . . . . . . . . . . . . 33
Section 2.08 Covenants of the Transferor . . . . . . . . . . . . . . . 34
Section 2.09 Authentication of Certificates . . . . . . . . . . . . . . 37
Section 2.10 Removal of Accounts . . . . . . . . . . . . . . . . . . . 38
Section 2.11 Discount Option . . . . . . . . . . . . . . . . . . . . . 39
ARTICLE III ADMINISTRATION AND SERVICING OF RECEIVABLES
Section 3.01 Acceptance of Appointment and Other Matters
Relating to the Servicer . . . . . . . . . . . . . . . . 41
Section 3.02 Servicing Compensation . . . . . . . . . . . . . . . . . . 43
Section 3.03 Representations Warranties and Covenants of
the Servicer . . . . . . . . . . . . . . . . . . . . . . 44
Section 3.04 Reports and Records for the Trustee: Bank
Account Statements . . . . . . . . . . . . . . . . . . . 47
Section 3.05 Annual Servicer's Certificate . . . . . . . . . . . . . . 48
Section 3.06 Annual Independent Public Accountants'
Servicing Report . . . . . . . . . . . . . . . . . . . . 48
Section 3.07 Tax Treatment . . . . . . . . . . . . . . . . . . . . . . 49
Section 3.08 Notices to Bridgestone/Firestone . . . . . . . . . . . . . 49
Section 3.09 Adjustments . . . . . . . . . . . . . . . . . . . . . . . 50
ARTICLE IV RIGHTS OF CERTIFICATEHOLDERS, ALLOCATION
AND APPLICATION OF COLLECTIONS AND SERVICER
AND TRANSFEROR LETTERS OF CREDIT
Section 4.01 Establishment of Collection Account and
Allocations with Respect to the Exchangeable
Transferor Certificate . . . . . . . . . . . . . . . . . 52
Section 4.01A Servicer Letter of Credit . . . . . . . . . . . . . . . . 56
Section 4.01B Transferor Letter of Credit . . . . . . . . . . . . . . . 60
ARTICLE V (ARTICLE V IS RESERVED AND MAY BE SPECIFIED IN
ANY SUPPLEMENT WITH RESPECT TO ANY SERIES)
ARTICLE VI THE CERTIFICATES
Section 6.01 The Certificates . . . . . . . . . . . . . . . . . . . . . 65
Section 6.02 Authentication of Certificates . . . . . . . . . . . . . . 65
Section 6.03 Registration of Transfer and Exchange of
Certificates . . . . . . . . . . . . . . . . . . . . . . 66
Section 6.04 Mutilated, Destroyed, Lost or Stolen
Certificates . . . . . . . . . . . . . . . . . . . . . . 68
Section 6.05 Persons Deemed Owners . . . . . . . . . . . . . . . . . . 69
Section 6.06 Appointment of Paying Agent . . . . . . . . . . . . . . . 69
Section 6.07 Access to List of Certificateholders' Names
and Addresses . . . . . . . . . . . . . . . . . . . . . 70
Section 6.08 Authenticating Agent . . . . . . . . . . . . . . . . . . . 71
Section 6.09 Tender of Exchangeable Transferor
Certificate . . . . . . . . . . . . . . . . . . . . . . 72
Section 6.10 (Reserved . . . . . . . . . . . . . . . . . . . . . . . . 74
Section 6.11 Book-Entry Certificates . . . . . . . . . . . . . . . . . 74
Section 6.12 Notice to Clearing Agency . . . . . . . . . . . . . . . . 75
Section 6.13 Definitive Certificates . . . . . . . . . . . . . . . . . 75
ARTICLE VII OTHER MATTERS RELATING TO THE TRANSFEROR
Section 7.01 Liability of the Transferor . . . . . . . . . . . . . . . 77
Section 7.02 Merger or Consolidation of, or Assumption of
the Obligations of, the Transferor . . . . . . . . . . . 77
Section 7.03 Limitation on Liability of the Transferor . . . . . . . . 78
Section 7.04 Indemnification of the Trust by the
Transferor . . . . . . . . . . . . . . . . . . . . . . . 78
ARTICLE VIII OTHER MATTERS RELATING TO THE SERVICER
Section 8.01 Liability of the Servicer . . . . . . . . . . . . . . . . 80
Section 8.02 Merger or Consolidation of, or Assumption of
the Obligations of, the Servicer . . . . . . . . . . . . 80
Section 8.03 Limitation on Liability of the Servicer and
Others . . . . . . . . . . . . . . . . . . . . . . . . . 81
Section 8.04 Servicer Indemnification of the Trust and the
Trustee . . . . . . . . . . . . . . . . . . . . . . . . 81
Section 8.05 The Servicer Not to Resign . . . . . . . . . . . . . . . . 82
Section 8.06 Access to Certain Documentation and
Information Regarding the Receivables . . . . . . . . . 82
Section 8.07 Delegation of Duties . . . . . . . . . . . . . . . . . . . 83
Section 8.08 Examination of Records . . . . . . . . . . . . . . . . . . 83
ARTICLE IX AMORTIZATION EVENTS
Section 9.01 Amortization Events . . . . . . . . . . . . . . . . . . . 84
Section 9.02 Additional Rights Upon the Occurrence of
Certain Events . . . . . . . . . . . . . . . . . . . . . 84
ARTICLE X SERVICER DEFAULTS
Section 10.01 Servicer Defaults . . . . . . . . . . . . . . . . . . . . 86
Section 10.02 Trustee to Act; Appointment of Successor . . . . . . . . . 88
Section 10.03 Notification to Certificateholders . . . . . . . . . . . . 90
Section 10.04 Waiver of Past Defaults . . . . . . . . . . . . . . . . . 90
ARTICLE XI THE TRUSTEE
Section 11.01 Duties of Trustee . . . . . . . . . . . . . . . . . . . . 91
Section 11.02 Rights of the Trustee . . . . . . . . . . . . . . . . . . 92
Section 11.03 Trustee Not Liable for Recitals in
Certificates . . . . . . . . . . . . . . . . . . . . . . 94
Section 11.04 Trustee May Own Certificates . . . . . . . . . . . . . . . 94
Section 11.05 The Servicer to Pay Trustee's Fees and
Expenses . . . . . . . . . . . . . . . . . . . . . . . . 94
Section 11.06 Eligibility Requirements for Trustee . . . . . . . . . . . 94
Section 11.07 Resignation or Removal of Trustee . . . . . . . . . . . . 95
Section 11.08 Successor Trustee . . . . . . . . . . . . . . . . . . . . 95
Section 11.09 Merger or Consolidation of Trustee . . . . . . . . . . . . 96
Section 11.10 Appointment of Co-Trustee or Separate
Trustee . . . . . . . . . . . . . . . . . . . . . . . . 96
Section 11.11 Tax Returns . . . . . . . . . . . . . . . . . . . . . . . 98
Section 11.12 Trustee May Enforce Claims Without Possession
of Certificates . . . . . . . . . . . . . . . . . . . . 98
Section 11.13 Suits for Enforcement . . . . . . . . . . . . . . . . . . 99
Section 11.14 Rights of Certificateholders to Direct
Trustee . . . . . . . . . . . . . . . . . . . . . . . . 99
Section 11.15 Representations and Warranties of Trustee . . . . . . . . 99
Section 11.16 Maintenance of Office or Agency . . . . . . . . . . . . . 100
ARTICLE XII TERMINATION
Section 12.01 Termination of Trust . . . . . . . . . . . . . . . . . . . 101
Section 12.02 Optional Purchase and Final Termination Date
of Investor Certificates of any Series . . . . . . . . . 101
Section 12.03 Final Payment with Respect to any Series . . . . . . . . . 102
Section 12.04 Transferor's Termination Rights . . . . . . . . . . . . . 104
ARTICLE XIII MISCELLANEOUS PROVISIONS
Section 13.01 Amendment . . . . . . . . . . . . . . . . . . . . . . . . 105
Section 13.02 Protection of Right, Title and Interest to
Trust . . . . . . . . . . . . . . . . . . . . . . . . . 107
Section 13.03 Limitation on Rights of Certificateholders . . . . . . . . 108
Section 13.04 Governing Law. . . . . . . . . . . . . . . . . . . . . . . 109
Section 13.05 Notices . . . . . . . . . . . . . . . . . . . . . . . . . 109
Section 13.06 Severability of Provisions . . . . . . . . . . . . . . . . 110
Section 13.07 Assignment . . . . . . . . . . . . . . . . . . . . . . . . 110
Section 13.08 Certificates Nonassessable and Fully Paid . . . . . . . . 110
Section 13.09 Further Assurances . . . . . . . . . . . . . . . . . . . . 110
Section 13.10 No Waiver; Cumulative Remedies . . . . . . . . . . . . . . 110
Section 13.11 Counterparts . . . . . . . . . . . . . . . . . . . . . . . 111
Section 13.12 Third Party Beneficiaries . . . . . . . . . . . . . . . . 111
Section 13.13 Actions by Certificateholders . . . . . . . . . . . . . . 111
Section 13.14 Merger and Integration . . . . . . . . . . . . . . . . . . 111
Section 13.15 Headings . . . . . . . . . . . . . . . . . . . . . . . . . 112
Section 13.16 Voting, Waiver and Consents . . . . . . . . . . . . . . . 112
EXHIBITS
- --------
Exhibit A-1: Form of Exchangeable Transferor Certificate
Exhibit A-2: Form of Bridgestone/Firestone Certificate
Exhibit B: Form of Assignment of Receivables in
Eligible Alternative Accounts
Exhibit C: Form of Reassignment of Receivables in
Removed Accounts
Exhibit D: Irrevocable Servicer Letter of Credit
Exhibit E: Form of Annual Servicer's Certificate
Exhibit F: Form of Opinion of Counsel - Provisions to
be Included in Opinion of Counsel Delivered
Pursuant to Subsection 2.05(b)(vi)
Exhibit G: Irrevocable Transferor Letter of Credit
Exhibit H: Form of Depository Agreement
Exhibit I: Irrevocable Transferor Letter of Credit
Schedule 1: List of Accounts
AMENDED AND RESTATED POOLING AND SERVICING AGREEMENT, dated as of
October ___, 1996 to the POOLING AND SERVICING AGREEMENT, dated as of
November 1, 1992, by and among FIRESTONE RETAIL CREDIT CORPORATION, a
corporation organized and existing under the laws of the Commonwealth of
Massachusetts, as Transferor; BRIDGESTONE/FIRESTONE, INC., a corporation
organized and existing under the laws of the State of Ohio, individually and
as Servicer; and THE FUJI BANK AND TRUST COMPANY, a banking corporation
organized and existing under the laws of the State of New York, as Trustee.
In consideration of the mutual agreements herein contained, each party
agrees as follows for the benefit of the other parties and for the benefit of
the Certificateholders to the extent provided herein:
ARTICLE I
DEFINITIONS
Section 1.01 Definitions. Whenever used in this Agreement, the
-----------
following words and phrases shall have the following meanings:
"Account" shall mean (a) each credit card account generated or to be
-------
generated by the Originator in the ordinary course of its business and
existing or arising under the Credit Card Program, and (b) subject to Section
2.05, as of each Addition Date, each Eligible Alternative Account identified
in each list delivered to the Trustee by the Transferor pursuant to Section
2.05. The definition of Account shall include each Transferred Account into
which an Account shall be transferred provided that such transfer was made in
accordance with all objective criteria of the Credit Card Guidelines. The
term "Account" shall be deemed to refer to an Eligible Alternative Account
only from and after the Addition Date with respect thereto.
"Accumulation Period" shall have, with respect to any Series, the
-------------------
meaning, if any, specified in the applicable Supplement.
"Addition Date" shall mean each date as of which Eligible Alternative
-------------
Accounts will be included as Accounts pursuant to Section 2.05.
"Addition Notice Date" shall mean, with respect to any Eligible
--------------------
Alternative Account, the last day in the month preceding the month in which
the Addition Date for such Eligible Alternative Account occurs.
"Additional Accounts" shall mean each credit card account to be
-------------------
generated by the Originator in the ordinary course of its
business arising under the Credit Card Program after the Series 1996-1
Closing Date.
"Adjustment Payment" shall have the meaning set forth in Section
------------------
3.09(a).
"Affiliate" of any Person shall mean any other Person controlling,
---------
controlled by or under common control with such Person.
"Aggregate Invested Amount" shall mean the sum of the Invested Amounts
-------------------------
with respect to all Series then issued and outstanding.
"Aggregate Invested Percentage" shall mean the sum of the applicable
-----------------------------
Invested Percentages with respect to all Series then issued and outstanding.
"Aggregate Receivables" shall mean, at any time, (a) the aggregate
---------------------
amount of Eligible Receivables and Eligible Alternative Receivables as of the
end of the prior Collection Period for each Account minus Defaulted
Receivables, minus (b)(i) an amount equal to the finance charges billed in
respect of such Eligible Receivables and Eligible Alternative Receivables in
such prior Collection Period, minus (ii) finance charges credited as a rebate
in respect of such Eligible Receivables and Eligible Alternative Receivables
during such prior Collection Period minus (iii) amounts billed in item (i)
above, net of rebates in item (ii) above, with respect to that portion of
such Eligible Receivables and Eligible Alternative Receivables that are
Discount Option Receivables.
"Agreement" shall mean this Amended and Restated Pooling and Servicing
---------
Agreement and all amendments hereof and supplements hereto, including any
Supplement.
"Alternative Account" shall mean an account arising from an Alternative
-------------------
Program.
"Alternative Programs" shall mean programs, other than the Credit Card
--------------------
Program which exists as of the Series 1996-1 Closing Date, (for which CFNA
underwrites and originates Accounts and Receivables) which may include, but
are not limited to, the establishment of private label credit card programs
and the offering of general purpose credit cards.
"Amortization Event" shall have, with respect to each Series, the
------------------
meaning specified in Section 9.01 and in any Supplement for the related
Series.
"Amortization Period" shall mean, with respect to any Series, the period
-------------------
following the Revolving Period which may be
the Accumulation Period, Controlled Amortization Period, Early Amortization
Period or Rapid Amortization Period (each as defined in any related
Supplement).
"Applicants" shall have the meaning specified in Section 6.07.
----------
"Appointment Date" shall have the meaning specified in Section 9.02.
----------------
"APR" shall mean the annual percentage rate or rates determined in the
---
manner described in the Credit Card Agreement applicable to each Account.
"Assignment" shall have the meaning set forth in Section 2.05(c).
----------
"Authorized Newspaper" shall mean any newspaper of general circulation
--------------------
in the Borough of Manhattan, the City of New York, or in such other location
as may be specified in a Supplement for a particular Series, printed in the
English language, or the official language of the country of publication, and
customarily published on each Business Day, whether or not published on
Saturdays, Sundays and holidays.
"Available Letter of Credit Amount" shall have, with respect to the
---------------------------------
Servicer Letter of Credit, the meaning specified in the Servicer Letter of
Credit and, with respect to the Transferor Letter of Credit, the meaning
specified in the Transferor Letter of Credit.
"Base Rate" shall mean, with respect to any Series, the amount stated
---------
in the applicable Supplement.
"B/F Amount" shall mean that portion of Aggregate Receivables
----------
represented by the B/F Percentage except as reduced pursuant to Section
2.06(c) or Section 3.09(a).
"B/F Percentage" shall mean 1%.
--------------
"Book-Entry Certificates" shall mean an Investor Certificate,
-----------------------
registered in the name of a Clearing Agency or a nominee thereof as described
in Section 6.11; provided that after the occurrence of a condition whereupon
book-entry registration and transfer are no longer permitted and Definitive
Certificates are to be issued to the Certificate Owners, such certificates
shall no longer be "Book-Entry Certificates."
"Bridgestone/Firestone" shall mean Bridgestone/Firestone, Inc., a
---------------------
corporation organized and existing under the laws of the State of Ohio.
"Bridgestone/Firestone Certificate" shall mean the certificate executed
---------------------------------
by the Transferor and authenticated by the Trustee, substantially in the form
of Exhibit A-2.
-----------
"Business Day" shall mean any day other than (a) a Saturday or a Sunday,
------------
or (b) a day on which banking institutions or trust companies in the Cities
of Cleveland, Ohio, Nashville, Tennessee, or New York, New York, or, as
specified in a Supplement for a particular Series, any other place where
payment on the Certificates is authorized for such Series, are authorized or
obligated by law, executive order or governmental decree to be closed.
"Certificate" shall mean one of any Series of Investor Certificates, the
-----------
Bridgestone/Firestone Certificate, or the Exchangeable Transferor
Certificate.
"Certificate Owner" shall mean, with respect to a Book-Entry
-----------------
Certificate, the Person who is the owner of a beneficial interest in such
Book-Entry Certificate, as reflected on the books of the Clearing Agency, or
on the books of a Person maintaining an account with such Clearing Agency.
"Certificate Rate" shall mean, with respect to any Series, the
----------------
percentage (or formula on the basis of which such rate shall be determined)
stated in the applicable Supplement.
"Certificate Register" shall mean the register maintained pursuant to
--------------------
Section 6.03, providing for the registration of the applicable Certificates
and transfer and exchange thereof.
"Certificateholder" or "Holder" shall mean the Person in whose name a
----------------- ------
Certificate is registered in the Certificate Register or, if applicable, the
Clearing Agency in whose name are registered any Book-Entry Certificates.
"Certificateholders' Interest" shall have the meaning specified in
----------------------------
Article IV of any Supplement for the related Series.
"Class" shall mean, with respect to any Series, any one of the Classes
-----
of Certificates of that Series as specified in the related Supplement.
"Clearing Agency" shall mean an organization registered as a "clearing
---------------
agency" pursuant to Section 17A of the Securities Exchange Act of 1934, as
amended.
"Clearing Agency Participant" shall mean a broker, dealer, bank, other
---------------------------
financial institution or other Person for whom from time to time a Clearing
Agency effects book-entry transfers and pledges of securities deposited with
the Clearing Agency.
"Closing Date" shall mean, with respect to any Series, the date of
------------
issuance of such Series, as specified in the related Supplement.
"Collection Account" shall have the meaning specified in Section 4.01.
------------------
"Collection Period" shall mean, with respect to each Account, each
-----------------
monthly billing cycle period ending in the period commencing on the 19th
calendar day of each calendar month and ending on the 18th calendar day of
the next succeeding calendar month during the term of the Trust.
"Collections" shall mean all payments by or on behalf of Obligors
-----------
(including Recoveries, Insurance Premiums and Insurance Proceeds) received by
the Servicer, the Originator or the Transferor in respect of the Receivables,
in the form of cash, checks or any other form of payment in accordance with
the Credit Card Agreement in effect from time to time.
"Controlled Amortization Period" shall have, with respect to any Series,
------------------------------
the meaning specified in the applicable Supplement.
"Corporate Trust Office" shall mean the principal office of the Trustee
----------------------
at which at any particular time its corporate trust business shall be
administered, which office at the date of the execution of this Agreement is
located at Two World Trade Center, 81st Floor, New York, New York 10048
(Attn: Trust Administration Department).
"Credit Card Agreement" shall mean, with respect to each Account, and
---------------------
collectively with respect to all Accounts, the agreements between the
Originator and each Obligor, governing the terms and conditions of the
applicable revolving credit card account or any successor credit card account
designations used by the Originator, Bridgestone/Firestone or the Transferor
as such agreements may be amended, modified or otherwise changed from time to
time and as distributed (including any amendments and revisions thereto) to
holders of such consumer revolving credit card accounts. The form of
agreement relating to Accounts generated by the Originator under the Credit
Card Program is as set forth in Exhibit G (or in a form substantially similar
to Exhibit G).
"Credit Card Guidelines" shall mean the written policies and procedures
----------------------
relating to the operation of the credit card business applicable to the
Credit Card Program or any Alternative Program, including, without
limitation, the written policies and procedures for determining the
creditworthiness of credit card customers, the extension of credit to credit
card customers, and the maintenance of credit card accounts and collection of
credit card receivables, as such policies and procedures may be amended
from time to time in conformance with all Requirements of Law, the failure to
comply with which would have a material adverse effect on Investor
Certificateholders.
"Credit Card Program" shall mean the private label credit card program
-------------------
established for customers of Retail Establishments which may include certain
credit features or enhancements including cash advances or convenience
checks, existing as of the Series 1996-1 Closing Date.
"Credit First" shall mean Credit First National Association, a national
------------
banking association organized and existing under the laws of the United
States.
"Cut-Off Date" shall mean, for each Account, the billing cycle closing
------------
date occurring during the period commencing on October 19, 1992 and ending on
November 18, 1992.
"Date of Processing" shall mean, with respect to any transaction, the
------------------
business day after such transaction is first output in written form, under
the Servicer's customary and usual servicing practices, from the Servicer's
computer file of consumer revolving credit card accounts (without regard to
the effective date of such recordation).
"Debtor Relief Laws" shall mean the Bankruptcy Code of the United States
------------------
of America and all other applicable liquidation, conservatorship, bankruptcy,
moratorium, rearrangement, receivership, insolvency, reorganization,
suspension of payment or similar debtor relief laws from time to time in
effect affecting the rights of creditors generally.
"Defaulted Amount" shall mean, with respect to any Distribution Date,
----------------
the sum for all the Accounts of the amount of Receivables which became
Defaulted Receivables in the Collection Period for such Distribution Date,
less the full amount of such Defaulted Receivables which are subject to a
transfer obligation of the Transferor under Section 2.06(b) or of the
Servicer under Section 3.03 with respect to such Distribution Date; provided,
--------
however, that if any of the events described in Section 9.01(a) occurs with
- -------
respect to the Transferor or Bridgestone/Firestone, the amount of such
Defaulted Receivables which are subject to transfer pursuant to Section
2.06(b) shall not be so subtracted and if any of the events described in
Section 10.01(d) occurs with respect to the Servicer, the amount of such
Defaulted Receivables which are subject to transfer pursuant to Section 3.03
shall not be so subtracted.
"Defaulted Receivables" shall mean, with respect to any Collection
---------------------
Period, all Receivables (other than Ineligible Receivables) in any Account
which are written off as uncollectible in such Collection Period, in
accordance with the
applicable Credit Card Guidelines. Notwithstanding the foregoing sentence, a
Receivable (other than an Ineligible Receivable) shall become a Defaulted
Receivable on the day on which such Receivable is recorded as written off on
the Servicer's computer master file of consumer revolving credit card
accounts but, in any event, shall be deemed a Defaulted Receivable no later
than the last day of the Collection Period following the Collection Period in
which it becomes 180 days delinquent (210 days after the date of the initial
billing statement).
"Definitive Certificates" shall have the meaning specified in Section
-----------------------
6.11.
"Definitive Registered Certificates" shall mean Definitive Certificates
----------------------------------
issued in registered form.
"Depository Agreement" shall mean the agreement among the Transferor,
--------------------
the Trustee and the Clearing Agency, in the form attached hereto as Exhibit
-------
H.
- -
"Designated Alternative Program" shall mean an Alternative Program
------------------------------
designated by the Transferor as a program for which the Transferor wants to
include Eligible Alternative Receivables in excess of the Ten Percent Number
Test and the Ten Percent Aggregate Test.
"Determination Date" shall mean the 2nd Business Day preceding each
------------------
Distribution Date.
"Discount Option Receivables" shall mean, as of the end of any
---------------------------
Collection Period after the date on which the Transferor's exercise of its
discount option pursuant to Section 2.11 takes effect, the sum of (a) the
aggregate Discount Option Receivables at the end of the start of such
Collection Period (which amount, prior to the date on which the Transferor's
exercise of its discount option takes effect and with respect to Receivables
generated prior to such date, shall be zero) plus (b) any New Discount Option
----
Receivables created during such Collection Period minus (c) any Discount
-----
Option Receivables Collections received during such Collection Period.
"Discount Option Receivable Collections" shall mean for any Collection
--------------------------------------
Period ending on and after the date on which the Transferor's exercise of its
discount option pursuant to Section 2.11 takes effect, the product of (a) a
fraction the numerator of which is the amount of Discount Option Receivables
and the denominator of which is the amount of Eligible Receivables and
Eligible Alternative Receivables (including the Discount Option Receivables
portion) in each case (for both numerator and denominator) at the start of
the Collection Period and (b) Collections received during such Collection
Period.
"Discount Percentage" shall mean the fixed percentage or variable
-------------------
percentage based on a formula, if any, designated by the Transferor pursuant
to Section 2.11.
"Distribution Date" shall mean unless otherwise specified in any
-----------------
Supplement for the related Series, the 1st day of each calendar month or, if
such 1st day is not a Business Day, the next succeeding Business Day,
beginning on the date specified in such Supplement.
"Dollars", "$" or "U.S.$" shall mean United States dollars.
------- - -----
"Early Amortization Period" shall mean, with respect to any Series, the
-------------------------
period specified in the related Supplement.
"Eligible Account" shall mean an Account (whether existing as of the
----------------
Series 1996-1 Closing Date or an Additional Account) (a) which has been
established under the Credit Card Program; (b) which is denominated in
Dollars; (c) the credit card or cards related to which have not been reported
lost or stolen; (d) the Obligor on which has provided, as its most recent
billing address, an address with a zip code in the United States or its
territories or possessions; (e) which is not an account of an Obligor in
bankruptcy or an account as to which the Servicer has any confirmed record of
any fraud-related activity; and (f) the Receivables in which have not been
charged-off or the account itself has not been closed prior to its billing
cycle cut-off date.
"Eligible Alternative Account" shall mean, as of the relevant Addition
----------------------------
Notice Date, an Account (a) which has been established under an Alternative
Program and designated by the Transferor as an Eligible Alternative Account
pursuant to Section 2.05; (b) which is denominated in Dollars; (c) the credit
card or cards related to which have not been reported lost or stolen; (d) the
Obligor on which has provided, as its most recent billing address, an address
with a zip code in the United States or its territories or possessions; (e)
which is not an account of an Obligor in bankruptcy or an account as to which
the Servicer has any confirmed record of any fraud-related activity; and (f)
the Receivables in which have not been charged-off or the account itself has
not been closed prior to its billing cycle cut-off date.
"Eligible Alternative Receivable" shall mean each Receivable which has
-------------------------------
arisen under an Eligible Alternative Account and meets criteria set forth in
subsections (b) through (k) of the definition of Eligible Receivable.
"Eligible Institution" shall mean a depository institution (which may
--------------------
be the Trustee or the Originator or an Affiliate of either) organized under
the laws of the United States or any one
of the states thereof, including the District of Columbia, which at all times
has the highest short-term rating of at least two nationally recognized
statistical rating agencies one at which is A-1+ from Standard & Poor's and
P-1 by Moody's and which is a member of the FDIC; provided, however, that an
-------- -------
institution which shall have corporate trust powers and which maintains the
Collection Account, any principal funding account, any interest funding
account or any other account maintained for the benefit of Certificateholders
as a fully segregated trust account with the trust department of such
institution shall not be required to meet the foregoing rating requirements.
"Eligible Receivable" shall mean each Receivable:
-------------------
(a) which has arisen under an Eligible Account;
(b) which was created in compliance with all Requirements of Law
applicable to the Originator and the Servicer, other than those with respect
to which there is no reasonable likelihood that a failure to comply could
have a material adverse effect upon Investor Certificateholders and pursuant
to a Credit Card Agreement which complies with all Requirements of Law
applicable to the Originator and the Servicer, other than those with respect
to which there is no reasonable likelihood that a failure to comply could
have a material adverse effect on Investor Certificateholders;
(c) with respect to which all consents, licenses, approvals or
authorizations of, or registrations or declarations with, any Governmental
Authority required to be obtained, effected or given in connection with the
creation of such Receivable or the execution, delivery and performance of the
Credit Card Agreement pursuant to which such Receivable was created, have
been duly obtained, effected or given and are in full force and effect as of
such date of creation;
(d) as to which at all times following the transfer of such
Receivable to the Trust, the Trust will have good and marketable title
thereto free and clear of all Liens arising prior to the transfer or arising
at any time under or through the Originator, the Servicer or the Transferor
or its Affiliates (which Affiliates shall not include the Trust) other than
Liens permitted pursuant to Section 2.08(b);
(e) which has been the subject of either a valid transfer and
assignment from the Transferor to the Trust of all of the Transferor's right,
title and interest therein or the grant to the Trust of a perfected security
interest which is prior to any interest of all third parties therein (and in
the proceeds thereof), effective until the termination of the Trust;
(f) which will at all times be the legal, valid and binding
payment obligation of the Obligor thereon enforceable against such Obligor in
accordance with its terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws, now or hereafter in effect, affecting the enforcement of
creditors' rights in general and except as such enforceability may be limited
by general principles of equity (whether considered in a suit at law or in
equity);
(g) which constitutes either an "account" or a "general
intangible" under and as defined in Article 9 of the UCC as then in effect in
the Commonwealth of Massachusetts and the States of New York and Ohio;
(h) which, at the time of transfer to the Trust, has not been
waived or modified except as permitted in accordance with Section 3.03(i);
(i) which is not subject to any right of rescission, setoff,
counterclaim or any other defense (including defenses arising out of
violations of usury laws) of the Obligor, other than defenses arising out of
applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting the enforcement of creditors' rights in general and
except as such enforceability may be limited by general principles of equity
(whether considered in a suit at law or equity) or as to which the Servicer
may, as described in Section 3.03(i), make an adjustment;
(j) as to which, at the time of transfer of such Receivable by the
Transferor to the Trust, or at the time of sale of such Receivable by the
Originator to the Transferor, each of the Transferor and the Originator has
satisfied all obligations on its part with respect to such Receivable
required to be fulfilled pursuant to the Credit Card Agreement or in
connection with the transfer and any applicable agreement pursuant to which
such transfer occurs; and
(k) as to which, at the time of transfer of such Receivable by the
Transferor to the Trust, or at the time of sale of such Receivable by the
Originator to the Transferor, each of the Transferor and the Originator has
not taken any action which would impair or failed to take any action
necessary to avoid impairing the rights of the Trust or the
Certificateholders therein.
"Eligible Servicer" shall mean the Trustee or a national banking
-----------------
association formed by Bridgestone/Firestone to own credit card accounts and
receivables or an entity which, at the time of its appointment as Servicer,
(i) is servicing a portfolio of consumer revolving credit card accounts, (ii)
is legally
qualified and has the capacity to service the Accounts, (iii) has
demonstrated the ability to service professionally and completely a portfolio
of similar accounts in accordance with high standards of skill and care and
(iv) is qualified to use the software that the Servicer is then currently
using to service the Accounts or obtains the right to use or has its own
software which is adequate to perform its duties under this Agreement.
"Enhancement" shall mean, with respect to any Series, the letter of
-----------
credit, liquidity facility, guaranteed rate agreement, maturity guaranty
facility, tax protection agreement, interest rate swap or any other contract
or agreement for the benefit of Certificateholders of such Series as
designated in the applicable Supplement.
"Enhancement Provider" shall mean, with respect to any Series, that
--------------------
Person designated as such in the applicable Supplement.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
-----
as amended.
"Escrow Account" shall have the meaning specified in Section 4.01A(e).
--------------
"Exchange" shall mean either of the procedures described under Section
--------
6.09.
"Exchangeable Transferor Certificate" shall mean the certificate
-----------------------------------
executed by the Transferor and authenticated by the Trustee, substantially in
the form of Exhibit A-1 and exchangeable as provided in Section 6.09.
-----------
"Exchange Date" shall have the meaning, with respect to any Series
-------------
issued pursuant to an Exchange, specified in Section 6.09.
"Exchange Notice" shall have the meaning, with respect to any Series
---------------
issued pursuant to an Exchange, specified in Section 6.09.
"FDIC" shall mean the Federal Deposit Insurance Corporation.
----
"Final Trust Termination Date" shall have the meaning specified in
----------------------------
Section 12.01.
"Finance Charge Collections" shall mean, with respect to any Collection
--------------------------
Period, the amount of Collections allocated as Finance Charge Collections
pursuant to Section 4.01(e).
"Fitch" shall mean Fitch Investors Service, Inc.
-----
"Fifteen Percent Quarterly Cap" shall have the meaning specified in
-----------------------------
Section 2.05(d).
"Fixed Allocation Percentage" shall (i) have with respect to any Series,
---------------------------
the meaning specified in the applicable Supplement and (ii) with respect to
the Bridgestone/Firestone Certificate, mean 1%.
"Floating Allocation Percentage" shall (i) have with respect to any
------------------------------
Series, the meaning specified in the applicable Supplement and (ii) with
respect to the Bridgestone/Firestone Certificate, mean 1%.
"Governmental Authority" shall mean the United States of America, any
----------------------
state or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of
or pertaining to government.
"Ineligible Receivable" shall have the meaning specified in Section
---------------------
2.06.
"Initial Closing Date" shall mean December 2, 1992.
--------------------
"Initial Invested Amount" shall mean, with respect to any Series, the
-----------------------
amount stated in the applicable Supplement.
"Insurance Agreement" shall mean any insurance policy for the benefit
-------------------
of the Originator or Bridgestone/Firestone covering any Obligor with respect
to Receivables under such Obligor's Account.
"Insurance Premiums" shall mean the amounts specified in the Insurance
------------------
Agreement applicable to each Account for insurance on such Account which are
retained by the Originator, the Servicer or Bridgestone/Firestone from
payments by the applicable Obligor or remitted to the Originator, the
Servicer or Bridgestone/Firestone by the applicable insurance provider.
"Insurance Proceeds" shall mean any amounts received by the Servicer,
------------------
the Originator or the Transferor from the applicable insurance providers
pursuant to any insurance policies covering any Obligor with respect to
Receivables under such Obligor's Account.
"Interest Accrual Period" shall mean, with respect to any Series, the
-----------------------
period during which interest accrues on such Series as specified in the
related Supplement.
"Internal Revenue Code" shall mean the Internal Revenue Code of 1986,
---------------------
as amended from time to time.
"Invested Amount" shall have, with respect to any Series, the meaning
---------------
specified in the applicable Supplement.
"Invested Percentage" shall have, with respect to any Series, the
-------------------
meaning specified in the applicable Supplement.
"Investor Certificate" shall mean any one of the certificates
--------------------
(including, without limitation, the Book-Entry Certificates or the Registered
Certificates) executed by the Transferor and authenticated by or on behalf of
the Trustee, substantially in the form attached to the applicable Supplement.
"Investor Certificateholder" shall mean the holder of record of an
--------------------------
Investor Certificate.
"Investor Default Amount" shall have, with respect to any Series, the
-----------------------
meaning specified in the applicable Supplement.
"Investor Exchange" shall have the meaning specified in Section 6.09.
-----------------
"Issuance Date" shall mean, with respect to any Series, the date of
-------------
initial issuance of such Series as specified in the related Supplement.
"Late Fees" shall have the meaning specified in the Credit Card
---------
Agreement applicable to each Account for late fees or similar terms.
"Letter of Credit Bank" shall mean The Sumitomo Bank, Limited, acting
---------------------
through its New York Branch, and the issuer of any substitute Servicer Letter
of Credit delivered pursuant to Section 4.01A(c) or substitute Transferor
Letter of Credit delivered pursuant to Section 4.01B(c).
"Letter of Credit Reimbursement Agreement" shall mean the Letter of
----------------------------------------
Credit Reimbursement Agreement, dated as of December 2, 1992, between
Bridgestone/Firestone and the Letter of Credit Bank, as from time to time
amended, or any similar agreement between Bridgestone/Firestone and the
issuer of any substitute Servicer Letter of Credit delivered pursuant to
Section 4.01A(c) or Transferor Letter of Credit delivered pursuant to Section
4.01B(c).
"Lien" shall mean any mortgage, deed of trust, pledge, hypothecation,
----
assignment, deposit arrangement, encumbrance, lien (statutory or other),
preference, priority or other security agreement or preferential arrangement
of any kind or nature whatsoever, including, without limitation, any
conditional sale or other title retention agreement, any financing lease
having substantially the same economic effect as any of the foregoing and the
filing of any financing statement under the UCC or
comparable law of any jurisdiction to evidence any of the foregoing;
provided, however, that any assignment permitted by Section 7.02 shall not
- -------- -------
be deemed to constitute a Lien; provided, further, however, that the Lien
-------- ------- -------
created by the Agreement shall not be deemed to constitute a Lien.
"Merchant Fees" shall mean all fees paid to the Originator in its
-------------
capacity as credit card issuer, by Retail Establishments in connection with
the Credit Card Program or any Alternative Program which are transferred by
the Originator to the Transferor pursuant to the Purchase and Sale Agreement.
"Minimum Transferor Interest Percentage" shall mean, with respect to any
--------------------------------------
Collection Period with respect to any Series, the percentage specified in the
Supplement in respect of such Series of Certificates.
"Monthly Periodic Rate" shall mean the APR divided by 12.
---------------------
"Monthly Servicing Fee" shall have, with respect to each Series, the
---------------------
meaning specified in Section 3.02.
"Monthly Servicer's Certificate" shall have the meaning set forth in
------------------------------
Section 3.04(b).
"Moody's" shall mean Moody's Investors Service, Inc.
-------
"Net Losses" shall mean, with respect to any Collection Period, the
----------
annualized percentage equivalent of a fraction the numerator of which is the
Defaulted Amount less the amount of Recoveries with respect to such
Collection Period and the denominator of which is the Aggregate Receivables
as of the end of the preceding Collection Period.
"New Discount Option Receivables" shall mean, for any Collection Period
-------------------------------
ending on and after the date on which the Transferor's exercise of its
discount option pursuant to Section 2.11 takes effect, the product of (a) the
amount of any Eligible Receivables and Eligible Alternative Receivables
created during such Collection Period and (b) the Discount Percentage.
"Non-Designated Alternative Program" shall mean an Alternative Program
----------------------------------
which the Transferor has not designated as a Designated Alternative Program.
"Obligor" shall mean, with respect to any Account, the Person or Persons
-------
obligated to make payments with respect to such Account, including any
guarantor thereof, but excluding any merchants.
"Officers' Certificate" shall mean, unless otherwise specified in the
---------------------
Agreement, a certificate signed by a Chairman of
the Board, President or any Vice President and a Treasurer, Secretary,
Assistant Secretary, or Assistant Treasurer or, in the case of a Successor
Servicer, a certificate signed by a Vice President and the financial
controller (or an officer holding an office with equivalent or more senior
responsibilities) of such Successor Servicer, and delivered to the Trustee.
"Opinion of Counsel" shall mean a written opinion of counsel, who may
------------------
be counsel of the Transferor and who shall be reasonably acceptable to the
Trustee; provided, however, that any opinion of counsel regarding federal
-------- -------
income tax consequences shall be rendered by independent outside counsel.
"Originator" shall mean Credit First (successor to Society National
----------
Bank) or any successor originator of Accounts as herein provided.
"Participation Agreement" shall mean the Amended and Restated
-----------------------
Participation Agreement, dated as of October ___, 1996, by and between
Bridgestone/Firestone and the Transferor, as the same may be supplemented,
modified, amended or amended and restated from time to time.
"Paying Agent" shall mean any paying agent appointed pursuant to Section
------------
6.06 and shall initially be the Trustee.
"Payoff Date" shall have the meaning specified in Section 4.01A(e).
-----------
"Periodic Finance Charges" shall have the meaning specified in the
------------------------
Credit Card Agreement applicable to each Account for finance charges (based
on a periodic rate) or similar term.
"Permitted Investments" shall mean (a) negotiable instruments or
---------------------
securities represented by instruments in bearer or registered form which
evidence (i) obligations fully guaranteed as to timely payment by the United
States of America; (ii) certificates of deposit of, or bankers' acceptances
issued by, any depository institution or trust company incorporated or
licensed under the laws of the United States of America or any state thereof
and subject to supervision and examination by federal or state banking or
depository institution authorities (which may be the Trustee or the
Originator or an Affiliate of either); provided, however, that at the time
-------- -------
of the Trust's investment or reinvestment or contractual commitment to invest
or reinvest therein, such depository institution or trust company shall have
the highest short-term rating granted by each Standard & Poor's and Moody's;
(iii) commercial paper having, at the time of the Trust's investment or
reinvestment or contractual commitment to invest or reinvest therein, a
rating from each Standard & Poor's and Moody's in the highest short-term
category granted by Standard & Poor's or Moody's, as applicable; (iv)
investments in money market funds having the highest long-term rating granted
by each Standard & Poor's and Moody's and maintained by commercial banks
having unimpaired capital and unimpaired surplus of at least $500,000,000;
(v) eurodollar time deposits having the highest long-term rating granted by
each Standard & Poor's and Moody's; (vi) repurchase agreements involving any
of the Permitted Investments described in clauses (i) through (iv) above so
long as the other party to the repurchase agreement has the rating described
in clause (iii) above; and (vii) any other investment, if each Standard &
Poor's and Moody's confirms in writing that such investment will not
adversely affect any ratings with respect to any Series of Investor
Certificates, and (b) demand deposits or time deposits in the name of the
Trust or the Trustee in any depository institution or trust company referred
to in (a)(ii) above. For the purpose of this definition, "highest short-term
rating" when used in respect of Standard Poor's shall mean "A-1+" and in
respect of Moody's shall mean "P-1".
"Person" shall mean any legal person, including any individual,
------
corporation, partnership, joint venture, association, joint-stock company,
trust, unincorporated organization, governmental entity or other entity of
similar nature.
"Pool Factor" shall mean, unless any Series is issued in more than one
-----------
Class as stated in any related Supplement, with respect to any Series and any
Record Date, a number (carried out to eight decimal places) representing the
quotient of (i) the applicable Invested Amount as of such Record Date
(determined after taking into account any reduction in the applicable
Invested Amount which will occur on the following Distribution Date) and (ii)
the applicable Initial Invested Amount.
"Portfolio Yield" shall mean, with respect to any Collection Period, the
---------------
annualized percentage equivalent of a fraction the numerator of which is the
amount of Finance Charge Collections for such Collection Period, calculated
on (an accrual) basis after subtracting the Defaulted Amount, and the
denominator of which is the Aggregate Receivables as of the end of the
preceding Collection Period.
"Principal Collections" shall mean that portion of Collections not
---------------------
deemed to be Finance Charge Collections.
"Principal Shortfalls" shall mean, with respect to any Collection Period
--------------------
and any outstanding Series, the amount which the related Supplement specifies
as the "Principal Shortfall" for such Business Day.
"Principal Terms" shall have the meaning, with respect to any Series
---------------
issued pursuant to an Exchange, specified in Section 6.09(c).
"Purchase and Sale Agreement" shall mean the Amended and Restated
---------------------------
Purchase and Sale Agreement by and among the Originator,
Bridgestone/Firestone and the Transferor, dated as of October __, 1996, as
the same has been and may be further supplemented, modified, amended or
amended and restated from time to time.
"Rapid Amortization Period" shall mean, with respect to any Series of
-------------------------
Certificates, the period specified in the related Supplement.
"Rating Agency" shall mean, with respect to each Series, the rating
-------------
agency or rating agencies that rated such Series, including Fitch, Moody's
and Standard & Poor's.
"Reassignment" shall have the meaning specified in Section 2.10.
------------
"Receivables" shall mean, for both the Credit Card Program and any
-----------
Alternative Program, all amounts transferred to the Transferor, payable by
Obligors on any Account, from time to time as shown on the Servicer's
records, including, without limitation, amounts payable for purchases of
goods or services and, if applicable, amounts payable for Periodic Finance
Charges, Late Fees, Returned Check Fees, returned convenience check fees,
cash advance fees and credit related insurance.
"Record Date" shall mean with respect to any Distribution Date, unless
-----------
otherwise provided in any Supplement for the related Series, the fifteenth
day of the preceding calendar month.
"Recoveries" shall mean all amounts or payments received by the Servicer
----------
with respect to Receivables which have previously become Defaulted
Receivables net of reasonable expenses.
"Registered Certificates" shall have the meaning specified in Section
-----------------------
6.01.
"REMARC Purchase Agreement" shall mean each purchase agreement with
-------------------------
respect to the Series 1992-B Class A REMARCs, as such agreements may be
amended or supplemented from time to time.
"Removal Date" shall have the meaning specified in Section 2.10.
------------
"Removal Notice Date" shall mean, with respect to any Removed Account,
-------------------
the last day in the month preceding the month in which the Removal Date for
such Removed Account occurs.
"Removed Accounts" shall have the meaning specified in Section 2.10.
----------------
"Repurchase Terms" shall mean, with respect to any Series issued
----------------
pursuant to an Exchange, the terms and conditions under which the Transferor
may repurchase such Series pursuant to Section 12.02 as modified by the
related Supplement.
"Requirements of Law" for any Person shall mean the certificate of
-------------------
incorporation and by-laws or other organizational or governing documents of
such Person, and any law, treaty, rule or regulation, or determination of an
arbitrator or Governmental Authority, in each case applicable to or binding
upon such Person or to which such Person is subject, whether Federal, state
or local (including, without limitation, usury laws, the Federal Truth in
Lending Act and Regulation Z and Regulation B of the Board of Governors of
the Federal Reserve System).
"Responsible Officer" when used with respect to the Trustee shall mean
-------------------
any officer within the Corporate Trust Office (or any successor group of the
Trustee) including any vice president, assistant vice president, assistant
secretary or any other officer of the Trustee customarily performing
functions similar to those performed by the persons who at the time shall be
such officers, respectively, or to whom any corporate trust matter is
referred because of his knowledge of and familiarity with the particular
subject.
"Retail Establishments" shall mean Bridgestone/Firestone stores and
---------------------
dealers and marketers of Bridgestone/Firestone products and certain other
dealers and marketers of automotive products and services, which are
unaffiliated with Bridgestone/Firestone.
"Returned Check Fee" shall have the meaning specified in the Credit Card
------------------
Agreement applicable to each Account for returned check fees or similar
terms.
"Revolving Period" shall mean, with respect to any Series, the period
----------------
specified in the related Supplement.
"Series" shall mean any series of Investor Certificates.
------
"Series Termination Date" shall mean, with respect to any Series, the
-----------------------
date stated in the related Supplement.
"Service Transfer" shall have the meaning specified in Section 10.01.
----------------
"Servicer" shall initially mean Bridgestone/Firestone and thereafter any
--------
Person appointed as successor as herein provided to service the Receivables.
"Servicer Default" shall have the meaning specified in Section 10.01.
----------------
"Servicer Letter of Credit" shall mean a letter of credit for the
-------------------------
benefit of the Trustee issued by the Letter of Credit Bank in substantially
the form of Exhibit D hereto.
---------
"Servicing Fee" shall have the meaning specified in Section 3.02.
-------------
"Servicing Fee Percentage" shall mean, with respect to any Series, the
------------------------
percentage specified in the related Supplement.
"Servicing Officer" shall mean any officer of the Servicer involved in,
-----------------
or responsible for, the administration and servicing of the Receivables whose
name appears on a list of servicing officers furnished to the Trustee by the
Servicer, as such list may from time to time be amended.
"Series 1996-1 Closing Date" shall mean October 31, 1996.
--------------------------
"Shared Excess Finance Charge Collections" shall mean, with respect to
----------------------------------------
any Determination Date, the aggregate amount of Excess Finance Charge
Collections for all outstanding Series that the related Supplements specify
are to be treated as "Shared Excess Finance Charge Collections" available to
be allocated to other Series for the related Collection Period.
"Shared Principal Collections" shall mean, with respect to any
----------------------------
Determination Date, the aggregate amount of Principal Collections for all
outstanding Series that the related Supplements specify are to be treated as
"Shared Principal Collections" available to be allocated to other Series for
the related Collection Period.
"Special Drawing" shall mean a drawing under the Servicer Letter of
---------------
Credit or Transferor Letter of Credit, as the case may be, made pursuant to
Section 4.01A or 4.01B hereof.
"Standard & Poor's" shall mean Standard & Poor's Corporation.
-----------------
"Stated Amount" shall have, with respect to the Servicer Letter of
-------------
Credit, the meaning specified in the Servicer Letter of Credit and, with
respect to the Transferor Letter of Credit, the meaning specified in the
Transferor Letter of Credit.
"Successor Servicer" shall have the meaning specified in Section 10.02.
------------------
"Supplement" shall mean, with respect to any Series, a supplement to
----------
this Agreement complying with the terms of Section 6.09, executed in
conjunction with any issuance of any Series.
"Ten Percent Number Test" shall have the meaning specified in Section
-----------------------
2.05(d).
"Ten Percent Aggregate Test" shall have the meaning specified in Section
--------------------------
2.05(d).
"Termination Date" shall have the meaning specified in the Servicer
----------------
Letter of Credit.
"Termination Notice" shall have, with respect to any Series, the meaning
------------------
specified in Section 10.01.
"Transfer" shall have the meanings specified in Section 2.01.
--------
"Transfer Agent and Registrar" shall have the meaning specified in
----------------------------
Section 6.03 and shall initially be the Trustee.
"Transfer Date" shall mean, with respect to any Distribution Date, the
-------------
Business Day next preceding such Distribution Date.
"Transfer Deposit Amount" shall mean, with respect to any Receivable for
-----------------------
any Distribution Date, an amount equal to the amount of the Receivable at the
end of the Collection Period for such Distribution Date, plus finance charges
at the APR on the balance for such Receivable from the last date billed
through the end of such Collection Period to the extent not included in the
amount of the Receivable.
"Transferor" shall mean Firestone Retail Credit Corporation, a
----------
corporation organized and existing under the laws of the Commonwealth of
Massachusetts.
"Transferor Amount" shall mean, with respect to any day, Aggregate
-----------------
Receivables for such day minus the sum of (i) the Aggregate Invested Amount
-----
(less the principal amount on deposit in any principal funding accounts) and
(ii) the B/F Amount.
"Transferor Escrow Account" shall have the meaning specified in Section
-------------------------
4.01B(d).
"Transferor Exchange" shall have the meaning specified in Section 6.09.
-------------------
"Transferor Interest" shall have the meaning specified in Section
-------------------
4.01(a).
"Transferor Letter of Credit" shall mean a letter of credit for the
---------------------------
benefit of the Trustee issued by the Letter of Credit Bank in substantially
the form of Exhibit I hereto.
---------
"Transferor Percentage" shall mean when used with respect to Finance
---------------------
Charge Collections, Principal Collections and the amount of Defaulted
Receivables, 100% minus the sum of the applicable Invested Percentages with
-----
respect to all Series then issued and outstanding and the B/F Percentage.
"Transferor Retained Certificates" shall mean Investor Certificates of
--------------------------------
any Series which the Transferor is required to retain pursuant to the terms
of any Supplement.
"Transferred Account" shall mean a credit card account (including an
-------------------
account arising from an Alternative Program) with respect to which a new
credit card account number has been issued by the Servicer because (i) a
credit card was lost or stolen, (ii) separate accounts were merged into a
single joint account, (iii) multiple accounts for a single individual were
merged into a single individual account, or (iv) a joint account was
converted to an individual account as a result of divorce or the death of a
spouse, each under circumstances not requiring standard application and
credit evaluation procedures under the Credit Card Guidelines and which can
be traced or identified by reference to or by way of the lists delivered to
the Trustee in disc or tape format pursuant to Sections 2.01 and 2.05, as an
account into which an Account has been transferred.
"Trust" shall mean the trust created by this Agreement.
-----
"Trust Assets" shall have the meaning specified in Section 2.01.
------------
"Trustee" shall mean The Fuji Bank and Trust Company, a banking
-------
corporation organized and existing under the laws of the State of New York,
and its successors and any corporation resulting from or surviving any
consolidation or merger to which it or its successors may be a party and any
successor Trustee at the time serving as successor Trustee hereunder.
"Twenty Percent Yearly Cap" shall have the meaning specified in Section
-------------------------
2.05(d).
"UCC" shall mean the Uniform Commercial Code, as amended from time to
---
time, as in effect in any specified or applicable jurisdiction.
"Unallocated Principal Collections" shall have the meaning described in
---------------------------------
Section ( ) 4.01(f).
"Undivided Interest" shall mean the undivided interest of any
------------------
Certificateholder in the Trust.
"Vice President" when used with respect to the Originator,
--------------
Bridgestone/Firestone or the Transferor shall mean any vice
president whether or not designated by a word or number of words added before
or after the title "vice president."
Section 1.02 Other Definitional Provisions.
-----------------------------
(a) All terms defined in any Supplement or this Agreement shall
have the defined meanings when used in any certificate or other document made
or delivered pursuant hereto unless otherwise defined therein.
(b) As used herein and in any certificate or other document made
or delivered pursuant hereto or thereto, accounting terms not defined in
Section 1.01 of the Agreement, and accounting terms partly defined in Section
1.01 of the Agreement to the extent not defined, shall have the respective
meanings given to them under generally accepted accounting principles. To
the extent that the definitions of accounting terms herein are inconsistent
with the meanings of such terms under generally accepted accounting
principles, the definitions contained herein shall control.
(c) The agreements, representations and warranties of the
Transferor and the Servicer in this Agreement shall be deemed to be the
agreements, representations and warranties of the Transferor and the
Servicer, respectively, solely in each such capacity for so long as either of
them acts in each such capacity under this Agreement.
(d) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to any Supplement or
this Agreement as a whole and not to any particular provision of such
Supplement or this Agreement, as the case may be; and Article, Section,
Subsection, Schedule and Exhibit references contained in this Agreement or
any Supplement are references to Articles, Sections, Subsections, Schedules
and Exhibits in or to this Agreement or any Supplement unless otherwise
specified.
(END OF ARTICLE I)
ARTICLE II
CONVEYANCE; ISSUANCE OF CERTIFICATES
Section 2.01 Conveyance. By execution of this Agreement, the
----------
Transferor does hereby transfer, assign, set over and otherwise convey to the
Trust for the benefit of the Certificateholders, without recourse (except as
specifically provided herein) (the making of such transfer, assignment, set-
over and conveyance being a "Transfer," and so to transfer, assign, set over
--------
and otherwise convey being to "Transfer"), all of its right, title and
interest in, to and under the Eligible Receivables now existing and hereafter
created in any Eligible Accounts whether now existing or hereafter created on
or after the Cut-off Date, all amounts due or to become due on or after the
Cut-Off Date and all amounts received with respect thereto, including all
Recoveries relating thereto (net of related expenses), Insurance Proceeds
(net of related expenses), all of its right, title and interest in, to and
under the Participation Agreement, the Purchase and Sale Agreement and any
Insurance Premiums paid under any Insurance Agreements and all proceeds of
any Insurance Agreement. Such property, together with the Collection Account
and all amounts on deposit in or credited to the Collection Account
(excluding any investment earnings on any such deposited amount) and any
other account or accounts maintained for the benefit of the
Certificateholders and available under any Enhancement to be provided by an
Enhancement Provider for any Series for payment to Certificateholders and all
proceeds (as defined in Section 9-306 of the UCC as in effect in the State of
New York and the Commonwealth of Massachusetts) of any of the foregoing shall
constitute the assets of the Trust (the "Trust Assets"). The foregoing
------------
transfer, assignment, set-over and conveyance does not constitute and is not
intended to result in a creation or an assumption by the Trust, the Trustee
or any Investor Certificateholder of any obligation of the Transferor or the
Servicer or any other Person in connection with the Accounts, the Receivables
or under any agreement or instrument relating thereto, including, without
limitation, any obligation to any merchants, Obligors or insurers.
In connection with such conveyance, the Transferor agrees to record and
file, at its own expense, any financing statements (and continuation
statements with respect to such financing statements when applicable) with
respect to the Receivables now existing and hereafter created for the
transfer of accounts meeting the requirements of applicable state law in such
manner and in such jurisdictions as are necessary to perfect the transfer and
assignment of the Receivables to the Trust, and to deliver a file-stamped
copy of such financing statements or other evidence of such filings to the
Trustee on or prior to the date of issuance of the Certificates. The Trustee
shall be under no obligation whatsoever to file such financing statements or
make
any other filings under the UCC in connection with such conveyance. The
Trustee shall be entitled to rely upon the filings made by the Transferor.
In connection with such conveyance, the Transferor further agrees, at
its own expense, on or prior to the Series 1996-1 Closing Date (a) to
indicate on its books and records that all Receivables created in connection
with the Accounts have been conveyed to the Trust pursuant to this Agreement
for the benefit of the Certificateholders and (b) to deliver to the Trustee a
true and complete list of all such Accounts specifying for each such Account,
as of the Cut-Off Date its account number. Such list shall be marked as
Schedule 1 to this Agreement and is hereby incorporated into and
----------
made a part of this Agreement. The Transferor shall subsequently deliver to
the Trustee on each Transfer Date a true and complete listing of all new
Accounts and account numbers as of the last day of the Collection Period
ending immediately prior to such date. Each such list shall be added as an
addendum to this Agreement and is hereby incorporated by reference.
Section 2.02 Acceptance by Trustee.
---------------------
(a) The Trustee hereby acknowledges its acceptance on behalf of
the Trust of all right, title and interest to the Trust Assets, now existing
and hereafter created, conveyed to the Trust pursuant to Section 2.01, and
declares that it shall maintain such right, title and interest, upon the
trust herein set forth, for the benefit of all Certificateholders. The
Trustee further acknowledges that, prior to or simultaneously with the
execution and delivery of this Agreement, the Transferor delivered to the
Trustee the list described in the last paragraph of Section 2.01.
(b) The Trustee hereby agrees not to disclose to any Person any of
the account numbers or other information, if any, contained in the lists
marked as Schedule 1 delivered to the Trustee by the Transferor pursuant to
----------
Section 2.01 or Section 2.05, except as may be required by law, as is
required in connection with the performance of its duties hereunder or in
enforcing the rights of the Certificateholders or to a Successor Servicer
appointed pursuant to Section 10.02. The Trustee agrees to take such
measures as shall be reasonably requested by the Transferor to protect and
maintain the security and confidentiality of such information, and, in
connection therewith, shall allow the Transferor to inspect the Trustee's
security and confidentiality arrangements from time to time during normal
business hours. The Trustee shall make reasonable efforts to provide the
Transferor with written notice five days prior to any disclosure pursuant to
this Section 2.02(b).
(c) The Trustee shall have no power to create, assume or incur
indebtedness, beneficial interests or other liabilities
in the name of the Trust other than as contemplated in this Agreement.
(d) Without prejudice to Section 2.01, the parties hereto intend
that this Agreement, which constitutes a security agreement under the UCC, is
a grant of a "security interest" (as defined in the UCC as in effect in the
State of New York) in the Receivables and the proceeds thereof to the Trust.
Section 2.03 Representations and Warranties of the Transferor Relating
---------------------------------------------------------
to the Transferor. The Transferor hereby represents and warrants to the
- -----------------
Trustee, on behalf of the Trust, as of the Series 1996-1 Closing Date, and
with respect to any Series, as of its Closing Date, unless otherwise stated
in such Supplement, that:
(a) Organization and Good Standing. The Transferor is a
------------------------------
corporation duly organized and validly existing in good standing under the
laws of the Commonwealth of Massachusetts, and has the corporate power and
authority to execute, deliver and perform its obligations under this
Agreement and the transactions contemplated under this Agreement and to
execute and deliver to the Trustee pursuant hereto the Certificates and, in
all material respects, to own its property and conduct its business as such
properties are presently owned and such business is presently conducted.
(b) Due Qualification. The Transferor is duly qualified to do
-----------------
business and is in good standing as a foreign corporation (or is exempt from
such requirements), and has obtained all necessary licenses and approvals
with respect to the Transferor, in each jurisdiction in which failure to so
qualify or to obtain such licenses and approvals could reasonably be expected
to render any Credit Card Agreement relating to an Account or any Receivable
unenforceable by the Transferor or the Trust or could reasonably be expected
to have a material adverse effect on the Certificateholders; provided that
--------
no representation or warranty is made with respect to any qualifications,
licenses or approvals which the Trustee would have to obtain to do business
in any state in which the Trustee seeks to enforce any Account or any
Receivable.
(c) Due Authorization. The execution and delivery of the Purchase
-----------------
and Sale Agreement, the Participation Agreement and this Agreement and the
execution and delivery to the Trustee of the Certificates by the Transferor
and the consummation of the transactions provided for in this Agreement have
been duly authorized by the Transferor by all necessary corporate action on
the part of the Transferor.
(d) Binding Obligation. The Purchase and Sale Agreement, the
------------------
Participation Agreement and this Agreement each
constitutes a legal, valid and binding obligation of the Transferor,
enforceable in accordance with its terms, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws now or hereinafter in effect affecting the enforcement of
creditors' rights in general and except as such enforceability may be limited
by general principles of equity (whether considered in a proceeding at law or
in equity).
(e) No Violation. The execution and delivery of the Purchase and
------------
Sale Agreement, the Participation Agreement and this Agreement and the
Certificates, the performance of the transactions contemplated by the
Purchase and Sale Agreement, the Participation Agreement and this Agreement
and the fulfillment of the terms hereof will not conflict with, violate,
result in any breach of any of the material terms and provisions of, or
constitute (with or without notice or lapse of time or both) a material
default under, any Requirement of Law applicable to the Transferor or any
indenture, contract, agreement, mortgage, deed of trust, or other instrument
to which the Transferor is a party or by which it or its properties is bound.
(f) No Proceedings. There are no proceedings or investigations
--------------
pending or, to the best knowledge of the Transferor, threatened against the
Transferor, before any court, regulatory body, administrative agency, or
other tribunal or governmental instrumentality (i) asserting the invalidity
of the Purchase and Sale Agreement, this Agreement, the Participation
Agreement or the Certificates, (ii) seeking to prevent the issuance of the
Certificates or the consummation of any of the transactions contemplated by
the Purchase and Sale Agreement, this Agreement, the Participation Agreement
or the Certificates, (iii) seeking any determination or ruling that, in the
reasonable judgment of the Transferor, could materially and adversely affect
the performance by the Transferor of its obligations under the Purchase and
Sale Agreement, the Participation Agreement or this Agreement (other than a
ruling or determination with respect to which there is no reasonable
likelihood of such an effect), (iv) seeking any determination or ruling that
could materially and adversely affect the validity or enforceability of this
Agreement, the Participation Agreement or the Certificates (other than a
ruling or determination with respect to which there is no reasonable
likelihood of such an effect), or (v) seeking to affect adversely the income
tax attributes of the Trust.
(g) All Consents Required. All approvals, authorizations,
---------------------
consents, orders or other actions of any Person or of any governmental body
or official required in connection with the execution and delivery by the
Transferor of the Purchase and Sale Agreement, the Participation Agreement,
this Agreement and the Certificates, the performance by the Transferor of the
transactions contemplated by the Purchase and Sale Agreement,
this Agreement and the fulfillment by the Transferor of the terms hereof have
been obtained.
The representations and warranties set forth in this Section 2.03 shall
survive the transfer and assignment of the Trust Assets to the Trust, and the
termination of the rights and obligations of the Servicer pursuant to Section
10.01. Upon discovery by the Transferor, the Servicer or the Trustee of a
breach of any of the foregoing representations and warranties, the party
discovering such breach shall give prompt written notice to the other
parties.
Section 2.04 Representations and Warranties Relating to the Agreement
--------------------------------------------------------
and the Receivables.
- -------------------
(a) Representations and Warranties. The Transferor and
------------------------------
Bridgestone/Firestone hereby, jointly and severally represent and warrant to
the Trustee, on behalf of the Trust, with respect to any Series, as of the
date of its related Supplement and Closing Date, unless otherwise stated in
such Supplement, and, with respect to any Series and matters involving
Additional Accounts as of the date of the Transfer of such Additional
Accounts and with respect to matters involving Eligible Alternative Accounts,
as of the related Addition Date that:
(i) the Purchase and Sale Agreement, the Participation
Agreement, this Agreement and, in the case of Eligible Alternative
Accounts, the related Assignment, each constitutes legal, valid and
binding obligations of the Transferor enforceable against the Transferor
in accordance with their terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium
or other similar laws now or hereafter in effect affecting the
enforcement of creditors' rights in general and except as such
enforceability may be limited by general principles of equity (whether
considered in a suit at law or in equity);
(ii) as of the Series 1996-1 Closing Date, Schedule 1 to this
----------
Agreement is and, as of the applicable Addition Date with respect to Eligible
Alternative Accounts added pursuant to Sections 2.05(b), 2.05(c) and 2.05(d),
will be, an accurate and complete listing of all the Accounts in all material
respects as of the Cut-Off Date or the applicable Addition Notice Date, as
the case may be, and the information contained therein with respect to the
identity of such Accounts and the Receivables existing thereunder is and will
be true and correct in all material respects as of such applicable Cut-Off
Date or Addition Notice Date; as of the Series 1996-1 Closing Date, the
amount of Aggregate Receivables was $____________; no selection procedures
believed by the Transferor or
Bridgestone/Firestone to be adverse to the interests of
Certificateholders has or shall have been used in selecting the
Accounts;
(iii) each Receivable existing on the Series 1996-1
Closing Date or thereafter arising in an Eligible Account or, in the
case of Eligible Alternative Accounts, on the Addition Date and
thereafter arising, has been conveyed to the Trust free and clear of any
Lien other than Liens permitted by Section 2.08(b);
(iv) with respect to each Receivable existing on the Series
1996-1 Date or thereafter arising in an Eligible Account, in the case of
Eligible Alternative Accounts, on the Addition Date, all consents,
licenses, approvals or authorizations of or registrations or
declarations with any Governmental Authority required to be obtained,
effected or given by the Transferor in connection with the conveyance of
such Receivable to the Trust have been duly obtained, effected or given
and are in full force and effect;
(v) this Agreement and, in the case of Eligible Alternative
Accounts, the related Assignment, either constitutes a valid transfer
and assignment to the Trust of all right, title and interest of the
Transferor in the Receivables and the proceeds thereof, or, if this
Agreement and, in the case of Eligible Alternative Accounts, the related
Assignment, does not constitute a valid transfer and assignment of such
property of the Transferor, it constitutes a grant of a "security
interest" (as defined in the UCC as in effect in the State of New York
and the Commonwealth of Massachusetts) in such property of the
Transferor to the Trust, which, in the case of Receivables existing or
thereafter arising in an Eligible Account and the proceeds thereof, is
enforceable upon execution and delivery of this Agreement, and which
will be enforceable with respect to such Eligible Alternative
Receivables hereafter created and the proceeds thereof upon such
creation and which will be enforceable with respect to Eligible
Alternative Accounts upon execution and delivery of the related
Assignment. Upon the filing of any financing statements described in
Section 2.01 and, in the case of the Receivables hereafter created or
transferred to the Trust and the proceeds thereof, upon the creation or
transfer thereof, the Trust shall have a first priority perfected
security or ownership interest in such property of the Transferor except
for Liens permitted under Section 2.08(b); provided, however, that such
-------- -------
security interest in proceeds shall remain perfected after 10 days from their
receipt by the Transferor only to the extent that such proceeds are
identifiable cash proceeds or come into the Trust's possession within the
applicable 10-day period; and
provided, further, that the Transferor makes no representation or
-------- -------
warranty with respect to the effect of Section 9-306(4) of the UCC on the
rights of the Trust to proceeds held by the Transferor at the time
proceedings under any Debtor Relief Laws are instituted by or against the
Transferor. Except as otherwise provided in this Agreement, neither the
Transferor nor any Person claiming through or under the Transferor has any
claim to or interest in the Collection Account; and
(vi) as of the Series 1996-1 Closing Date, each Receivable
existing on such date is (or if such Receivable comes into existence in
the future, will be) an Eligible Receivable in all material respects
and, in the case of Eligible Alternative Accounts, as of the Addition
Date, each Receivable transferred to the Trust with respect to such
Eligible Alternative Account is (or if such Receivable comes into
existence in the future, will be) an Eligible Receivable.
(b) Notice of Breach. The representations and warranties set
----------------
forth in this Section 2.04 shall survive the transfer and assignment of the
Trust Assets to the Trust. Upon discovery by the Transferor,
Bridgestone/Firestone, the Servicer or the Trustee of a breach of any of the
representations and warranties set forth in this Section 2.04, the party
discovering such breach shall give prompt written notice to the others.
Section 2.05 Addition of Accounts.
--------------------
(a) All accounts created after the Series 1996-1 Closing Date
which meet the definition of Eligible Accounts shall be included as Accounts
from and after the date upon which such Eligible Accounts are created and all
Receivables in such Eligible Accounts, whether such Receivables are existing
or thereafter created, shall be transferred automatically to the Trust upon
purchase by the Transferor from the Originator.
(b) Subject to Section 2.05(c) and (d), the Transferor may, but
shall not be obligated to, designate from time to time additional credit card
accounts with respect to receivables arising from Alternative Programs
("Eligible Alternative Accounts") to be included as Accounts and convey the
Eligible Alternative Receivables arising from such Eligible Alternative
Accounts to the Trust.
(c) The Transferor shall be permitted to designate and assign
Eligible Alternative Receivables from Eligible Alternative Accounts only upon
satisfaction of the following conditions:
(i) The Transferor shall designate only Eligible Alternative
Accounts;
(ii) On or prior to each Addition Date in respect of Eligible
Alternative Accounts, the Transferor shall have executed and delivered
to the Trustee a written assignment (including an acceptance by the
Trustee for the benefit of the Certificateholders) in substantially the
form of Exhibit B (the "Assignment") and a true and complete list
--------- ----------
identifying all such Eligible Alternative Accounts specifying for each such
Account, as of the Addition Notice Date, its account number. Such list shall
be as of the Addition Date with respect to such Assignment and shall be
incorporated into and made part of such Assignment and this Agreement; in the
event that the Servicer is then required to make daily deposits into the
Collection Account pursuant to Section 4.01(h), the Transferor on or prior to
each Addition Date will deposit into the Collection Account an amount equal
to the Collections which have been processed on the Eligible Alternative
Accounts from their applicable Addition Notice Date through the Business Day
preceding such Addition Date;
(iii) The Transferor represents and warrants (x) as of
each Addition Date with respect to Eligible Alternative Accounts added
pursuant to Sections 2.05(b) and 2.05(c) that (a) the list of Eligible
Alternative Accounts, as of the Addition Notice Date, complies in all
material respects with the requirements of paragraph (ii) above and (b)
no selection procedure was utilized by the Transferor in selecting the
Eligible Alternative Accounts which is adverse to the interests of the
Investor Certificateholders; and (y) as of the Addition Notice Date and
as of the Addition Date, the Transferor is not insolvent;
(iv) The Transferor shall have delivered to the Trustee
written confirmation from each Rating Agency that such Rating Agency
will not reduce or withdraw its rating on any outstanding Series as a
result of such addition;
(v) On or before each Addition Date, the Transferor shall
deliver a certificate of a Vice President or more senior officer
confirming the items set forth in paragraphs (ii), (iii) and (iv) above.
The Trustee may conclusively rely on such certificate, shall have no
duty to make inquiries with regard to matters set forth therein and
shall incur no liability in so relying; and
(vi) On or before each Addition Date, the Transferor shall
deliver to the Trustee and each Rating Agency, an Opinion of Counsel
(which, in this instance, shall be outside counsel to the Transferor)
with respect to the Receivables in the Eligible Alternative Accounts
substantially in the form of Exhibit F.
Upon satisfaction of the above conditions, the Transferor shall execute
and deliver the Assignment to the Trustee, and the Eligible Alternative
Receivables from the Eligible Alternative Accounts shall be conveyed to the
Trust as provided in the Assignment.
(d) The Transferor shall be permitted to designate Eligible
Alternative Accounts and convey such Eligible Alternative Accounts and the
Eligible Alternative Receivables arising out of such Eligible Alternative
Accounts pursuant to Sections 2.05(b) and (c) until either (i) the number of
Eligible Alternative Accounts equal 10% of the number of Eligible Accounts
and Eligible Alternative Accounts (the "Ten Percent Number Test") or (ii) the
aggregate dollar amount of Eligible Alternative Accounts equals 10% of the
aggregate dollar amount of Eligible Accounts and Eligible Alternative
Accounts (the "Ten Percent Aggregate Test"); together with the Ten Percent
Number Test, the "Ten Percent Tests"). When either Ten Percent Test has been
met, the Transferor must request written confirmation from each Rating Agency
that such Rating Agency will not reduce or withdraw its rating on any
outstanding Series as a result of the inclusion of additional Eligible
Alternative Accounts from a designated Alternative Program and the related
Eligible Alternative Receivables. The Transferor is not required to obtain
written confirmation from each Rating Agency if the Transferor elects to
maintain (x) the number of Eligible Alternative Accounts below the Ten
Percent Number Test and (y) the aggregate dollar amount of Eligible
Alternative Receivables below the Ten Percent Aggregate Test.
When each Rating Agency has rendered its written consent to the
continued inclusion of Eligible Alternative Accounts from a Designated
Alternative Program, the Transferor may continue to transfer Eligible
Alternative Accounts from a designated Alternative Program to the Trust,
provided that (i) the number of Eligible Alternative Accounts relating to a
Designated Alternative Program does not exceed 20% of the number of Eligible
Accounts and Eligible Alternative Accounts, calculated as of December 31, of
each calendar year (the "Twenty Percent Yearly Cap") and (ii) the number of
Eligible Alternative Accounts relating to a Designated Alternative Program
does not exceed 15% of the number of Eligible Accounts and Eligible
Alternative Accounts, calculated as of March 31, June 30, September 30 and
December 31 of each year for the preceding three Collection Periods (the
"Fifteen Percent Quarterly Cap"). In addition, the Transferor may continue
to transfer Eligible Alternative Accounts from Non-Designated Alternative
Programs, subject to the Ten Percent Number Test and the Ten Percent
Aggregate Test.
Section 2.06 Transfer of Ineligible Receivables.
----------------------------------
(a) In the event of a breach with respect to a Receivable of any
representations and warranties set forth in Section 2.04(a)(iii) or in the
event that a Receivable is not an Eligible Receivable or Eligible Alternative
Receivable, as applicable, as a result of the failure to satisfy the
conditions set forth in clause (d) of the definition of Eligible Receivable:
(i) if the Lien of the subject Receivable is not of the type
otherwise described in clause (ii) below, and as a result of such breach
or event such Receivable becomes a Defaulted Receivable or the Trust's
rights in, to or under such Receivable or its proceeds are impaired or
the proceeds of such Receivable are not available for any reason to the
Trust free and clear of any Lien, then each such Receivable shall be
automatically removed from the Trust on the terms and conditions set
forth below; or
(ii) if such Lien meets any of the following conditions: (1)
such Lien arises in favor of the United States of America or any state
or any agency or instrumentality thereof and involves taxes or liens
arising under Title IV of ERISA or (2) such Lien has been consented to
by the Transferor, then in the case of clause (1) upon the earlier to
occur of the discovery of such breach or event by the Transferor or the
Servicer or receipt by the Transferor and the Servicer of written notice
of such breach or event given by the Trustee or in the case of clause
(2), immediately upon the occurrence of such breach, each such
Receivable shall be automatically removed from the Trust on the terms
and conditions set forth below.
(b) In the event of a breach of any representations and warranties
set forth in Section 2.04(a)(iv) or 2.04(a)(vi) or in the event any
Receivable is not at any time an Eligible Receivable or Eligible Alternative
Receivable, as applicable, for any reason other than the failure to satisfy
the conditions set forth in clause (d) of the definition of Eligible
Receivable then, upon the expiration of 60 days from the earlier to occur of
the discovery of any such event by the Transferor or Bridgestone/Firestone,
or receipt by the Transferor or Bridgestone/Firestone of written notice of
any such event given by the Trustee, the Servicer or the Originator each such
Receivable shall be removed from the Trust on the terms and conditions set
forth below; provided, however, that no such removal shall be required to be
-------- -------
made with respect to a Receivable which is not an Eligible Receivable or
Eligible Alternative Receivable, as applicable, to be removed pursuant to
this sentence if the event giving rise to the obligation to remove such
Receivable from the Trust and any material adverse effect on the interests of
Investor Certificateholders in such Receivable shall be cured by the
Servicer.
(c) When required with respect to a Receivable (an "Ineligible
----------
Receivable") by the provisions of Section 2.06(a) or 2.06(b), such Receivable
- ----------
shall be automatically removed from the Trust by deducting the amount of each
such Ineligible Receivable from the amount of Receivables in the Trust, and
the Transferor shall immediately make a deposit in the Collection Account in
immediately available funds in an amount equal to the Transfer Deposit
Amount. Such deposit shall be considered a payment in full of the Ineligible
Receivable and shall be applied as a Finance Charge Collection or Principal
Collection, as applicable, in accordance with Article IV. On and after the
date of such removal, each Ineligible Receivable so removed shall not be
included in the calculation of any Invested Percentage, the Transferor
Percentage or the Transferor Amount. In the event that the exclusion of an
Ineligible Receivable from the calculation of the Transferor Amount would
cause the Transferor Amount to be a negative number or would otherwise not be
permitted by law, such Ineligible Receivable shall not be included in the
calculation of the B/F Amount. In the event that such exclusion would cause
the B/F Amount to be a negative number, such Ineligible Receivable shall not
be removed from the Trust. Upon each removal of an Ineligible Receivable
from the Trust, the Trust shall automatically and without further action be
deemed to transfer, assign, set-over and otherwise convey to the Transferor,
without recourse, representation or warranty, all the right, title and
interest of the Trust in and to such Ineligible Receivable, all monies due or
to become due with respect thereto and all proceeds thereof, provided that
any Periodic Finance Charges relating to such Ineligible Receivable accrued
through the date of removal of such Ineligible Receivable and not otherwise
included in the Transfer Deposit Amount shall continue to be property of the
Trust. The Trustee shall execute such documents and instruments of transfer
or assignment and take such other actions as shall reasonably be requested by
the Transferor to effect the conveyance of such Ineligible Receivable
pursuant to this Section. In the event that on any day within 60 days of the
date on which the removal of an Ineligible Receivable from the Trust pursuant
to this Section is effected, the applicable representations and warranties
shall be true and correct in all material respects on such date, the
Transferor may, but shall not be required to, direct the Servicer to include
such Receivable in the Trust by adding such Receivable to the Receivables in
the Trust. Upon addition of a Receivable to the Trust pursuant to this
Section, the Transferor and Bridgestone/Firestone shall have been deemed to
have made the applicable representations and warranties in Section 2.04(a) as
of the date of such addition, as if the Receivable had been created on such
date, and shall execute all such necessary documents and instruments of
transfer or assignment and take such other actions as shall be necessary to
effect and perfect the reconveyance of such Receivable to the Trust. The
obligation of the Transferor set forth in this Section, or the automatic
removal of such Receivable from the Trust, as the case may be, shall
constitute the sole remedy respecting any breach of the representations and
warranties set forth in the above-referenced Sections with respect to such
Receivable available to Certificateholders or the Trustee on behalf of
Certificateholders.
Section 2.07 Purchase of Certificates. In the event of any breach of
------------------------
any of the representations and warranties set forth in Sections 2.03(d) and
(g) or 2.04(a)(i) through 2.04(a)(v) and such event could have a material
adverse effect on Investor Certificateholders, either the Trustee, or the
Holders of Investor Certificates evidencing Undivided Interests aggregating
more than 50% of the Invested Amount of all Series, by notice then given in
writing to the Transferor (and to the Trustee and the Servicer if given by
the Investor Certificateholders), may direct the Transferor to purchase all
Certificates of all Series outstanding within 60 days of such notice, or
within such longer period as may be specified in such notice and the
Transferor shall be obligated to make such purchase on a Distribution Date
occurring within such period on the terms and conditions set forth below;
provided, however, that no such purchase shall be required to be made if,
- -------- -------
during such applicable period, the breached representations and warranties
contained shall be satisfied in all material respects and any material
adverse effect on the Investor Certificateholders caused thereby shall have
been cured. The Transferor shall deposit in the Collection Account on a
Transfer Date occurring within the applicable period an amount equal to the
purchase price (as described in the next succeeding sentence) for the
Investor Certificates. The purchase price for any such purchase will be
equal to the sum of (a) the Invested Amount of such Series at the end of the
day on the Record Date preceding the date such deposit is made, plus (b) an
----
amount equal to all monthly interest accrued but unpaid on the Investor
Certificates of such Series for the related Interest Accrual Period for the
Distribution Date on which the distribution of such deposit is scheduled to
be made pursuant to Section 12.03 and all prior Distribution Dates.
Notwithstanding anything to the contrary in this Agreement, the entire amount
of the purchase price deposited in the Collection Account shall be
distributed to the Investor Certificateholders of such Series on such
Distribution Date pursuant to Section 12.03. Payment of such purchase price
into the Collection Account in immediately available funds shall otherwise be
considered a prepayment of Receivables. If the Trustee or the Investor
Certificateholders give notice directing the Transferor to purchase the
Investor Certificates of any Series as provided above, the obligation of the
Transferor to purchase the Investor Certificates of such Series pursuant to
this Section 2.07 shall constitute the sole remedy respecting an event of the
type specified in the first sentence of this Section 2.07 available to such
Investor
Certificateholders (or the Trustee on behalf of such Investor
Certificateholders).
Section 2.08 Covenants of the Transferor. The Transferor hereby
---------------------------
covenants that:
(a) Receivables Not to be Evidenced by Promissory Notes or Chattel
--------------------------------------------------------------
Paper. The Transferor will take no action to cause any Receivable to be
- -----
evidenced by any instrument (as defined in the UCC as in effect in the States
of New York and Ohio or the Commonwealth of Massachusetts). Each Receivable
shall be payable pursuant to a contract which does not create a Lien on any
goods purchased thereunder.
(b) Security Interests. Except for the conveyances hereunder, the
------------------
Transferor will not sell, pledge, assign or transfer to any other Person, or
grant, create, incur, assume or suffer to exist any Lien on any Receivable,
whether now existing or hereafter created, or any interest therein, and the
Transferor shall defend the right, title and interest of the Trust in, to and
under the Receivables, whether now existing or hereafter created, against all
claims of third parties claiming through or under the Transferor; provided,
--------
however, that nothing in this Section 2.08(b) shall prevent or be deemed to
- -------
prohibit the Transferor from suffering to exist upon any of the Receivables
any Liens for municipal or other local taxes if such taxes shall not at the
time be due and payable or if the Transferor shall currently be contesting
the validity thereof in good faith by appropriate proceedings and shall have
set aside on its books adequate reserves with respect thereto.
(c) Periodic Finance Charges. The Transferor hereby agrees that,
------------------------
except as otherwise required by any Requirement of Law applicable to the
Transferor or as is deemed by the Originator to be necessary in order for the
Originator to maintain its business on a competitive basis based on a good
faith assessment by the Originator of the nature of its competition in its
business, it shall not at any time reduce the APR of the Periodic Finance
Charges assessed on the Receivables and/or any fees charged on any of the
Accounts, if as a result of any such reduction, the Transferor's reasonable
expectation of the Portfolio Yield as of such date would be less than the
Base Rate of any Series.
(d) Credit Card Agreements and Guidelines. The Transferor shall
-------------------------------------
ensure compliance with the obligations under the Credit Card Agreements
relating to the Accounts and the Credit Card Guidelines except insofar as any
failure so to comply or perform would not materially and adversely affect the
rights of the Trust or the Certificateholders
hereunder or under the Certificates. Subject to compliance with all
Requirements of Law the failure to comply with which would have a
material adverse effect on the Investor Certificateholders, the
Transferor shall not agree to any change in the terms and provisions of
the Credit Card Agreement or the Credit Card Guidelines in any respect
(including, without limitation, the calculation of the amount, or the
timing, of charge-offs and the periodic finance charge to be assessed
thereon) unless in the reasonable judgment of the Transferor (a) if it
owns a comparable segment of credit card accounts, then such change is
made applicable to such comparable segment which has characteristics the
same as, or substantially similar to, the Accounts which are the subject
of such change and which were existing on the Cut-Off Date and (b) if it
does not own such a comparable segment, it will not make any such change
with the intent to materially benefit the Transferor over the Investor
Certificateholders.
(e) Account Allocations. In the event that the Transferor is
-------------------
unable for any reason to transfer Receivables to the Trust in accordance with
the provisions of this Agreement (including, without limitation, by reason of
the application of the provisions of Section 9.02, any Governmental Authority
having authority over the Transferor or any court of competent jurisdiction
ordering that the Transferor not transfer any additional Receivables to the
Trust) then, in any such event, (A) the Transferor agrees (except as
prohibited by any such order) to allocate and pay to the Trust, after the
date of such inability, all Principal Collections, and all amounts which
would have constituted Collections, including Finance Charge Collections,
with respect to such Receivables which would have been Receivables allocable
to Principal Collections but for the Transferor's inability to transfer such
Receivables (up to an aggregate amount equal to the amount of Receivables in
the Trust on such date), (B) the Transferor agrees to have such amounts
applied as Collections in accordance with Article IV and (C) for only so long
as the allocation and application of all Collections and all amounts which
would have constituted Collections are made in accordance with clauses (A)
and (B) above, Receivables allocable to Principal Collections (and all
amounts which would have constituted Receivables allocable to Principal
Collections but for the Transferor's inability to transfer Receivables to the
Trust) which are written off as uncollectible in accordance with this
Agreement shall be allocated in accordance with the related Supplement and
all amounts which would have constituted Receivables allocable to Principal
Collections but for the Transferor's inability to transfer Receivables to the
Trust shall be deemed to be Receivables allocable to Principal Collections
for purposes
of calculating the Invested Percentage thereunder. If the Transferor is
unable pursuant to any Requirement of Law to allocate Collections as
described above, the Transferor agrees that it shall, in any such event,
allocate, after the date that the Transferor becomes unable to do so,
payments on each Account with respect to the principal balance of such
Account first to the oldest principal balance of such Account and to
have such payments applied as Collections in accordance with Article IV.
The parties hereto agree that Receivables allocable to Finance Charge
Collections, whenever created, accrued in respect of Receivables which
have been conveyed to the Trust shall continue to be a part of the Trust
notwithstanding any cessation of the transfer of additional Receivables
to the Trust and Collections with respect thereto shall continue to be
allocated and paid in accordance with Article IV.
(f) Delivery of Collections. In the event that the Transferor
-----------------------
receives Collections, the Transferor agrees to pay the Servicer or any
Successor Servicer all payments received by the Transferor in respect of the
Receivables as soon as practicable after receipt thereof by the Transferor,
but in no event later than two Business Days after the receipt by the
Transferor thereof.
(g) Notice of Liens. The Transferor shall notify the Trustee
---------------
promptly after becoming aware of any Lien on any Receivable other than the
conveyances hereunder.
(h) Status of Accounts and Receivables. The Transferor hereby
----------------------------------
agrees to comply with all Requirements of Law applicable to the Transferor
the failure to comply with which would have a material adverse effect on the
Investor Certificateholders.
(i) Other Debt; Receivables. The Transferor will not create,
-----------------------
incur, assume or suffer to exist any indebtedness, whether current or funded,
or any other liability except (i) indebtedness of the Transferor representing
fees, expenses and indemnities payable pursuant to this Agreement, (ii)
indebtedness of the Transferor representing fees, indemnities or expenses
payable to J.H. Holdings, Inc., (iii) indebtedness of the Transferor
representing fees, indemnities or expenses payable to any remarketing agent,
the placement agent or the underwriter of any certificates issued by the
Trust from time to time, (iv) indebtedness of the Transferor representing
fees, indemnities or expenses payable pursuant to the REMARC Purchase
Agreement, (v) indebtedness of the Transferor representing fees, expenses or
other amounts payable to the Originator under the Purchase and Sale
Agreement, (vi) indebtedness of the Transferor representing amounts
payable in respect of SWAPs,
(vii) fees of the Rating Agencies in connection with rating any Series
of certificates issued by the Trust and (viii) indebtedness or other
liability on account of incidentals or services supplied or furnished to
the Transferor (including reasonable accountants' and attorneys' fees);
provided that the aggregate amount of the indebtedness or
--------
liabilities described in this subpart (viii) shall not exceed $4,750
at any one time outstanding.
Section 2.09 Authentication of Certificates. Pursuant to the request
------------------------------
of the Transferor, the Trustee shall cause Certificates in authorized
denominations evidencing the entire ownership of the Trust to be duly
authenticated and delivered to or upon the order of the Transferor pursuant
to Section 6.02.
Section 2.10 Removal of Accounts.
-------------------
(a) On each Determination Date that the Transferor Amount (plus
the B/F Amount and any amount available under the Transferor Letter of
Credit) for the related Collection Period exceeds 7% of the Aggregate
Invested Amount with respect to such Determination Date, the Trustee shall be
deemed to have offered to the Transferor automatically and without any notice
to or action by or on behalf of the Trustee, as of such Determination Date,
the right to remove from the Trust all of the Trust's right, title and
interest in, to and under the Receivables now existing and hereafter created,
all monies due or to become due and all amounts received with respect thereto
and all proceeds thereof in or with respect to those Accounts designated by
the Transferor (the "Removed Accounts") in an aggregate amount not greater
----------------
than the lesser of (a) the excess of the Transferor Amount (plus amounts
available to be drawn under the Transferor Letter of Credit or the Transferor
Escrow Account solely to cover obligations of the Transferor under Section
3.09(a) plus the B/F Amount) over the Minimum Transferor Interest Percentage
of the Aggregate Invested Amount and (b) ____% of the aggregate amount of
Aggregate Receivables on such Removal Date. To accept such offer, the
Transferor is required to furnish to the Trustee and each Rating Agency
written notice by the fifth Business Day after the Determination Date
specifying the approximate aggregate amount of Receivables covered by the
offer that the Transferor intends to accept.
(b) In addition to the foregoing provisions, the Transferor shall
be permitted to accept reassignment to it of the Receivables from Removed
Accounts only upon satisfaction of the following conditions:
(i) On each date specified by the Transferor for removal of
the Removed Accounts (a "Removal Date"), the Trustee shall deliver to
------------
the Transferor a written reassignment in substantially the form of Exhibit
-------
C (the "Reassignment") and the Transferor shall deliver to the Trustee a true
- - ------------
and complete list identifying all Accounts the Receivables of which remain in
the Trust, specifying for each such Account, as of the Removal Notice Date,
its account number. Such list shall be incorporated into and made a part of
this Agreement as of the date of such Reassignment;
(ii) The Transferor represents and warrants as of each Removal
Date that (a) the list of the Accounts not removed from the Trust, as of
the Removal Notice Date, complies in all material respects with the
requirements of paragraph (i) above; and (b) no selection procedure used
by the Transferor which is adverse to the interests of the Investor
Certificateholders was utilized in selecting the Removed Accounts;
(iii) The removal of any Receivables in any Removed
Accounts on any Removal Date shall not, in the reasonable belief of the
Transferor, cause an Amortization Event to occur;
((iv) As of the Removal Date, either (a) the Receivables
are not more than ____% delinquent by estimated principal amount and the
weighted averaged delinquency of such Receivables is not more than 60
days, or (b) the Receivables are not more than ____% delinquent by
estimated principal amount and the weighted average delinquency of such
Receivables does not exceed 90 days.)
(v) The Transferor shall have delivered 20 days' prior
written notice (which may be given prior to the Determination Date in
expectation that the Trustee will make the offer described in Section
2.10(a)) of such removal to each Rating Agency which has rated any
outstanding Series and the Trustee shall have received written
confirmation from each Rating Agency that such Rating Agency will not
reduce or withdraw its rating on any outstanding Series as a result of
such removal; and
(vi) The Transferor shall have delivered to the Trustee a
certificate of a Vice President or more senior officer confirming the
items set forth in paragraphs (i) through (v) above. The Trustee may
conclusively rely on such certificate, shall have no duty to make
inquiries with regard to the matters set forth therein and shall incur
no liability in so relying.
Upon satisfaction of the above conditions, the Trustee shall
execute and deliver the Reassignment to the Transferor, and the
Receivables from the Removed Accounts shall no longer constitute a part
of the Trust.
Section 2.11 Discount Option.
---------------
(a) The Transferor shall have the option to designate a
percentage, which may be a fixed percentage or a variable percentage based on
a formula (the "Discount Percentage"), of Eligible and Eligible Alternative
Receivables, without giving effect to any discounting pursuant to this
Section 2.11, arising on or after the date of such designation, to be treated
as Receivables which give rise to Finance Charge Collections. The Transferor
shall provide to the Servicer, the Trustee, any Enhancement Provider and any
Rating Agency 15 days' prior written notice of such designation, and such
designation shall become effective on the date designated therein (i) unless
such designation in the reasonable belief of the Transferor would cause an
Amortization Event to occur, or an event which, with notice or the lapse of
time or both, would constitute an Amortization Event and (ii) only if each
Rating Agency shall have delivered a letter to the Transferor and the Trustee
confirming that its then current rating of the Investor Certificates of any
Series then outstanding will not be reduced or withdrawn as a result of such
designation. After any such designation of a Discount Percentage, the
Transferor may from time to time increase, reduce or withdraw the Discount
Percentage upon satisfaction of the conditions in this Section 2.11(a).
(b) On each Distribution Date after the date on which the
Transferor's exercise of its discount option takes effect, and with respect
to Receivables generated on and after such date, the Transferor shall deposit
into the Collection Account in immediately available funds an amount equal to
the amount of the Discount Option Receivable Collections received during the
Collection Period most recently ended. The deposit made by the Transferor
into the Collection Account under the preceding sentence shall be considered
a payment of such Discount Option Receivables and shall be applied as Finance
Charge Collections in accordance with Article IV.
(END OF ARTICLE II)
ARTICLE III
ADMINISTRATION AND SERVICING
OF RECEIVABLES
Section 3.01 Acceptance of Appointment and Other Matters Relating to
-------------------------------------------------------
the Servicer.
- ------------
(a) Bridgestone/Firestone agrees to act as the Servicer under this
Agreement and any Investor Certificateholders and the Transferor by its
acceptance of the Certificates consents to Bridgestone/Firestone acting as
Servicer.
(b) The Servicer shall service and administer the Receivables and
shall collect payments due under the Receivables in accordance with its
customary and usual servicing procedures for servicing the Receivables and in
accordance with the Credit Card Guidelines and shall have full power and
authority, acting alone or through any party properly designated by it
hereunder, to do any and all things in connection with such servicing and
administration which it may deem necessary or desirable. Without limiting
the generality of the foregoing and subject to Section 10.01, the Servicer is
hereby authorized and empowered, unless such power and authority is revoked
by the Trustee (i) to make withdrawals and payments and to instruct the
Trustee to make withdrawals and payments from the Collection Account or any
other account or accounts maintained for the benefit of Certificate-holders
as set forth in this Agreement, (ii) to instruct the Trustee to take any
action permitted or required under any Enhancement at such time as set forth
in this Agreement, (iii) to execute and deliver, on behalf of the Trust for
the benefit of the Certificateholders, any and all instruments of
satisfaction or cancellation, or of partial or full release or discharge, and
all other comparable instruments, with respect to the Receivables and, after
the delinquency of any Receivable and to the extent permitted under and in
compliance with applicable law and regulations, to commence enforcement
proceedings with respect to such Receivables and (iv) to make any filings,
reports, notices, applications, registrations with, and to seek any consent
or authorizations from the Securities and Exchange Commission and any state
securities authority on behalf of the Trust as may be necessary or advisable
to comply with any Federal or state securities or reporting requirements or
laws.
(c) In the event that the Transferor is unable for any reason to
transfer Receivables to the Trust in accordance with the provisions
(including, without limitation, by reason of the application of the
provisions of Section 9.02 or any Governmental Authority having regulatory
authority over the Transferor or any court of competent jurisdiction ordering
that the Transferor not transfer any additional Receivables to the Trust)
then, in any such event (except as prohibited by such order), (A) the
Transferor agrees that the Servicer shall allocate, after such date, all
Principal Collections and all amounts which would have constituted
Collections (including Finance Charge Collections) with respect to such
Receivables which would have been Receivables allocable to Principal
Collections but for the Transferor's inability to transfer such Receivables
(up to an aggregate amount equal to the amount of Receivables in the Trust as
of such date) in accordance with Section 2.08(e), (B) the Transferor agrees
to have such amounts applied as Collections in accordance with Article IV and
(C) for only so long as all Collections and all amounts which would have
constituted Collections are allocated and applied in accordance with clauses
(A) and (B) above, Receivables allocable to Principal Collections and all
amounts which would have constituted Receivables allocable to Principal
Collections but for the Transferor's inability to transfer Receivables to the
Trust which are written off as uncollectible in accordance with this
Agreement shall continue to be allocated in accordance with the related
Supplement and all amounts which would have constituted Receivables allocable
to Principal Collections but for the Transferor's inability to transfer
Receivables to the Trust shall be deemed to be Receivables allocable to
Principal Collections for purposes of calculating the Invested Percentage
thereunder. If the Servicer is unable pursuant to any Requirement of Law to
allocate Collections, as described above, the Transferor agrees that the
Servicer shall, in any such event, allocate, after the date that the Servicer
becomes unable to do so, payments on each Account with respect to the
principal balance of such Account first to the oldest principal balance of
such Account and to have such payments applied as Collections in accordance
with Article IV. The parties hereto agree that Receivables allocable to
Finance Charge Collections, whenever created, accrued in respect of
Receivables allocable to Principal Collections which have been conveyed to
the Trust shall continue to be a part of the Trust notwithstanding any
cessation of the transfer of additional Receivables allocable to Principal
Collections to the Trust and Collections with respect thereto shall continue
to be allocated and paid in accordance with Article IV.
(d) If Transferor accepts reassignment of an Ineligible Receivable
pursuant to subsection 2.06(c) then, in any such event, Servicer agrees to
account for payments received with respect to such Ineligible Receivable
separately from its accounting for Collections on Principal Receivables
retained by the Trust. If payments received from or on behalf of an Obligor
are not specifically applicable either to an Ineligible
Receivable of such Obligor reassigned to Transferor or to receivables of such
Obligor retained in the Trust, then Servicer agrees to allocate payments
proportionately based on the total amount of Principal Receivables of such
Obligor retained in the Trust and the total amount owing by such Obligor or
any Ineligible receivables purchased by Transferor, and the portion
allocable to any Principal Receivables retained in the Trust shall be treated
as Collection and deposited in accordance with the provisions of Article IV.
(e) The Servicer shall not be obligated to use separate servicing
procedures, offices, employees or accounts for servicing the Receivables from
the procedures, offices, employees and accounts used by the Servicer in
connection with servicing other credit card receivables.
(f) The Servicer shall maintain fidelity bond coverage insuring
against losses through wrongdoing of its officers and employees who are
involved in the servicing of credit card receivables covering such actions
and in such amounts as the Servicer believes to be reasonable from time to
time.
(g) The Servicer shall comply with and perform its servicing
obligations with respect to the Accounts and Receivables in accordance with
the Credit Card Agreements relating to the Accounts and the Credit Card
Guidelines.
Section 3.02 Servicing Compensation. As compensation for its servicing
----------------------
activities hereunder and reimbursement for its expenses as set forth in the
immediately following paragraph, the Servicer shall be entitled to receive a
monthly servicing fee in respect of any Collection Period (or portion
thereof) prior to the termination of the Trust pursuant to Section 12.01 (the
"Servicing Fee"), payable in arrears on each Distribution Date, equal to the
-------------
sum of, with respect to each Series, one-twelfth of the product of (a) the
applicable Servicing Fee Percentage with respect to each Series, and (b) the
sum of (x) an allocable portion (based on the relative percentages of the
Invested Amounts) of the Transferor Amount and the B/F Amount and (y) the
aggregate invested Amount with respect to each Series on the last day of the
second preceding Collection Period after giving effect to any payment of
principal on the related Distribution Date for such Collection Period (or, in
the case of the first Distribution Date, the Initial Invested Amount). The
share of the Servicing Fee allocable to each Series with respect to any
Distribution Date shall be equal to one-twelfth of the product of (A) the
related Servicing Fee Percentage and (B) the Invested Amount of such Series
on the last day of the second preceding Collection Period after giving effect
to any payment of principal on the related Distribution Date for such
Collection Period (or, in the case of the first Distribution Date, the
Initial Invested Amount) (with respect to any such Series, the "Monthly
-------
Servicing Fee"). The remainder of the Servicing Fee shall be paid by the
- -------------
Holder of the Exchangeable Transferor Certificate and by Bridgestone/
Firestone as holder of the Bridgestone/Firestone Certificate. Any such
amount not paid by the Holders of the Exchangeable Transferor Certificate and
the Bridgestone/ Firestone Certificate
may be withheld by the Servicer from other amounts payable to the
Holders of the Exchangeable Transferor Certificate and the
Bridgestone/Firestone Certificate under this Agreement. In no event shall
the Trustee or the Investor Certificateholders be liable for the share of the
Servicing Fee to be paid by the Holders of the Exchangeable Transferor
Certificate and the Bridgestone/Firestone Certificate. Any Monthly Servicing
Fees shall be payable to the Servicer solely pursuant to the terms of, and to
the extent amounts are available for payment under, Article IV.
The Servicer's expenses include the amounts due to the Trustee pursuant
to Section 11.05 and the reasonable fees and disbursements of independent
accountants and all other expenses incurred by the Servicer in connection
with its activities hereunder, and including all other fees and expenses of
the Trust not expressly stated herein to be for the account of the
Certificateholders; provided that in no event shall the Servicer be liable
--------
for any Federal, state or local income or franchise tax, or any interest or
penalties with respect thereto, assessed on the Trust, the Trustee or the
Certificateholders except as expressly provided herein. So long as
Bridgestone/Firestone is acting as Servicer hereunder, in the event that the
Servicer fails to pay the amounts due to the Trustee pursuant to Section
11.05, the Trustee shall be entitled to receive such amounts from the
Servicing Fee, prior to the payment thereof to the Servicer. The Servicer
shall be required to pay expenses for its own account and shall not be
entitled to any payment therefor other than the Servicing Fee.
Section 3.03 Representations Warranties and Covenants of the Servicer.
--------------------------------------------------------
Bridgestone/Firestone, as initial Servicer, hereby makes, and any Successor
Servicer by its appointment hereunder shall make, the following
representations, warranties and covenants with respect to any Series as of
the date of the related Supplement and its Closing Date or, in the case of
any Successor Servicer, the date of its appointment, unless otherwise stated
in such Supplement, on which the Trustee shall be deemed to have relied in
accepting the Receivables in trust and in authenticating the Certificates;
(a) Organization and Good Standing. The Servicer is a corporation
------------------------------
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation, and has the corporate power and authority
to execute, deliver and perform its obligations under this Agreement and, in
all material respects, to own its property and conduct its business as such
properties are presently owned and as such business is presently conducted.
(b) Due Qualification. The Servicer is duly qualified to do
-----------------
business and is in good standing as a foreign corporation (or is exempt from
such requirements) and has obtained all
necessary licenses and approvals in each jurisdiction in which the failure to
so qualify or to obtain such license or approval would have a material
adverse effect upon the Certificateholders.
(c) Due Authorization. The execution, delivery, and performance
-----------------
of this Agreement, and the consummation of the transactions provided in this
Agreement, have been duly authorized by the Servicer by all necessary
corporate action on the part of the Servicer.
(d) Binding Obligations. This Agreement constitutes the legal,
-------------------
valid, and binding obligations of the Servicer, enforceable in accordance
with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws nov
or hereinafter in effect affecting the enforcement of creditors' rights in
general and except as such enforceability may be limited by general
principles of equity (whether considered in a proceeding at law or in
equity).
(e) No Violation. The execution and delivery of this Agreement
------------
by the Servicer, and the performance of the transactions contemplated by this
Agreement and the fulfillment of the terms hereof applicable to the Servicer,
will not conflict with, violate, result in any breach of any of the material
terms and provisions of, or constitute (with or without notice or lapse of
time or both) a material default under, any Requirement of Law applicable to
the Servicer or any indenture, contract, agreement, mortgage, deed of trust,
or other instrument to which the Servicer is a party or by which it is bound.
(f) No Proceedings. There are no proceedings or investigations,
--------------
pending or, to the best knowledge of the Servicer, threatened against the
Servicer before any court, regulatory body, administrative agency or other
tribunal or governmental instrumentality (i) seeking to prevent the issuance
of the Certificates or the consummation of any of the transactions
contemplated by this Agreement, (ii) seeking any determination or ruling
that, in the reasonable judgment of the Servicer, would materially and
adversely affect the performance by the Servicer of its obligations under
this Agreement, or (iii) seeking any determination or ruling that would
materially and adversely affect the validity or enforceability of this
Agreement.
(g) Compliance with Requirements of Law. The Servicer shall duly
-----------------------------------
satisfy all obligations on its part to be fulfilled under or in connection
with the Receivables or Accounts, will maintain in effect all qualifications
required under Requirements of Law in order to properly service the
Receivables and the Accounts and will comply in all material respects with
all Requirements of Law in connection with servicing the Receivables
and the Accounts the failure to comply with which would have a material
adverse effect on Certificateholders.
(h) No Rescission or Cancellation. Subject to the provision set
-----------------------------
forth in Section 3.03(i), the Servicer shall not permit any rescission or
cancellation of Receivable except as ordered by a court of competent
jurisdiction or other Governmental Authority.
(i) Protection of Certificateholders' Rights. The Servicer shall
----------------------------------------
not take any action which could reasonably be expected to impair or omit to
take any action necessary to avoid impairment of the rights of
Certificateholders in the Receivables, nor shall it reschedule, revise or
defer Collections due on the Receivables, nor take any action to cause
Receivables to be evidenced by a promissory note: provided, however, the
-------- -------
Servicer may, in accordance with the Credit Card Guidelines and with prudent
servicing practices, make customer service adjustments and adjustments in
payment schedules in the ordinary course of business.
(j) All Consents Required. All approvals, authorizations,
---------------------
consents, orders or other actions of any Person or of any governmental body
or official required in connection with the execution and delivery by the
Servicer of this Agreement, the performance by the Servicer of the
transactions contemplated by this Agreement and the fulfillment by the
Servicer of the terms hereof, have been obtained.
In the event (x) there is any breach of any of the representations,
warranties or covenants of the Servicer contained in Section 3.03(g), (h) or
(j) with respect to any Receivable or (y) the Servicer has failed to comply
in all material respects with all Requirements of Law applicable to any
Receivable or the Account relating to any Receivable, and as a result of such
breach or failure such Receivable becomes a Defaulted Receivable or the
rights of the Trust in, to or under such Receivable or its proceeds are
impaired or the proceeds of such Receivable are not available to the Trust,
then if in either case such noncompliance has not been cured within 60 days
(or with the prior consent of a Responsible Officer of the Trustee, such
longer period specified in such consent but not to exceed an additional 60
days) of the earlier to occur of the discovery of such event by the Servicer,
or receipt by the Servicer of written notice of such event given by the
Trustee, an Enhancement Provider or the Transferor, the Servicer shall accept
the transfer of all the Receivables in each Account as to which such event
relates on the terms and conditions set forth below; provided, however, that
-------- -------
no such transfer shall be required to be made with respect to such Receivable
if, within such 60-day period, the event giving rise to the obligation to
accept the transfer of such Receivable and any material adverse effect on
the interests of Certificateholders in such Receivable shall be cured by the
Servicer. The Servicer shall accept the transfer of a Receivable by making a
deposit into the Collection Account in immediately available funds by the
Transfer Date following the expiration of the 60-day period set forth in this
Section in an amount equal to the Transfer Deposit Amount for such
Receivable. Upon each such transfer to the Servicer, the Trustee shall
automatically and without further action be deemed to transfer, assign, and
set over, and otherwise convey to the Servicer, without recourse,
representation or warranty, all right, title and interest of the Trust in and
to such Receivable, all monies due or to become due with respect thereto and
all proceeds thereof; and such Receivable shall be treated by the Trustee as
collected in full as of the Collection Period to which such Transfer Deposit
Amount relates. The Trustee shall execute such documents and instruments of
transfer or assignment prepared by the Servicer in form reasonably
satisfactory to the Trustee and take such other actions as shall be
reasonably requested by the Servicer to effect the conveyance of any
Receivable pursuant to this Section. The obligation of the Servicer to
accept the transfer of any such Receivables shall constitute the sole remedy
respecting any breach of the representations, warranties and covenants set
forth in Section 3.03(g), (h) or (j) with respect to such Receivables
available to Certificateholders or the Trustee on behalf of
Certificateholders.
Section 3.04 Reports and Records for the Trustee: Bank Account
-------------------------------------------------
Statements.
- ----------
(a) Daily Records. Upon two Business Days prior notice by the
-------------
Trustee, the Servicer shall make available at an office of the Servicer
selected by the Servicer for inspection by the Trustee on a business day
during the Servicer's normal business hours a record setting forth (i) the
Collections processed by the Servicer on the preceding Business Day on each
Account and (ii) the amount of Receivables as of the close of business on the
second preceding Business Day in all Accounts. The Servicer shall, at all
times, maintain its computer files with respect to the Accounts in such a
manner so that the Accounts may be specifically identified and, upon prior
request of the Trustee, shall make available to the Trustee at an office of
the Servicer selected by the Servicer on any Business Day during the
Servicer's normal business hours any computer programs necessary to make such
identification.
(b) Monthly Servicer's Certificate. Unless otherwise stated in
------------------------------
the relating Supplement with respect to any Series, no later than the
Determination Date prior to each Distribution Date, the Servicer shall
forward by facsimile (to be followed by original confirmation in writing) or
overnight delivery service to the Trustee, the Paying Agent, any Enhancement
Provider and each Rating Agency a certificate of a Servicing Officer
substantially in the form attached as an exhibit to the applicable
Supplement. Such certificate shall include a certification that to the best
of such officer's knowledge, the Servicer has fully performed all of its
obligations under the Agreement throughout such preceding month, or, if there
has been a default in the performance of any such obligation, specifying each
such default known to such officer and the nature and status thereof.
(c) Rating Agency Requests for Information. The Servicer shall
--------------------------------------
provide each Rating Agency such information with respect to the Trust as such
Rating Agency shall reasonably request.
Section 3.05 Annual Servicer's Certificate. The Servicer will deliver
-----------------------------
to the Trustee, any Enhancement Provider and each Rating Agency on or before
March 31 of each calendar year, beginning with March 31, 1993, an Officers'
Certificate substantially in the form of Exhibit E stating that (a) a review
---------
of the activities of the Servicer during the preceding calendar year (or
portion thereof, as applicable) and of its performance under this Agreement
was made under the supervision of the officers signing such certificate and
(b) to the be t of such officers' knowledge, based on such review, the
Servicer has fully performed all of its obligations under this Agreement
throughout such period, or, if there has been a default in the performance of
any such obligation, specifying each such default known to each such officer
and the nature and status thereof. A copy of such certificate may be
obtained by any Certificateholder by a request in writing to the Trustee
addressed to the Corporate Trust Office.
Section 3.06 Annual Independent Public Accountants' Servicing Report.
-------------------------------------------------------
(a) On or before March 31 of each calendar year, beginning with
March 31, 1994, the Servicer shall cause a firm of nationally recognized
independent public accountants (who may also render other services to the
Servicer or the Transferor) to furnish a report (which report shall cover the
period from January 1 to and including December 31 of the prior calendar year
or for the report due March 31, 1994 from the Initial Closing Date to
December 31, 1993) to the Trustee, each Rating Agency and any Enhancement
Provider to the effect that they have applied certain procedures agreed upon
with the Servicer and examined certain documents and records relating to the
servicing of Accounts under this Agreement, and that, based upon such agreed-
upon procedures, nothing has come to the attention of such accountants that
caused them to believe the servicing (including, without limitation, the
allocation of Collections) has not been conducted in compliance with the
terms and conditions set forth in Sections 3.01, 3.04, 3.05, 3.09 and 12.01
and Article IV and
any Supplement, except for such exceptions as they believe to be immaterial
and such other exceptions as shall be set forth in such statement. In
addition, each report shall set forth the agreed upon procedures performed.
A copy of such report may be obtained by any Certificateholder by a request
in writing to the Trustee addressed to the Corporate Trust Office.
(b) On or before March 31 of each calendar year, beginning with
March 31, 1994, the Servicer shall cause a firm of nationally recognized
independent public accountants (who may also render other services to the
Servicer or the Transferor) to furnish a report to the Trustee, each Rating
Agency and any Enhancement Provider to the effect that they have compared the
mathematical calculations of each amount set forth in the monthly
certificates forwarded by the Servicer pursuant to Section 3.04(b) during the
period covered by such report (which shall be the period from January 1 to
and including December 31 of the prior calendar year or for the calendar year
ending December 31, 1993 from the Initial Closing Date to December 31, 1993)
with the Servicer's computer reports which were the source of such amounts
and that on the basis of such comparison, such accountants are of the opinion
that such amounts are in agreement, except for such exceptions as they
believe to be immaterial and such other exceptions as shall be set forth in
such statement. A copy of such report may be obtained by any
Certificateholder by a request in writing to the Trustee addressed to the
Corporate Trust Office.
Section 3.07 Tax Treatment. The Transferor has entered into this
-------------
Agreement and the Investor Certificates (other than those held by the
Transferor) have been (or will be) issued with the intention that such
Investor Certificates will qualify under applicable tax law as indebtedness.
The Transferor, the Trustee, each such Investor Certificateholder by
acceptance of its Certificate and each Certificate Owner by acquiring an
interest in such an Investor Certificate agree to treat the Investor
Certificates as debt for purposes of Federal, state and local income or
franchise taxes and other tax imposed on or measured by income. Furthermore,
the Trustee shall treat the Trust as a security device only, and shall not
file tax returns or obtain an employer identification number on behalf of the
Trust.
Section 3.08 Notices to Bridgestone/Firestone. In the event that
--------------------------------
Bridgestone/Firestone is no longer acting as Servicer, any Successor Servicer
appointed pursuant to Section 10.02 shall deliver or make available to
Bridgestone/Firestone each certificate and report required to be prepared,
forwarded or delivered thereafter pursuant to Sections 3.04, 3.05 and 3.06.
Section 3.09 Adjustments.
-----------
(a) If the Servicer adjusts downward the amount of any Receivable
because of a rebate, refund, unauthorized charge or billing error to an
Obligor, or because such Receivable was created in respect of merchandise
which was refused or returned by an Obligor, or if the Servicer otherwise
adjusts downward the amount of any Receivable without either receiving
Collections therefor or charging off such amount as uncollectible or any
Receivable is discovered as having been created through a fraudulent or
counterfeit charge, then, in any such case, the Transferor shall make a
deposit into the Collection Account in immediately available funds in an
amount equal to the amount of any such adjustment or the amount of any such
fraudulent or counterfeit charge on the Transfer Date following the
Collection Period in which such adjustment obligation arises. In the event
that the Transferor shall fail to deposit any amount required to be deposited
in the Collection Account pursuant to the preceding sentence, the Trustee
shall make a proper demand under the Transferor Letter of Credit pursuant to
Section 4.01B hereof, up to the amount available thereunder, in the amount
required to be so deposited by the Transferor which the Transferor failed to
so deposit. Any deposit into the Collection Account in connection with the
adjustment of a Receivable (including the proceeds of any drawing under the
Transferor Letter of Credit) shall be considered an "Adjustment Payment,"
------------------
shall be treated as Finance Charge Collections or Principal Collections, as
applicable, and shall be applied in accordance with Article IV. If proceeds
from the Transferor Letter of Credit are not available to pay such adjustment
obligation in full, then the amount of Receivables used to calculate the
Transferor Amount, any Invested Percentage, the B/F Amount and the Transferor
Percentage will be reduced by the amount of the adjustment. Any adjustment
required pursuant to the preceding sentence in the amount of Receivables used
in the calculation of the Transferor Amount, any Invested Percentage, the B/F
Amount and the Transferor Percentage shall be made on or prior to the end of
the Collection Period in which such adjustment obligation arises. In the
event that the exclusion of such Receivables from the calculation of the
Transferor Amount would cause the Transferor Amount to be a negative number,
the B/F Amount shall be reduced by the amount by which the Transferor Amount
would be reduced below zero.
(b) If (i) the Servicer makes a deposit into the Collection
Account in respect of a Collection of a Receivable and such Collection was
received by the Servicer in the form of a check which is not honored for any
reason or (ii) the Servicer makes a mistake with respect to the amount of any
Collection and deposits an amount that is less or more than the actual amount
of such Collection, the Servicer shall appropriately adjust the amount
subsequently deposited into the Collection Account to reflect such dishonored
check or mistake. Any Receivable in
respect of which a dishonored check is received shall be deemed not to have
been paid. Nothing in this Section 3.09(b) shall be interpreted to require
or permit the Servicer to recover any such adjustment from
Certificateholders.
(END OF ARTICLE III)
ARTICLE IV
RIGHTS OF CERTIFICATEHOLDERS, ALLOCATION
AND APPLICATION OF COLLECTIONS AND SERVICER
AND TRANSFEROR LETTERS OF CREDIT
Section 4.01 Establishment of Collection Account and Allocations with
--------------------------------------------------------
Respect to the Exchangeable Transferor Certificate.
- --------------------------------------------------
(a) The Collection Account. The Trustee, for the benefit of the
----------------------
Certificateholders, shall establish and maintain or cause to be established
and maintained in the name of the Trustee, on behalf of the Trust, with an
Eligible Institution a segregated account (the "Collection Account"), bearing
------------------
a designation clearly indicating that the funds deposited therein are held in
trust for the benefit of the Certificateholders. The Trustee shall possess
all right, title and interest in all funds on deposit from time to time in
the Collection Account and in all proceeds thereof. The Collection Account
shall be under the sole dominion and control of the Trustee for the benefit
of the Certificateholders. If, at any time, the institution holding the
Collection Account ceases to be an Eligible Institution, the Trustee (or the
Servicer on its behalf) shall within 10 Business Days establish a new
Collection Account meeting the conditions specified above with an Eligible
Institution, transfer any cash and/or any investments to such new Collection
Account and from the date such new Collection Account is established, it
shall be the Collection Account for all purposes hereof. Pursuant to the
authority granted to the Servicer in Section 3.01(b), the Servicer shall have
the power, revocable by the Trustee, to make withdrawals and payments from
the Collection Account and to instruct the Trustee to make withdrawals and
payments from the Collection Account for the purposes of carrying out the
Servicer's or Trustee's duties hereunder.
Each Series shall represent interests in the Trust including the
benefits of any Enhancement to be provided by an Enhancement Provider issued
with respect to such Series as indicated in the Supplement relating to such
Series and the right to receive Collections and other amounts at the times
and in the amounts specified in this Article IV to be deposited in the
Collection Account and any other accounts maintained for the benefit of the
Certificateholders or paid to the Investor Certificate Holders. The
Exchangeable Transferor Certificate shall represent the interests in the
Trust not represented by any Series then outstanding or the Bridgestone/
Firestone Certificate, including the right to receive Collections and other
amounts at the times and in the amounts specified in this Article IV to be
paid to the Transferor (the "Transferor Interest"), provided, however, that
------------------- -------- -------
such certificate shall not represent any interest in the Collection Account
and any other accounts maintained for the
benefit of the Certificateholders or the benefits of any Enhancement to be
provided by an Enhancement Provider issued with respect to any Series, except
as specifically provided in this Article IV.
(b) Administration of the Collection Account. At the direction
----------------------------------------
of the Servicer, funds on deposit in the Collection Account to be so invested
shall be invested by the Trustee in Permitted Investments. All such
Permitted Investments shall be held by the Trustee for the benefit of the
Certificateholders. Investments of funds representing Collections collected
during any Collection Period shall be invested in Permitted Investments that
will mature so that such funds will be available at the close of business on
the Transfer Date following such Collection Period. Any funds on deposit in
the Collection Account to be so invested shall be invested solely in
Permitted Investments. All such Permitted Investments shall be held to
maturity. Funds deposited in the Collection Account on a Transfer Date with
respect to the next following Distribution Date are not required to be
invested overnight. The Eligible Institution maintaining the Collection
Account shall maintain possession of the negotiable instruments or
securities, if any, evidencing the Permitted Investments described in clause
(a) of the definition thereof from the time of purchase thereof until the
time of maturity. On each Distribution Date, all interest and other
investment earnings (net of losses and investment expenses) on funds on
deposit in the Collection Account shall be paid to Transferor.
(c) Identification of Account. Schedule 2, which is hereby
------------------------- ----------
incorporated into and made a part of this Agreement, identifies the
Collection Account by setting forth the account number of such account, the
account designation of such account and the name of the institution with
which such account has been established.
(d) Allocations For the Exchangeable Transferor Certificate and
-----------------------------------------------------------
the Bridgestone/Firestone Certificate. Throughout the existence of the
- -------------------------------------
Trust, the Servicer shall allocate on a daily basis to (x) the Holder of the
Exchangeable Transferor Certificate an amount equal to the product (A) of the
Transferor Percentage and (B) the aggregate amount of Principal Collections
in respect of such Collection Period and (y) to Bridgestone/Firestone as
Holder of the Bridgestone/Firestone Certificate an amount equal to the
product of (A) the B/F Percentage and (B) the aggregate amount of Finance
Charge Collections and Principal Collections in respect of such Collection
Period. Unless specified in any Supplement, the Servicer need not deposit
into the Collection Account any such amounts allocated to the Transferor or
Bridgestone/Firestone and any other amounts allocated to the Exchangeable
Transferor
Certificate pursuant to any Supplement and shall pay such amounts
allocated to Bridgestone/Firestone as collected and shall pay such amounts
allocated to the Transferor as collected to the Transferor as long as the
Transferor Amount is greater than or equal to zero.
(e) Allocations of Collections. At all times prior to the
--------------------------
delivery of an Officers Certificate to the Trustee certifying that the
Servicer can allocate Finance Charge Collections and Principal Collections on
an actual basis for all of the Receivables for all purposes of this Agreement
the Servicer shall allocate Collections processed with respect to the
Receivables for any day during a Collection Period to Finance Charge
Collections to the extent of the amount of Periodic Finance Charges billed or
accrued on the Accounts during the prior Collection Period minus the
-----
amount of any finance charges being credited as a rebate during such prior
Collection Period for which an allocation is being made divided by the number
of days in such Collection Period. The balance of the Collections processed
for any day during a Collection Period shall be allocated to Principal
Collections. After delivery to the Trustee of the Officers' Certificate
referred to above Finance Charge Collections and Principal Collections shall
be allocated on an actual basis. The allocations provided for in this
Section shall not apply to Recoveries and Merchant Fees, which shall be
treated as Finance Charge Collections for all purposes of this Agreement.
(f) Shared Principal Collections. On each Business Day, Shared
----------------------------
Principal Collections shall be allocated to each outstanding Series pro rata
based on the Principal Shortfall, if any, for each such Series. The Servicer
shall pay any remaining Shared Principal Collections on such Business Day to
the Transferor; provided, that if an Amortization Period has commenced and
--------
is continuing with respect to more than one outstanding Series, such
remaining Shared Principal Collections shall be allocated to such Series pro
rata based on the Invested Percentage for Aggregate Receivables applicable
for such Series.
(g) Collections. Bridgestone/Firestone, as Servicer, will apply
-----------
all Collections with respect to the Receivables for each Collection Period as
described in this Article IV. The Servicer shall pay Collections to the
Holder of the Exchangeable Transferor Certificate and Bridgestone/Firestone
as Holder of the Bridgestone/Firestone Certificate to the extent such
Collections are allocated to the Exchangeable Transferor Certificate and the
Bridgestone/Firestone Certificate, respectively, pursuant to Section 4.01(d)
and as otherwise provided in Article IV. Subject to Section 4.01(h), the
Servicer may deposit into the Collection Account on any Business Day, and
shall deposit into the Collection Account on or prior to the Transfer Date
Collections with respect to the prior Collection Period to the extent such
Collections are allocated to any Series in accordance with
Article IV, except that the Servicer may distribute any amount determined to
be payable to the Holder of any subordinated Certificate (e.g. the Series
1992-A Class B Certificate and the Series 1992-B Class B Certificates)
pursuant to any Supplement in respect of a Collection Period at any time
after the related Determination Date.
(h) Daily Collections. While Bridgestone/Firestone is the
-----------------
Servicer, and subject to the availability of a Servicer Letter of Credit, it
may hold for its own benefit all Collections, subject further, however, to
this subsection 4.01(h). The Servicer shall deposit all Collections
(including Collections then held by it) directly into the Collection Account
as soon as possible after the Date of Processing thereof, but in no event
later than two Business Days following such Date of Processing thereof,
commencing in the event of any of the following:
(i) the termination of Bridgestone/Firestone as Servicer;
(ii) 35 days shall have passed from the date the Servicer
received notice pursuant to Section 4.01A(b) of the downgrading of the
short-term unsecured debt ratings of the Letter of Credit Bank below
A-1+ by S&P, F-1+ by Fitch and P-1 by Moody's and either (A) there shall
not have been delivered to the Trustee a substitute Servicer Letter of
Credit in accordance with Section 4.01A(c) or (B) the Trustee shall not
have made a demand for a Special Drawing under the Servicer Letter of
Credit pursuant to Section 4.01A(e);
(iii) the Servicer shall have received notice pursuant to
Section 4.01A(b) of the downgrading of the short-term unsecured debt
ratings of the Letter of Credit Bank to or below A-2 by S&P, F-2 by
Fitch and P-1 by Moody's and either (A) there shall not have been
delivered to the Trustee a substitute Servicer Letter of Credit in
accordance with Section 4.01(c) or (B) the Servicer shall not have
instructed the Trustee to make a demand for a Special Drawing under the
Servicer Letter of Credit pursuant to Section 4.01A(e); or
(iv) five Business Days remain to the expiry or termination
of the Servicer Letter of Credit and there shall not have been delivered
to the Trustee a substitute Servicer Letter of Credit in accordance with
Section 4.01A(c).
Should the Servicer be required to make daily deposits of
Collections into the Collection Account pursuant to this Section, the
Servicer may make an estimated allocation of Finance Charge Collections and
Principal Collections for the purposes of
determining the amount of Collections to be so deposited as long as the
Trustee received confirmation from each Rating Agency that such method does
not cause a downgrading or withdrawal of the then current rating of any
Series; provided, however, that as soon as practical thereafter, the Servicer
-------- -------
shall reconcile the estimated allocation of Collections with the actual
allocation required under this Agreement.
If at any time Bridgestone/Firestone is the Servicer, Collections
held by Bridgestone/Firestone allocable to all Series and not previously used
to purchase receivables exceed the Available Letter of Credit Amount under
the Servicer Letter of Credit (for the avoidance of doubt, it is agreed that
the Available Letter of Credit Amount shall be zero after the return of the
funds on deposit in the Escrow Account pursuant to Section 4.01A(e) unless a
substitute Servicer Letter of Credit is provided to the Trustee pursuant to
Section 4.01A(c)) then the Servicer shall deposit all Collections directly
into the Collection Account; provided, however, that Bridgestone/Firestone
shall be required to deposit Collections directly into the Collection Account
pursuant to this paragraph only for so long as Collections held by
Bridgestone/Firestone exceed the Available Letter of Credit Amount.
Section 4.01A Servicer Letter of Credit. In accordance with Section
-------------------------
4.01(h), the following provisions shall apply so long as Bridgestone
/Firestone is the Servicer hereunder:
(a) Servicer Letter of Credit. If with respect to any Collection
-------------------------
Period the Servicer shall have failed to make in full the remittance of
Collections or any other payment required to be made pursuant to Section
4.01(9), the Trustee shall draw on the Servicer Letter of Credit, in
accordance with the terms thereof, in the amount of the shortfall between the
amount of funds that are required to be remitted by the Servicer to the
Collection Account as set forth in the Monthly Servicer's Certificate and the
amount of funds actually so remitted. Any such draw on the Servicer Letter
of Credit shall be made after receipt of the related Monthly Servicer's
Certificate but on or before 1:00 P.M. (New York City time) on the Transfer
Date for such Collection Period, provided the Trustee has received such
Monthly Servicer's Certificate prior to such time. Upon receipt of the
proceeds of any drawing under the Servicer Letter of Credit, the Trustee
shall deposit such proceeds into the Collection Account. Amounts so
deposited by the Trustee pursuant to this Section 4.01A(a) shall not be
deemed to constitute amounts deposited pursuant to Section 2.06(c), 2.07 or
12.01(b). The Servicer shall include in each Monthly Servicer's Certificate,
or in an Officer's Certificate provided to the Trustee with each Monthly
Servicer's Certificate, the Stated Amount (as defined in the Servicer Letter
of Credit) of the Servicer Letter of Credit as of the related Determination
Date.
(b) Downgrade of Letter of Credit Bank or Expiration of Term of
-----------------------------------------------------------
Servicer Letter of Credit.
- -------------------------
(i) On the fifth Business Day prior to the expiry date of
the Servicer Letter of Credit (as such letter of credit may have been
renewed or extended), the Trustee shall give written notice thereof to
the Servicer.
(ii) In the event that a Responsible Officer of the Trustee
obtains actual knowledge that the short-term unsecured debt rating of
the Letter of Credit Bank has been withdrawn or reduced below A-1+ by
S&P, or F-1+ by Fitch or P-1 by Moody's, the Trustee shall promptly give
written notice thereof to the Servicer. Within 35 (thirty-five) days
(or immediately if the short-term debt rating of the Letter of Credit
Bank has been reduced to or below A-2 or F-2 by the applicable Rating
Agency) of receipt of such notice, the Servicer shall either (x) deliver
to the Trustee a substitute Servicer Letter of Credit in accordance with
Section 4.01A(c), (y) instruct the Trustee in writing to make a demand
for a Special Drawing under the Servicer Letter of Credit pursuant to
Section 4.01A(e) or (z) commence depositing Collections directly into
the Collection Account pursuant to Section 4.01(h).
(c) Substitute Servicer Letter of Credit. The Trustee shall
------------------------------------
accept delivery of a letter of credit in substitution for the Servicer Letter
of Credit and shall deliver the Servicer Letter of Credit to the Letter of
Credit Bank for cancellation upon the satisfaction of the following
conditions:
(i) The substitute letter of credit shall be irrevocable
and shall be issued by a bank or other financial institution whose short
term unsecured debt is rated A-1+ by S&P, F-1+ by Fitch or P-1 by
Moody's, and the substitute letter of credit shall provide that drawings
thereunder may be made on substantially the same terms and conditions as
the initial Servicer Letter of Credit, and the substitute letter of
credit shall have been delivered to the Trustee.
(ii) The Trustee shall have received written confirmation
from each Rating Agency with an outstanding rating on any Series to the
effect that the delivery of the substitute letter of credit to the
Trustee and the termination of the initial Servicer Letter of Credit
will not result in the downgrade or withdrawal of any outstanding rating
on any then outstanding Series.
(iii) The amount available to be drawn under, and the Stated
Amount of, the substitute letter of credit shall be at least equal to
the amount which was available to be
drawn under, and the Stated Amount of, the Servicer Letter of Credit
being replaced.
(iv) The Trustee shall have received written opinions of
counsel (acceptable to the Trustee) (including domestic and foreign
counsel, if applicable) to the issuer of the substitute letter of
credit, which opinions shall be reasonably satisfactory to the Trustee
and the Transferor and their respective counsel, substantially to the
same effect as the opinions delivered to the Trustee on the date of
issuance of the Servicer Letter of Credit with respect to the Servicer
Letter of Credit.
(v) The Servicer shall have delivered to the Trustee an
Officer's Certificate confirming the items set forth in (i) through
(iii) above. The Trustee may conclusively rely on such certificate,
shall have no duty to make inquiries with regard to the matters set
forth therein and shall incur no liability in so relying.
Upon the delivery to the Trustee of a substitute letter of credit
in accordance with this Section 4.01A(e), such substitute letter of credit
shall be the Servicer Letter of Credit and the issuer thereof shall be a
Letter of Credit Bank for all purposes hereof.
(d) Daily Remittances. If the Servicer elects to begin daily
-----------------
remittances of Collections to the Collection Account pursuant to Section
4.01A(b) above, the Servicer shall instruct the Trustee in writing to submit
the Servicer Letter of Credit to the Letter of Credit Bank for cancellation
and the Servicer shall begin such daily remittances in accordance with
Section 4.01(h) hereof.
(e) Special Drawing. If the Servicer elects to instruct the
---------------
Trustee to make a Special Drawing pursuant to Section 4.01A(b) above, the
Servicer shall provide two Business Days' notice to the Letter of Credit Bank
and shall instruct the Trustee in writing to promptly draw upon the Servicer
Letter of Credit to the full extent of the Available Letter of Credit Amount
thereunder and deposit such amount into the Escrow Account (as defined
below). On the Closing Date, the Trustee for the benefit of the Holders of
the Investor Certificates shall establish or cause to be established with the
Trustee in the name of the Trustee, on behalf of the Servicer, a segregated
trust account (the "Escrow Account"), bearing a designation clearly
--------------
indicating that the funds deposited therein are held for the benefit of such
Certificateholders. Such account shall be maintained in the corporate trust
department of the Trustee if the short-term unsecured debt rating of the
Trustee is below A-1+ from Standard & Poor's or below P-1 from Moody's. All
funds on deposit in the Escrow Account shall, at the direction of the
Servicer, be invested by the Trustee in Permitted Investments which will be
held to maturity and which will mature so that all funds on deposit therein
will be available prior to the Distribution Date next following such
investment. The Trustee shall maintain possession of the negotiable
instruments or securities, if any, evidencing the Permitted Investments
described in clause (a) of the definition thereof from the time of purchase
thereof until maturity. Until the earlier of (a) the date on which all
Series are paid in full and (b) the termination of the Trust (the "Payoff
------
Date"), if a drawing under the Servicer Letter of Credit is called for under
- ----
Section 4.01 (a), a withdrawal in the same amount from the Escrow Account
shall instead be made and the related funds applied as provided therein. Any
reimbursement with respect to any drawing which would otherwise have been
applied to reinstate the Servicer Letter of Credit shall be deposited in the
Escrow Account. If, as evidenced by an Officers' Certificate of the
Servicer, on any Distribution Date the amount on deposit in the Escrow
Account (excluding any investment earnings on deposit therein) exceeds the
unpaid balance of all Series plus interest accrued and unpaid thereon through
the then current applicable interest accrual period, the Trustee shall
withdraw such excess amount on such Distribution Date and pay such excess to
the Letter of Credit Bank for application in accordance with the agreement
pursuant to which the Letter of Credit was issued. From and after the date
of such Special Drawing the term "Available Letter of Credit Amount" with
---------------------------------
respect to the Servicer Letter of Credit shall be deemed to refer to the
amount on deposit in the Escrow Account (excluding any investment earnings
thereon). On the first Business Day after the earlier of the Payoff Date and
the scheduled expiration date of the Servicer Letter of Credit, all funds in
the Escrow Account shall be paid to the Letter of Credit Bank for application
in accordance with the agreement pursuant to which the Servicer Letter of
Credit was issued. Any investment earnings on the Escrow Account shall be
remitted monthly on each Distribution Date to the Letter of Credit Bank for
application by the Letter of Credit Bank in accordance with the agreement
pursuant to which the Servicer Letter of Credit was issued. All funds on
deposit in the Escrow Account shall be the sole and exclusive property of the
Trustee for the benefit of the Holders of all Series, subject to the rights
of the Letter of Credit Bank as provided herein. Neither the Transferor nor
the Servicer shall at any time have any ownership or other interest in such
funds or any right to withdraw or to receive such funds. In the event that,
notwithstanding the intention of the parties hereto, such funds are deemed to
be the property of the Servicer, the Servicer hereby grants to the Trustee,
for the benefit of the Holders of the Investor Certificates, a first priority
security interest in and to all of the Servicer's right, title and interest
in such funds for the purpose of securing the rights of the Trustee for the
benefit of the Holders of the Investor Certificates hereunder subject to the
rights of the Letter of
Credit Bank and the Trustee's obligations to remit funds on deposit in the
Escrow Account to the Letter of Credit Bank as described herein.
In the event that the Servicer delivers to the Trustee a substitute
letter of credit meeting the requirements of Section 4.01A(c), the Trustee
shall release to the initial Letter of Credit Bank any funds on deposit in
the Escrow Account for application pursuant to the agreement pursuant to
which the initial Servicer Letter of Credit was issued.
Section 4.01B Transferor Letter of Credit.
---------------------------
(a) Transferor Letter of Credit. If with respect to any
---------------------------
Collection Period the Servicer adjusts downward the amount of any Receivable
pursuant to Section 3.09(a) and the Transferor fails to make any deposit to
the Collection Account in respect thereof as required pursuant to Section
3.09(a), the Trustee shall draw on the Transferor Letter of Credit, in
accordance with the terms thereof, in the amount of the adjustment. Any such
draw on the Transferor Letter of Credit shall be made after receipt of the
related Monthly Servicer's Certificate but on or before 1:00 P.M. (New York
City time) on the Transfer Date for such Collection Period provided such
Monthly Servicer's Certificate is received by the Trustee prior to such time.
Upon receipt of the proceeds of any drawing under the Transferor Letter of
Credit, the Trustee shall deposit such proceeds into the Collection Account.
The Servicer shall include in each Monthly Servicer's Certificate, or in an
Officer's Certificate provided to the Trustee with each Monthly Servicer's
Certificate, the Stated Amount (as defined in the Transferor Letter of
Credit) of the Transferor Letter of Credit as of the related Determination
Date.
(b) Downgrade Credit of Transferor Letter of Credit Bank or
-------------------------------------------------------
Expiration of Term of Transferor Letter of Credit.
- -------------------------------------------------
(i) On the fifth Business Day prior to the expiry date of
the Transferor Letter of Credit (as such letter of credit may have been
renewed or extended), the Trustee shall give written notice thereof to
the Transferor.
(ii) In the event that a Responsible Officer of the Trustee
obtains actual knowledge that the short-term unsecured debt rating of
the Letter of Credit Bank has been withdrawn or reduced below A-1+ by
S&P, F-1+ by Fitch or P-1 by Moody's by the applicable Rating Agency,
the Trustee shall promptly give written notice thereof to the
Transferor. Within 35 (thirty-five) days (or immediately if the short-
term debt rating of the Letter of Credit Bank has been reduced to or
below A-2 or F-2 by the applicable Rating Agency) of receipt of such
notice, the Transferor shall
either (x) deliver to the Trustee a substitute Transferor Letter of
Credit in accordance with Section 4.01B(c) or (y) instruct the Trustee
in writing to make a demand for a Special Drawing under the Transferor
Letter of Credit pursuant to Section 4.01B(d).
(c) Substitute Transferor Letter of Credit. The Trustee shall
--------------------------------------
accept delivery of a letter of credit in substitution for the Transferor
Letter of Credit and shall deliver the Transferor Letter of Credit to the
Letter of Credit Bank for cancellation upon the satisfaction of the following
conditions:
(i) The substitute letter of credit shall be irrevocable
and shall be issued by a bank or other financial institution whose short
term unsecured debt is rated A-1+ and F-1+ by the applicable Rating
Agency, and the substitute letter of credit shall provide that drawings
thereunder may be made on substantially the same terms and conditions as
the initial Transferor Letter of Credit, and the substitute letter of
credit shall have been delivered to the Trustee.
(ii) The Trustee shall have received written confirmation
from each Rating Agency with an outstanding rating on any Series to the
effect that the delivery of the substitute letter of credit to the
Trustee and the termination of the initial Transferor Letter of Credit
will not result in the downgrade or withdrawal of any outstanding rating
on any then outstanding Series.
(iii) The amount available to be drawn under, and the Stated
Amount of, the substitute letter of credit shall be at least equal to
the amount which was available to be drawn under, and the Stated Amount
of, the Transferor Letter of Credit being replaced.
(iv) The Transferor Amount (plus the B/F Amount and the
Available Letter of Credit Amount) expressed as a percentage of the
aggregate invested amount of all outstanding Series issued by the Trust
with respect to the Transferor Letter of Credit shall be at least equal
to the Minimum Transferor Interest Percentage.
(v) The Trustee shall have received written opinions of
counsel (acceptable to the Trustee) (including domestic and foreign
counsel, if applicable) to the issuer of the substitute letter of
credit, which opinions shall be reasonably satisfactory to the Trustee
and the Transferor and their respective counsel, substantially to the
same effect as the opinions delivered to the Trustee on the date of
issuance of the Transferor Letter of Credit with respect to the
Transferor Letter of Credit.
(vi) The Transferor shall have delivered to the Trustee an
Officer's Certificate confirming the items set forth in (i) through (iv)
above. The Trustee may conclusively rely on such certificate, shall
have no duty to make inquiries with regard to the matters set forth
therein and shall incur no liability in so relying.
Upon the delivery to the Trustee of a substitute letter of credit
in accordance with this Section 4.01B(c), such substitute letter of credit
shall be the Transferor Letter of Credit and the issuer thereof shall be a
Letter of Credit Bank for all purposes hereof.
(d) Special Drawing. If the Transferor elects to instruct the
---------------
Trustee to make a Special Drawing pursuant to Section 4.01B(b) above, the
Transferor shall provide two Business Days notice to the Letter of Credit
Bank and shall instruct the Trustee in writing to promptly draw upon the
Transferor Letter of Credit to the full extent of the Available Letter of
Credit Amount thereunder and deposit such amount into the Transferor Escrow
Account (as defined below). On the Closing Date, the Trustee for the benefit
of the Holders of the Investor Certificates shall establish or cause to be
established with the Trustee in the name of the Trustee, on behalf of the
Transferor, a segregated trust account (the "Transferor Escrow Account"),
-------------------------
bearing a designation clearly indicating that the funds deposited therein are
held for the benefit of such Certificateholders. Such account shall be
maintained in the corporate trust department of the Trustee if the short-term
unsecured debt rating of the Trustee is below A-1+ from Standard & Poor's or
P-1 from Moody's. All funds on deposit in the Transferor Escrow Account
shall, at the direction of the Transferor, be invested by the Trustee in
Permitted Investments which will be held to maturity and which will mature so
that all funds on deposit therein will be available prior to the Distribution
Date next following such investment. The Trustee shall maintain possession
of the negotiable instruments or securities, if any, evidencing the Permitted
Investments described in clause (a) of the definition thereof from the time
of purchase thereof until maturity. Until the earlier of (a) the date on
which all Series are paid in full and (b) the Payoff Date, if a drawing under
the Transferor Letter of Credit is called for under Section 4.01B(a), a
withdrawal in the same amount from the Transferor Escrow Account shall
instead be made and the related funds applied as provided therein. Any
reimbursement with respect to any drawing which would otherwise have been
applied to reinstate the Transferor Letter of Credit shall be deposited in
the Transferor Escrow Account. If, as evidenced by an Officers' Certificate
of the Transferor, on any Distribution Date the amount on deposit in the
Transferor Escrow Account (excluding any investment earnings on deposit
therein) exceeds the unpaid balance of all Series plus interest accrued
and unpaid thereon through the then current applicable interest accrual
period, the Trustee shall withdraw such excess amount on such Distribution
Date and pay such excess to the Letter of Credit Bank for application in
accordance with the agreement pursuant to which the Transferor Letter of
Credit was issued. From and after the date of such Special Drawing, the term
"Available Letter of Credit Amount" with respect to the Transferor Letter of
---------------------------------
Credit shall be deemed to refer to the amount on deposit in the Transferor
Escrow Account (excluding any investment earnings thereon). On the first
Business Day after the earlier of the Payoff Date and the scheduled
expiration date of the Transferor Letter of Credit, all funds in the
Transferor Escrow Account shall be paid to the Letter of Credit Bank for
application in accordance with the agreement pursuant to which the Transferor
Letter of Credit was issued. Any investment earnings on the Transferor
Escrow Account shall be remitted monthly on each Distribution Date to the
Letter of Credit Bank for application by the Letter of Credit Bank in
accordance with the agreement pursuant to which the Transferor Letter of
Credit was issued. All funds on deposit in the Transferor Escrow Account
shall be the sole and exclusive property of the Trustee for the benefit of
the Holders of all Series, subject to the rights of the Letter of Credit Bank
as provided herein. Neither the Transferor nor the Servicer shall at any
time have any ownership or other interest in such funds or any right to
withdraw or to receive such funds. In the event that, notwithstanding the
intention of the parties hereto, such funds are deemed to be the property of
the Transferor, the Transferor hereby grants to the Trustee, for the benefit
of the Holders of the Investor Certificates, a first priority security
interest in and to all of the Transferor's right, title and interest in such
funds for the purpose of securing the rights of the Trustee for the benefit
of the Holders of the Investor Certificates hereunder subject to the rights
of the Letter of Credit Bank and the Trustee's obligations to remit funds on
deposit in the Transferor Escrow Account to the Letter of Credit Bank as
described herein.
In the event that the Transferor delivers to the Trustee a substitute
letter of credit meeting the requirements of Section 4.01B(c), the Trustee
shall release to the initial Letter of Credit Bank any funds on deposit in
the Transferor Escrow Account for application pursuant to the agreement
pursuant to which the initial Transferor Letter of Credit was issued.
(THE REMAINDER OF ARTICLE IV IS RESERVED
AND MAY BE SPECIFIED IN ANY SUPPLEMENT
WITH RESPECT TO ANY SERIES)
ARTICLE V
(ARTICLE V IS RESERVED AND MAY BE SPECIFIED IN
ANY SUPPLEMENT WITH RESPECT TO ANY SERIES)
ARTICLE VI
THE CERTIFICATES
Section 6.01 The Certificates. Subject to Section 6.11 of the
----------------
Agreement, the Investor Certificates of each Series shall be issued in fully
registered form (the "Registered Certificates"), and shall be substantially
-----------------------
in the form of the exhibits with respect thereto attached to the applicable
Supplement. The Exchangeable Transferor Certificate shall be substantially
in the form of Exhibit A-1. The Investor Certificates and the Exchangeable
-----------
Transferor Certificate shall, upon issuance pursuant hereto or to Section
6.09 or Section 6.11 of the Agreement, be executed and delivered by the
Transferor to the Trustee for authentication and redelivery as provided in
Sections 2.09 and 6.02 of the Agreement. Any Investor Certificates shall be
issued in minimum denominations of $1,000 and in integral multiples of $1,000
in excess thereof, unless otherwise specified in any Supplement. If
specified in the related Supplement for any Series, the Investor Certificates
shall be issued upon initial issuance as a single certificate in an original
principal amount equal to the Initial Invested Amount as described in Section
6.10 of the Agreement. The Exchangeable Transferor Certificate shall be
issued to the Transferor as a single certificate. The Bridgestone/Firestone
Certificate shall be issued to Bridgestone/Firestone as a single certificate
in substantially the form of Exhibit A-2. Each Certificate shall be executed
-----------
by manual or facsimile signature on behalf of the Transferor by its President
or any Vice President. Certificates bearing the manual or facsimile (in the
case of the Transferor) signature of the individual who has, at the time when
such signature was affixed, authorized to sign on behalf of the Transferor or
the Trustee shall not be rendered invalid, notwithstanding that such
individual has ceased to be so authorized prior to the authentication and
delivery of such Certificates or does not hold such office at the date of
such Certificates. No Certificate shall be entitled to any benefit under
this Agreement or any applicable Supplement, or be valid for any purpose,
unless there appears on such Certificate a certificate of authentication
substantially in the form provided for herein executed by or on behalf of the
Trustee by the manual signature of a duly authorized signatory, and such
certificate upon any Certificate shall be conclusive evidence, and the only
evidence, that such Certificate has been duly authenticated and delivered
hereunder. All Certificates shall be dated the date of their authentication.
Section 6.02 Authentication of Certificates. Contemporaneously with
------------------------------
the assignment and transfer of the Receivables, whether now existing or
hereafter created, and the other Trust Assets to the Trust, the Trustee shall
authenticate and deliver the initial Series of Investor Certificates upon the
order of the Transferor. The Trustee shall authenticate and deliver the
Bridgestone/Firestone Certificates upon the order of the Transferor. The
Trustee shall authenticate and deliver the Exchangeable Transferor
Certificate, upon the order of the Transferor, to the Transferor
simultaneously with the delivery of the initial Series of Investor
Certificates. Upon an Exchange as provided in Section 6.09 of the Agreement
and the satisfaction of certain other conditions specified therein, the
Trustee shall authenticate and deliver the Investor Certificates of
additional Series (with the designation provided in the applicable
Supplement), upon the order of the Transferor, to the persons designated in
such Supplement. Upon the order of the Transferor, the Certificates of any
Series shall be duly authenticated by or on behalf of the Trustee, in
authorized denominations equal to (in the aggregate) the Initial Invested
Amount of such Series of Investor Certificates. If specified in the related
Supplement for any Series, the Trustee shall authenticate Book-Entry
Certificates or Certificates in physical form that are issued upon original
issuance thereof, upon the written order of the Transferor, to a Clearing
Agency or its nominee as provided in Section 6.11 of the Agreement against
payment of the purchase price thereof.
Section 6.03 Registration of Transfer and Exchange of Certificates.
-----------------------------------------------------
(a) The Trustee shall cause to be kept at the office or agency to
be maintained by a transfer agent and registrar (which may be the Trustee)
(the "Transfer Agent and Registrar") in accordance with the provisions of
----------------------------
Section 6.03(c) of the Agreement a register (the "Certificate Register") in
--------------------
which, subject to such reasonable regulations as it may prescribe, the
Transfer Agent and Registrar shall provide for the registration of the
Registered Certificates and of transfers and exchanges of the Registered
Certificates as herein provided. The Trustee is hereby initially appointed
Transfer Agent and Registrar for the purpose of registering the Registered
Certificates and transfers and exchanges of the Registered Certificates as
herein provided. The Trustee shall be permitted to resign as Transfer Agent
and Registrar upon 30 days' written notice to the Transferor and the
Servicer; provided, however, that such resignation shall not be effective and
-------- -------
the Trustee shall continue to perform its duties as Transfer Agent and
Registrar until the Transferor has appointed a successor Transfer Agent and
Registrar acceptable to the Transferor and the Trustee. If specified in the
related Supplement for any Series of Certificates, the Transferor shall
appoint any co-transfer agent and co-registrar chosen by the Transferor, and
acceptable to the Trustee. If specified in such related Supplement, so long
as the Registered Certificates relating to such Supplement are outstanding,
the Transferor shall maintain a co-transfer agent and co-registrar in New
York City or any other city designated in such Supplement and any reference
in this Agreement to the Transfer Agent and Registrar shall include
any co-transfer agent and co-registrar unless the context requires otherwise.
Upon surrender for registration of transfer of any Registered
Certificate at any office or agency of the Transfer Agent and Registrar
maintained for such purpose and compliance with applicable requirements of
the Transfer Agent and Registrar, the Transferor shall execute, and the
Trustee shall authenticate and deliver, in the name of the designated
transferee or transferees, one or more new Registered Certificates in
authorized denominations of the same Series representing like aggregate
Undivided Interests in the Trust.
At the option of any Registered Certificateholder, Registered
Certificates may be exchanged for other Registered Certificates of the same
Series in authorized denominations of like aggregate Undivided Interests in
the Trust, upon surrender of the Registered Certificates to be exchanged at
any office or agency of the Transfer Agent and Registrar maintained for such
purpose.
The preceding provisions of this Section 6.03 notwithstanding, the
Trustee or the Transfer Agent and Registrar, as the case may be, shall not be
required to register the transfer of or exchange any Certificate of any
Series for a period of 15 days preceding the due date for any payment with
respect to the Certificates of such Series.
Whenever any Investor Certificates of any Series are so surrendered
for exchange the Transferor shall execute and the Trustee shall authenticate
and (unless the Transfer Agent and Registrar is different from the Trustee in
which case the Transfer Agent and Registrar shall) deliver the Investor
Certificates of such Series which the Certificateholder making the exchange
is entitled to receive. Every Investor Certificate presented or surrendered
for registration of transfer or exchange shall be accompanied by a written
instrument of transfer in a form satisfactory to the Trustee and the Transfer
Agent and Registrar duly executed by the Certificateholder thereof or his
attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Investor Certificates but the Transfer Agent and Registrar and
the Trustee or any co-transfer agent and co-registrar or co-trustee may
require payment of a sum sufficient to cover any tax or governmental charge
that may be imposed in connection with any transfer or exchange of Investor
Certificates.
All Investor Certificates surrendered for registration of transfer
or exchange shall be cancelled by the Transfer Agent and Registrar and
destroyed by the Trustee.
The Transferor shall execute and deliver to the Trustee or the
Transfer Agent and Registrar, as applicable, and Registered Certificates in
such amounts and at such times as are necessary to enable the Trustee to
fulfill its responsibilities under this Agreement and the Certificates.
Any Series Supplement may set forth additional restrictions on the
transfer of Certificates.
(b) Except as provided in any Supplement or in Sections 6.09 and
7.02 of the Agreement, the Transferor's interest in the Exchangeable
Transferor Certificate shall not be sold, transferred, assigned, exchanged,
pledged, participated or otherwise conveyed except that the Transferor
Interest may be participated to Bridgestone/Firestone pursuant to the
Participation Agreement. The Bridgestone/Firestone Certificate may not be
sold, assigned, pledged or otherwise conveyed.
(c) The Transfer Agent and Registrar will maintain at its expense
in the Borough of Manhattan, the City of New York (or subject to Section
6.03(a) of the Agreement any other city designated in such Supplement), an
office or offices or agency or agencies where Investor Certificates may be
surrendered for registration of transfer or exchange.
(d) Any Supplement may provide for restrictions applicable to the
transfer of a particular Series of Certificates.
Section 6.04 Mutilated, Destroyed, Lost or Stolen Certificates.
-------------------------------------------------
If (a) any mutilated Certificate is surrendered to the Transfer Agent and
Registrar, or the Transfer Agent and Registrar receives evidence to its
satisfaction of the destruction, loss or theft of any Certificate and
(b) there is delivered to the Transfer Agent and Registrar, the Trustee and
the Transferor such security or indemnity as may be required by them to save
each of them harmless, then, in the absence of notice to the Trustee that
such Certificate has been acquired by a bona fide purchaser, the Transferor
shall execute and the Trustee shall authenticate and (unless the Transfer
Agent and Registrar is different from the Trustee, in which case the Transfer
Agent and Registrar shall) deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Certificate, a new Certificate of like
tenor and aggregate Undivided Interest, if applicable. In connection with
the issuance of any new Certificate under this Section 6.04, the Trustee or
the Transfer Agent and Registrar may require the payment by the
Certificateholder of a sum sufficient to cover any tax or other governmental
expenses (including the fees and expenses of the Trustee and Transfer Agent
and Registrar) connected therewith. Any Certificate issued pursuant to this
Section 6.04 shall constitute complete and indefeasible evidence of ownership
in the Trust, as if originally issued, whether or not the lost, stolen or
destroyed Certificate shall be found at any time.
Section 6.05 Persons Deemed Owners. Prior to due presentation of a
---------------------
Certificate for registration of transfer, the Trustee, the Paying Agent, the
Transfer Agent and Registrar and any agent of any of them may treat the
person in whose name any Certificate is registered as the owner of such
Certificate for the purpose of receiving distributions pursuant to Article IV
hereof and for all other purposes whatsoever, and neither the Trustee, the
Paying Agent, the Transfer Agent and Registrar nor any agent of any of them
shall be affected by any notice to the contrary. Notwithstanding the
foregoing provisions of this Section 6.05, in determining whether the holders
of the requisite Undivided Interests have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Certificates
owned by the Transferor, the Servicer or any affiliate thereof (as defined in
Rule 405 under the Securities Act of 1933, as amended), shall be disregarded
and deemed not to be outstanding, except that, in determining whether the
Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Certificates which
the Trustee knows to be so owned shall be so disregarded. Certificates so
owned which have been pledged in good faith shall not be disregarded and may
be regarded as outstanding if the pledgee establishes to the satisfaction of
the Trustee the pledgee's right so to act with respect to such Certificates
and that the pledgee is not the United States, the Servicer or an affiliate
thereof (as defined above).
Section 6.06 Appointment of Paying Agent. The Paying Agent shall make
---------------------------
distributions to Investor Certificateholders from the Collection Account (or
any other account or accounts maintained for the benefit of
Certificateholders as specified in the related Supplement for any Series)
pursuant to Articles IV and V hereof. Any Paying Agent shall have the
revocable power to withdraw funds from the Collection Account (or any other
account or accounts maintained for the benefit of Certificateholders as
specified in the related Supplement for any Series for the purpose of making
distributions referred to above. The Trustee may revoke such power and
remove the Paying Agent if the Trustee determines in its sole discretion that
the Paying Agent shall have failed to perform its obligations under this
Agreement in any material respect. The Paying Agent shall initially be the
Trustee and any co-paying agent chosen by the Transferor and acceptable to
the Trustee. The Trustee shall be permitted to resign as Paying Agent upon
30 days' written notice to the Trustee and the Transferor. In the event that
the Trustee shall no longer be the Paying Agent, the Transferor shall appoint
a successor to act as Paying Agent and such successor shall be
acceptable to the Trustee. The Trustee shall cause the initial Paying Agent
and each successor Paying Agent or any additional Paying Agent appointed by
the Transferor to execute and deliver to the Trustee an instrument in which
such initial or successor Paying Agent or additional Paying Agent shall agree
with the Trustee that, as Paying Agent, such initial or successor Paying
Agent or additional Paying Agent will hold all sums, if any, held by it for
payment to the Investor Certificateholders in trust for the benefit of the
Investor Certificateholders entitled thereto until such sums shall be paid to
such Certificateholders. The Paying Agent shall return all unclaimed funds
to the Trustee and upon removal of a Paying Agent shall also return all funds
in its possession to the Trustee. The provisions of Sections 11.01, 11.02
and 11.03 shall apply to the Trustee also in its role as Paying Agent, for so
long as the Trustee shall act as Paying Agent. Any reference in this
Agreement to the Paying Agent shall include any co-paying agent unless the
context requires otherwise.
Section 6.07 Access to List of Certificateholders' Names and
-----------------------------------------------
Addresses. The Transfer Agent and Registrar shall furnish to the Servicer
- ---------
(or the Paying Agent or any agent thereof), within five Business Days after
receipt by the Trustee of a request therefor from the Servicer or the Paying
Agent, respectively, in writing, a list in such form as the Servicer or the
Paying Agent may reasonably require, of the names and addresses of the
Investor Certificateholders. If three or more Holders of Investor
Certificates of any Class of any Series or holders representing Undivided
Interests in the Trust aggregating not less than 5% of the Invested Amount of
the Investor Certificates of any Class of any Series (the "Applicants")
----------
apply in writing to the Trustee, and such application states that the
Applicants desire to communicate with other Investor Certificateholders of
any Series with respect to their rights under this Agreement or under the
Investor Certificates and is accompanied by a copy of the communication which
such Applicants propose to transmit, then the Trustee, after having been
adequately indemnified by such Applicants for its costs and expenses shall
afford or shall cause the Transfer Agent and Registrar to afford such
Applicants access during normal business hours to the most recent list of
Certificateholders held by the Trustee, within five Business Days after the
receipt of such application. Such list shall be as of a date no more than 30
days prior to the date of receipt of such Applicants' request.
Every Certificateholder agrees with the Trustee that neither the
Trustee, the Transfer Agent and Registrar, nor any of their respective agents
shall be held accountable by reason of the disclosure of any such information
as to the names and addresses of the Certificateholders hereunder, regardless
of the sources from which such information was derived.
Section 6.08 Authenticating Agent.
--------------------
(a) The Trustee may appoint one or more authenticating agents with
respect to the Certificates which shall be authorized to act on behalf of the
Trustee in authenticating the Certificates in connection with the issuance,
delivery, registration of transfer, exchange or repayment of the
Certificates. Whenever reference is made in this Agreement to the
authentication of Certificates by the Trustee or the Trustee's certificate of
authentication, such reference shall be deemed to include authentication on
behalf of the Trustee by an authenticating agent and a certificate of
authentication executed on behalf of the Trustee by an authenticating agent.
Each authenticating agent must be reasonably acceptable to the Transferor.
(b) Any institution succeeding to the corporate agency business of
an authenticating agent shall continue to be an authenticating agent without
the execution or filing of any paper or any further act on the part of the
Trustee or such authenticating agent.
(c) An authenticating agent may at any time resign by giving
written notice of resignation to the Trustee and to the Transferor. The
Trustee may at any time terminate the agency of an authenticating agent by
giving notice of termination to such authenticating agent and to the
Transferor. Upon receiving such a notice of resignation or upon such a
termination, or in case at any time an authenticating agent shall cease to be
acceptable to the Trustee or the Transferor, the Trustee promptly may appoint
a successor authenticating agent. Any successor authenticating agent upon
acceptance of its appointment hereunder shall become agent ted with all the
rights, powers and duties of its predecessor hereunder, with like effect as
if originally named as an authenticating agent. No successor authenticating
agent shall be appointed unless acceptable to the Trustee and the Transferor.
(d) The Servicer agrees to pay, on behalf of the Trust, to each
authenticating agent from time to time reasonable compensation for its
services under this Section 6.08.
(e) The provisions of Sections 11.01, 11.02 and 11.03 shall be
applicable to any authenticating agent.
(f) Pursuant to an appointment made under this Section 6.08, the
Certificate, may have endorsed thereon, in lieu of the Trustee's certificate
of authentication, an alternate certificate of authentication in
substantially the following form:
This is one of the Certificates described in the within mentioned
Pooling and Servicing Agreement.
_________________________
_________________________
as Authenticating Agent
for the Trustee,
By: _____________________
Authorized Officer
Section 6.09 Tender of Exchangeable Transferor Certificate.
---------------------------------------------
(a) Upon any Exchange, the Trustee shall issue to the Transferor
under Section 6.01 for execution and redelivery to the Trustee for
authentication under Section 6.02 one or more new Series of Investor
Certificates. Any such Series of Investor Certificates shall be
substantially in the form specified in the applicable Supplement and shall
bear, upon its face, the designation for such Series to which it belongs so
selected by the Transferor. Except as specified in any Supplement for a
related Series, all Investor Certificates of any Series shall be equally and
ratably entitled as provided herein to the benefits hereof without
preference, priority or distinction on account of the actual time or times of
authentication and delivery, all in accordance with the terms and provisions
of this Agreement and the applicable Supplement.
(b) The Transferor may tender the Exchangeable Transferor
Certificate to the Trustee in exchange for (i) one or more newly issued
Series of Investor Certificates and (ii) a reissued Exchangeable Transferor
Certificate (any such tender a "Transferor Exchange"). In addition, to the
-------------------
extent permitted for any Series of Investor Certificates as specified in the
related Supplement, the Transferor may tender the Investor Certificates of
any Series and the Exchangeable Transferor Certificate to the Trustee
pursuant to the terms and conditions set forth in such Supplement in exchange
for, respectively (i) one or more newly issued Series of Investor
Certificates and (ii) a reissued Exchangeable Transferor Certificate (an
"Investor Exchange"). The Transferor Exchange and Investor Exchange are
-----------------
referred to collectively herein as an "Exchange." The Transferor may perform
--------
an Exchange by notifying the Trustee, in writing, at least five days in
advance (an "Exchange Notice") of the date upon which the Exchange is to
---------------
occur (an "Exchange Date"). Any Exchange Notice shall state the designation
-------------
of any Series to be newly issued on the Exchange Date and, with respect to
each such Series: (a) its Initial Invested Amount (or the method for
calculating such Initial Invested Amount), if any, which, in the aggregate,
at any
time, may not be greater than the current principal amount of the
Exchangeable Transferor Certificate less the current required Transferor
Amount, if any, at such time (or in the case of an Investor Exchange, the sum
of the Invested Amount of the Series of Investor Certificates to be exchanged
plus the current principal amount of the Exchangeable Transferor
Certificate), and (b) its Certificate Rate (or the method for allocating
interest payments or other cash flow to such newly issued Series), if any.
On the Exchange Date, the Trustee shall only authenticate and deliver the
Certificates of any such Series upon delivery to it of the following: (a) a
Supplement in form satisfactory to the Trustee executed by the Transferor and
specifying the Principal Terms of such Series, (b) the applicable
Enhancement, if any, (c) an Opinion of Counsel to the effect that the newly
issued Series of Investor Certificates will be characterized as either
indebtedness or an interest in a partnership under existing law for Federal
income tax purposes and that the issuance of the newly issued Series of
Investor Certificates will not have any material adverse impact on the
Federal income tax characterization of any outstanding Series of Investor
Certificates that have been the subject of a previous opinion of tax counsel,
(d) an agreement, if any, pursuant to which the Enhancement Provider agrees
to provide Enhancement, (e) written confirmation from each Rating Agency that
the Exchange will not result in the Rating Agency's reducing or withdrawing
its rating or otherwise adversely affect any rating on any then outstanding
Series rated by it and (f) the existing Exchangeable Transferor Certificate
or applicable Investor Certificates, as the case may be. Upon satisfaction
of such conditions, the Trustee shall cancel the existing Exchangeable
Transferor Certificate or applicable Investor Certificates, as the case may
be and issue, as provided above, such Series of Investor Certificates and a
new Exchangeable Transferor Certificate, dated the Exchange Date.
(c) In conjunction with an Exchange, the parties hereto shall
execute a Supplement, which shall specify the relevant terms with respect to
any Series of Investor Certificates, which may include, without limitation:
(i) its name or designation, (ii) an Initial Invested Amount or the method of
calculating the Initial Invested Amount, (iii) a Certificate Rate (or formula
for the determination thereof), (iv) the rights of the Transferor as Holder
of the Exchangeable Transferor Certificate that have been transferred to the
Holders of such Series pursuant to such Exchange (including any rights to
allocations of Collections), (v) the interest payment date or dates and the
date or dates from which interest shall accrue, (vi) the method of allocating
Principal Collections for such Series and, if applicable, with respect to
other Series and the method by which the principal amount of Investor
Certificates of such Series shall amortize or accrete and the method for
allocating Finance Charge Collections and Defaulted Receivables, (vii) the
names of any accounts to be used by such Series and the
terms governing the operation of any such accounts, (viii) the Servicing Fee
Percentage, (ix) the Minimum Transferor Interest Percentage, (x) Minimum
Aggregate Receivables, (xi) the Series Termination Date, (xii) the terms of
any Enhancement, (xiii) the Enhancement Provider, (xiv) the Base Rate,
(xv) the Repurchase Terms or the terms on which the Certificates of such
Series may be remarketed to other investors, (xvi) any deposit into any
account provided for such Series, (xvii) the number of Classes of such
Series, and if more than one Class, the rights and priorities of each such
Class, (xviii) whether the Certificates may be issued in bearer form and any
limitations imposed thereon, (xix) the priority of any Series with respect to
any other Series, and (xx) any other relevant terms of such Series (all such
terms, the "Principal Terms" of such Series). If on the date of the
---------------
issuance of such Series there is issued and outstanding no Series of Investor
Certificates which is currently rated by a Rating Agency, then as a condition
to such Exchange a nationally recognized investment banking firm or
commercial bank shall also deliver to the Trustee an officer's certificate
stating, in substance, that the Exchange will not have an adverse effect on
the timing or distribution of payments to such other Series of Investor
Certificates then issued and outstanding.
Section 6.10 (Reserved)
--------
Section 6.11 Book-Entry Certificates. Unless otherwise provided in
-----------------------
any related Supplement, the Investor Certificates, upon original issuance,
will be issued in the form of the requisite number of typewritten
Certificates representing the Book-Entry Certificates, to be delivered to The
Depository Trust Company, the initial Clearing Agency, by, or on behalf of,
the Transferor. The Investor Certificates shall initially be registered on
the Certificate Register in the name of CEDE & Co., the nominee of the
Depository Trust Company, and no Certificate Owner will receive a definitive
certificate representing such Certificate Owner's interest in the Investor
Certificates, except as provided in Section 6.13 of the Agreement. Unless
and until definitive, fully registered Investor Certificates (the "Definitive
----------
Certificates") have been issued to Certificate Owners pursuant to Section
- ------------
6.13 of the Agreement:
(i) the provision of this Section 6.11 shall be in full
force and effect;
(ii) all payments and notices to the Certificate Owners
shall be made to the Clearing Agency;
(iii) to the extent that the provisions of this Section 6.11
conflict with any other provisions of this Agreement, the provisions of
this Section 6.11 shall control but shall be subject to the provisions
of Section 6.05;
(iv) the rights of Certificate Owners shall be exercised
only through the Clearing Agency and the Clearing Agency Participants
and shall be limited to those established by law and agreements between
such Certificate Owners and the Clearing Agency and for the Clearing
Agency Participants. Pursuant to the Depository Agreement, unless and
until Definitive Certificates are issued pursuant to Section 6.13 of the
Agreement, the initial Clearing Agency will make book-entry transfers
among the Clearing Agency Participants and receive and transmit
distributions of principal and interest on the Investor Certificates to
such Clearing Agency Participants; and
(v) whenever this Agreement requires or permits actions to
be taken based upon instructions or directions of a specified percentage
of the Invested Amount of any or all Series of Certificates outstanding,
the Clearing Agency shall be deemed to represent such percentage only to
the extent that it has received instructions to such effect from
Certificate Owners and/or Clearing Agency Participants owning or
representing, respectively, such required percentage of the beneficial
interest in Investor Certificates.
Section 6.12 Notice to Clearing Agency. Whenever notice or other
-------------------------
communication to the Investor Certificateholders is required under this
Agreement, unless and until Definitive Certificates shall have been issued to
Certificate Owners pursuant to Section 6.13 of the Agreement, the Trustee,
the Servicer and the Paying Agent shall give all such notices and
communications specified herein to be given to Holders of the Investor
Certificates to the Clearing Agency or Agencies.
Section 6.13 Definitive Certificates. If Book-Entry Certificates have
-----------------------
been issued pursuant to Section 6.11 and if (i)(A) the Transferor advises the
Trustee in writing that the Clearing Agency is no longer willing or able to
discharge properly its responsibilities under the Depository Agreement, and
(B) the Trustee or the Transferor is unable to locate a qualified successor,
(ii) the Transferor at its option, advises the Trustee in writing that it
elects to terminate the book-entry system through the Clearing Agency or
(iii) after the occurrence of a Servicer Default, Certificate Owners
representing beneficial interests aggregating not less than 50% of the
Invested Amount of any Series advise the Trustee and the Clearing Agency
through the Clearing Agency Participants in writing that the continuation of
a book-entry system through the Clearing Agency is no longer in the best
interests of the Certificate Owners, the Trustee shall notify all Certificate
Owners, through each applicable Clearing Agency, of the occurrence of any
such event and of the availability of Definitive Certificates to Certificate
Owners requesting the same. Upon surrender to the Trustee of the
Investor Certificates by the Clearing Agency, accompanied by registration
instructions from the Clearing Agency for registration, the Trustee shall
issue the Definitive Certificates. Neither the Transferor, the Transfer
Agent and Registrar nor the Trustee shall be liable for any delay in delivery
of such instructions and may conclusively rely on, and shall be protected in
relying on, such instructions.
(END OF ARTICLE VI)
ARTICLE VII
OTHER MATTERS RELATING
TO THE TRANSFEROR
Section 7.01 Liability of the Transferor. The Transferor shall be
---------------------------
liable for each obligation, covenant, representation and warranty of the
Transferor, arising under or related to this Agreement or any Supplement.
Except as provided in the preceding sentence, the Transferor shall be liable
only to the extent of the obligations specifically undertaken by the
Transferor in its capacity as Transferor hereunder.
Section 7.02 Merger or Consolidation of, or Assumption of the
------------------------------------------------
Obligations of, the Transferor.
- ------------------------------
(a) The Transferor shall not consolidate with or merge into any
other corporation or convey or transfer its properties and assets
substantially as an entirety to any Person unless:
(i) the corporation formed by such consolidation or into
which the Transferor is merged or the Person which acquires by
conveyance or transfer the properties and assets of the Transferor
substantially as an entirety shall be, if the Transferor is not the
surviving entity, organized and existing under the laws of the United
States of America or any state or the District of Columbia, and shall be
a corporation, a savings and loan association, national association, a
bank or other entity and, if the Transferor is not the surviving entity,
shall expressly assume, by an agreement supplemental hereto, executed
and delivered to the Trustee, in form satisfactory to the Trustee, the
performance of every covenant and obligation of the Transferor
hereunder; and
(ii) the Transferor has delivered to the Trustee an
officers' certificate signed by a Vice President (or any more senior
officer) of the Transferor and an Opinion of Counsel each stating that
such consolidation, merger, conveyance or transfer and such supplemental
agreement comply with this Section 7.02 and that all conditions
precedent herein provided for relating to such transaction have been
complied with; and
(iii) the Transferor has delivered notice to each Rating
Agency of such consolidation, merger, conveyance or transfer and shall
have received written confirmation from each Rating Agency that such
consolidation, merger, conveyance or transfer would not cause a
reduction or withdrawal of the rating of any Series of Certificates then
outstanding.
(b) The obligations of the Transferor hereunder shall not be
assignable nor shall any Person succeed to the obligations of the Transferor
hereunder except in each case in accordance with the provisions of the
foregoing paragraph.
Section 7.03 Limitation on Liability of the Transferor. Subject to
-----------------------------------------
Sections 7.01 and 7.04 of the Agreement, neither the Transferor nor any of
its directors or officers or employees or agents in its capacity as
Transferor shall be under any liability to the Trust, the Trustee, the
Certificateholders or any other Person for any action taken or for refraining
from the taking of any action in the capacity as Transferor pursuant to this
Agreement whether arising from express or implied duties under this Agreement
or any Supplement; provided, however, that this provision shall not protect
-------- -------
the Transferor against any liability which would otherwise be imposed by
reason of willful misfeasance, bad faith or gross negligence in the
performance of duties or by reason of reckless disregard of obligations and
duties hereunder. The Transferor and any director or officer or employee or
agent of the Transferor may rely in good faith on any document of any kind
prima facie properly executed and submitted by any Person respecting any
- ----- -----
matters arising hereunder.
Section 7.04 Indemnification of the Trust by the Transferor.
----------------------------------------------
Notwithstanding anything to the contrary contained herein, the Transferor (i)
agrees to be liable directly to the injured party for the entire amount of
any losses, claims, damages, liabilities and expenses of the Trust to the
extent that the Transferor would be liable if the Trust were a partnership
under the Delaware Revised Uniform Limited Partnership Act in which the
Transferor was a general partner and (ii) shall indemnify and hold harmless
the Trust and the Trustee from and against any loss, liability, expense,
damage, claim or injury (other than those attributable to an Investor
Certificateholder in the capacity as an investor in the Investor Certificates
as a result of defaults on the Receivables) arising out of or based on this
Agreement by reason of any acts, omissions, or alleged acts or omissions
arising out of activities of the Trust or the Trustee, or the actions of the
Servicer including, but not limited to, amounts payable to the Servicer
pursuant to Section ____, any judgment, award, settlement, reasonable
attorneys' fees and other costs or expenses incurred in connection with the
defense of any actual or threatened action, proceeding or claim; provided
--------
that the Transferor shall not indemnify the Trustee (but shall indemnify any
other injured party) if such loss, liability, expense, damage or injury is
due to the Trustee's willful malfeasance, bad faith or gross negligence or by
reason of the Trustee's reckless disregard of its obligations hereunder. The
provisions of this indemnity shall run directly to and be
enforceable by an injured party subject to the limitations hereof.
(END OF ARTICLE VII)
ARTICLE VIII
OTHER MATTERS RELATING TO THE SERVICER
Section 8.01 Liability of the Servicer. The Servicer shall be liable
-------------------------
under this Agreement only to the extent of the obligations specifically
undertaken by the Servicer in its capacity as Servicer.
Section 8.02 Merger or Consolidation of, or Assumption of the
------------------------------------------------
Obligations of, the Servicer. The Servicer shall not consolidate with or
- ----------------------------
merge into any other corporation or convey or transfer its properties and
assets substantially as an entirety to any Person, unless:
(i) the corporation formed by such consolidation or into
which the Servicer is merged or the Person which acquires by conveyance
or transfer the properties and assets of the Servicer substantially as
an entirety shall be a corporation organized and existing under the laws
of the United States of America or any State or the District of
Columbia, and shall be a corporation, a savings and loan association, a
national association, a bank or other entity and, if the Servicer is not
the surviving entity, such corporation shall expressly assume, by an
agreement supplemental hereto executed and delivered to the Trustee in a
form satisfactory to the Trustee, the performance of every covenant and
obligation of the Servicer hereunder (provided that this Section 8.02(i)
shall not be construed to extend to mergers of subsidiaries of the
Servicer into the Servicer as long as the Servicer is the surviving
entity); and
(ii) the Servicer has delivered to the Trustee an officer's
certificate signed by a Vice President (or more senior officer) of the
Servicer stating that such consolidation, merger, conveyance or transfer
comply with this Section 8.02 and that all conditions precedent herein
provided for relating to such transaction have been complied with and if
an agreement supplemental hereto has been executed as contemplated by
clause (i) above, an Opinion of Counsel stating that such supplemental
agreement is a legal, valid and standing obligation of the Servicer
enforceable against the Servicer in accordance with its terms; and
(iii) the Servicer has delivered notice to each Rating Agency
of such consolidation, merger, conveyance or transfer and shall have
received written confirmation from each Rating Agency that such
consolidation, merger, conveyance or transfer would not cause a
reduction or withdrawal of the rating of any Series of Certificates then
outstanding.
Section 8.03 Limitation on Liability of the Servicer and Others.
--------------------------------------------------
Except as provided in Section 8.04 of the Agreement with respect to the Trust
and the Trustee, neither the Servicer nor any of the directors or officers or
employees or agents of the Servicer shall be under any liability to the
Trust, the Trustee, the Certificateholders or any other person for any action
taken or for refraining from the taking of any action in its capacity as
Servicer pursuant to this Agreement or any Supplement; provided, however,
-------- -------
that this provision shall not protect the Servicer against any liability
which would otherwise be imposed by reason of willful misfeasance, bad faith
or gross negligence in the performance of duties or by reason of reckless
disregard of obligations and duties hereunder. The Servicer and any director
or officer or employee or agent of the Servicer may rely in good faith on any
document of any kind prima facie properly executed and submitted by any
----- -----
Person respecting any matters arising hereunder. The Servicer shall not be
under any obligation to appear in, prosecute or defend any legal action which
is not incidental to its duties to service the Receivables in accordance with
this Agreement or any Supplement which in its reasonable opinion may involve
it in any expense or liability.
Section 8.04 Servicer Indemnification of the Trust and the Trustee.
-----------------------------------------------------
The Servicer shall indemnify and hold harmless the Trust, for the benefit of
the CertificatehoLders, and the Trustee, including its officers, directors
and employees from and against any loss (excluding any investment loss),
liability, expense, damage or injury suffered or sustained in connection with
the acceptance of performance of the trusts and duties herein contained in
any Supplement, including those arising from acts or omissions of the
Servicer pursuant to this Agreement or any Supplement, including but not
limited to any judgment, award, settlement, reasonable attorneys' fees and
expenses and other costs or expenses incurred in connection with the defense
of any actual or threatened action, proceeding or claim, provided that except
in the case of any proceeding, action or claim which may involve a conflict
between the interests on the Servicer and those of the Trustee, Trustee or
Certificateholders, such attorneys to be reasonably acceptable to the
Servicer provided, however, that the Servicer shall not indemnify the Trust
-------- -------
or the Trustee or its officers, directors or employees for such loss,
liability, expense, damage or injury to the extent such loss, liability,
expense, damage or injury shall be due to the fraud, negligence or willful
misconduct by the Trustee or its officers, directors or employees; provided,
--------
further, that the Servicer shall not indemnify the Trust, the Trustee or its
- -------
officers, directors or employees or the Investor Certificateholders for any
liability, cost or expense of the Trust or the Trustee or its officers,
directors or employees with respect to any action taken by the Trustee at the
request of the Investor Certificateholders nor with respect to any Federal,
state or local income or
franchise taxes (or any interest or penalties with respect thereto) required
to be paid by the Trust or the Investor Certificateholders in connection
herewith to any taxing authority. Subject to Sections 7.01 and 7.04 and
Section 10.02(b) of the Agreement, any indemnification pursuant to this
Section shall be only from the assets of the Servicer. The provisions of
this indemnity shall run directly to and be enforceable by an injured party
subject to the limitations hereof and shall survive the termination of the
Agreement and payment in full of the Certificates.
Section 8.05 The Servicer Not to Resign. The Servicer shall not
--------------------------
resign from the obligations and duties hereby imposed on it except (a) upon
determination that (i) the performance of its duties hereunder is no longer
permissible under applicable law and (ii) there is no reasonable action which
the Servicer could take to make the performance of its duties hereunder
permissible under applicable law or (b) upon the satisfaction of the
following conditions, (i) upon the assumption, by an agreement supplemental
hereto, executed by and delivered to the Trustee in form satisfactory to the
Trustee, of the obligations and duties of the Servicer hereunder by the
proposed Successor Servicer, (ii) the written confirmation by Rating Agencies
that the then rating of the Certificates will not, solely as a result of such
transfer, be reduced or withdrawn, (iii) the delivery to the Trustee of an
Opinion of Counsel to the effect that such transfer will not have any
material adverse impact on the Federal income tax characterization of any
outstanding Series of Investor Certificates that have been the subject of a
previous opinion of tax counsel and (iv) the proposed Successor Servicer has
a net worth of not less than $100,000,000 and its regular business includes
the servicing of credit card receivables. If the Trustee is unable within
120 days of the date of such determination to appoint a Successor Servicer
pursuant to Section 10.02, the Trustee shall serve as Successor Servicer
hereunder but shall have continued authority to appoint another Person as
Successor Servicer. Any such determination permitting the resignation of the
Servicer shall be evidenced as to clause (a) above by an Opinion of Counsel
to such effect delivered to the Trustee. No such resignation shall become
effective until the Trustee or a Successor Servicer shall have assumed the
responsibilities and obligations of the Servicer in accordance with Section
10.02 of the Agreement as if a Termination Notice had been given.
Section 8.06 Access to Certain Documentation and Information Regarding
---------------------------------------------------------
the Receivables. The Servicer shall provide to the Trustee reasonable access
- ---------------
to the documentation regarding the Accounts and the Receivables in such cases
where the Trustee is required in connection with the performance of its
obligation under this Agreement or any Supplement, the enforcement of the
rights of the Investor Certificateholders, or
by applicable statutes or regulations to review such documentation, such
access being afforded without charge but only (i) upon reasonable request,
(ii) during normal business hours, (iii) subject to the Servicer's normal
security and confidentiality procedures and (iv) at offices designated by the
Servicer. Nothing in this Section 8.06 shall derogate from the obligation of
the Transferor, the Trustee or the Servicer to observe any applicable law
prohibiting disclosure of information regarding the Obligors and the failure
of the Servicer to provide access as provided in this Section 8.06 as a
result of such obligation shall not constitute a breach of this Section 8.06.
Section 8.07 Delegation of Duties. In the ordinary course of
--------------------
business, the Servicer may at any time delegate any duties hereunder to any
Person who agrees to conduct such duties in accordance with the Credit Card
Guidelines and this Agreement; however, if such delegation is not in the
ordinary course of the Servicer's business, written notice shall be given to
the Trustee and each Rating Agency of such delegation. Any delegation shall
not relieve the Servicer of its liability and responsibility with respect to
such duties, and shall not constitute a resignation within the meaning of
Section 8.05 of the Agreement.
Section 8.08 Examination of Records. Each of the Transferor and the
----------------------
Servicer shall indicate clearly and unambiguously in its computer files or
other records that the Receivables arising in the Accounts have been
transferred to the Trust pursuant to this Agreement for the benefit of the
Investor Certificateholders. Each of the Transferor and the Servicer shall,
prior to the sale or transfer to a third party of any receivable held in its
custody, examine its computer and other records to determine that such
receivable is not a Receivable.
(END OF ARTICLE VIII)
ARTICLE IX
AMORTIZATION EVENTS
Section 9.01 Amortization Events. Unless modified with respect to any
-------------------
Series of Investor Certificates by any related Supplement, if any one of the
following events shall occur:
(a) the Originator, Bridgestone/Firestone or the Transferor
voluntarily seeks, consents to or acquiesces in the benefit or benefits of
any Debtor Relief Law or becomes a party to (or is made the subject of) any
proceeding provided for by any Debtor Relief Law, other than as creditor or
claimant, and in the event such proceeding is involuntary, the petition
instituting same is not dismissed within 90 days of its filing or the
Originator or the Transferor shall become unable for any reason to transfer
Receivables to the Trust in accordance with the provisions of this Agreement;
or
(b) the Trust shall become an "investment company" within the
meaning of the Investment Company Act of 1940, as amended;
then an "Amortization Event" with respect to all Series of Certificates shall
occur without any notice or other action on the part of the Trustee or
Investor Certificateholders.
Upon the occurrence and during the continuance of any involuntary
proceeding under any Debtor Relief Law with respect to the Transferor or the
Originator, the Transferor shall not transfer any Receivables hereunder to
the Trust.
Section 9.02 Additional Rights Upon the Occurrence of Certain Events.
-------------------------------------------------------
(a)If either the Transferor or Bridgestone/Firestone (i) seeks,
consents to or acquiesces in the benefit or benefits of any Debtor Relief Law
or becomes a party to (or is made the subject of) any proceeding provided for
by any Debtor Relief Law, other than as creditor or claimant, and in the
event such proceeding is involuntary, the petition instituting the same is
not dismissed within (90) days of its filing or (ii) goes into liquidation or
any other Person shall be appointed as a bankruptcy trustee or receiver or
conservator of the Transferor or Bridgestone/Firestone, the Transferor shall
on the day of such appointment (the "Appointment Date") immediately
----------------
cease to transfer Receivables to the Trust and the Transferor or Bridgestone
/Firestone as applicable, shall promptly give notice to the Trustee of such
appointment. Notwithstanding any cessation of the transfer to the Trust of
additional Receivables, Receivables transferred to the Trust prior to the
occurrence of any such voluntary or involuntary event and all Collections
thereof, including Finance Charge Collections (other than Discount Option
Receivable Collections), whenever created or accrued in respect of such
Receivables shall continue to be a part of the Trust. Within 15 days of the
Appointment Date, the Trustee shall (i) publish a notice in an Authorized
Newspaper that a bankruptcy trustee or receiver, as the case may be, of the
Transferor has been appointed and that the Trustee intends to sell, dispose
of or otherwise liquidate the Receivables or interest therein (as described
below) on commercially reasonable terms and in a commercially reasonable
manner and (ii) send written notice to the Investor Certificateholders
describing the provisions of this Section 9.02 and requesting instructions
from such Holders. Unless otherwise prohibited by law or unless within 60
days from the day notice pursuant to clause (i) above is first published, the
Trustee shall have received written instructions of Holders of Investor
Certificates representing Undivided Interests aggregating more than 50% of
the Invested Amount of each Series (or, with respect to Series having more
than one class, each class of such Series) to the effect that such
Certificateholders disapprove of the liquidation of the Receivables or
interest therein (as described below) and wish to continue receiving
Receivables under the Trust as before such appointment, the Trustee shall
proceed to sell, dispose of, or otherwise liquidate the Receivables, in a
commercially reasonable manner and on commercially reasonable terms, which
shall include the solicitation of competitive bids. The Trustee may obtain a
prior determination from such bankruptcy trustee or receiver that the terms
and manner of any proposed sale, disposition or liquidation are commercially
reasonable. The provisions of Section 9.01 and this Section 9.02 are not
mutually exclusive.
(b) The proceeds from the sale, disposition or liquidation of the
Receivables or interest therein pursuant to Section (a) above shall be
treated as Collections on the Receivables and shall be allocated in
accordance with the provisions of Article IV with respect to any Series as to
which such sale, disposition or liquidation relates; provided that the
--------
Trustee shall determine conclusively the amount of such proceeds which are
allocable to Finance Charge Collections and the amount of such proceeds which
are allocable to Principal Collections; provided, however, that any amounts
-------- -------
payable to the Holder of the Exchangeable Transferor Certificate shall be
payable to the Trustee to the extent of the reasonable costs, fees and
expenses incurred by the Trustee in connection with such sale, liquidation or
other disposition. On the day following the Distribution Date on which such
proceeds are distributed to the Investor Certificateholders, the Trust shall
terminate.
(END OF ARTICLE IX)
ARTICLE X
SERVICER DEFAULTS
Section 10.01 Servicer Defaults. If any one of the following events
-----------------
(a "Servicer Default") shall occur and be continuing:
----------------
(a) failure by the Servicer to make any payment, transfer or
deposit or to give instructions or to give notice to the Trustee to make such
payment, transfer or deposit or any withdrawal or to give notice to the
Trustee as to any required drawing or payment under any Enhancement on or
before the date occurring five Business Days after the date such payment,
transfer or deposit or such instruction or notice is required to be made or
given, as the case may be, under the terms of this Agreement or any
Supplement;
(b) failure on the part of the Servicer duly to observe or perform
any other covenants or agreements of the Servicer set forth in this Agreement
or any Supplement which could reasonably have a material adverse effect on
the Certificateholders (other than a failure with respect to which there is
no reasonable likelihood of such an effect), which continues unremedied for a
period of 60 days after the earlier of discovery by the Servicer or the date
on which written notice of such failure, requiring the same to be remedied,
shall have been given to the Servicer by the Trustee, or to the Servicer and
the Trustee by the Holders of Investor Certificates evidencing Undivided
Interests in the Trust aggregating not less than 50% of the Invested Amount
of any Series adversely affected thereby; or the Servicer shall assign its
duties under this Agreement, except as permitted by Section 8.07;
(c) any representation, warranty or certification made by the
Servicer in this Agreement, any Supplement or in any certificate delivered
pursuant to this Agreement or any Supplement shall prove to have been
incorrect when made, which could reasonably have a material adverse effect on
the rights of the Certificateholders and which material adverse effect
continues for Certificateholders for a period of 60 days after the date on
which written notice thereof, requiring the same to be remedied, shall have
been given to the Servicer by the Trustee, or to the Servicer and the Trustee
by the Holders of Investor Certificates evidencing Undivided Interests in the
Trust aggregating not less than 50% of the Invested Amount of any Series
adversely affected thereby; or
(d) the Servicer voluntarily seeks, consents to or acquiesces in
the benefit or benefits of any Debtor Relief Law or becomes a party to (or is
made the subject of) any proceeding provided for by any Debtor Relief Law,
other than as creditor or
claimant, and in the event such proceeding is involuntary, the petition
instituting the same is not dismissed within 90 days of its filing;
then, in the event of any Servicer Default, so long as the Servicer Default
shall not have been remedied, either the Trustee, or the Holders of Investor
Certificates evidencing Undivided Interests aggregating more than 50% of the
Aggregate Invested Amount, by notice then given in writing to the Servicer
(and to the Trustee if given by the Investor Certificateholders) (a
"Termination Notice"), may terminate all but not less than all of the rights
------------------
and obligations of the Servicer as Servicer under this Agreement and in and
to the Receivables and the proceeds thereof. After receipt by the Servicer
of a Termination Notice, and on the date that a Successor Servicer shall have
been appointed by the Trustee pursuant to Section 10.02 of the Agreement, all
authority and power of the Servicer under this Agreement shall pass to and be
vested in a Successor Servicer (a "Service Transfer"); and, without
----------------
limitation, the Trustee is hereby authorized and empowered (upon the failure
of the Servicer to cooperate) to execute and deliver, on behalf of the
Servicer, as attorney-in-fact or otherwise, all documents and other
instruments upon the failure of the Servicer to execute or deliver such
documents or instruments, and to do and accomplish all other acts or things
necessary or appropriate to effect the purposes of such Service Transfer.
The Trustee shall, as soon as practicable, notify the Servicer Letter of
Credit Bank of such Service Transfer and surrender the Servicer Letter of
Credit to the Servicer Letter of Credit Bank for cancellation. The Servicer
agrees to cooperate with the Trustee and such Successor Servicer in effecting
the termination of the responsibilities and rights of the Servicer to conduct
servicing hereunder, including, without limitation, the transfer to such
Successor Servicer of all authority of the Servicer to service the
Receivables provided for under this Agreement, including, without limitation,
all authority over all Collections which shall on the date of transfer be
held by the Servicer for deposit, or which have been deposited by the
Servicer, in the Collection Account, or which shall thereafter be received
with respect to the Receivables, and in assisting the Successor Servicer.
The Servicer shall promptly transfer its electronic records relating to the
Receivables to the Successor Servicer in such electronic form as the
Successor Servicer may reasonably request and shall promptly transfer to the
Successor Servicer all other records, correspondence and documents necessary
for the continued servicing of the Receivables in the manner and at such
times as the Successor Servicer shall reasonably request. To the extent that
compliance with this Section 10.01 shall require the Servicer to disclose to
the Successor Servicer information of any kind which the Servicer reasonably
deems to be confidential, the Successor Servicer shall be required to enter
into such customary licensing and
confidentiality and nondisclosure agreements as the Servicer shall deem
reasonably necessary to protect its interest.
Notwithstanding the foregoing, a delay in or failure of performance
under Section 10.01(a) of the Agreement for a period of 10 Business Days or
under Section 10.01(b) or (c) of the Agreement for a period of 60 Business
Days, shall not constitute a Servicer Default, if such delay or failure could
not be prevented by the exercise of reasonable diligence by the Servicer and
such delay or failure was caused by an Act of God or the public enemy, acts
of declared or undeclared war, public disorder, rebellion or sabotage,
epidemics, landslides, lightning, fire, hurricanes, earthquakes, floods or
similar causes. The preceding sentence shall not relieve the Servicer from
using its best efforts to perform its respective obligations in a timely
manner in accordance with the terms of this Agreement and the Servicer shall
provide the Trustee, any Enhancement Provider, the Transferor and the
Investor Certificateholders with an Officers' Certificate giving prompt
notice of such failure or delay by it, together with a description of its
efforts to so perform its obligations. The Servicer shall immediately notify
the Trustee in writing of any Servicer Default.
Section 10.02 Trustee to Act; Appointment of Successor.
----------------------------------------
(a) On and after the receipt by the Servicer of a Termination
Notice pursuant to Section 10.01, the Servicer shall continue to perform all
servicing functions under this Agreement until the date specified in the
Termination Notice or otherwise specified by the Trustee in writing or, if no
such date is specified in such Termination Notice, or otherwise specified by
the Trustee, until a date mutually agreed upon by the Servicer and Trustee.
The Trustee shall as promptly as possible after the giving of a Termination
Notice, and with the consent of any Enhancement Provider (unless the
applicable Supplement specifies otherwise) and the Originator, which consent
shall not be unreasonably withheld, appoint an Eligible Servicer a successor
servicer (the "Successor Servicer"), and such Successor Servicer
------------------
shall accept its appointment by a written assumption in a form acceptable to
the Trustee. In the event that a Successor Servicer has not been appointed
or has not accepted its appointment at the time when the Servicer ceases to
act as Servicer, the Trustee without further action shall automatically be
appointed the Successor Servicer. The Trustee may delegate any of its
servicing obligations to an affiliate or agent in accordance with Section
3.01(b) of the Agreement. Notwithstanding the above, the Trustee shall, if
it is unable so to act, petition a court of competent jurisdiction to appoint
any established institution having a net worth of not less than $100,000,000
and whose regular business includes the servicing of credit card receivables
as the Successor Servicer hereunder. The
Servicer shall immediately give notice to each Rating Agency upon the
appointment of a Successor Servicer.
(b) Upon its appointment, the Successor Servicer shall be the
successor in all respects to the Servicer with respect to servicing functions
under this Agreement and shall be subject to all the responsibilities, duties
and liabilities relating thereto placed on the Servicer by the terms and
provisions hereof, and all references in this Agreement to the Servicer shall
be deemed to refer to the Successor Servicer except for the references in
Sections 8.04 and 11.05 of the Agreement which shall continue to refer to
Bridgestone/Firestone; provided, however, that (i) Bridgestone/Firestone
-------- -------
shall not indemnify the Trust or the Trustee if the acts, omissions or
alleged acts or omissions upon which a claim for indemnification arises
pursuant to Section 8.04 of the Agreement constitute fraud, gross negligence,
breach of fiduciary duty or willful misconduct by a Successor Servicer (which
obligation shall be assumed by the Successor Servicer) and (ii)
Bridgestone/Firestone shall not pay or reimburse the Trustee pursuant to
Section 11.05 of the Agreement for any expense, disbursement or advance of
the Trustee related to or arising as a result of the gross negligence or bad
faith of the Successor Servicer (which obligation shall be assumed by the
Successor Servicer). The Successor Servicer shall expressly be authorized,
subject to Section 8.07 of the Agreement, to delegate any of its duties
hereunder to Bridgestone/Firestone for a reasonable period on and after the
date of any Servicer Transfer pursuant to this Article X. Any Successor
Servicer, by its acceptance of its appointment, will automatically agree to
be bound by the terms and provisions of any agreement under which an
Enhancement Provider agrees to provide Enhancement for a Series.
(c) In connection with any Termination Notice, the Trustee will
review any bids which it obtains from Eligible Servicers and shall be
permitted to appoint any Eligible Servicer submitting such a bid as a
Successor Servicer for servicing compensation not in excess of the Servicing
Fee; provided, however, that no such monthly compensation paid out of
-------- -------
Collections shall be in excess of the Monthly Servicing Fee permitted to the
Servicer pursuant to Section 3.02.
(d) All authority and power granted to the Successor Servicer
under this Agreement shall automatically cease and terminate upon termination
of the Trust pursuant to Section 12.01, and shall pass to and be vested in
the Transferor and, without limitation, the Transferor is hereby authorized
and empowered to execute and deliver, on behalf of the Successor Servicer, as
attorney-in-fact or otherwise, all documents and other instruments, and to do
and accomplish all other acts or things necessary or appropriate to effect
the purposes of such transfer of servicing rights. The Successor Servicer
agrees to cooperate with the Transferor in effecting the termination of the
responsibilities and rights of the Successor Servicer to conduct servicing on
the Receivables. The Successor Servicer shall transfer its electronic
records relating to the Receivables to the Transferor in such electronic form
as the Transferor may reasonably request and shall transfer all other
records, correspondence and documents to the Transferor in the manner and at
such times as the Transferor shall reasonably request. To the extent that
compliance with this Section 10.02 shall require the Successor Servicer to
disclose to the Transferor information of any kind which the Successor
Servicer deems to be confidential, the Transferor shall be required to enter
into such customary licensing and confidentiality agreements as the Successor
Servicer shall deem necessary to protect its interests.
Section 10.03 Notification to Certificateholders. Upon the occurrence
----------------------------------
of any Servicer Default, the Servicer shall give prompt written notice
thereof to the Trustee, any Enhancement Provider and each Rating Agency and
the Trustee shall give notice to the Investor Certificateholders at their
respective addresses appearing in the Certificate Register. Upon any
termination or appointment of a Successor Servicer pursuant to this Article
X, the Trustee shall give prompt written notice thereof to each Rating
Agency, any Enhancement Provider and to Investor Certificateholders at their
respective addresses appearing in the Certificate Register.
Section 10.04 Waiver of Past Defaults. The Holders of Investor
-----------------------
Certificates evidencing Undivided Interests aggregating more than 66-2/3% of
the Invested Amount of each Series affected by any default by the Servicer
may, on behalf of all Certificateholders, waive any default by the Servicer
in the performance of its obligations hereunder and its consequences, except
a default in the failure to make any required deposits or payments of
interest or principal with respect to any Series of Certificates. Upon any
such waiver of a past default, such default shall cease to exist, and any
default arising therefrom shall be deemed to have been remedied for every
purpose of this Agreement. No such waiver shall extend to any subsequent or
other default or impair any right consequent thereon except to the extent
expressly so waived.
(END OF ARTICLE X)
ARTICLE XI
THE TRUSTEE
Section 11.01 Duties of Trustee.
-----------------
(a) The Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Agreement, and no implied
covenants or obligations shall be read into this Agreement. If a Servicer
Default to the actual knowledge of a Responsible Officer of the Trustee has
occurred (which has not been cured or waived), the Trustee shall exercise
such of the rights and powers vested in it by this Agreement or any
Supplement, as the case may be, and use the same degree of care and skill in
their exercise, as a prudent man would exercise or use under the
circumstances in the conduct of his own affairs.
(b) The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments
furnished to the Trustee which are specifically required to be furnished
pursuant to any provision of this Agreement or any Supplement, shall examine
them to determine whether they substantially conform to the requirements of
this Agreement or any Supplement.
(c) Subject to Section 11.01(a), no provision of this Agreement or
any Supplement shall be construed to relieve the Trustee from liability for
its own negligent action, its own negligent failure to act or its own willful
misconduct; provided, however, that:
-------- -------
(i) The Trustee shall not be liable for an error of judgment
made in good faith by a Responsible Officer or Responsible Officers of
the Trustee, unless it shall be proved that the Trustee was negligent in
ascertaining the pertinent facts;
(ii) The Trustee shall not be liable with respect to any
action taken, suffered or omitted to be taken by it in good faith in
accordance with the direction of the Holders of Investor Certificates
evidencing Undivided Interests in the Trust aggregating more than 50% or
such other amount as may be set forth in any Supplement for a Series of
the Invested Amount of any Series pursuant to Section 11.14; and
(iii) The Trustee shall not be charged with knowledge of any
failure by the Servicer to comply with any of its obligations, including
the obligations of the Servicer referred to in clauses (a), (b) and (c)
of Section 10.01, unless a Responsible Officer of the Trustee obtains
actual knowledge of such failure.
(d) The Trustee shall not be required to expend or risk its own
funds or otherwise incur financial liability in the performance of any of its
duties hereunder, or in the exercise of any of its rights or powers, if there
is reasonable ground for believing that the repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured
to it, and none of the provisions contained in this Agreement or any
Supplement shall in any event require the Trustee to perform, or be
responsible for the manner of performance of, any obligations of the Servicer
under this Agreement or any Supplement except during such time, if any, as
the Trustee shall be the successor to, and be vested with the rights, duties,
powers and privileges of, the Servicer in accordance with the terms of this
Agreement or any Supplement.
(e) Except for actions expressly authorized by this Agreement or
any Supplement, the Trustee shall take no action reasonably likely to impair
the interests of the Trust in any Receivable now existing or hereafter
created or to impair the value of any Receivable now existing or hereafter
created.
(f) Except as specifically provided in this Agreement, the Trustee
shall have no power to vary the corpus of the Trust.
(g) In the event that the Paying Agent or the Transfer Agent and
Registrar shall fail to perform any obligation, duty or agreement in the
manner or on the day required to be performed by the Paying Agent or the
Transfer Agent and Registrar, as the case may be, under this Agreement, the
Trustee shall be obligated as soon as possible upon actual knowledge of a
Responsible Officer thereof and receipt of appropriate records, if any, to
perform such obligation, duty or agreement in the manner so required.
(h) Any action, suit or proceeding brought in respect of one or
more particular Series shall have no effect on the Trustee's rights, duties
and obligations hereunder with respect to any one or more Series not the
subject of such action, suit or proceeding.
Section 11.02 Rights of the Trustee. Except as otherwise provided in
---------------------
Section 11.01:
(a) The Trustee may rely on and shall be protected in acting on,
or in refraining from acting in accord with, any resolution, Officers'
Certificate, Opinion of Counsel, certificate of auditors or any other
certificate, statement, instrument, opinion, report, notice, request,
consent, order, appraisal, bond or other paper or document believed by it to
be genuine and to have been signed or presented to it pursuant to this
Agreement or any Supplement by the proper party or parties;
(b) The Trustee may reasonably consult with counsel and any
Opinion of Counsel shall be full and complete authorization and protection in
respect of any action taken or suffered or omitted by it hereunder in good
faith and in accordance with such Opinion of Counsel;
(c) Subject to Section 11.01(a), the Trustee shall be under no
obligation to exercise any of the rights or powers vested in it by this
Agreement or any Supplement, or to institute, conduct or defend any
litigation hereunder or in relation hereto, at the request, order or
direction of any of the Certificateholders, pursuant to the provisions of
this Agreement or any Supplement, unless such Certificateholders shall have
offered to the Trustee reasonable security or indemnity against the costs,
expenses and liabilities which may be incurred therein or thereby;
(d) The Trustee shall not be liable for any action taken, suffered
or omitted by it in good faith and believed by it to be authorized or within
the discretion or rights or powers conferred upon it by this Agreement or any
Supplement;
(e) The Trustee shall not be bound to make any investigation into
the facts of matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval, bond
or other paper or document, unless requested in writing so to do by Holders
of Investor Certificates evidencing Undivided Interests aggregating more than
50% of the Invested Amount of any Series which could be adversely affected if
the Trustee does not perform such acts;
(f) The Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through agents or
attorneys or custodians, and the Trustee shall not be responsible for any
misconduct or negligence on the part of any such agent, attorney or custodian
appointed with due care by it hereunder;
(g) Except as may be required by Section 11.01(a) of the
Agreement, the Trustee shall not be required to make any initial or periodic
examination of any documents or records related to the Receivables or the
Accounts for the purpose of establishing the presence or absence of defects,
the compliance by the Transferor and Servicer with their representations and
warranties or for any other purpose; and
(h) Whether or not therein expressly so provided, every provision
of this Agreement relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of
this Section 11.02.
Section 11.03 Trustee Not Liable for Recitals in Certificates. The
-----------------------------------------------
Trustee assumes no responsibility for the correctness of the recitals
contained herein and in the Certificates (other than the certificate of
authentication on the Certificates). Except as set forth in Section 11.15 of
the Agreement, the Trustee makes no representations as to the validity or
sufficiency of this Agreement or any Supplement or of the Certificates (other
than the certificate of authentication on the Certificates) or of any
Receivable or related document. The Trustee shall not be accountable for the
use or application by the Transferor of any of the Certificates or of the
proceeds of such Certificates, or for the use or application of any funds
paid to the Transferor in respect of the Receivables or deposited in the
Collection Account or other Accounts now or hereafter established to
effectuate the transactions contemplated herein and in accordance with the
terms hereof.
Section 11.04 Trustee May Own Certificates. The Trustee in its
----------------------------
individual or any other capacity may become the owner or pledgee of Investor
Certificates with the same rights as it would have if it were not the
Trustee.
Section 11.05 The Servicer to Pay Trustee's Fees and Expenses. The
-----------------------------------------------
Servicer covenants and agrees to pay to the Trustee from time to time, and
the Trustee shall be entitled to receive, reasonable compensation (which
shall not be limited by any provision of law in regard to the compensation of
a trustee of an express trust) for all services rendered by it in the
execution of the trust hereby created and in the exercise and performance of
any of the powers and duties hereunder of the Trustee, and, subject to
Section 8.04, the Servicer will pay or reimburse the Trustee upon its request
for all reasonable expenses, disbursements and advances incurred or made by
the Trustee in accordance with any of the provisions of this Agreement or any
Supplement (including the reasonable fees and expenses of its agents and
counsel) except any such expense, disbursement or advance as may arise from
its negligence or bad faith and except as provided in the following sentence.
If the Trustee is appointed Successor Servicer pursuant to Section 10.02, the
provision of this Section 11.05 shall not apply to expenses, disbursements
and advances made or incurred by the Trustee in its capacity as Successor
Servicer, which shall be covered out of the Servicing Fee.
Section 11.06 Eligibility Requirements for Trustee. The Trustee
------------------------------------
hereunder shall at all times be a corporation organized and doing business
under the laws of the United States of America or any state thereof
authorized under such laws to exercise corporate trust powers, having a
combined capital and surplus of at least $50,000,000 and subject to
supervision or examination by Federal or state authority. If such
corporation publishes reports of condition at least annually, pursuant to law
or to the
requirements of the aforesaid supervising or examining authority, then for
the purpose of this Section 11.06, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set
forth in its most recent report of condition so published. In case at any
time the Trustee shall cease to be eligible in accordance with the provisions
of this Section 11.06, the Trustee shall resign immediately in the manner and
with the effect specified in Section 11.07.
Section 11.07 Resignation or Removal of Trustee.
---------------------------------
(a) The Trustee may at any time resign and be discharged from the
trust hereby created by giving written notice thereof to the Transferor and
the Servicer. Upon receiving such notice of resignation, the Transferor
shall promptly appoint a successor trustee by written instrument, in
duplicate, one copy of which instrument shall be delivered to the resigning
Trustee and one copy to the successor trustee. If no successor trustee shall
have been so appointed and have accepted appointment within 30 days after the
giving of such notice of resignation, the resigning Trustee may petition any
court of competent jurisdiction for the appointment of a successor trustee.
(b) If at any time the Trustee shall cease to be eligible in
accordance with the provisions of Section 11.06 of the Agreement and shall
fail to resign after written request therefor by the Servicer, or if at any
time the Trustee shall be legally unable to act, or shall be adjudged a
bankrupt or insolvent, or if a receiver of the Trustee or of its property
shall be appointed, or any public officer shall take charge or control of the
Trustee or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation, then the Servicer may remove the Trustee and
promptly appoint a successor trustee by written instrument, in duplicate, one
copy of which instrument shall be delivered to the Trustee so removed and one
copy to the successor trustee.
(c) Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section 11.07
shall not become effective until acceptance of appointment by the successor
trustee as provided in Section 11.08.
Section 11.08 Successor Trustee.
-----------------
(a) Any successor trustee appointed as provided in Section 11.07
of the Agreement shall execute, acknowledge and deliver to the Transferor and
to its predecessor Trustee an instrument accepting such appointment
hereunder, and thereupon the resignation or removal of the predecessor
Trustee shall become effective and such successor trustee, without any
further
act, deed or conveyance, shall become fully vested with all the rights,
powers, duties and obligations of its predecessor hereunder and under any
Supplement with like effect as if originally named as Trustee herein. The
predecessor Trustee shall deliver to the successor trustee at the expense of
the Servicer, all documents or copies thereof, and statements held by it
hereunder; and the Transferor and the predecessor Trustee shall execute and
deliver such instruments and do such other things as may reasonably be
required for fully and certainly vesting and confirming in the successor
trustee all such rights, power, duties and obligations. The Servicer shall
immediately give notice to each Rating Agency upon the appointment of a
successor trustee.
(b) No successor trustee shall accept appointment as provided in
this Section 11.08 unless at the time of such acceptance such successor
trustee shall be eligible under the provisions of Section 11.06.
(c) Upon acceptance of appointment by a successor trustee as
provided in this Section 11.08, such successor trustee shall mail notice of
such succession hereunder to all Certificateholders at their addresses as
shown in the Certificate Register.
Section 11.09 Merger or Consolidation of Trustee. Any Person into
----------------------------------
which the Trustee may be merged or converted or with which it may be
consolidated, or any Person resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any Person succeeding
to the corporate trust business of the Trustee, shall be the successor of the
Trustee hereunder, provided such corporation shall be eligible under the
provisions of Section 11.06, without the execution or filing of any paper or
any further act on the part of any of the parties hereto, anything herein to
the contrary notwithstanding. The Trustee shall deliver notice to the
Servicer, and each Rating Agency of any such merger, conversion,
consolidation or succession.
Section 11.10 Appointment of Co-Trustee or Separate Trustee.
---------------------------------------------
(a) Notwithstanding any other provisions of this Agreement or any
Supplement, at any time, for the purpose of meeting any legal requirements of
any jurisdiction in which any part of the Trust may at the time be located,
the Trustee shall have the power and may execute and deliver all instruments
to appoint one or more persons to act as a co-trustee or co-trustees, or
separate trustee or separate trustees, of all or any part of the Trust, and
to vest in such Person or Persons, in such capacity and for the benefit of
the Certificateholders, such title to the Trust, or any part thereof, and,
subject to the other provisions of this Section 11.10, such powers, duties,
obligations, rights and trusts as the Trustee may consider necessary or
desirable. No co-trustee or separate trustee hereunder shall be required to
meet the terms of eligibility as a successor trustee under Section 11.06 and
no notice to Certificateholders of the appointment of any co-trustee or
separate trustee shall be required under Section 11.08.
(b) Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions
and conditions:
(i) All rights, powers, duties and obligations conferred or
imposed upon the Trustee shall be conferred or imposed upon and
exercised or performed by the Trustee and such separate trustee or
co-trustee jointly (it being understood that such separate trustee or
co-trustee is not authorized to act separately without the Trustee
joining in such act), except to the extent that under any law of any
jurisdiction in which any particular act or acts are to be performed
(whether as Trustee hereunder or as successor to the Servicer
hereunder), the Trustee shall be incompetent or unqualified to perform
such act or acts, in which event such rights, powers, duties and
obligations (including the holding of title to the Trust Assets or any
portion thereof in any such jurisdiction) shall be exercised and
performed singly by such separate trustee or co-trustee, but solely at
the direction of the Trustee;
(ii) No trustee hereunder shall be personally liable by reason
of any act or omission of any other trustee hereunder; and
(iii) The Trustee may at any time accept the resignation of or
remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the Trustee
shall be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement
and the conditions of this Article XI. Each separate trustee and co-trustee,
upon its acceptance of the trusts conferred, shall be vested with the estates
or property specified in its instrument of appointment, either jointly with
the Trustee or separately, as may be provided therein, subject to all the
provisions of this Agreement or any Supplement, specifically including every
provision of this Agreement or any Supplement relating to the conduct of,
affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee and a copy thereof given to
the Servicer.
(d) Any separate trustee or co-trustee may at any time constitute
the Trustee, its agent or attorney-in-fact with full power and authority, to
the extent not prohibited by lay, to do any lawful act under or in respect to
this Agreement or any Supplement on its behalf and in its name. If any
separate trustee or co-trustee shall die, become incapable of acting, resign
or be removed, all of its estates, properties, rights, remedies and trusts
shall vest in and be exercised by the Trustee, to the extent permitted by
law, without the appointment of a new or successor trustee.
Section 11.11 Tax Returns. In accordance with Section 3.07 hereof, the
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Trustee shall not file any Federal income tax return for the Trust. In the
event of any Special Drawing pursuant to Section 4.01A(e) or 4.01B(d), the
Servicer shall report the investment earnings thereon as its income for
federal income tax purposes. In the event the Trust shall be required to
file state tax returns or pursuant to an audit or administrative proceeding
or change in applicable regulations to file Federal tax returns, the Servicer
shall prepare or shall cause to be prepared any tax returns required to be
filed by the Trust and shall remit such returns to the Trustee for signature
at least five days before such returns are due to be filed; the Trustee shall
promptly sign such returns and deliver such returns after signature to the
Servicer and such returns shall be filed by the Servicer. The Servicer in
accordance with the provisions of any supplement of the Agreement shall also
prepare or shall cause to be prepared all tax information required by law to
be distributed to Investor Certificateholders. The Trustee, upon request,
will furnish the Servicer with all such information known to the Trustee as
may be reasonably required in connection with the preparation of all tax
returns of the Trust, and shall, upon request, execute such returns. In no
event shall the Trustee, the Servicer or the Transferor be liable for any
liabilities, costs or expenses of the Trust, the Investor Certificateholders
or the Certificate Owners arising under any tax law, including without
limitation Federal, state or local income or excise taxes or any other tax
imposed on or measured by income (or any interest or penalty with respect
thereto or arising from a failure to comply therewith).
Section 11.12 Trustee May Enforce Claims Without Possession of
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Certificates. All rights of act (i) on and claims under this Agreement or
- ------------
any Supplement or the Certificates may be prosecuted and enforced by the
Trustee without the possession of any of the Certificates or the production
thereof in any proceeding relating thereto, and any such proceeding
instituted by the Trustee shall be brought in its own name as trustee. Any
recovery of judgment shall, after provision for the payment of the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, be for the ratable benefit of the Certificateholders in respect
of which such judgment has been obtained.
Section 11.13 Suits for Enforcement. If a Servicer Default shall occur
---------------------
and be continuing, the Trustee, in its discretion may, subject to the
provisions of Section 10.01 of the Agreement, proceed to protect and enforce
its rights and the rights of the Certificateholders under this Agreement or
any Supplement by suit, action or proceeding in equity or at law or
otherwise, whether for the specific performance of any covenant or agreement
contained in this Agreement or any Supplement or in aid of the execution of
any power granted in this Agreement or any Supplement or for the enforcement
of any other legal, equitable or other remedy as the Trustee, being advised
by counsel, shall deem most effectual to protect and enforce any of the
rights of the Trustee or the Certificateholders. Nothing herein contained
shall be deemed to authorize the Trustee to authorize or consent to or accept
or adopt on behalf of any Certificateholder any plan of reorganization,
arrangement, adjustment or composition affecting the Certificates or the
rights of any Holder thereof, or authorize the Trustee to vote in respect of
the claim of any Certificateholder in any such proceeding.
Section 11.14 Rights of Certificateholders to Direct Trustee. Except
----------------------------------------------
for those actions taken pursuant to Section 9.02, holders of Investor
Certificates evidencing Undivided Interests in the Trust aggregating more
than 50% of the Invested Amount of any Series or such other amount as may be
set forth in any Supplement for a Series affected by the conduct of any
proceeding or the exercise of any right conferred on the Trustee shall have
the right to direct the time, method, and place of conducting such proceeding
for any remedy available to the Trustee, or exercising any such trust or
power; provided, however, that, subject to Section 11.01, the Trustee shall
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have the right to decline to follow any such direction if the Trustee being
advised by counsel determines that the action so directed may not lawfully be
taken, or if the Trustee in good faith shall, by a Responsible Officer or
Responsible Officers of the Trustee, determine that the proceedings so
directed would be illegal or involve it in personal liability or be unduly
prejudicial to the rights of Certificateholders not parties to such
direction; and provided further that nothing in this Agreement or any
--------
Supplement shall impair the right of the Trustee to take any action deemed
proper by the Trustee and which is not inconsistent with such direction of
the Certificateholders.
Section 11.15 Representations and Warranties of Trustee. The Trustee
-----------------------------------------
represents and warrants that:
(i) The Trustee is a banking corporation organized and
existing under the laws. of the State of New York and authorized to
conduct and engage in a banking and trust business under such laws;
(ii) The Trustee has full power, authority and right to
execute, deliver and perform this Agreement, and has taken all necessary
action to authorize the execution, delivery and performance by it of
this Agreement; and
(iii) This Agreement has been duly executed and delivered by
the Trustee.
Section 11.16 Maintenance of Office or Agency. The Trustee will
-------------------------------
maintain at its expense in the Borough of Manhattan, The City of New York, an
office or offices or agency or agencies where notices and demands to or upon
the Trustee in respect of the Certificates and this Agreement may be served.
The Trustee initially appoints the Corporate Trust Office as its office for
such purposes in New York. The Trustee will give prompt written notice to
the Servicer and to Certificateholders of any change in the location of the
Certificate Register or any such office or agency.
(END OF ARTICLE XI)
ARTICLE XII
TERMINATION
Section 12.01 Termination of Trust.
--------------------
(a) The respective obligations and responsibilities of the
Transferor, the Servicer and the Trustee created hereby (other than the
obligation of the Trustee to make payments to Certificateholders as hereafter
set forth) shall terminate, except with respect to the duties described in
Section 12.03(b), upon the earlier of (i) the day after the day on which
funds shall have been deposited in the Collection Account sufficient to pay
the Aggregate Invested Amount plus interest accrued at the applicable
Certificate Rates through the end of the applicable Interest Accrual Period
in full on all Series of Investor Certificates and paid to the Holders of
such Certificates and (ii) a day which is September 15, 2092 (the "Final
-----
Trust Termination Date"); provided, however, that in no event shall the trust
- ---------------------- -------- -------
created by the Agreement continue beyond the expiration of 21 years from the
death of the last survivor of the descendants, living on the date of this
Agreement, of Joseph P. Kennedy, of the Commonwealth of Massachusetts,
formerly United States representative at the Court of St. James. The
Servicer shall promptly notify the Trustee of any respective termination
pursuant to this Section 12.01.
(b) If on the Transfer Date in the month immediately preceding the
month in which the Final Trust Termination Date occurs in the case of
Subsection (a)(ii) above, (after giving effect to all transfers, withdrawals,
deposits and drawings to occur on such date and the payment of principal on
any Series of Certificates to be made on the related Distribution Date
pursuant to Article IV) the Invested Amount of any Series would be greater
than zero, the Servicer shall sell within 30 days of such Transfer Date all
of the Receivables. The proceeds of such sale shall be treated as
Collections on the Receivables and shall be allocated in accordance with
Article IV; provided, however, that the Trustee in its sole discretion shall
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determine conclusively the amount of such proceeds which are allocable to
Finance Charge Collections and the amount of such proceeds which are
allocable to Principal Collections. During such 30-day period, the Servicer
shall continue to collect Collections on the Receivables and allocate such
payments in accordance with the provisions of Article IV.
Section 12.02 Optional Purchase and Final Termination Date of Investor
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Certificates of any Series.
- --------------------------
(a) If provided in any Supplement on a Distribution Date the
Transferor may, but shall not be obligated to, purchase any such Series of
Investor Certificates by depositing into the
Collection Account, on the preceding Transfer Date, an amount equal to the
Invested Amount thereof plus interest accrued and unpaid thereon at the
applicable Certificate Rate through the Interest Accrual Period related to
such Distribution Date on which the purchase will be made; provided, however,
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that no such purchase of any Series of Investor Certificates shall occur
unless the Transferor shall deliver an Opinion of Counsel reasonably
acceptable to the Trustee, that such purchase of any Series of Investor
Certificates would not constitute a fraudulent conveyance of the Transferor.
(b) The amount deposited pursuant to Section 12.02(a) shall be
paid to the Investor Certificateholders of the related Series pursuant to
Article IV on the Distribution Date following the date of such deposit. All
Certificates of a Series which are purchased by the Transferor pursuant to
Section 12.02(a) shall be delivered by the Transferor upon such purchase to,
and be cancelled by, the Transfer Agent and Registrar and be disposed of in a
manner satisfactory to the Trustee and the Transferor.
(c) All principal or interest with respect to any Series of
Investor Certificates shall be due and payable no later than the Series
Termination Date with respect to such Series. Unless otherwise provided in a
Supplement, in the event that the Invested Amount of any Series of
Certificates is greater than zero on its Series Termination Date (after
giving effect to all transfers, withdrawals, deposits and drawings to occur
on such date and the payment of principal to be made on such Series on such
date), the Trustee will sell or cause to be sold, and pay the proceeds to all
Certificateholders of such Series pro rata in final payment of all principal
of and accrued interest on such Series of Certificates, an amount of
Receivables or interests in Receivables up to 110% of the Invested Amount of
such Series at the close of business on such date (but not more than an
amount of Receivables equal to the sum of (1) the product of (A) the current
Transferor Percentage, (B) Aggregate Receivables and (C) a fraction the
numerator of which is the related Invested Percentage with respect to Finance
Charge Collections and the denominator of which is the sum of all Invested
Percentages with respect to Finance Charge Collections of all Series
outstanding and (2) the Invested Amount of such Series). Any proceeds of
such sale in excess of such principal and interest paid shall be paid to the
Holder of the Exchangeable Transferor Certificate. Upon such Series
Termination Date with respect to the applicable Series of Certificates, final
payment of all amounts allocable to any Investor Certificates of such Series
shall be made in the manner provided in Section 12.03.
Section 12.03 Final Payment with Respect to any Series.
----------------------------------------
(a) Written notice of any termination, specifying the Distribution
Date upon which the Investor Certificateholders of
any Series may surrender their Certificates for payment of the final
distribution with respect to such Series and cancellation, shall be given
(subject to at least two days' prior notice from the Servicer to the Trustee)
by the Trustee to Investor Certificateholders of such Series mailed not later
than such final distribution specifying (a) the Distribution Date (which
shall be the Distribution Date in the month in which the deposit is made
pursuant to Section 2.07 or Section 12.02(a)) upon which final payment of
such Investor Certificates will be made upon presentation and surrender of
such Investor Certificates at the office or offices therein designated, (b)
the amount of any such final payment and (c) that the Record Date otherwise
applicable to such Distribution Date is not applicable, payments being made
only upon presentation and surrender of the Investor Certificates at the
office or offices therein specified. The Servicer's notice to the Trustee in
accordance with the preceding sentence shall be accompanied by an Officers'
Certificate setting forth the information specified in the applicable
Supplement covering the period during the then current calendar year through
the date of such notice and setting forth the date of such final
distribution. The Trustee shall give such notice to the Transfer Agent and
Registrar and the Paying Agent at the time such notice is given to such
Investor Certificateholders.
(b) Notwithstanding the termination of the Trust pursuant to
Section 12.01(a) or the occurrence of the Series Termination Date with
respect to any Series pursuant to Section 12.02 of the Agreement, all funds
then on deposit in the Collection Account shall continue to be held in trust
for the benefit of the Certificateholders and the Paying Agent or the Trustee
shall pay such funds to the Certificateholders upon surrender of their
Certificates. In the event that all of the Investor Certificateholders of
such Series shall not surrender their Certificates for cancellation within
six months after the date specified in the above-mentioned notice, the
Trustee shall give a second written notice to the remaining Investor
Certificateholders of such Series upon receipt of the appropriate records
from the Transfer Agent and Registrar to surrender their Certificates for
cancellation and receive the final distribution with respect thereto. If
within one and one-half years after the second notice all the Investor
Certificates of such Series shall not have been surrendered for cancellation,
the Trustee may take appropriate steps, or may appoint an agent to take
appropriate steps, to contact the remaining Investor Certificateholders of
such Series concerning surrender of their Certificates, and the cost thereof
shall be paid out of the funds in the Collection Account held for the benefit
of such Investor Certificateholders.
(c) All Certificates surrendered for payment of the final
distribution with respect to such Certificates and cancellation shall be
cancelled by the Transfer Agent and
Registrar and be disposed of in a manner satisfactory to the Trustee and the
Transferor.
Section 12.04 Transferor's Termination Rights. Upon the termination
-------------------------------
of the Trust pursuant to Section 12.01 and the surrender of the Exchangeable
Transferor Certificate, the Trustee shall return to the Transferor (without
recourse, representation or warranty) all right, title and interest of the
Trust in the Receivables, then existing or thereafter created, all moneys due
or to become due with respect thereto (including all accrued interest
theretofore posted as Periodic Finance Charges), and all proceeds thereof,
including all Recoveries relating thereto and all proceeds thereof and all
right, title and interest of the Transferor in, to and under the Purchase and
Sale Agreement, except for amounts held by the Trustee pursuant to Subsection
12.03(b). The Trustee shall execute and deliver such instruments of transfer
and assignment, in each case without recourse, as shall be reasonably
requested by the Transferor to vest in the Transferor all right, title and
interest which the Trust had in the Receivables.
(END OF ARTICLE XII)
ARTICLE XIII
MISCELLANEOUS PROVISIONS
Section 13.01 Amendment.
---------
(a) This Agreement and any Supplement may be amended from time to
time by the Servicer, the Transferor and the Trustee, without the consent of
any of the Certificateholders, to cure any ambiguity, to correct or
supplement any provisions herein which may be inconsistent with any other
provisions herein or to add any other provisions with respect to matters or
questions raised under this Agreement which shall not be inconsistent with
the provisions of this Agreement, provided, however, that such action shall
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not, as evidenced by an Opinion of Counsel, adversely affect in any material
respect the interests of any of the Investor Certificateholders. The Trustee
may, but shall not be obligated to, enter into any such amendment which
affects the Trustee's rights, duties or immunities under this Agreement or
otherwise.
This Agreement and any Supplement may also be amended from time to time
by the Servicer, the Transferor and the Trustee, without the consent of any
of the Certificateholders, for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this
Agreement, or of modifying, in any manner the rights of the Holders of
Certificates; provided that (i) the Servicer shall have provided an Officer's
--------
Certificate to the Trustee and any Enhancement Provider to the effect that
such amendment will not materially and adversely affect the interests of the
Certificateholders, (ii) such amendment shall not, as evidenced by an Opinion
of Counsel, cause the Trust to be characterized for Federal income tax
purposes as an association taxable as a corporation or otherwise have any
material adverse impact on the Federal income taxation of any outstanding
Series of Investor Certificates or any Certificate Owner and (iii) the Rating
Agencies shall confirm that such amendment shall not cause a reduction or
withdrawal of the rating of any outstanding Series of Certificates; provided,
--------
further, that such amendment shall not reduce in any manner the amount of,
- -------
or delay the timing of, distributions which are required to be made on any
Investor Certificate of such Series without the consent of the related
Investor Certificateholder, change the definition of or the manner of
calculating the interest of any Investor Certificateholder of such Series
without the consent of the related Investor Certificateholder or reduce the
percentage pursuant to clause (b) required to consent to any such amendment,
in each case without the consent of all such Investor Certificateholders;
provided, further, that (w) the transfer of the Accounts and/or the servicing
- -------- -------
functions with respect thereto to a national banking association established
and owned by Bridgestone/Firestone to own the Originator's credit
card accounts and receivables and to act as Servicer shall require the prior
written consent of the Rating Agencies, (x) the transfer of the Accounts to
any national bank to own the Originator's credit card accounts and
receivables shall require written consent of the applicable Rating Agencies
and an opinion of counsel stating that the transfer will not result in the
transfer of the Receivables for federal tax purposes, (y) any transaction
effected in accordance with Section 8.02 hereof and (z) any other
transactions related, supplemental or incidental thereto (including any
transaction effected pursuant to clause (x) above) shall be deemed not to
materially and adversely affect the interests of the Certificateholders and
shall not require the delivery of an Officer's Certificate of the Servicer
pursuant to clause (i) above.
(b) This Agreement and any Supplement may also be amended from
time to time by the Servicer, the Transferor and the Trustee with the consent
of the Holders of Investor Certificates evidencing Undivided Interests
aggregating not less than 66-2/3% of the Invested Amount of each and every
Series affected, for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Agreement or of
modifying in any manner the rights of the Investor Certificateholders of any
Series then issued and outstanding; provided, however, that no such amendment
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under this Subsection (b) shall (i) reduce in any manner the amount of, or
delay the timing of, distributions which are required to be made on any
Investor Certificate of such Series without the consent of the related
Investor Certificateholders; (ii) change the definition of or the manner of
calculating the interest of any Investor Certificateholder of such Series
without the consent of the related Investor Certificateholder or (iii) reduce
the aforesaid percentage required to consent to any such amendment, in each
case without the consent of all such Investor Certificateholders.
(c) Promptly after the execution of any amendment described in
this Section the Trustee shall furnish written notification of the substance
of such amendment to each Investor Certificateholder, and the Servicer shall
furnish written notification of the substance of such amendment to any
related Enhancement Provider and each Rating Agency.
(d) It shall not be necessary for the consent of Investor
Certificateholders under this Section 13.01 to approve the particular form of
any proposed amendment, but it shall be sufficient if such consent shall
approve the substance thereof. The manner of obtaining such consents and of
evidencing the authorization of the execution thereof by Investor
Certificateholders shall be subject to such reasonable requirements as the
Trustee may prescribe.
(e) Any Assignment or Reassignments regarding the addition to or
removal of Receivables from the Trust respectively, as provided in Sections
2.05 and 2.10, respectively, of the Agreement executed in accordance with the
provisions hereof shall not be considered amendments to this Agreement,
including, without limitation, for the purpose of Sections 13.01(a) and (b).
Section 13.02 Protection of Right, Title and Interest to Trust.
------------------------------------------------
(a) The Servicer shall cause this Agreement, any Supplement, all
amendments hereto and/or all financing statements and continuation statements
and any other necessary documents covering the Certificateholders and the
Trustee's right, title and interest to the Trust Assets, and the Transferor's
rights in and to the Receivables to be promptly recorded, registered and
filed, and at all times to be kept recorded, registered and filed, all in
such manner and in such places as may be required by law fully to preserve
and protect the right, title and interest of the Trustee hereunder to all
property comprising the Trust Assets and to preserve and protect the right,
title and interest of the Transferor to the Receivables. The Servicer shall
deliver to the Trustee file-stamped copies of, or filing receipts for, any
document recorded, registered or filed as provided above, as soon as
available following such recording, registration or filing. The Transferor
shall Cooperate fully with the Servicer in connection with the obligations
set forth above and will execute any and all documents reasonably required to
fulfill the intent of this Section 13.02(a).
(b) Within 30 days after the Transferor makes any change in its
name identity or corporate structure which would make any financing statement
or continuation statement filed in accordance with paragraph (a) above
seriously misleading within the meaning of Section 9-402(7) of the UCC as in
effect in the Commonwealth of Massachusetts the Transferor shall give the
Trustee and the Servicer notice of any such change and shall file such
financing statements or amendments as may be necessary to continue the
perfection of the Trust's security interest in the Receivables and the
proceeds thereof.
(c) The Transferor and the Servicer will give the Trustee prompt
written notice of any relocation of any office from which the Servicer
services Receivables or in which the Transferor and the Servicer keep
records concerning the Receivables or of the relocation of the Transferor's
and the Servicer's principal executive offices and whether, as a result of
such relocation, the applicable provisions of the UCC would require the
filing of any amendment of any previously filed financing or continuation
statement or of any new financing statement and shall file such financing
statements or amendments as may be necessary to perfect or to continue the
perfection of
the Trust's security interest in the Receivables and the proceeds thereof.
The Servicer will at all times maintain each office from which it services
Receivables, and the Transferor and the Servicer will at all times maintain
their principal executive offices within the United States of America.
(d) The Servicer will deliver to the Trustee: (i) upon the
execution and delivery of each amendment of the Agreement or any Supplement
(provided, however, that the adoption of a Supplement pursuant to Section
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6.09 which supplements or modifies Article IV for a particular new Series
shall not be considered an amendment) other than amendments pursuant to
Section 13.01(a) and upon each date that any Additional Accounts are to be
included in the Accounts pursuant to Section 2.05 hereof, an Opinion of
Counsel substantially in the form of Exhibit F; and (ii) on or before March
---------
31 of each year, beginning with March 31, 1994, an Opinion of Counsel, dated
on or after January 1 of such year, stating to the effect that no filing or
other action, except such action as shall be described therein, is necessary
from the date thereof through March 31 of the following year to continue the
perfected status of the interest of the Trust in the collateral described in
the financing statements referred to in such opinion.
(e) If at any time the Servicer is no longer
Bridgestone/Firestone, the Transferor shall deliver to the Successor Servicer
powers-of-attorney such that such Successor Servicer may perform the
obligations set forth in Sections 13.02(a), 13.02(b) and 13.02(c).
Section 13.03 Limitation on Rights of Certificateholders.
------------------------------------------
(a) The death or incapacity of any Investor Certificateholder
shall not operate to terminate this Agreement or the Trust, nor shall such
death or incapacity entitle such Investor Certificateholders' legal
representatives or heirs to claim an accounting or to take any action or
commence any proceeding in any court for a partition or winding up of the
Trust, nor otherwise affect the rights, obligations and liabilities of the
parties hereto or any of them.
(b) No Investor Certificateholder shall have any right to vote
(except as specifically provided in this Agreement) or in any manner
otherwise control the operation and management of the Trust, or the
obligations of the parties hereto, nor shall any Investor Certificateholder
be under any liability to any third person by reason of any action taken by
the parties to this Agreement pursuant to any provision hereof (other than
the Holder of the Exchangeable Transferor Certificate, to the extent
provided herein).
(c) No Certificateholder shall have any right by virtue of any
provisions of this Agreement to institute any suit, action or proceeding in
equity or at law upon or under or with respect to this Agreement, unless such
Certificateholder previously shall have given to the Trustee, and unless the
Holders of Investor Certificates evidencing Undivided Interests in the Trust
aggregating more than 50% of the Invested Amount of any Series which may be
adversely affected but for the institution of such suit, action or proceeding
shall have made, written request upon the Trustee to institute such action,
suit or proceeding in its own name as Trustee hereunder and shall have
offered to the Trustee such reasonable indemnity as it may require against
the costs, expenses and liabilities to be incurred therein or thereby, and
the Trustee, for 60 days after its receipt of such notice, request and offer
of indemnity, shall have neglected or refused to institute any such action,
suit or proceeding; it being understood and intended, and being expressly
covenanted by each Certificateholder with every other Certificateholder and
the Trustee, that no one or more Certificateholders shall have any right in
any manner whatsoever by virtue or by availing itself or themselves of any
provisions of this Agreement to affect, disturb or prejudice the rights of
the Investor Certificateholders of any other of the Investor Certificates, or
to obtain or seek to obtain priority over or preference to any other such
Certificateholder, or to enforce any right under this Agreement, except in
the manner herein provided and for the equal, ratable and common benefit of
all Certificateholders. For the protection and enforcement of the provisions
of this Section 13.03, each and every Certificateholder and the Trustee shall
be entitled to such relief as can be given either at law or in equity.
Section 13.04 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
-------------
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT
REFERENCE TO ITS CONFLICTS OF LAW PROVISIONS.
Section 13.05 Notices. All demands, notices and communications
-------
hereunder shall be in writing and shall be deemed to have been duly given if
personally delivered at, or sent by overnight courier or facsimile to, or
mailed by registered mail, return receipt requested, to (a) in the case of
Firestone Retail Credit Corporation to c/o JH Management Company, One
International Place, Boston, Massachusetts 02110, Attention: ______________;
(b) in the case of Bridgestone/Firestone, Inc., 50 Century Boulevard,
Nashville, Tennessee 37214, Attention: Treasurer and (c) in the case of the
Trustee, to the Corporate Trust Office; or, as to each party, at such other
address as shall be designated by such party in a written notice to each
other party. Any notice required or permitted to be mailed to a
Certificateholder shall be given by first-class mail, postage prepaid, at the
address of such Certificateholder as shown in the
Certificate Register. Any notice so mailed within the time prescribed in
this Agreement shall be conclusively presumed to have been duly given,
whether or not the Certificateholder receives such notice.
Copies of all notices, reports, certificates and amendments delivered
hereunder shall be mailed to the Rating Agency as follows: (a) Standard &
Poor's Corporation, 25 Broadway, New York, NY 10004, Attention: Structured
Finance, (b) Moody's Investor Services, 99 Church Street, New York, N.Y.
10007, Attention: Structured Finance and (c) Fitch Investors Service, Inc.,
One State Street Plaza, New York, NY 10004, Attention: Structured
Surveillance Department.
Section 13.06 Severability of Provisions. If any one or more of the
--------------------------
covenants, agreements, provisions or terms of this Agreement shall for any
reason whatsoever be held invalid, then such covenants, agreements,
provisions or terms shall be deemed severable from the remaining covenants,
agreements, provisions or terms of this Agreement and shall in no way affect
the validity or enforceability of the other provisions of this Agreement or
of the Certificates or rights of the Certificateholders thereof.
Section 13.07 Assignment. Notwithstanding anything to the contrary
----------
contained herein, except as provided in Section 8.02, this Agreement,
including any Supplement, may not be assigned by the Servicer without the
prior consent of Holders of Investor Certificates evidencing Undivided
Interests aggregating not less than 66-2/3% of the Invested amount of the
Investor Certificates of each Series on a Series by Series basis.
Section 13.08 Certificates Nonassessable and Fully Paid. It is the
-----------------------------------------
intention of the parties to this Agreement that the Investor
Certificateholders shall not be personally liable for obligations of the
Trust, that the interests in the Trust represented by the Investor
Certificates shall be nonassessable for any losses or expenses of the Trust
or for any reason whatsoever, and that Certificates upon authentication
thereof by the Trustee pursuant to Sections 2.09 and 6.02 are and shall be
deemed fully paid.
Section 13.09 Further Assurances. The Transferor and the Servicer
------------------
agree to do and perform, from time to time, any and all acts and to execute
any and all further instruments required or reasonably requested by the
Trustee more fully to effect the purposes of this Agreement, including,
without limitation, the execution of any financing statements or continuation
statements relating to the Receivables for filing under the provisions of the
UCC of any applicable jurisdiction.
Section 13.10 No Waiver; Cumulative Remedies. No failure to exercise
------------------------------
and no delay in exercising, on the part of the
Trustee or the Investor Certificateholders, any right, remedy, power or
privilege hereunder, shall operate as a waiver thereof; nor shall any single
or partial exercise of any right, remedy, power or privilege hereunder
preclude any other or further exercise thereof or the exercise of any other
right, remedy, power or privilege. The rights, remedies, powers and
privileges herein provided are cumulative and not exhaustive of any rights,
remedies, powers and privileges provided by law.
Section 13.11 Counterparts. This Agreement and any Supplement may be
------------
executed in two or more counterparts (and by different parties on separate
counterparts), each of which shall be an original, but all of which together
shall constitute one and the same instrument.
Section 13.12 Third Party Beneficiaries. This Agreement and any
-------------------------
Supplement will inure to the benefit of and be binding upon the parties
hereto, and, in addition, shall inure to the benefit of the
Certificateholders and their respective successors and permitted assigns.
Except as otherwise provided in this Article XIII or Section 7.04, no other
person will have any right or obligation hereunder; provided, however, that
-------- -------
if so specified in the applicable Supplement, an Enhancement Provider may be
deemed to be a third party beneficiary of this Agreement.
Section 13.13 Actions by Certificateholders.
-----------------------------
(a) Wherever in this Agreement or any Supplement, a provision is
made that an action may be taken or a notice, demand or instruction given by
Investor Certificateholders, such action, notice or instruction may be taken
or given by any Investor Certificateholder of any Series, unless such
provision requires a specific percentage of Investor Certificateholders of a
certain Series or all Series.
(b) Any request, demand, authorization, direction, notice,
consent, waiver or other act by a Certificateholder shall bind such
Certificateholder and every subsequent holder of such Certificate issued upon
the registratiOn of transfer thereof or in exchange therefor or in lieu
thereof in respect of anything done or omitted to be done by the Trustee or
the Servicer in reliance thereon, whether or not notation of such action is
made upon such Certificate.
Section 13.14 Merger and Integration. Except as specifically stated
----------------------
otherwise herein, this Agreement sets forth the entire understanding of the
parties relating to the subject matter hereof, and all prior understandings,
written or oral, are superseded by this Agreement. This Agreement may not be
modified, amended, waived or supplemented except as provided herein.
Section 13.15 Headings. The headings herein are for purposes of
--------
reference only and shall not otherwise affect the meaning or interpretation
of any provision hereof.
Section 13.16 Voting, Waiver and Consents. Notwithstanding anything
---------------------------
herein to the contrary, any certificate held by, or on behalf of, the
Transferor or any of its Affiliates shall not be entitled to vote for, or
give its consent to, or grant a waiver with respect to, any matter required,
permitted or authorized hereby to be voted upon, consented to or waived. For
the purposes of calculating the percentage of any Certificates so voting,
consenting or granting such waiver, such Certificate held by, or on behalf
of, the Transferor or any of it. Affiliates shall be deemed not to be
outstanding and it interest shall not be reflected in either the numerator or
denominator of the fraction by which such percentage is derived.
(END OF ARTICLE XIII)
IN WITNESS WHEREOF, the Transferor, Bridgestone/Firestone, the Servicer
and the Trustee have caused this Agreement to be duly executed by their
respective officers as of the day and year first above written.
FIRESTONE RETAIL CREDIT CORPORATION,
as Transferor
By
-----------------------------------------------
Name:
Title:
BRIDGESTONE/FIRESTONE, INC.
as Servicer and individually
By
-----------------------------------------------
Name:
Title:
THE FUJI BANK AND TRUST COMPANY,
as Trustee
By
-----------------------------------------------
Name:
Title:
IN WITNESS WHEREOF, the Transferor, Bridgestone/Firestone, the Servicer
and the Trustee have caused this Agreement to be duly executed by their
respective officers as of the day and year first above written.
FIRESTONE RETAIL CREDIT CORPORATION,
as Transferor
By
-----------------------------------------------
Name:
Title:
BRIDGESTONE/FIRESTONE, INC.
as Servicer and individually
By
-----------------------------------------------
Name:
Title:
THE FUJI BANK AND TRUST COMPANY,
as Trustee
By
-----------------------------------------------
Name:
Title:
Exhibit A-1
-----------
FORM OF EXCHANGEABLE TRANSFEROR CERTIFICATE
One Unit
BRIDGESTONE/FIRESTONE MASTER TRUST
EXCHANGEABLE TRANSFEROR CERTIFICATE
THIS CERTIFICATE REPRESENTS THE TRANSFEROR INTEREST
IN THE BRIDGESTONE/FIRESTONE MASTER TRUST
Evidencing an undivided interest in a trust, the corpus of which
consists of receivables generated or to be generated under a private label
credit card program (the "Credit Card Program") established by Credit First
National Association ("Credit First") and all monies due or to become due in
respect thereof.
(Not an interest in or obligation of
Credit First, Bridgestone/Firestone, Inc. or
Firestone Retail Credit Corporation or
any affiliate thereof)
This certifies that FIRESTONE RETAIL CREDIT CORPORATION is the
registered owner of an undivided interest (the "Transferor Interest") in the
Bridgestone/Firestone Master Trust (the "Trust") not represented by the
Investor Certificates and the Bridgestone/Firestone Certificate issued
pursuant to the Amended and Restated Pooling and Servicing Agreement, dated
as of October ___, 1996 (the "Agreement"; such term to include any Supplement
thereto) by and among Firestone Retail Credit Corporation, as transferor (the
"Transferor"), Bridgestone/Firestone, Inc., as servicer (the "Servicer") and
The Fuji Bank and Trust Company, as trustee (the "Trustee"). The corpus of
the Trust consists of all of the Transferor's right, title and interest in a
portfolio of receivables (the "Receivables") existing in consumer revolving
credit card accounts identified in the Agreement from time to time (the
"Accounts") as of the Cut-Off Date, all Receivables generated under the
Accounts from time to time thereafter, all monies due or to become due and
all amounts received with respect to the Receivables in existence in the
Accounts on the Cut-Off Date or generated thereafter including all Recoveries
relating thereto (net of related expenses) insurance proceeds (net of related
expenses), all right, title and interest of the Transferor in, to and under
the Participation Agreement, Purchase and Sale Agreement and any Insurance
Premiums paid under any Insurance Agreement, all monies on deposit in the
Collection Account
(excluding any investment earnings on such deposited amounts), any other
account or accounts maintained for the benefit of Certificateholders and
available under any Enhancement to be provided by an Enhancement Provider for
any Series for payment to Certificateholders, the Servicer Letter of Credit
and all other assets and interests constituting the Trust and all proceeds of
the foregoing.
Although a summary of certain provisions of the Agreement is set forth
below, this Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for information with respect to the
interests, rights, benefits, obligations, proceeds, and duties evidenced
hereby and the rights, duties and obligations of the Trustee. A copy of the
Agreement may be requested from the Trustee by writing to the Trustee at The
Fuji Bank and Trust Company, Two World Trade Center, 81st Floor, New York,
New York 10048, Attention: Trust Administration Department. To the extent
not defined herein, the capitalized terms used herein have the meanings
ascribed to them in the Agreement. This 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 Transferor by virtue of the
acceptance hereof assents and by which the Transferor is bound.
This Certificate is not permitted to be transferred, assigned, exchanged
or otherwise pledged or conveyed except in compliance with the terms of the
Agreement .
The Receivables consist of amounts transferred to the Transferor,
payable by Obligors on any Account, from time to time as shown on the
Servicer's records, including, without limitation, amounts payable for the
purchases of goods or services and amounts payable for Periodic Finance
Charges, Late Fees, Returned Check Fees, returned convenience check fees,
cash advance fees and credit related insurance, as more fully specified in
the Agreement.
This Certificate is the Exchangeable Transferor Certificate (the
"Certificate"), which represents an undivided interest in the Trust,
-----------
including the right to receive the Collections and other amounts at the times
and in the amounts specified in the Agreement to be paid to the holder of the
Exchangeable Transferor Certificate. The aggregate interest represented by
this Certificate at any time in the Receivables in the Trust shall not exceed
the Transferor Interest at such time. In addition to this Certificate,
Investor Certificates will be issued to investors pursuant to the Agreement,
which will represent the interests of Investor Certificateholders in the
Trust and the Bridgestone/Firestone Certificate will be issued to
Bridgestone/Firestone, pursuant to the Agreement, which will represent the
interest of Bridgestone/Firestone in the Trust.
This Certificate shall not represent any interest in the Collection Account
or other account or any Enhancement except as provided in the Agreement.
Subject to certain conditions in the Agreement, the obligations created
by the Agreement and the Trust created thereby shall terminate upon the
earlier of (i) September 15, 2092 and (ii) the day after the date on which
funds shall have been deposited in the Collection Account sufficient to pay
the Aggregate Invested Amount plus interest accrued at the applicable
Certificate Rates through the end of the applicable Interest Accrual Period
in full on all Series of Investor Certificates; provided, however, that in
-------- -------
no event shall the trust created by the Agreement continue beyond the
expiration of 21 years from the death of the last survivor of the
descendants, living on the date of the Agreement, of Joseph P. Kennedy, of
the Commonwealth of Massachusetts, formerly United States representative at
the Court of St. James.
Upon termination of the Trust pursuant to Article XII of the Agreement,
subject to the provisions of the Agreement and the surrender of this
Certificate, the Trustee shall assign and convey to the Transferor (without
recourse, representation or warranty) all right, title and interest of the
Trust in the Receivables, whether then existing or thereafter created, and
all proceeds thereof, except for amounts held by the Trustee pursuant to
Subsection 12.03(b). The Trustee shall execute and deliver such instruments
of transfer and assignment, in each case without recourse, as shall be
reasonably requested by the Transferor to vest in the Transfer or all right,
title and interest which the Trust has in the Receivables.
Unless the certificate of authentication herein 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.
IN WITNESS WHEREOF, the Transferor has caused this Certificate to be
duly executed.
FIRESTONE RETAIL CREDIT CORPORATION
By:
----------------------------------------------
Name:
Title:
CERTIFICATE OF AUTHENTICATION
This is the Exchangeable Transferor Certificate referred to in the
within mentioned Pooling and Servicing Agreement.
THE FUJI BANK AND TRUST COMPANY,
as Trustee
By:
----------------------------------------------
Authorized Signatory
Exhibit A-2
-----------
FORM OF BRIDGESTONE/FIRESTONE CERTIFICATE
One Unit
BRIDGESTONE/FIRESTONE MASTER TRUST
BRIDGESTONE/FIRESTONE CERTIFICATE
THIS CERTIFICATE REPRESENTS THE B/F ALLOCATION PERCENTAGE
IN THE BRIDGESTONE/FIRESTONE MASTER TRUST
Evidencing an undivided interest in a trust, the corpus of which
consists of receivables generated or to be generated under a private label
credit card program established by Credit First National Association ("Credit
First") and all monies due or to become due in respect thereof.
(Not an interest in or obligation of
Credit First, Bridgestone/Firestone, Inc. or
Firestone Retail Credit Corporation or
any affiliate thereof)
This certifies that BRIDGESTONE/FIRESTONE, INC. is the registered owner
of an undivided one percent interest (the "B/F Allocation Percentage") in the
Bridgestone/Firestone Master Trust (the "Trust"). This Certificate, the
Investor Certificates and the Exchangeable Transferor Certificate were issued
pursuant to the Amended and Restated Pooling and Servicing Agreement, dated
as of October ___, 1996 (the "Agreement"; such term to include any Supplement
thereto) by and among Firestone Retail Credit Corporation, as transferor (the
"Transferor"), Bridgestone/Firestone, Inc., as servicer (the "Servicer") and
The Fuji Bank and Trust Company, as trustee (the "Trustee"). The corpus of
the Trust consists of all of the Transferor's right, title and interest in a
portfolio of receivables (the "Receivables") existing in consumer revolving
credit card accounts identified in the Agreement from time to time (the
"Accounts") as of the Cut-Off Date, all Receivables generated under the
Accounts from time to time thereafter, all monies due or to become due and
all amounts received with respect to the Receivables in existence in the
Accounts on the Cut-Off Date or generated thereafter including all Recoveries
relating thereto (net of related expenses) insurance proceeds (net of related
expenses), all right, title and interest of the Transferor in, to and under
the Participation Agreement, the Purchase and Sale Agreement and any
Insurance Premiums paid under any Insurance Agreement, all monies on deposit
in the Collection Account (excluding any investment earnings on such
deposited amounts),
any other account or accounts maintained for the benefit of
Certificateholders and available under any Enhancement to be provided by an
Enhancement Provider for any Series for payment to Certificateholders,
Servicer Letter of Credit and all other assets and interests constituting the
Trust and all proceeds of the foregoing.
Although a summary of certain provisions of the Agreement is set forth
below, this Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for information with respect to the
interests, rights, benefits, obligations, proceeds, and duties evidenced
hereby and the rights, duties and obligations of the Trustee. A copy of the
Agreement may be requested from the Trustee by writing to the Trustee at The
Fuji Bank and Trust Company, Two World Trade Center, 81st Floor, New York,
New York 10048, Attention: Trust Administration Department. To the extent
not defined herein, the capitalized terms used herein have the meanings
ascribed to them in the Agreement. This 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 Transferor by virtue of the
acceptance hereof assents and by which the Transferor is bound.
This Certificate is not permitted to be transferred, assigned, exchanged
or otherwise pledged or conveyed except in compliance with the terms of the
Agreement.
The Receivables consist of amounts transferred to the Transferor,
payable by Obligors on any Account, from time to time as shown on the
Servicer's records, including, without limitation, amounts payable for
purchases of goods or services and amounts Payable for Periodic Finance
Charges, Late Fees, Returned Check Fees, returned convenience check fees,
cash advance fees and credit related insurance, as more fully specified in
the Agreement.
This Certificate is the Bridgestone/Firestone Certificate (the
"Certificate"), which represents an undivided one percent interest in the
-----------
Trust, including the right to receive the Collections and other amounts at
the times and in the amounts specified in the Agreement to be paid to the
holder of the Bridgestone/Firestone Certificate. The aggregate interest
represented by this Certificate at any time in the Receivables in the Trust
shall not exceed the B/F Allocation Percentage. In addition to this
Certificate, Investor Certificates will be issued to investors pursuant to
the Agreement, which will represent the interests of Investor
Certificateholders in the Trust and the Exchangeable Transferor Certificate
will be issued to the Transferor, pursuant to the Agreement, which will
represent the interest of the Transferor in the Trust. This Certificate
shall not represent any interest in the Collection
Account or other account or any Enhancement except as provided in the
Agreement.
Subject to certain conditions in the Agreement, the obligations created
by the Agreement and the Trust created thereby shall terminate upon the
earlier of (i) September 15, 2092 and (ii) the day after the date on which
funds shall have been deposited in the Collection Account sufficient to pay
the Aggregate Invested amount plus interest accrued at the applicable
Certificate Rates through the end of the applicable Interest Accrual Period
in full on all Series of Investor Certificates; provided, however, that in
-------- -------
no event shall the trust created by the Agreement continue beyond the
expiration of 21 years from the death of the last survivor of the
descendants, living on the date of the Agreement, of Joseph P. Kennedy, of
the Commonwealth of Massachusetts, formerly United States representative at
the Court of St. James.
Unless the certificate of authentication herein 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.
IN WITNESS WHEREOF, the Transferor has caused this Certificate to be
duly executed.
FIRESTONE RETAIL CREDIT CORPORATION
By:
----------------------------------------------
Name:
Title:
CERTIFICATE OF AUTHENTICATION
This is the BRIDGESTONE/FIRESTONE Certificate referred to in the within
mentioned Pooling and Servicing Agreement.
THE FUJI BANK AND TRUST COMPANY,
as Trustee
By:
----------------------------------------------
Authorized Signatory
EXHIBIT B
---------
FORM OF ASSIGNMENT OF RECEIVABLES IN
ELIGIBLE ALTERNATIVE ACCOUNTS
(As required by Subsection 2.05(b)(ii) of
the Pooling and Servicing Agreement)
ASSIGNMENT No. _____ OF RECEIVABLES IN ELIGIBLE ALTERNATIVE ACCOUNTS,
dated as of _________________, by and between FIRESTONE RETAIL CREDIT
CORPORATION (the "Transferor"), a Massachusetts corporation, as Transferor,
and THE FUJI BANK AND TRUST COMPANY, a banking corporation organized and
existing under the laws of the State of New York, as Trustee (the "Trustee")
pursuant to the Pooling and Servicing Agreement referred to below.
W I T N E S E T H:
- - - - - - - - -
WHEREAS, the Transferor, Bridgestone/Firestone, Inc.
("Bridgestone/Firestone"), as Servicer, and the Trustee are parties to the
Amended and Restated Pooling and Servicing Agreement, dated as of
October ___, 1996 (hereinafter as such agreement may have been or may from
time to time be, amended, supplemented or otherwise modified, the "Pooling
and Servicing Agreement");
WHEREAS, pursuant to the Pooling and Servicing Agreement, the Transferor
pursuant to Section 2.05(b) and (c) of the Pooling and Servicing Agreement,
may designate Eligible Alternative Accounts of the Transferor to be included
as Accounts and to convey the Receivables of such Eligible Alternative
Accounts, whether now existing or hereafter created, to the Trust as part of
the corpus of the Trust (as each such term is defined in the Pooling and
Servicing Agreement); and
WHEREAS, the Trustee is willing to accept such designation and
conveyance of the Receivables in the Eligible Alternative Accounts subject to
the terms and conditions hereof;
NOW, THEREFORE, the Transferor and the Trustee hereby agree as follows:
1. Defined Terms. All capitalized terms used herein shall have the
-------------
meanings ascribed to them in the Pooling and Servicing Agreement unless
otherwise defined herein.
"Addition Date" shall mean, with respect to the Eligible Alternative
-------------
Accounts designated hereby, (___________________, 199__).
"Addition Notice Date" shall mean, with respect to the Eligible
--------------------
Alternative Accounts, the last day in the month preceding the month in which
the Addition Date occurs.
2. Designation of Eligible Alternative Accounts. The Transferor does
--------------------------------------------
hereby deliver herewith a list or computer file containing a true and
complete schedule identifying all such Eligible Alternative Accounts
specifying for each such Account, as of the Addition Notice Date, its account
number. Such list or computer file shall be as of the date of this
Assignment incorporated into and made part of this Assignment and is marked
as Schedule 1 to this Assignment.
----------
3. Conveyance of Receivables.
-------------------------
(a) The Transferor does hereby transfer, assign, set over and otherwise
convey to the Trust for the benefit of Certificateholders, without recourse
all of its right, title and interest in, to and under the Receivables now
existing and hereafter created designated on Schedule 1 hereof, all monies
----------
due or to become due and all amounts received with respect thereto, including
all Recoveries related thereto (net of related expenses), insurance proceeds
(net of related expenses), and any Insurance Premiums paid under any
Insurance Agreement and all proceeds thereof. The foregoing transfer,
assignment, set-over and conveyance does not constitute and is not intended
to result in a creation or an assumption by the Trust, the Trustee or any
Investor Certificateholder of any obligation of the Servicer, the Transferor
or any other Person in connection with the Accounts, the Receivables or under
any agreement or instrument relating thereto, including, without limitation,
any obligation to any Obligors, merchants, or Credit First National
Association and any affiliate thereof, or insurers.
(b) In connection with such transfer, the Transferor agrees to record
and file, at its own expense, a financing statement (and continuation
statements with respect to such financing statements when applicable) with
respect to the Receivables now existing and hereafter created for the
transfer of accounts meeting the requirements of applicable state law in such
manner and in such jurisdictions as are necessary to perfect the transfer and
assignment of the Receivables to the Trust, and to deliver a file-stamped
copy of such financing statement or other evidence of such filing to the
Trustee on or prior to the date of issuance of the Certificates. The Trustee
shall be under no obligation whatsoever to file such financing statement, or
a continuation statement to such financing statement, or make any other
filing under the UCC in connection with such transfer.
(c) In connection with such transfer, the Transferor further agrees, at
its own expense, on or prior to the date of this Assignment to indicate in
its books and records that all
Receivables created in connection with the Eligible Alternative Accounts
designated hereby have been conveyed to the Trust pursuant to this Assignment
for the benefit of the Certificateholders.
4. Acceptance by Trustee. Subject to the satisfaction of the
---------------------
conditions set forth in Section 6, the Trustee hereby acknowledges its
acceptance on behalf of the Trust for the benefit of all Certificateholders
of all right, title and interest to the property, now existing and hereafter
created, conveyed to the Trust pursuant to Section 3(a) of this Assignment,
and declares that it shall maintain such right, title and interest, upon the
trust set forth in the Pooling and Servicing Agreement. The Trustee further
acknowledges that, prior to or simultaneously with the execution and delivery
of this Assignment, the Transferor delivered to the Trustee the written list
described in Section 2 of this Assignment.
5. Representations and Warranties of the Transferor. The Transferor
------------------------------------------------
hereby represents and warrants to the Trustee, on behalf of the Trust, as of
the date of this Assignment and as of the Addition Date that:
(a) Legal, Valid and Binding Obligation. This Assignment constitutes
-----------------------------------
a legal, valid and binding obligation of the Transferor enforceable against
the Transferor in accordance with its terms, except as such enforceability
may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws now and hereafter in effect affecting the
enforcement of creditors' rights in general and except as such enforceability
may be limited by general principles of equity (whether considered in a suit
at law or in equity);
(b) Eligibility of Accounts: As of the Addition Notice Date, to the
-----------------------
best knowledge of the Transferor, each Eligible Alternative Account
designated hereby is an Eligible Alternative Account in all material
respects;
(c) Selection Procedures. No selection procedure adverse to the
--------------------
interests of the Investor Certificateholders was utilized in selecting the
Alternative Accounts designated hereby from the available Eligible
Alternative Accounts;
(d) Insolvency. The Transferor is not insolvent and, after giving
----------
effect to the conveyance set forth in Section 3 of the Assignment, will not
be insolvent; and
(e) Security Interest. This Assignment constitutes a valid transfer
-----------------
and assignment to the Trust of all right, title and interest of the
Transferor in the Receivables including all Recoveries relating thereto and
the proceeds thereof (including insurance proceeds to the extent that the
Seller is entitled
thereto) relating thereto or, if this Assignment does not constitute a valid
transfer and assignment of such property, it constitutes a grant of a
"security interest" (as defined in the UCC as in effect in the State of New
York) in such property to the Trust, which, in the case of existing
Receivables and the proceeds thereof, is enforceable upon execution and
delivery of this Assignment, and which will be enforceable with respect to
such Receivables hereafter created and the proceeds thereof upon such
creation. Upon the filing of the financing statement described in Section 3
of the Assignment and, in the case of the Receivables hereafter created and
the proceeds thereof, upon the creation thereof, the Trust shall have a first
priority perfected security or ownership interest in such property except for
Liens permitted under subsection 2.08(b) of the Pooling and Servicing
Agreement; provided, however, that such security interest in proceeds shall
-------- -------
remain perfected after 10 days from their receipt by the Servicer (so long as
Bridgestone/Firestone is the Servicer) or the Transferor only to the extent
that such proceeds are identifiable cash proceeds or that come into the
Trust's possession within the applicable 10-day period; and provided,
--------
further, that the Transferor makes no representation or warranty with respect
- -------
to the effect of Section 9-306(4) of the UCC on the rights of the Trust to
proceeds held by the Transferor at the time insolvency proceedings are
instituted by or against the Transferor.
6. Conditions Precedent. The acceptance of the Trustee set forth in
--------------------
Section 4 hereof and the amendment of the Pooling and Servicing Agreement as
set forth in Section 7 hereof are subject to the satisfaction, on or prior to
the Addition Date, of the following conditions precedent:
(a) Representations and Warranties. Each of the representations and
------------------------------
warranties made by the Transferor in Section 5 shall be true and correct as
of the Addition Notice Date or as of the Addition Date as applicable.
(b) Officer's Certificate. The Transferor shall have delivered to the
---------------------
Trustee a certificate of a Vice President or more senior officer confirming
the items set forth in Section 2.05(b)(v) of the Pooling and Servicing
Agreement.
(c) Opinion of Counsel. The Transferor shall have delivered to the
------------------
Trustee an Opinion of Counsel with respect to the Eligible Alternative
Accounts designated hereby substantially in the form of Exhibit F to the
---------
Pooling and Servicing Agreement.
(d) Additional Information. The Transferor shall have delivered to the
----------------------
Trustee such information, if any, as was reasonably requested by the Trustee
to satisfy itself as to the accuracy of the representation and warranty set
forth in Section 5(b) of this Agreement.
7. Amendment of the Pooling and Servicing Agreement. The Pooling and
------------------------------------------------
Servicing Agreement is hereby amended by providing that all references to the
"Pooling and Servicing Agreement," to "this Agreement" and "herein" shall
be deemed from and after the Addition Date to be a dual reference to the
Pooling and Servicing Agreement as supplemented by this Assignment. Except
as expressly amended hereby, all of the representations, warranties, terms,
covenants and conditions of the Pooling and Servicing Agreement shall remain
unamended and shall continue to be, and shall remain, in full force and
effect in accordance with its terms and except as expressly provided herein
shall not constitute or be deemed to constitute a waiver of compliance with
or consent to noncompliance with any term or provision of the Pooling and
Servicing Agreement.
8. Counterparts. This Assignment may be executed in any number of
------------
counterparts, all of which taken together shall constitute one and the same
instrument.
9. Governing Law. THIS ASSIGNMENT SHALL BE GOVERNED BY AND CONSTRUED
-------------
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE TO ITS
CONFLICTS OF LAW PROVISIONS.
IN WITNESS WHEREOF, the undersigned have caused this Assignment of
Receivables in Eligible Alternative Accounts to be duly executed and
delivered by their respective duly authorized officers on the day and the
year first above written.
FIRESTONE RETAIL CREDIT CORPORATION,
as Transferor
By
-----------------------------------------------
Title:
THE FUJI BANK AND TRUST COMPANY,
as Trustee
By
-----------------------------------------------
Title:
EXHIBIT C
---------
FORM OF REASSIGNMENT OF RECEIVABLES IN REMOVED ACCOUNTS
(As required by Subsection 2.10(b)(i) of
the Pooling and Servicing Agreement)
REASSIGNMENT No. ___ OF RECEIVABLES, dated as of ___________, __, by and
between FIRESTONE RETAIL CREDIT CORPORATION, as Transferor (the
"Transferor"), a Massachusetts corporation, and THE FUJI BANK AND TRUST
COMPANY, a banking corporation organized and existing under the laws of the
State of New York, as Trustee (the "Trustee") pursuant to the Pooling and
Servicing Agreement referred to below.
W I T N E S S E T H
-------------------
WHEREAS, the Transferor, Bridgestone/Firestone, Inc.
("Bridgestone/Firestone"), as servicer and the Trustee are parties to the
Amended and Restated Pooling and Servicing Agreement, dated as of
______________ (hereinafter as such agreement may have been, or may from time
to time be, amended, supplemented or otherwise modified, the "Pooling and
Servicing Agreement");
WHEREAS, pursuant to the Pooling and Servicing Agreement, the Transferor
wishes to remove all Receivables from certain designated Accounts of the
Transferor (the "Removed Accounts.) and to cause the Trustee to reconvey the
Receivables of such Removed Accounts, whether now existing or hereafter
created, from the Trust to the Transferor; and
WHEREAS, the Trustee is willing to accept such designation and to
reconvey the Receivables in the Removed Accounts subject to the terms and
conditions hereof;
NOW, THEREFORE, the Transferor and the Trustee hereby agree as follows:
1. Defined Terms. All terms defined in the Pooling and Servicing
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Agreement and used herein shall have such defined meanings when used herein,
unless otherwise defined herein.
"Removal Date" shall mean, with respect to the Removed Accounts
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designated hereby, ___________, 19__.
"Removal Notice Date" shall mean, with respect to the Removed Account,
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the billing date for such Removed Account in the month preceding the month in
which the Removal Date for such Removed Account occurs, (which shall be a
date on or prior to the fifth Business Day prior to the Removal Date).
2. Designation of Removed Accounts. The Transferor shall deliver to
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the Trustee herewith a list or computer file containing a true and complete
schedule identifying all Accounts the Receivables of which have not been
removed from the Trust specifying for each such Account, as of the Removal
Notice Date, its account number. Such schedule shall be marked as Schedule
--------
1 to this Reassignment and shall be incorporated into and made a part of this
- -
Reassignment as of the Removal Date.
3. Conveyance of Receivables.
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(a) The Trustee does hereby transfer, assign, set-over and otherwise
convey to the Transferor, without recourse on and after the Removal Date, all
right, title and interest of the Trust in, to and under the Receivables now
existing and hereafter created in the Removed Accounts designated hereby, all
amounts due or to become due and all amounts received with respect thereto,
including all Recoveries relating thereto (net of related expenses),
insurance proceeds (net of related expenses), all of its right, title and
interest in, to and under the Participation Agreements, Purchase and Sale
Agreement and any Insurance Premiums paid under any Insurance Agreement and
all proceeds of any Insurance Agreement.
(b) In connection with such transfer, the Trustee agrees to execute and
deliver to the Transferor, on or prior to the date of this Reassignment, a
termination statement prepared by the Transferor in form satisfactory to the
Trustee with respect to the Receivables now existing and hereafter created in
the Removed Accounts reassigned hereby (which may be a single termination
statement with respect to all such Receivables) evidencing the release by the
Trust of its lien on the Receivables in the Removed Accounts, and meeting the
requirements of applicable state law, in such manner and such jurisdictions
as are necessary to remove such lien.
4. Acceptance by Trustee. The Trustee hereby acknowledges that, prior
---------------------
to or simultaneously with the execution and delivery of this Reassignment,
the Transferor delivered to the Trustee the computer file or microfiche list
described in Section 2 of this Reassignment.
5. Representations and Warranties of the Transferor. The Transferor
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hereby represents and warrants to the Trustee, on behalf of the Trust, as of
the date of this Agreement and as of the Removal Date:
(a) Legal, Valid and Binding Obligation. This Reassignment constitutes
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a legal, valid and binding obligation of the Transferor enforceable against
the Transferor, in accordance with its terms, except as such enforceability
may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect affecting the enforcement of
creditors' rights in general and except as such enforceability may be limited
by general principles of equity (whether considered in a suit at law or in
equity); and
(b) Selection Procedures. No selection procedures believed by the
--------------------
Transferor to be materially adverse to the interests of the Investor
Certificateholders of any Series were utilized in selecting the Removed
Accounts designated hereby.
6. Conditions Precedent. The amendment of the Pooling and Servicing
Agreement set forth in Section 7 hereof is subject to the satisfaction, on or
prior to the Removal Date, of the following condition precedent:
(a) Officers' Certificate. The Transferor shall have delivered to the
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Trustee an Officers' Certificate certifying that (i) as of the Removal Date,
all requirements set forth in Section 2.10 of the Pooling and Servicing
Agreement for designating Removed Accounts and reconveying the Receivables of
such Removed Accounts, whether now existing or hereafter created, have been
satisfied, and (ii) each of the representations and warranties made by the
Transferor in Section 5 hereof is true and correct as of the Removal Date.
The Trustee may conclusively rely on such Officers' Certificate, shall have
no duty to make inquiries with regard to the matters set forth therein and
shall incur no liability in so relying.
7. Amendment of the Pooling and Servicing Agreement. The Pooling and
------------------------------------------------
Servicing Agreement is hereby amended to provide that all references therein
to the "Pooling and Servicing Agreement," to "this Agreement" and "herein"
shall be deemed from and after the Removal Date to be a dual reference to the
Pooling and Servicing Agreement as supplemented by this Reassignment. Except
as expressly amended hereby, all of the representations, warranties, terms,
covenants and conditions of the Pooling and Servicing Agreement shall remain
unamended and shall continue to be, and shall remain, in full force and
effect in accordance with its terms and except as expressly provided herein
shall not constitute or be deemed to constitute a waiver of compliance with
or a consent to non-compliance with any term or provision of the Pooling and
Servicing Agreement.
8. Counterparts. This Reassignment may be executed in two or more
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counterparts (and by different parties on separate counterparts), each of
which shall be an original, but all of which together shall constitute one
and the same instrument.
9. Governing Law. THIS REASSIGNMENT SHALL BE GOVERNED BY AND
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CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT
REFERENCE TO ITS CONFLICTS OF LAW PROVISIONS.
IN WITNESS WHEREOF, the undersigned have caused this Reassignment of
Receivables to be duly executed and delivered by their respective duly
authorized officers on the day and year first above written.
FIRESTONE RETAIL CREDIT CORPORATION,
as Transferor
By
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Title:
THE FUJI BANK AND TRUST COMPANY,
as Trustee
By
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Title:
EXHIBIT D
---------
Date: ______________, 1992
IRREVOCABLE SERVICER LETTER OF CREDIT NO. _________
The Fuji Bank and Trust Company
Two World Trade Center
81st Floor
New York, New York 10048
Attention: Trust Administration Department
Gentlemen:
At the request and for the account of our customer,
Bridgestone/Firestone, an Ohio corporation (the "Corporation"), we (the
"Bank") hereby establish in your favor this Irrevocable Letter of Credit No.
________________________ wherein you, as trustee (the "Trustee") under the
Amended and Restated Pooling and Servicing Agreement, as supplemented
(collectively, the "Pooling and Servicing Agreement") among the Corporation,
as servicer, Firestone Retail Credit Corporation, as transferor and you,
pursuant to which the Bridgestone/Firestone Master Trust, Series 1992-A and
Series 1992-B Certificates (the "Certificates") have been issued, are hereby
irrevocably authorized, to draw (i) as required under Section 4.01A(a) of the
Pooling and Servicing Agreement or (ii) Section 4.01A(e) of the Pooling and
Servicing Agreement (a "Special Drawing"), upon the terms and conditions
hereinafter set forth, in an aggregate amount not exceeding $45,000,000
(hereinafter, as reduced from time to time in accordance with the provisions
hereof, the "Stated Amount").
Funds under this Letter of Credit are available to you only against your
written certificate signed by a person purporting to be your authorized
officer, appropriately completed, in the form of Annex 1 or Annex 2 hereto
for payment of certain amounts due from, but unpaid by, the Corporation under
the Pooling and Servicing Agreement.
We hereby agree that each demand made under and in compliance with the
terms of this Letter of Credit will be duly honored by us upon due delivery
of the certificate(s), as specified above, appropriately completed (together
with the enclosures, if any, required thereby), if presented as specified
on or before the expiration date hereof. If a presentation in respect of
payment is made by you hereunder at or prior to 12:00 P.M., New York City
time, on a Business Day, and provided that the documents so presented conform
to the terms and conditions hereof, payment shall be made to you of the
amount specified, in immediately available funds, not later than 3:00 P.M.,
New York City time, on the same Business Day. If a presentation in respect
of payment is made by you hereunder after 3:00 P.M., New York City time, on a
Business Day, such presentation shall be deemed to have been made prior to
3:00 P.M., New York City time, on the next succeeding Business Day. You
agree to use your best efforts to provide us telephonic notice at the time
any presentation in respect of payment is made hereunder; provided, however,
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that failure to provide such telephonic notice shall not affect our
obligation to make payment in respect of any such presentation in respect of
payment. If requested by you, payment under this Letter of Credit will be
wire transferred to an account in New York, New York specified in the related
certificate. As used herein, "Business Day" shall mean any day other than a
Saturday, a Sunday, or a day on which banking institutions in New York, New
York shall be authorized or obligated by law, executive order or governmental
decree to be closed.
If a drawing made by you hereunder does not, in any instance, conform to
the terms and conditions of this Letter of Credit, we shall give you prompt
notice that the purported drawing was not effected in accordance with the
terms and conditions of this Letter of Credit, stating the reasons therefor
and that we are holding any documents presented in connection therewith at
your disposal or are returning the same to you, as we may elect.
Except as otherwise specified in Annex 2, each drawing under this Letter
of Credit shall be verified to Account No. ________ maintained by the Trustee
(the "Collection Account").
Only you, as Trustee, may make a drawing under this Letter of Credit.
Upon the payment of the amount specified in the related certificate(s)
presented hereunder, we shall be fully discharged of our obligation under
this Letter of Credit with respect to such certificate(s) and we shall not
thereafter be obligated to make any further payments under this Letter of
Credit in respect of such certificate(s) to you or any other person. By
paying to you an amount demanded in accordance herewith, we make no
representation as to the correctness of the amount demanded.
This Letter of Credit shall expire at our close of business in New York,
New York on the first to occur of the following dates (the "Termination
Date"): (x) ______________ ___, 199_ or, if said date shall not be a Business
Day, on the Business Day
next succeeding said date, or (y) the date the Corporation ceases to be the
Servicer under the Pooling and Servicing Agreement, as provided in a written
notice to us from the Trustee, or (z) the date of receipt by us of your
written certificate signed by a person purporting to be your authorized
officer, appropriately completed, in the form of Annex 3 hereto. This Letter
of Credit shall be promptly surrendered to us upon expiration.
Drawings in respect of payments hereunder honored by us shall not, in
the aggregate, exceed the Stated Amount in effect immediately prior to such
drawing. Each drawing honored by us hereunder shall pro tanto reduce the
--- -----
Stated Amount in effect immediately prior to such drawing.
This Letter of Credit is subject to, and shall be governed by, the
Uniform Customs and Practice for Documentary Credits (1983 Revision),
International Chamber of Commerce, Publication No. 400 (the "Uniform
Customs"). This Letter of Credit shall be deemed to be made under the laws
of the State of New York, including Article 5 of the Uniform Commercial Code
of such State, and shall, as to matters not governed by the Uniform Customs,
be governed by and construed in accordance with the laws of the State of New
York.
Notwithstanding anything in Article 54(e) of the Uniform Customs to the
contrary, this Letter of Credit is transferable in its entirety (but not in
part) only to a successor Trustee under the Pooling and Servicing Agreement
upon presentation to us of this Letter of Credit accompanied by the transfer
form attached hereto as Annex 4, to the transferee specified therein.
All documents presented to us in connection with any demand for payment
hereunder, as well as all notices and other communications to us in respect
of this Letter of Credit, shall be in writing and addressed and presented to
us at our office at One World Trade Center, New York, New York 10048
Attention: Loan Administration and shall make specific reference to this
Letter of Credit by number. Such documents, notices and other communication
shall be personally delivered to us, or may be sent to us by tested telex or
over a telecopier (promptly confirmed by delivery of the written document,
notice or other communication, as the case may be, provided that such
confirmation shall not be a condition to the effectiveness of such demand for
payment, notice or other communication) to the following numbers, as
applicable:
Telex No.: 420575 (Answerback: SMTBK)
Telecopier No.: (212) 524-0612
This Letter of Credit sets forth in full our undertaking, and such
undertaking shall not in any way be modified, amended,
amplified or limited by reference to any document, instrument or agreement
referred to herein (including, without limitation, the certificates), except
only Annex 1 through 4 hereto; and any such reference shall not be deemed to
incorporate herein by reference any document, instrument or agreement except
as set forth above.
Very truly yours,
The Sumitomo Bank, Limited
By:
----------------------------------------------
Name:
Title:
ANNEX 1 TO
LETTER OF CREDIT NO.
------------------------------------
CERTIFICATE FOR "ANNEX 1 DRAWING"
---------------------------------
The undersigned, as Trustee (the "Trustee"), acting through the
undersigned duly authorized officer of the Trustee, hereby certifies to The
Sumitomo Bank, Limited (the "Bank"), with reference to the Bank's Irrevocable
Letter of Credit No. ______________ (the "Letter of Credit"; any capitalized
term used herein and not defined shall have its respective meaning as set
forth in the Letter of Credit) issued in favor of the Trustee, that:
(1) The Trustee is the Trustee under the Pooling and Servicing
Agreement.
(2) The Corporation, as servicer (the "Servicer") under the
Pooling and Servicing Agreement, has notified us, as Trustee under the
Pooling and Servicing Agreement, pursuant to a Monthly Servicer's
Certificate (as defined in the Pooling and Servicing Agreement) (a copy
of which is attached hereto) furnished pursuant to Section 3.04(b) of
the Pooling and Servicing Agreement, that the following amount was
required to be remitted by the Corporation to the Collection Account
pursuant to Section 4.01(g) of the Pooling end Servicing Agreement with
respect to the Distribution Date (as defined in the Pooling and
Servicing Agreement) occurring on (insert applicable Distribution Date):
-----------------------------------
$(insert amount required to be remitted pursuant to Section 4.01(g)).
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(3) The Corporation has failed to deposit the following portion of
amounts owed by it with respect to such Distribution Date as set forth
in paragraph (2) above: $(insert amount of deficiency).
---------------------------
(4) The Trustee is making a drawing under the Letter of Credit in
the amount of $_________ which amount equals the lesser of (a) the
amount set forth in paragraph (3) and (b) the amount identified by the
Servicer in the Monthly Servicer's Certificate referred to in paragraph
(2) above as being available on the date hereof (and after giving effect
to any contemporaneous demand for payment under the Letter of Credit
being made by the Trustee) to be drawn under the Letter of Credit.
(5) The Trustee has not received notice from the Corporation or any
other person or entity contesting the accuracy of such Monthly
Servicer's Certificate.
(6) The account to which payment under the Letter of Credit is to
be wire transferred is Account No. 30492-01/0.1, maintained at The Fuji
Bank and Trust Company.
IN WITNESS WHEREOF, the Trustee has executed and delivered this
certificate as of the _____ day of _____________.
THE FUJI BANK, AND
TRUST COMPANY, as Trustee
By
-----------------------------------------------
Name:
Title:
ANNEX 2 TO
LETTER OF CREDIT NO.
-------------------------------------
CERTIFICATE FOR "SPECIAL DRAWING"
---------------------------------
___________, 19__
The Sumitomo Bank, Limited
One World Trade Center, 95th Floor
New York, New York 10048
Attention:
Re: Irrevocable Letter of Credit No. ________________
Gentlemen:
The undersigned, a duly authorized officer of The Fuji Bank and Trust
Company (the "Trustee"), hereby certifies to The Sumitomo Bank, Limited with
reference to irrevocable Letter of Credit No. ________________ (the "Letter
of Credit") (any capitalized term used herein and not defined shall have the
meaning set forth in the Letter of Credit) issued by The Sumitomo Bank,
Limited (the "Bank"), in favor of the Trustee, that:
(1) The Trustee is the Trustee under the Pooling and Servicing
Agreement.
(2) The Trustee has been instructed by the Servicer to make a Special
Drawing.
(3) A Responsible Officer of the Trustee has obtained knowledge that the
short-term debt rating of the Bank has been reduced, suspended or withdrawn.
(4) The Trustee hereby demands payment under the Letter of Credit in the
amount of $_____, which amount equals the Available Letter of Credit Amount
on the Business Day preceding the date hereof, as specified in the Monthly
Servicer's Certificate delivered by the Servicer pursuant to Section 3.04(b)
of the Pooling and Servicing Agreement (and after giving effect to any
contemporaneous demand for payment under the Letter of Credit being made with
respect to such date).
(5) All amounts received by the Trustee from the Bank in respect of this
certificate shall be applied in accordance with Section 4.01A(e) of the
Pooling and Servicing Agreement.
(6) The Trustee directs that such amounts be deposited in Account No.
____________ at The Fuji Bank and Trust Company.
IN WITNESS WHEREOF, the Trustee has executed and delivered this
certificate as of this _____ day of ____________, 19__.
THE FUJI BANK AND
TRUST COMPANY, as Trustee
By:
----------------------------------------------
Authorized Signatory
ANNEX 3 TO
LETTER OF CREDIT NO.
-------------------------------------
CERTIFICATE FOR THE TERMINATION
OF LETTER OF CREDIT NO.
----------------
The Sumitomo Bank, Limited
One World Trade Center
New York, New York 10048
Attention:
The undersigned, a duly authorized officer of The Fuji Bank and Trust
Company (the "Trustee"), hereby certifies to The Sumitomo Bank, Limited, with
reference to Irrevocable Letter of Credit No. ________________ (the "Letter
of Credit"; any capitalized terms used herein and not defined shall have the
meaning set forth in the Letter of Credit) issued by The Sumitomo Bank,
Limited in favor of the Trustee, that the Letter of Credit shall terminate on
_________________. Accordingly, we herewith return to you for cancellation
the Letter of Credit, which is terminated, as of the date hereof, pursuant to
its terms.
Date: _______________ THE FUJI BANK AND TRUST COMPANY,
as Trustee
By
------------------------------------------
Authorized Officer
ANNEX 4 TO
LETTER OF CREDIT NO.
-------------------------------------
___________, 19__
The Sumitomo Bank, Limited
One World Trade Center
New York, New York 10048
Attention: Loan Administration
Re: Irrevocable Letter of Credit No.
----------------
of The Sumitomo Bank, Limited
Gentlemen:
For value received, the undersigned beneficiary hereby irrevocably
transfers to:
_________________________________________
(Name of Transferee)
_________________________________________
(Address)
all rights of the undersigned beneficiary to draw under the above-captioned
Letter of Credit (the "Letter of Credit"). The transferee has succeeded the
undersigned as Trustee under the Pooling and Servicing Agreement (as defined
in the Letter of Credit).
By this transfer, all rights of the undersigned beneficiary in the
Letter of Credit are transferred to the transferee and the transferee shall
hereafter have the sole rights as beneficiary thereof; provided, however,
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that no rights shall be deemed to have been transferred to the transferee
until such transfer complies with the requirements of the Letter of Credit
pertaining to transfers.
The Letter of Credit is returned herewith and in accordance therewith we
ask that this transfer be effective and that you cause the transfer of the
Letter of Credit to our transferee or that, if so requested by the
transferee, you cause the issuance of a new irrevocable Letter of Credit in
favor of the transferee with provisions consistent with the Letter of Credit.
Very truly yours,
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as predecessor Trustee
By
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(Name and Title)
EXHIBIT E
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FORM OF ANNUAL SERVICER'S CERTIFICATE
(As required to be delivered on or before
March 31 of each calendar year, beginning
with March 31, 1993, pursuant to Section
3.05 of the Pooling and Servicing Agreement)
BRIDGESTONE/FIRESTONE, INC.
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BRIDGESTONE/FIRESTONE MASTER TRUST
- --------------------------------------------------------------------------
The undersigned, duly authorized representatives of
Bridgestone/Firestone, Inc. ("Bridgestone/Firestone"), as Servicer pursuant
to the Amended and Restated Pooling and Servicing Agreement dated as of
_______________ by and between Firestone Retail Credit Corporation, as
Transferor, Bridgestone/Firestone, as Servicer, and The Fuji Bank and Trust
Company, as Trustee, do hereby certify that:
1. Bridgestone/Firestone is, as of the date hereof, the Servicer under
the Pooling and Servicing Agreement.
2. The undersigned are duly authorized pursuant to the Pooling and
Servicing Agreement to execute and deliver this Certificate to the Trustee.
3. A review of the activities of the Servicer during the calendar year
ended December 31, 19_ and of its performance under the Pooling and Servicing
Agreement was conducted under our supervision.
4. Based on such review, the Servicer has, to the best of our
knowledge, fully performed all its obligations under the Pooling and
Servicing Agreement and no default in the performance of such obligations has
occurred or is continuing except as set forth in paragraph 5 below.
5. The following is a description of each default in the performance
of the Servicer's obligations under the provisions of the Pooling and
Servicing Agreement known to us to have been made by the Servicer noted
during the year ended December 31, 19__, which sets forth in detail the (i)
nature of each such default, (ii) the action taken by the Servicer, if any,
to remedy each
such default and (iii) the current status of each default: (If applicable,
insert "None.")
IN WITNESS WHEREOF, the undersigned has duly executed this Certificate
this __ day of ________, 19__.
BRIDGESTONE/FIRESTONE, INC.,
as Servicer
By
-----------------------------------------------
Name:
Title:
By
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Name:
Title:
EXHIBIT F
---------
(FORM OF OPINION OF COUNSEL
PROVISIONS TO BE INCLUDED IN
OPINION OF COUNSEL TO BE
DELIVERED PURSUANT TO
SUBSECTION 2.05(b)(vi)
----------------------------
The opinion set forth below may be subject to certain qualifications,
assumptions, limitations and exemptions (including, without limitation, with
respect to the consideration given for the Eligible Alternative Accounts and
the insolvency of the Transferor at the time of the conveyance of such
Accounts) taken or made in the opinion of ____________________________ with
respect to similar matters delivered on the Closing Date.
Pursuant to the Assignment No. __ of Receivables in Eligible Alternative
Accounts (the "Assignment"), the Transferor will transfer, assign, set-over
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and otherwise convey to the Trust all of its right, title and interest in, to
and under the Receivables now existing and hereafter created in the Eligible
Alternative Accounts ("Receivables in Eligible Alternative Accounts"). If
the assignment, transfer and conveyance of the Receivables in Eligible
Alternative Accounts is determined to be a sale of the Receivables in
Eligible Alternative Accounts and such sale is a sale of accounts (as defined
in the Code), the Assignment together with the filing of a UCC-1 financing
statement with the Secretary of State of the Commonwealth of Massachusetts,
is effective to transfer the Transferor's interest therein on the terms and
conditions set forth in the Assignment, prior to all liens. If the
assignment, transfer and conveyance of the Receivables in Eligible
Alternative Account is determined to be a sale of general intangibles, then,
assuming the applicability of Massachusetts law the Assignment is effective
to transfer the Transferor's interest in the Receivables in Eligible
Alternative Accounts. If the assignment, transfer and conveyance of the
Receivables in Eligible Alternative Accounts is determined to be the granting
of a security interest in the Receivables in Eligible Alternative Accounts,
the Assignment, together with the filing (which has been completed) of a
UCC-1 financing statement with the Secretary of State of the Commonwealth of
Massachusetts is effective to grant to and create in favor of the Trust a
first priority perfected security interest in the Receivables in Eligible
Alternative Accounts.)
EXHIBIT G
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Date: ___________, 1992
IRREVOCABLE TRANSFEROR LETTER OF CREDIT NO. _____
The Fuji Bank and Trust Company
Two World Trade Center
81st Floor
New York, New York 10048
Attention: Trust Administration Department
Gentlemen:
At the request and for the account of our customer,
Bridgestone/Firestone, an Ohio corporation (the "Corporation"), we (the
"Bank") hereby establish in your favor this Irrevocable Letter of Credit No.
______ wherein you, as trustee (the "Trustee") under the Pooling and
Servicing Agreement, as supplemented by the Series 1992-A and Series 1992-B
Supplements, each dated as of November 1, 1992 (collectively, the "Pooling
and Servicing Agreement") among the Corporation, as servicer, Firestone
Retail Credit Corporation, as transferor and you, pursuant to which the
Bridgestone/Firestone Master Trust, Series 1992-A and Series 1992-B
Certificates (the "Certificates") have been issued, are hereby irrevocably
authorized, to draw (i) as required under Section 4.01B(a) of the Pooling and
Servicing Agreement or (ii) Section 4.01B(d) of the Pooling and Servicing
Agreement (a "Special Drawing"), upon the terms and conditions hereinafter
set forth, in an aggregate amount not exceeding $15,000,000 (hereinafter, as
reduced from time to time in accordance with the provisions hereof, the
"Stated Amount").
Funds under this Letter of Credit are available to you only against your
written certificate signed by a person purporting to be your authorized
officer, appropriately completed, in the form of Annex 1 or Annex 2 hereto
for payment of certain amounts due from, but unpaid by, the Corporation under
the Pooling and Servicing Agreement.
We hereby agree that each demand made under and in compliance with the
terms of this Letter of Credit will be duly honored by us upon due delivery
of the certificate(s), as specified above, appropriately completed (together
with the
enclosures, if any, required thereby), if presented as specified on or before
the expiration date hereof. If a presentation in respect of payment is made
by you hereunder at or prior to 12:00 P.M., New York City time, on a Business
Day, and provided that the documents so presented conform to the terms and
conditions hereof, payment shall be made to you of the amount specified, in
immediately available funds, not later than 3:00 P.M., New York City time, on
the same Business Day. If a presentation in respect of payment is made by
you hereunder after 3:00 P.M., New York City time, on a Business Day, such
presentation shall be deemed to have been made prior to 3:00 P.M., New York
City time, on the next succeeding Business Day. You agree to use your best
efforts to provide us telephonic notice at the time any presentation in
respect of payment is made hereunder; provided, however, that failure to
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provide such telephonic notice shall not affect our obligation to make
payment in respect of any such presentation in respect of payment. If
requested by you, payment under this Letter of Credit will be wire
transferred to an account in New York, New York specified in the related
certificate. As used herein, "Business Day" shall mean any day other than a
Saturday, a Sunday, or a day on which banking institutions in New York, New
York shall be authorized or obligated by law, executive order or governmental
decree to be closed.
If a drawing made by you hereunder does not, in any instance, conform to
the terms and conditions of this Letter of Credit, we shall give you prompt
notice that the purported drawing was not effected in accordance with the
terms and conditions of this Letter of Credit, stating the reasons therefor
and that we are holding any documents presented in connection therewith at
your disposal or are returning the same to you, as we may elect.
Except as otherwise specified in Annex 2, each drawing under this Letter
of Credit shall be verified to Account No. _____ maintained by the Trustee
(the "Collection Account").
Only you, as Trustee, may make a drawing under this Letter of Credit.
Upon the payment of the amount specified in the related certificate(s)
presented hereunder, we shall be fully discharged of our obligation under
this Letter of Credit with respect to such certificate(s) and we shall not
thereafter be obligated to make any further payments under this Letter of
Credit in respect of such certificate(s) to you or any other person. By
paying to you an amount demanded in accordance herewith, we make no
representation as to the correctness of the amount demanded.
This Letter of Credit shall expire at our close of business in New York,
New York on the first to occur of the following dates (the "Termination
Date"): (x) ________, 199__ or, if said
date shall not be a Business Day, on the Business Day next succeeding said
date, or (y) the date the Corporation ceases to be the Servicer under the
Pooling and Servicing Agreement, as provided in a written notice to us from
the Trustee, or (z) the date of receipt by us of your written certificate
signed by a person purporting to be your authorized officer, appropriately
completed, in the form of Annex 3 hereto. This Letter of Credit shall be
promptly surrendered to us upon expiration.
Drawings in respect of payments hereunder honored by us shall not, in
the aggregate, exceed the Stated Amount in effect immediately prior to such
drawing. Each drawing honored by us hereunder shall pro tanto reduce the
--- -----
Stated Amount in effect immediately prior to such drawing.
This Letter of Credit is subject to, and shall be governed by, the
Uniform Customs and Practice for Documentary Credits (1983 Revision),
International Chamber of Commerce, Publication No. 400 (the "Uniform
Customs"). This Letter of Credit shall be deemed to be made under the laws
of the State of New York, including Article 5 of the Uniform Commercial Code
of such State, and shall, as to matters not governed by the Uniform Customs,
be governed by and construed in accordance with the laws of the State of New
York.
Notwithstanding anything in Article 54(e) of the Uniform Customs to the
contrary, this Letter of Credit is transferable in its entirety (but not in
part) only to a successor Trustee under the Pooling and Servicing Agreement
upon presentation to us of this Letter of Credit accompanied by the transfer
form attached hereto as Annex 4, to the transferee specified therein.
All documents presented to us in connection with any demand for payment
hereunder, as well as all notices and other communications to us in respect
of this Letter of Credit, shall be in writing and addressed and presented to
us at our office at One World Trade Center, New York, New York 10048
Attention: Loan Administration and shall make specific reference to this
Letter of Credit by number. Such documents, notices and other communication
shall be personally delivered to us, or may be sent to us by tested telex or
over a telecopier (promptly confirmed by delivery of the written document,
notice or other communication, as the case may be, provided that such
confirmation shall not be a condition to the effectiveness of such demand for
payment, notice or other communication) to the following numbers, as
applicable:
Telex No.: 420575 (Answerback: SMTBK)
Telecopier No.: (212) 524-0612
This Letter of Credit sets forth in full our undertaking, and such
undertaking shall not in any way be modified, amended, amplified or limited
by reference to any document, instrument or agreement referred to herein
(including, without limitation, the Certificates), except only Annex 1
through 4 hereto; and any such reference shall not be deemed to incorporate
herein by reference any document, instrument or agreement except as set forth
above.
Very truly yours,
The Sumitomo Bank, Limited
By:
----------------------------------------------
Name:
Title:
ANNEX 1 TO
LETTER OF CREDIT NO.
---------------------------------
CERTIFICATE FOR "ANNEX 1 DRAWING"
---------------------------------
The undersigned, as Trustee (the "Trustee"), acting through the
undersigned duly authorized officer of the Trustee, hereby certifies to The
Sumitomo Bank, Limited (the "Bank"), with reference to the Bank's Irrevocable
Letter of Credit No. ____________ (the "Letter of Credit"; any capitalized
term used herein and not defined shall have its respective meaning as set
forth in the Letter of Credit) issued in favor of the Trustee, that:
(1) The Trustee is the Trustee under the Pooling and Servicing
Agreement.
(2) The Corporation, a servicer (the "Servicer") under the Pooling
and Servicing Agreement, has notified us, as Trustee under the Pooling
and Servicing Agreement, pursuant to a Monthly Servicer's Certificate
(as defined in the Pooling and Servicing Agreement) (a copy of which is
attached hereto) furnished pursuant to Section 3.04(b) of the Pooling
and Servicing Agreement, that the following amount was required to be
remitted by the Corporation to the Collection Account pursuant to
Section 3.09(a) of the Pooling and Servicing Agreement with respect to
the Distribution Date (as defined in the Pooling and Servicing
Agreement) occurring on (insert applicable Distribution Date): $(insert
-----------------------------------
amount required to be remitted pursuant to Section 3.09(a)).
(3) The Corporation has failed to deposit the following portion of
amounts owed by it with respect to such Distribution Date as set forth
in paragraph (2) above: $(insert amount of deficiency).
---------------------------
(4) The Trustee is making a drawing under the Letter of Credit in
the amount of $_________ which amount equals the lesser of (a) the
amount set forth in paragraph (3) and (b) the amount identified by the
Servicer in the Monthly Servicer's Certificate referred to in paragraph
(2) above as being available on the date hereof (and after giving effect
to any contemporaneous demand for payment under the Letter of Credit
being made by the Trustee) to be drawn under the Letter of Credit.
(5) The Trustee has not received notice from the Corporation or
any other person or entity contesting the accuracy of such Monthly
Servicer's Certificate.
(6) The account to which payment under the Letter o(Pound
Sterling) Credit is to be wire transferred is Account No. 30492-01/0.1,
maintained at The Fuji Bank and Trust Company.
IN WITNESS WHEREOF, the Trustee has executed and delivered this
certificate as of the _____ day of _____________.
THE FUJI BANK, AND TRUST COMPANY,
as Trustee
By
-----------------------------------------------
Name:
Title:
ANNEX 2 TO
LETTER OF CREDIT NO.
---------------------------------
CERTIFICATE FOR "SPECIAL DRAWING"
---------------------------------
___________, 19__
The Sumitomo Bank, Limited
One World Trade Center
New York, New York 10048
Attention:
Re: Irrevocable Letter of Credit No.____________
Gentlemen:
The undersigned, a duly authorized officer of The Fuji Bank and Trust
Company (the "Trustee"), hereby certifies to The Sumitomo Bank, Limited with
reference to irrevocable Letter of Credit No. ______________ (the "Letter of
Credit") (any capitalized term used herein and not defined shall have the
meaning set forth in the Letter of Credit) issued by The Sumitomo Bank,
Limited (the "Bank"), in favor of the Trustee, that:
(1) The Trustee is the Trustee under the Pooling and Servicing
Agreement.
(2) The Trustee has been instructed by the Servicer to make a Special
Drawing.
(3) A Responsible Officer of the Trustee has obtained knowledge that the
short-term debt rating of the Bank has been reduced, suspended or withdrawn.
(4) The Trustee hereby demands payment under the Letter of Credit in the
amount of $_____, which amount equals the Available Letter of Credit Amount
on the Business Day preceding the date hereof, as specified in the Monthly
Servicer's Certificate delivered by the Servicer pursuant to Section 3.04(b)
of the Pooling and Servicing Agreement (and after giving effect to any
contemporaneous demand for payment under the Letter of Credit being made with
respect to such date).
(5) All amounts received by the Trustee from the Bank in respect of this
certificate shall be applied in accordance with Section 4.01A(e) of the
Pooling and Servicing Agreement.
(6) The Trustee directs that such amounts be deposited in Account No.
______________ at The Fuji Bank and Trust Company.
IN WITNESS WHEREOF, the Trustee has executed and delivered this
certificate as of this _____ day of ________, 19__.
THE FUJI BANK AND TRUST COMPANY,
as Trustee
By:
----------------------------------------------
Authorized Signatory
ANNEX 3 TO
LETTER OF CREDIT NO.
---------------------------------
CERTIFICATE FOR THE TERMINATION
OF LETTER OF CREDIT NO. _________________
The Sumitomo Bank, Limited
One World Trade Center
New York, New York 10048
Attention: Loan Administration
The undersigned, a duly authorized officer of The Fuji Bank and Trust
Company (the "Trustee"), hereby certifies to The Sumitomo Bank, Limited, with
reference to Irrevocable Letter of Credit No. _______________ (the "Letter of
Credit"; any capitalized terms used herein and not defined shall have the
meaning set forth in the Letter of Credit) issued by The Sumitomo Bank,
Limited in favor of the Trustee, that the Letter of Credit shall terminate on
_________________. Accordingly, we herewith return to you for cancellation
the Letter of Credit, which is terminated, as of the date hereof, pursuant to
its terms.
Date: ____________ THE FUJI BANK AND
TRUST COMPANY, as Trustee
By
-----------------------------------------------
Authorized Officer
ANNEX 4 TO
LETTER OF CREDIT NO.
-------------------------------------
___________, 19__
The Sumitomo Bank, Limited
One World Trade Center
New York, New York 10048
Attention: Loan Administration
Re: Irrevocable Letter of Credit No._________
of The Sumitomo Bank, Limited
Gentlemen:
For value received, the undersigned beneficiary hereby irrevocably
transfers to:
---------------------------
(Name of Transferee)
---------------------------
(Address)
all rights of the undersigned beneficiary to draw under the above-captioned
Letter of Credit (the "Letter of Credit"). The transferee has succeeded the
undersigned as Trustee under the Pooling and Servicing Agreement (as defined
in the Letter of Credit).
By this transfer, all rights of the undersigned beneficiary in the
Letter of Credit are transferred to the transferee and the transferee shall
hereafter have the sole rights as beneficiary thereof; provided, however,
-------- -------
that no rights shall be deemed to have been transferred to the transferee
until such transfer complies with the requirements of the Letter of Credit
pertaining to transfers.
The Letter of Credit is returned herewith and in accordance therewith we
ask that this transfer be effective and that you cause the transfer of the
Letter of Credit to our transferee or that, if so requested by the
transferee, you cause the issuance
of a new irrevocable Letter of Credit in favor of the transferee with
provisions consistent with the Letter of Credit.
Very truly yours,
-------------------------------------------------
as predecessor Trustee
By
-----------------------------------------------
(Name and Title)
Telegraphic Address One World Trade
"SUMITBANK, New York" THE SUMITOMO BANK, LIMITED Center
Telephone No. Suite 9651,
(212)553-0100 New York Branch New York,
New York 10048
Date: December 2, 1992
IRREVOCABLE TRANSFEROR LETTER OF
CREDIT NO. LG/MIS/NY-430647
The Fuji Bank and Trust Company
Two World Trade Center
81st Floor
New York, New York 10048
Attention: Trust Administration Department
Gentlemen:
At the request and for the account of our customer,
Bridgestone/Firestone, an Ohio corporation (the "Corporation"), we (the
"Bank") hereby establish in your favor this irrevocable Letter of Credit No.
LG/MIS/NY-430647 wherein you, as trustee (the "Trustee') under the Pooling
and Servicing Agreement, as supplemented by the Series 1992-A and Series
1992-B Supplements, each dated as of November 1, 1992 (collectively, the
"Pooling and Servicing Agreement") among the Corporation, as servicer,
Firestone Retail Credit Corporation, as transferor and you, pursuant to which
the Bridgestone/Firestone Master Trust, Series 1992-A and Series 1992-B
Certificates (the "Certificates") have been issued, are hereby irrevocably
authorized, to draw (i) as required under Section 4.01B(a) of the Pooling and
Servicing Agreement or (ii) Section 4.01B(d) of the Pooling and Servicing
Agreement (a "Special Drawing"), upon the terms and conditions hereinafter
set forth, in an aggregate amount not exceeding $15,000,000 (hereinafter, as
reduced from time to time in accordance with the provisions hereof, the
"Stated Amount").
Funds under this Letter of Credit are available to you only against your
written certificate signed by a person purporting to be your authorized
officer, appropriately completed, in the form of Annex 1 or Annex 2 hereto
for payment of certain amounts due from, but unpaid by, the Corporation under
the Pooling and Servicing Agreement.
We hereby agree that each demand made under and in compliance with the
terms of this Letter of Credit will be duly honored by us upon due delivery
of the certificate(s), as specified above, appropriately completed (together
with the enclosures, if any, required thereby), if presented as specified on
or before the expiration date hereof. If a presentation in respect of
payment is made by you hereunder at or prior to 1:00 P.M., New York City
time,on a Business Day, and provided that the documents so presented conform
to the terms and conditions hereof, payment shall be made to you of the
amount specified, in immediately available funds, not later than 4:00 P.M.,
New York City time, on the same Business Day. If a presentation in respect
of payment is made by you hereunder after 1:00 P.M., New York City time, on a
Business Day, such presentation shall be deemed to have been made prior to
1:00 P.M., New York City time, on the next succeeding Business Day. You
agree to use your best efforts to provide us telephonic notice at the time
any presentation in respect of payment is made hereunder; provided, however,
that failure to provide such telephonic notice shall not affect our
obligation to make payment in respect of any such presentation in respect of
payment. If requested by you, payment under this Letter of Credit will be
wire transferred to an account in New York, New York specified in the related
certificate. As used herein, "Business Day" shall mean any day other than a
Saturday, a Sunday, or a day on which banking institutions in New York, New
York shall be authorized or obligated by law, executive order or governmental
decree to be closed.
If a drawing made by you hereunder does not, in any instance, conform to
the terms and conditions of this Letter of Credit, we shall give you prompt
notice that the purported drawing was not effected in accordance with the
terms and conditions of this Letter of Credit, stating the reasons therefor
and that we are holding any documents presented in connection therewith at
your disposal or are returning the same to you, as we may elect.
Except as otherwise specified in Annex 2, each drawing under this Letter
of Credit shall be verified to Account No. 30492-01/0.1 maintained by the
Trustee (the "Collection Account").
Telegraphic Address One World Trade
"SUMITBANK, New York" THE SUMITOMO BANK, LIMITED Center
Telephone No. Suite 9651,
(212)553-0100 New York Branch New York,
New York 10048
Only you, as Trustee, may make a drawing under this Letter of Credit.
Upon the payment of the amount specified in the related certificate(s)
presented hereunder, we shall be fully discharged of our obligation under
this Letter of Credit with respect to such certificate(s) and we shall not
thereafter be obligated to make any further payments under this Letter of
Credit in respect of such certificate(s) to you or any other person. By
paying to you an amount demanded in accordance herewith, we make no
representation as to the correctness of the amount demanded.
This Letter of Credit shall expire at our close of business in New York,
New York on the first to occur of the following dates (the "Termination
Date"): (x) November 30, 1993 or, if said date shall not be a Business Day,
on the Business Day next succeeding said date, or (y) the date of receipt by
us of your written certificate signed by a person purporting to be your
authorized officer, appropriately completed, in the form of Annex 3 hereto.
This Letter of Credit shall be promptly surrendered to us upon expiration.
Drawings in respect of payments hereunder honored by us shall not in the
aggregate, exceed the Stated Amount in effect immediately prior to such
drawing. Each drawing honored by us hereunder shall pro tanto reduce the
--- -----
Stated Amount in effect immediately prior to such drawing.
This Letter of Credit is subject to, and shall be governed by, the
Uniform Customs and Practice for Documentary Credits (1983 Revision),
International Chamber of Commerce, Publication No. 400 (the "Uniform
Customs"). This Letter of Credit shall be deemed to be made under the laws
of the State of New York, including Article 5 of the Uniform Commercial Code
of such State, and shall, as to matters not governed by the Uniform Customs,
be governed by and construed in accordance with the laws of the State of New
York.
Notwithstanding anything in Article 54(e) of the Uniform Customs to the
contrary, this Letter of Credit is transferable in its entirety (but not in
part) only to a successor Trustee under the Pooling and Servicing Agreement
upon presentation to us of this Letter of Credit accompanied by the transfer
form attached hereto as Annex 4, to the transferee specified therein.
All documents presented to us in connection with any demand for payment
hereunder, as well as all notices and other communications to us in respect
of this Letter of Credit, shall be in writing and addressed and presented to
us at our office at One World Trade Center, New York, New York 10048
Attention: Loan Administration and shall make specific reference to this
Letter of Credit by number. Such documents, notices and other communication
shall be personally delivered to us, or may be sent to us by tested telex or
over a telecopier (promptly confirmed by delivery of the written document,
notice or other communication, as the case may be, provided that such
confirmation shall not be a condition to the effectiveness of such demand for
payment, notice or other communication) to the following numbers, as
applicable:
Telex No.: 420615 (Answerback: SMTBK)
Telecopier No.: (212) 524-0612
This Letter of Credit sets forth in full our undertaking, and such
undertaking shall not in any way be modified, amended, amplified or
__________________ by reference to any document, instrument or agreement
referred to herein (including, without limitation, the Certificates), except
only Annex 1 through 4 hereto; and any such reference shall not be deemed to
incorporate herein by reference any document, instrument or agreement except
as set forth above.
Very Truly yours,
The Sumitomo Bank, Limited
By:____________________________________
Name:
Title:
EXHIBIT 4.2
Brown & Wood
Draft 10/14/96
FIRESTONE RETAIL CREDIT CORPORATION,
Transferor,
BRIDGESTONE/FIRESTONE, INC.
and
THE FUJI BANK AND TRUST COMPANY,
Trustee
on behalf of the Series 1996-1
Certificateholders
______________________________
SERIES 1996-1 SUPPLEMENT
Dated as of October ___, 1996
to
AMENDED AND RESTATED POOLING AND SERVICING AGREEMENT
Dated as of October ___, 1996
______________________________
BRIDGESTONE/FIRESTONE MASTER TRUST
SERIES 1996-1
TABLE OF CONTENTS
SECTION 1. Designation . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 2. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 3. Aggregate Receivables . . . . . . . . . . . . . . . . . . . . 16
SECTION 4. Reassignment and Transfer Terms . . . . . . . . . . . . . . . 16
SECTION 5. Delivery and Payment for the Series 1996-1
Certificates . . . . . . . . . . . . . . . . . . . . .. . . . 16
SECTION 6. Form of Delivery of the Series 1996-1
Certificates . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 7. Article IV of the Agreement . . . . . . . . . . . . . . . . . 17
Section 4.02. Rights of Certificateholders . . . . . . . . . . . . 17
Section 4.03. Collections and Allocation . . . . . . . . . . . . . 17
Section 4.04. Determination of Monthly Interest for the
Series 1996-1 Certificates . . . . . . . . . . . . . 19
Section 4.05. Determination of Monthly Principal . . . . . . . . . 21
Section 4.06. Coverage of Required Amount for the Series
1996-1 Certificates . . . . . . . . . . . . . . . . . 23
Section 4.07. Application of Funds on Deposit in the
Collection Account for the Series 1996-1
Certificates . . . . . . . . . . . . . . . . . . . . 24
Section 4.08. Investor Charge-Offs . . . . . . . . . . . . . . . . 27
Section 4.09. Excess Finance Charge Collections for the
Series 1996-1 Certificates . . . . . . . . . . . . . 29
Section 4.10. Reallocated Principal Collections for the
Series 1996-1 Certificates . . . . . . . . . . . . . 33
SECTION 8. Article V of the Agreement . . . . . . . . . . . . . . . . . 33
Section 5.01. Distributions . . . . . . . . . . . . . . . . . . . . 33
Section 5.02. Statements to Series 1996-1
Certificateholders . . . . . . . . . . . . . . . . . 34
SECTION 9. Article VI of the Agreement . . . . . . . . . . . . . . . . 35
SECTION 10. Consents of Series 1996-1 Certificateholders . . . . . . . . 36
SECTION 11. Amortization Events . . . . . . . . . . . . . . . . . . . . 37
SECTION 12. Servicing Fee . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 13. Ratification of Pooling and Servicing Agreement . . . . . 39
SECTION 14. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 15. Governing Law . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 16. Certain Amendments . . . . . . . . . . . . . . . . . . . . . 39
EXHIBITS
A-1: Form of Class A Certificate
A-2: Form of Class B Certificate
A-3: Form of Subordinated Transferor Certificate
B: Form of Payment Date Statement
C: Form of Monthly Servicer's Certificate
D: Form of Investment Letter (Rule 144A)
E: Form of Transferor Certificate
F: Form of Investment Letter (Non Rule 144A)
SERIES 1996-1 SUPPLEMENT, dated as of October ___, 1996 (this "Series
------
Supplement") among FIRESTONE RETAIL CREDIT CORPORATION, a corporation
- ----------
organized and existing under the laws of the Commonwealth of Massachusetts,
as Transferor, BRIDGESTONE/FIRESTONE, INC., a corporation organized and
existing under the laws of the State of Ohio, individually and as Servicer
and THE FUJI BANK AND TRUST COMPANY, a banking corporation organized and
existing under the laws of the State of New York (together with its
successors in trust thereunder as provided in the
Agreement referred to below, the "Trustee"), as trustee under the Amended
-------
and Restated Pooling and Servicing Agreement dated as of October ___, 1996,
as amended, modified or supplemented from time to time (the "Agreement").
---------
PRELIMINARY STATEMENT
Section 6.09 of the Agreement provides, among other things, that the
Transferor 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 Transferor for execution and redelivery to
the Trustee for authentication of one or more Series of Certificates. The
Transferor has tendered the Exchange Notice required by Section 6.09(b) of
the Agreement and hereby enters into this Supplement with the Trustee as
required by Section 6.09(c) of the Agreement to provide for the issuance,
authentication and delivery of the Series 1996-1 Asset Backed Certificates
(the "Investor Certificates"). In the event that any term or provision
---------------------
contained herein shall conflict with or be inconsistent with any term or
provision contained in the Agreement, the terms and provisions of this
Series Supplement shall govern.
All capitalized terms not otherwise defined herein are defined in the
Agreement. All Article or Section references herein shall mean Article or
Section of the Agreement, except as otherwise provided herein. Unless
otherwise stated herein, as the context otherwise requires or if such term is
otherwise defined in the Agreement, each capitalized term used or defined
herein shall relate only to the Series 1996-1 Certificates and no other
Series of Investor Certificates issued by the Trust.
SECTION 1. Designation. 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
Series 1996-1 Asset Backed Certificates (the "Series 1996-1 Certificates"),
--------------------------
consisting of $(200,000,000) principal amount of Class A Certificates (the
"Class A Certificates"), $(28,000,000) principal amount of Class B
--------------------
Certificates (the "Class B Certificates"), $10,000,000 principal amount of
--------------------
an uncertificated interest in the Trust (the "Collateral Interest"), and
-------------------
$19,000,000 principal amount of a Subordinated Transferor Certificate (the
"Subordinated Transferor Certificate").
-----------------------------------
SECTION 2. Definitions. The following words and phrases shall
-----------
have the meanings set forth below with respect to the Series 1996-1
Certificates and the definitions of such terms are applicable to the
singular as well as the plural form of such terms and to the masculine as
well as the feminine and neuter genders of such terms:
"Amortization Event" shall have the meaning specified in Section
------------------
12.
"Amortization Period" shall mean, with respect to the Investor
-------------------
Certificates, the period following the Revolving Period which shall be
either the Controlled Amortization Period or the Rapid Amortization Period.
"Base Rate" shall mean the Weighted Average Certificate Rate plus
---------
2.00% per annum.
"Class A Additional Interest" shall have the meaning specified in
---------------------------
Section 4.04(a) of the Agreement.
"Class A Certificate Rate" shall mean _____% per annum, calculated
------------------------
on the basis of a 360-day year of twelve 30-day months.
"Class A Certificateholder" shall mean the Person in whose name
a
-------------------------
Class A Certificate is registered in the Certificate Register.
"Class A Certificateholders' Interest" shall mean the portion of
------------------------------------
the Series 1996-1 Certificateholders' Interest evidenced by the Class A
Certificates.
"Class A Certificates" shall mean any one of the certificates
--------------------
executed by the Transferor and authenticated by or on behalf of the
Trustee, substantially in the form of Exhibit A-1 hereto.
"Class A Controlled Amortization Amount" shall mean $__________.
--------------------------------------
"Class A Floating Allocation Percentage" shall mean, with respect
--------------------------------------
to any Collection Period, the percentage equivalent of a fraction, the
numerator of which is the Class A Invested Amount and the denominator of
which is the Aggregate Receivables in the Trust each on the last day of the
immediately preceding Collection Period; provided, however, that when
used in respect of the allocation of Finance Charge Collections, such
percentage shall be the percentage equivalent of a fraction the numerator
of which is the Class A Invested Amount on the last day of the immediately
preceding Collection Period and the denominator of which is the sum of the
numerators used to calculate the Invested Percentage for the allocation of
Finance Charge Collections for all Series of Certificates outstanding during
such Collection Period (including all classes of such Series) and the B/F
Amount.
"Class A Initial Invested Amount" shall mean the aggregate initial
-------------------------------
principal amount of the Class A Certificates, which is $(200,000,000).
"Class A Interest Shortfall" shall have the meaning specified in
--------------------------
Section 4.04(a).
"Class A Invested Amount" shall mean, when used with respect to
any
-----------------------
date, an amount equal to (a) the Class A Initial Invested Amount, minus (b)
the aggregate amount of principal payments made to Class A
Certificateholders prior to such date minus (c) the excess, if any, of the
aggregate amount of Class A Investor Charge-Offs for all Distribution
Dates preceding such date over Class A Investor Charge-Offs reimbursed
pursuant to Section 4.08(a) prior to such date.
"Class A Investor Charge-Offs" shall have the meaning specified
----------------------------
in Section 4.08(a).
"Class A Investor Default Amount" shall mean, with respect to each
-------------------------------
Distribution Date, an amount equal to the product of the Class A Floating
Allocation Percentage applicable during the immediately preceding
Collection Period and the amount of Defaulted Receivables for such
Collection Period.
"Class A Monthly Interest" shall mean the monthly interest
------------------------
distributable in respect of the Class A Certificates as calculated in
accordance with Section 4.04(a).
"Class A Monthly Principal" shall mean the monthly principal
-------------------------
distributable in respect of the Class A Certificates as calculated in
accordance with Section 4.05(a).
"Class A Monthly Servicing Fee" shall mean, with respect to any
-----------------------------
Distribution Date, one twelfth of the product of 2.00% and the Class A
Invested Amount on the last day of the second preceding Collection Period
(or in the case of the first Distribution Date, the initial principal amount
of the Class A Certificates).
"Class A Pool Factor" shall mean, with respect to any Record Date,
-------------------
a number carried out to eight decimal places representing the ratio of the
Class A Invested Amount as of such Record Date (determined after taking into
account any decreases in the Class A Invested Amount which will occur on the
following Distribution Date) to the Class A Initial Invested Amount.
"Class A Required Amount" shall mean, with respect to any
-----------------------
Distribution Date, the amount by which (a) the sum of (i) Class A Monthly
Interest for such Distribution Date, (ii) any Class A Monthly Interest
previously due but not paid to the Class A Certificateholders on a prior
Distribution Date, (iii) Class A Additional Interest, if any, for such
Distribution Date and any Class A Additional Interest previously due but not
paid to the Class A Certificateholders on a prior Distribution Date, (iv) the
Class A Monthly Servicing Fee for such Distribution Date and (v)
the Class A Investor Default Amount, if any, for such Distribution Date
exceeds (b) the Class A Floating Allocation Percentage of Finance Charge
Collections deposited in the Collection Account for the immediately preceding
Collection Period.
"Class B Additional Interest" shall have the meaning specified in
---------------------------
Section 4.04(b) of the Agreement.
"Class B Certificate Rate" shall mean ____% per annum, calculated
------------------------
on the basis of a 360-day year of twelve 30-day months.
"Class B Certificateholder" shall mean the Person in whose name a
-------------------------
related Class B Certificate is registered in the Certificate Register.
"Class B Certificateholders' Interest" shall mean the portion of
------------------------------------
the Series 1996-1 Certificateholders' Interest evidenced by the Class B
Certificates.
"Class B Certificates" shall mean any one of the certificates
--------------------
executed by the Transferor and authenticated by or on behalf of the Trustee,
substantially in the form of Exhibit A-2.
"Class B Floating Allocation Percentage" shall mean, with respect
--------------------------------------
to any Collection Period, the percentage equivalent of a fraction, the
numerator of which is the Class B Invested Amount and the denominator of
which is the Aggregate Receivables in the Trust each on the last day of the
immediately preceding Collection Period; provided, however, that when
used in respect of the allocation of Finance Charge Collections, such
percentage shall be the percentage equivalent of a fraction the numerator
of which is the Class B Invested Amount on the last day of the immediately
preceding Collection Period and the denominator of which is the sum of the
numerators used to calculate the Invested Percentage for the allocation of
Finance Charge Collections for all Series of Certificates outstanding during
such Collection Period (includingall classes ofsuch Series) andthe B/F Amount.
"Class B Initial Invested Amount" shall mean the aggregate initial
-------------------------------
principal amount of the Class B Certificates, which is $(28,000,000).
"Class B Interest Shortfall" shall have the meaning specified in
--------------------------
Section 4.04(b).
"Class B Invested Amount" shall mean, when used with respect to any
-----------------------
date, an amount equal to (a) the Class B Initial Invested Amount, minus
(b) the amount of principal payments made to Class B Certificateholders
prior to such date, minus (c) the aggregate amount of Class B Investor
Charge-Offs for all prior Distribution Dates, minus (d) the aggregate amount
of Class B Reallocated Principal Collections for all prior Distribution
Dates which have been used to fund the Required Amount with respect to such
Distribution Dates pursuant to Sections 4.06 and 4.10 for which neither the
Subordinated Transferor Invested Amount nor the Collateral Interest
Invested Amount has been reduced for all prior Business Days (provided
that the Class B Invested Amount shall in no event be reduced to an amount
less than zero), minus (e) an amount equal to the aggregate amount by which
the Class B Invested Amount has been reduced to fund the Class A Investor
Default Amount on all prior Distribution Dates pursuant to Section 4.08(a)
and plus (f) the amount of Excess Finance Charge Collections
allocated and available on all prior Distribution Dates pursuant to
Section 4.09(d), for the purpose of reimbursing amounts deducted
pursuant to the foregoing clauses (c), (d) and (e).
"Class B Investor Charge-Offs" shall have the meaning specified in
----------------------------
Section 4.08(b).
"Class B Investor Default Amount" shall mean, with respect to each
-------------------------------
Distribution Date, an amount equal to the product of the Class B Floating
Allocation Percentage applicable during the immediately preceding Collection
Period and the amount of Defaulted Receivables for such Collection Period.
"Class B Monthly Interest" shall mean the monthly interest
------------------------
distributable in respect of the Class B Certificates as calculated in
accordance with Section 4.04(b).
"Class B Monthly Principal" shall mean the monthly principal
-------------------------
distributable in respect of the Class B Certificates as calculated in
accordance with Section 4.05(b).
"Class B Monthly Servicing Fee" shall mean, with respect to any
-----------------------------
Distribution Date, one twelfth of the product of 2.00% and the Class B
Invested Amount on the last day of the second preceding Collection Period
(or in the case of the first Distribution Date, the initial principal amount
of the Class B Certificates).
"Class B Pool Factor" shall mean, with respect to any Record Date,
-------------------
a number carried out to eight decimal places representing the ratio of the
Class B Invested Amount as of such Record Date (determined after taking into
account any increases or decreases in the Class B Invested Amount which will
occur on the following Distribution Date) to the Class B Initial Invested
Amount.
"Class B Reallocated Principal Collections" shall mean, with
-----------------------------------------
respect to each Distribution Date, the Principal Collections allocable to
the Class B Certificates with respect to such Distribution Date (equal to
the Class B Floating Allocation Percentage of Principal Collections for the
related Collection Period for any such Distribution Date during the
Revolving Period and equal to the product of the Fixed Allocation Percentage
of Principal Collections and a fraction, the numerator of which is the Class
B Invested Amount and the denominator of which is the Invested Amount of the
Series 1996-1 Certificates as of the last day of the prior Collection Period
for any such Distribution Date during any Amortization Period), in an amount
equal to the Class A Required Amount, if any, with respect to such
Distribution Date after giving effect to any
payment of the Class A Required Amount from Excess Finance Charge
Collections, Subordinated Transferor Reallocated Principal Collections and
Collateral Interest Reallocated Principal Collections.
"Class B Required Amount" shall mean, with respect to any
-----------------------
Distribution Date, the amount by which (a) the sum of (i) Class B Monthly
Interest for such Distribution Date, (ii) any Class B Monthly Interest
previously due but not paid to the Class B Certificateholders on a prior
Distribution Date, (iii) Class B Additional Interest, if any, for such
Distribution Date and any Class B Additional Interest previously due but not
paid to the Class B Certificateholders on a prior Distribution Date, (iv) the
Class B Monthly Servicing Fee for such Distribution Date and (v)
the Class B Investor Default Amount, if any, for such Distribution Date
exceeds (b) the Class B Floating Allocation Percentage of Finance Charge
Collections deposited in the Collection Account for the immediately preceding
Collection Period.
"Closing Date" shall mean, with respect to the Series 1996-1
------------
Certificates, October __, 1996.
"Collateral Interest Accrual Period" shall mean, with respect to
----------------------------------
any Distribution Date, the period from and including the first day of the
preceding calendar month to and including the last day of such preceding
calendar month, except the initial Collateral Interest Accrual Period shall
be deemed to be the period from the Closing Date through the last day of the
calendar month preceding the initial Distribution Date.
"Collateral Interest Additional Interest" shall have the meaning
---------------------------------------
specified in Section 4.04(c) of the Agreement.
"Collateral Interest Certificateholders' Interest" shall mean the
------------------------------------------------
portion of the Series 1996-1 Certificateholders' Interest evidenced by the
Collateral Interest.
"Collateral Interest Floating Allocation Percentage" shall mean,
--------------------------------------------------
with respect to any Collection Period, the percentage equivalent of a
fraction, the numerator of which is the Collateral Interest Invested Amount
and the denominator of which is the Aggregate Receivables in the Trust each
on the last day of the immediately preceding Collection Period; provided,
however, that when used in respect of the allocation of
Finance Charge Collections, such percentage shall be the percentage
equivalent of a fraction the numerator of which is the Collateral Interest
Invested Amount on the last day of the immediately preceding Collection
Period and the denominator of which is the sum of the numerators used to
calculate the Invested Percentage for the allocation of Finance Charge
Collections for all Series of Certificates outstanding during such Collection
Period (including all classes of such Series) and the B/F Amount.
"Collateral Interest Holder" shall mean the entity so designated
--------------------------
in the Loan Agreement.
"Collateral Interest Initial Invested Amount" shall mean the
-------------------------------------------
aggregate initial principal amount of the Collateral Interest, which is
$(10,000,000).
"Collateral Interest Invested Amount" shall mean, when used with
-----------------------------------
respect to any date, an amount equal to (a) the Collateral Interest Initial
Invested Amount, minus (b) the amount of principal payments made to
Collateral Interest Holder prior to such date, minus (c) the aggregate
amount of Collateral Interest Investor Charge-Offs for all prior
Distribution Dates, minus (d) the aggregate amount of Collateral Interest
Reallocated Principal Collections for all prior Distribution Dates which
have been used to fund the Required Amount with respect to such Distribution
Dates pursuant to Sections 4.06 and 4.10 for which the Subordinated
Transferor Invested Amount has not been reduced for all prior Business Days
(provided that the Collateral Interest Invested Amount shall in no event be
reduced to an amount less than zero), minus (e) an amount equal to the
aggregate amount by which the Collateral Interest Invested Amount has been
reduced to fund the Class A Investor Default Amount and the Class B Investor
Default Amount on all prior Distribution Dates pursuant to Section 4.08 and
plus (f) the amount of Excess Finance Charge Collections allocated and
available on all prior Distribution Dates pursuant to Section 4.09(f), for
the purpose of reimbursing amounts deducted pursuant to the foregoing clauses
(c), (d) and (e).
"Collateral Interest Investor Charge-Offs" shall have the meaning
----------------------------------------
specified in Section 4.08(c).
"Collateral Interest Investor Default Amount" shall mean, with
-------------------------------------------
respect to each Distribution Date, an amount equal to the product of the
Collateral Interest Floating Allocation Percentage applicable during the
immediately preceding Collection Period and the amount of Defaulted
Receivables for such Collection Period.
"Collateral Interest Monthly Interest" shall mean the monthly
------------------------------------
interest distributable in respect of the Collateral Interest as calculated in
accordance with Section 4.04(c).
"Collateral Interest Monthly Principal" shall mean the monthly
-------------------------------------
principal distributable in respect of the Collateral Interest as calculated
in accordance with Section 4.05(c).
"Collateral Interest Monthly Servicing Fee" shall mean, with
-----------------------------------------
respect to any Distribution Date, one twelfth of the product of 2.00% and
the Collateral Interest Invested Amount on the last day of the second
preceding Collection Period (or in the case of the first Distribution Date,
the initial principal amount of the Collateral Interest).
"Collateral Interest Pool Factor" shall mean, with respect to any
-------------------------------
Record Date, a number carried out to eight decimal places representing
the ratio of the Collateral Interest Invested Amount as of such Record
Date (determined after taking into account any increases or decreases in
the Collateral Interest Invested Amount which will occur on the following
Distribution Date) to the Collateral Interest Initial Invested Amount.
"Collateral Interest Rate" shall mean, with respect to any Interest
------------------------
Accrual Period, a per annum rate equal to LIBOR for such Interest Accrual
Period plus % provided, however, with respect to the first Interest
------
Accrual Period, the Collateral Interest Rate will be equal to %.
---
"Collateral Interest Reallocated Principal Collections" shall mean,
-----------------------------------------------------
with respect to each Distribution Date, the Principal Collections allocable
to the Collateral Interest with respect to such Distribution Date (equal to
the Collateral Interest Floating Allocation Percentage of Principal
Collections for the related Collection Period for any such Distribution Date
during the Revolving Period and equal to the product of
the Fixed Allocation Percentage of Principal Collections and a fraction, the
numerator of which is the Collateral Interest Invested Amount and the
denominator of which is the Invested Amount of the Series 1996-1 Certificates
as of the last day of the prior Collection Period for any such Distribution
Date during any Amortization Period) in an amount equal
to the Class A and Class B Required Amount, if any, with respect to such
Distribution Date after giving effect to any payment of the Class A and Class
B Required Amount from Excess Finance Charge Collections and Subordinated
Transferor Reallocated Principal Collections.
"Collateral Interest Required Amount" shall mean, with respect to
-----------------------------------
any Distribution Date, the amount by which (a) the sum of (i) Collateral
Interest Monthly Interest for such Distribution Date, (ii) any Collateral
Interest Monthly Interest previously due but not paid to the Collateral
Interest Holder on a prior Distribution Date, (iii) Collateral Interest
Additional Interest, if any, for such Distribution Date and any Collateral
Interest Additional Interest previously due but not paid to the Collateral
Interest Holder on a prior Distribution Date, (iv) the Collateral Interest
Monthly Servicing Fee for such Distribution Date and (v) the Collateral
Interest Investor Default Amount, if any, for such Distribution Date exceeds
(b) the Collateral Interest Floating Allocation Percentage of Finance Charge
Collections deposited in the Collection Account for the immediately
preceding Collection Period.
"Collateral Interest Shortfall" shall have the meaning specified
-----------------------------
in Section 4.04(c).
"Controlled Amortization Period" shall mean an amortization period
------------------------------
commencing on ________, 1998 and continuing to, but not including, the date
on which the Class A Invested Amount has been paid in full or to, and
including, (i) the date of termination of the Trust pursuant to Section 12.01
or (ii) the Final Series 1996-1 Termination Date or (iii) the day on which an
Amortization Event occurs or is deemed to have occurred.
"Controlled Distribution Amount" shall mean, for any Distribution
------------------------------
Date with respect to the Controlled Amortization Period, an amount equal to
the sum of the Class A Controlled Amortization Amount and any existing
Deficit Controlled Amortization Amount.
"Deficit Controlled Amortization Amount" shall mean, on the first
--------------------------------------
Distribution Date with respect to the Controlled Amortization Period, the
excess, if any, of the Class A Controlled Amortization Amount over the
amount distributed as Class A Monthly Principal for such Distribution Date
and, on each subsequent Distribution Date with respect to the Controlled
Amortization Period, the excess, if any, of the Class A Controlled
Amortization Amount and any then existing Deficit Controlled Amortization
Amount over the aggregate Class A Monthly Principal distributed on such
Distribution Date.
"Designated Maturity" shall mean, for any LIBOR Determination Date,
-------------------
(a) with respect to the Collateral Interest, prior to the occurrence of an
Amortization Event, (three months), and after the occurrence of an
Amortization Event, (one month).
"Distribution Date" shall mean the first day of each month, unless
-----------------
such first day is not a Business Day, in which case the next Business Day,
commencing on __________, 1996.
"Excess Finance Charge Collections" shall mean, with respect to any
---------------------------------
Distribution Date, the sum of the amounts, if any, specified pursuant to
Sections 4.07 (a)(iv), (b)(iv), (c)(iv) and (d)(ii) with respect to such
Distribution Date.
"Final Series 1996-1 Termination Date" shall mean ________________.
------------------------------------
"Fixed Allocation Percentage" shall mean, for any Collection Period
---------------------------
with respect to an Amortization Period when used with respect to the
allocation of Principal Collections, the percentage equivalent of the ratio
which the sum of the Class A Invested Amount, the Class B Invested Amount,
the Collateral Interest Invested Amount and the Subordinated Transferor
Invested Amount, each as of the last day of the Revolving Period, bears to
the greater of (a) the Aggregate Receivables on the last
day of the prior Collection Period and (b) the sum of the numerators used
to calculate the Invested Percentage with respect to Principal Collections
for all Series of Certificates outstanding for such Collection Period.
"Floating Allocation Percentage" shall mean for any Collection
------------------------------
Period, the sum of the applicable Class A Floating Allocation Percentage,
the Class B Floating Allocation Percentage for such Collection Period, the
Collateral Interest Floating Percentage and the Subordinated Transferor
Floating Allocation Percentage.
"Floating Rate Interest Factor" shall mean with respect to any
-----------------------------
Interest Accrual Period, the number of days from and including the first day
in the Interest Accrual Period to but excluding the last day in the Interest
Accrual Period, divided by 360.
"Initial Invested Amount" shall mean the aggregate initial
-----------------------
principal amount of the Investor Certificates of Series 1996-1, which is
$(275,000,000).
"Interest Accrual Period" shall mean, with respect to any
-----------------------
Distribution Date, the period from and including the first day of the
preceding calendar month to and including the last day of such preceding
calendar month, which shall be deemed to be a 30-day period, (except the
initial Interest Accrual Period shall be deemed to be the period from the
Closing Date through the last day of the calendar month preceding the
initial Distribution Date.)
"Invested Amount" shall mean, when used with respect to any date,
---------------
an amount equal to the sum of the Class A Invested Amount, the Class B
Invested Amount, the Collateral Interest Invested Amount and Subordinated
Transferor Invested Amount, each as of such date.
"Invested Percentage" shall mean for any Collection Period, (a)
-------------------
with respect to Finance Charge Collections and Defaulted Receivables at any
time or Principal Collections during the Revolving Period, the Floating
Allocation Percentage and (b) with respect to Principal Collections during
the Amortization Period, the Fixed Allocation Percentage.
"Investor Certificateholder" shall mean the Holder of record of an
--------------------------
Investor Certificate of Series 1996-1.
"Investor Certificates" shall mean the Class A Certificates, the
---------------------
Class B Certificates, the Collateral Interest and the Subordinated
Transferor Certificate.
"Investor Default Amount" shall mean, with respect to each
-----------------------
Distribution Date, an amount equal to the sum of the Class A Investor
Default Amount, the Class B Investor Default Amount, the Collateral Interest
Investor Default Amount and the Subordinated Transferor Investor
Default Amount, each for such Distribution Date.
"LIBOR" shall mean, as of any LIBOR Determination Date, the rate
-----
for deposits in United States dollars for a period of the Designated
Maturity commencing on the first day of the relevant Interest Accrual
Period which appears on Telerate Page 3750 as of 11:00 a.m., London time, on
the day that is the LIBOR Determination Date. If such rate does not
appear on Telerate Page 3750, the rate for that day will be determined on
the basis of the rates at which deposits in United States dollars are
offered by the Reference Banks at approximately 11:00 a.m., London time, on
that day to major banks in the London interbank market for a period of the
Designated Maturity commencing on the first day of the relevant Interest
Accrual Period. The Servicer 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 day will be the
arithmetic mean of the quotations. If fewer than two quotations are
provided as requested, the rate for that day will be the arithmetic mean of
the rates quoted by major banks in New York City, selected by the Servicer,
at approximately 11:00 a.m., New York City time, on that day for loans in
United States dollars to leading European banks for the Designated
Maturity commencing on the first day of the relevant Interest Accrual Period.
"LIBOR Determination Date" shall mean, with respect to any Interest
------------------------
Accrual Period, the second London Business Day prior to the commencement of
such Interest Accrual Period.
"Loan Agreement" shall mean the agreement, dated as of October ___,
--------------
1996, among the Transferor, the Servicer, the Trustee and the Collateral
Interest Holder, as amended or modified from time to time.
"London Business Day" shall mean, a business day on which dealings
-------------------
in deposits in United States dollars are transacted in the London interbank
market.
"Minimum Transferor Interest Percentage" shall mean, with respect
--------------------------------------
to the Series 1996-1 Certificates, __________.
"Payment Date Statement" shall have the meaning specified in
----------------------
Section 5.02(a).
"Principal Shortfalls" shall mean on any Business Day (x) for
--------------------
Series 1996-1, (i) during the Controlled Amortization Period, the excess of
the Controlled Distribution Amount over the aggregate amount applied with
respect thereto for such Business Day and for each prior Business Day in such
Collection Period, and (ii) at all other times, the Invested Amount of the
class then receiving principal payments after the application of Principal
Collections on such Business Day or (y) for any other Series the amounts
specified as such in the Supplement for such other Series.
"Rapid Amortization Period" shall mean an Amortization Period
-------------------------
commencing on the earlier of the day on which (i) the Class A Invested
Amount has been reduced to zero or (ii) an Amortization Event occurs or is
deemed to have occurred and ending on the earlier to occur of (x) the date on
which the Invested Amount has
been paid in full or (x) the Final Series 1996-1 Termination Date.
"Rating Agency" shall mean Standard & Poor's Ratings Services, a
-------------
division of the McGraw-Hill Companies, Inc. and Moody's Investor's Services,
Inc., to the extent such entities were selected by the Transferor to rate the
Series 1996-1 Investor Certificates.
"Reallocated Principal Collections" shall mean, with respect to
---------------------------------
each Distribution Date, the sum of the Class B Reallocated Principal
Collections, Collateral Interest Reallocated Principal Collections and the
Subordinated Transferor Reallocated Principal Collections.
"Record Date" shall mean, with respect to any Distribution Date,
-----------
the 15th day of the calendar month immediately preceding such Distribution
Date.
"Reference Banks" shall mean four major banks in the London
---------------
interbank market selected by the Servicer.
"Required Amount" shall mean the sum of the Class A Required
---------------
Amount, the Class B Required Amount and the Collateral Interest Required
Amount.
"Revolving Period" shall mean, with respect to the Series 1996-1
----------------
Certificates, the period from and including the Closing Date, up to and
including the day prior to the day on which an Amortization Period
commences.
"Series 1996-1 Certificateholders' Interest" shall have the meaning
------------------------------------------
specified in Section 4.02.
"Servicing Fee Percentage" shall mean 2.00% per annum.
------------------------
"Shared Principal Collections" shall mean, as the context requires,
----------------------------
either (a) the amount allocated to the Series 1996-1 Certificates which
may be applied in accordance with Article IV of the Agreement or (b) the
amounts allocated to the investor certificates (other than Transferor
Retained Certificates) of other Series which the applicable Series
Supplements for such Series specify are to be treated as "Shared Principal
Collections" and which may be applied to cover Principal Shortfalls with
respect to the Series 1996-1 Certificates.
"Subordinated Transferor Certificate" shall mean the certificate
-----------------------------------
executed by the Transferor and authenticated by or on behalf of the Trustee,
substantially in the form of Exhibit A-3.
"Subordinated Transferor Certificateholder" shall mean the Person
-----------------------------------------
in whose name the Subordinated Transferor Certificate is registered in the
Certificate Register.
"Subordinated Transferor Certificateholders' Interest" shall mean
----------------------------------------------------
the Series 1996-1 Certificateholders' Interest evidenced by the Subordinated
Transferor Certificate.
"Subordinated Transferor Floating Allocation Percentage" shall
------------------------------------------------------
mean, with respect to any Collection Period, the percentage equivalent of
a fraction, the numerator of which is the Subordinated Transferor Invested
Amount and the denominator of which is the Aggregate Receivables
in the Trust each on the last day of the immediately preceding Collection
Period; provided, however, that when used in respect of the allocation of
Finance Charge Collections, such percentage shall be the percentage
equivalent of a fraction the numerator of which is the Subordinated
Transferor Invested Amount on the last day of the immediately preceding
Collection Period and the denominator of which is the sum of the numerators
used to calculate the Invested Percentage for the allocation of Finance
Charge Collections for all Series of Certificates outstanding during such
Collection Period (including all classes of such Series) and the B/F Amount.
"Subordinated Transferor Investor Default Amount" shall mean, with
-----------------------------------------------
respect to each Distribution Date, an amount equal to the product of the
Subordinated Transferor Floating Allocation Percentage applicable during the
immediately preceding Collection Period and the amount of Defaulted
Receivables for such Collection Period.
"Subordinated Transferor Initial Invested Amount" shall mean the
-----------------------------------------------
aggregate initial principal amount of the Subordinated Transferor
Certificate, which is $(19,000,000).
"Subordinated Transferor Invested Amount" shall mean, when used
---------------------------------------
with respect to any date, an amount equal to (a) the Subordinated Transferor
Initial Invested Amount, minus (b) the amount of principal payments made to
the Subordinated Transferor Certificateholder prior to such date, minus (c)
the aggregate amount of Subordinated Transferor Investor Charge-Offs for all
prior Distribution Dates, minus (d) the aggregate amount of Reallocated
Principal Collections for all prior Distribution Dates which have been used
to fund the Required Amount with respect to such Distribution Dates pursuant
to Sections 4.06 and 4.10 (provided that the Subordinated Transferor Invested
Amount shall in no event be reduced to an amount less than zero), minus (e)
an amount equal to the aggregate amount by which the Subordinate Transferor
Invested Amount has been reduced to fund the Class A Investor Default Amount,
the Class B Investor Default Amount and the Collateral Interest Investor
Default Amount on all prior Distribution Dates pursuant to Section 4.08 and
plus (f) the amount of Excess Finance Charge Collections allocated and
available on all prior Distribution Dates pursuant to Section
4.09(h), for the purpose of reimbursing amounts deducted pursuant to the
foregoing clauses (c), (d) and (e).
"Subordinated Transferor Investor Charge-Offs" shall have the
--------------------------------------------
meaning specified in Section 4.08(d).
"Subordinated Transferor Monthly Principal" shall mean the monthly
-----------------------------------------
principal distributable in respect of the Subordinated Transferor
Certificate as calculated in accordance with Section 4.05(d).
"Subordinated Transferor Monthly Servicing Fee" shall mean, with
---------------------------------------------
respect to any Distribution Date, one twelfth of the product of 2.00% and
the Subordinated Transferor Invested Amount on the last day of the second
preceding Collection Period (or in the case of the first Distribution Date,
the initial principal amount of the Subordinated Transferor Certificate).
"Subordinated Transferor Pool Factor" shall mean, with respect to
-----------------------------------
any Record Date, a number carried out to eight decimal places representing
the ratio of the Subordinated Transferor Invested Amount as of such
Record Date (determined after taking into account any increases or decreases
in the Subordinated Transferor Invested Amount which will occur
on the following Distribution Date) to the Subordinated Transferor Initial
Invested Amount.
"Subordinated Transferor Reallocated Principal Collections" shall
---------------------------------------------------------
mean, with respect to each Distribution Date, the Principal Collections
allocable to the Subordinated Transferor Certificate with respect to such
Distribution Date (equal to the Subordinated Transferor Floating Allocation
Percentage of Principal Collections for the related Collection
Period for any such Distribution Date during the Revolving Period and equal
to the product of the Fixed Allocation Percentage of Principal Collections
and a fraction, the numerator of which is the Subordinated Transferor
Invested Amount and the denominator of which is the Invested Amount of the
Series 1996-1 Certificates as of the last day of the prior Collection Period
for any such Distribution Date during any Amortization Period) in an amount
equal to the Class A, Class B and Collateral Interest Required Amount, if
any, with respect to such Distribution Date (after giving effect to any
payment of the Class A, Class B and Collateral Interest Required Amount from
Excess Finance Charge Collections).
"Telerate Page 3750" means 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).
"Termination Payment Date" shall mean the earlier of the first
------------------------
Distribution Date following the liquidation or sale of the Receivables as
a result of an Amortization Event and the occurrence of the Final Series
1996-1 Termination Date.
"Weighted Average Certificate Rate" shall mean, with respect to any
---------------------------------
Determination Date, a fraction, the numerator of which is equal to the sum of
(a) the product of the Class A Certificate Rate and the Class A Invested
Amount, (b) the product of the Class B Certificate Rate and the Class B
Invested Amount and (c) the product of the Collateral Interest Rate and the
Collateral Interest Invested Amount, and the denominator of which is equal to
the sum of the Class A
Invested Amount, the Class B Invested Amount and the Collateral Interest
Invested Amount.
SECTION 3. Aggregate Receivables. The Transferor shall maintain
---------------------
the Aggregate Receivables at a level such that the Transferor Amount (plus
any amounts available under the Transferor Letter of Credit or the
Transferor Escrow Account and the B/F Amount) is equal to or greater than
_% (the "Minimum Transferor Interest Percentage") of the Aggregate Invested
--------------------------------------
Amount of all Series of Certificates issued by the Trust. On each
Determination Date, the Transferor shall calculate whether the Aggregate
Receivables have been maintained at the specified level.
SECTION 4. Reassignment and Transfer Terms. The Series 1996-1
-------------------------------
Certificates may be reassigned and transferred to the Transferor on any
Distribution Date on or after which the Invested Amount is reduced to an
amount less than or equal to $__________ or 5% of the Initial Invested
Amount, subject to the provisions of Section 12.02.
SECTION 5. Delivery and Payment for the Series 1996-1
------------------------------------------
Certificates. The Trustee shall deliver the Series 1996-1 Certificates when
- ------------
authenticated in accordance with Section 6.02 of the Agreement.
SECTION 6. Form of Delivery of the Series 1996-1 Certificates.
--------------------------------------------------
The Class A Certificates and the Class B Certificates shall be delivered as
Book-Entry Certificates as provided in Section 6.11 of the Agreement.
The Collateral Interest shall be transferred pursuant to the Loan Agreement.
The Subordinated Transferor Certificate shall be delivered in
physical form.
SECTION 7. Article IV of the Agreement. Any provisions of Article
---------------------------
IV of the Agreement which distribute Collections to the Transferor on the
basis of the Transferor Percentage shall continue to apply irrespective of
the issuance of the Series 1996-1 Certificates. Section 4.01, Section
4.01A and Section 4.01B of the Agreement shall read in their entirety as
provided in the Agreement.
Article IV of the Agreement (except for Sections 4.01, 4.01A and
4.01B) 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 4.02. Rights of Certificateholders. The Series 1996-1
----------------------------
Certificates shall represent undivided interests in the Trust, consisting
of the right to receive, to the extent necessary to make the required
payments with respect to such Investor Certificates at the times and in the
amounts specified in this Agreement, (a) the Floating Allocation Percentage
and Fixed Allocation Percentage (as applicable from time to time pursuant to
Sections 4.04 and 4.05 of the Agreement) of Collections received with respect
to the Receivables and (b) funds on deposit in the Collection Account (for
such Series, the "Series 1996-1 Certificateholders' Interest"). The
------------------------------------------
Subordinated Transferor Certificate shall be subordinate to the Collateral
Interest, the Collateral Interest shall be subordinate to the Class B
Certificates and the Class B Certificates shall be subordinate to the
Class A Certificates. The Exchangeable Transferor Certificate shall not
represent any interest in the Collection Account, except as specifically
provided in this Article IV.
Section 4.03. Collections and Allocation.
--------------------------
(a) Collections. The Servicer will apply or will instruct the
-----------
Trustee to apply all funds on deposit in the Collection Account as described
in this Article IV.
(b) Allocations. On each Determination Date, the Servicer shall
-----------
determine whether an Amortization Event is deemed to have occurred in the
related Collection Period with respect to the Series 1996-1 Certificates,
and the Servicer shall allocate Collections with respect to the related
Collection Period as follows:
(i) During the Revolving Period. On each Determination Date,
---------------------------
or more frequently at the option of the Servicer, allocate to the
Series 1996-1 Certificateholders' Interest (x) an amount equal to
the Floating Allocation Percentage of the Principal Collections
for the prior Collection Period and remit such amounts to the
Holder of the Exchangeable Transferor Certificate (except that
such remittance shall not include Reallocated Principal
Collections used to cover the Required Amount (except to the
extent of the Class A Investor Default Amount) and shall not
exceed the Transferor Interest on such Determination Date, after
giving effect to any new Receivables purchased by the Holder of
the Exchangeable Transferor Certificate and transferred to the
Trust on such day) and (y) an amount equal to the Floating
Allocation Percentage of the Finance Charge
Collections for the prior Collection Period and deposit such
amount into the Collection Account as and when required pursuant
to Section 4.01;
(ii) During any Amortization Period. On each Determination
------------------------------
Date, or more frequently at the option of the Servicer, allocate
to the Series 1996-1 Certificateholders' Interest (x) an amount
equal to the Fixed Allocation Percentage of the Principal
Collections for the prior Collection Period and deposit such
amount into the Collection Account and (y) an amount equal to
the Floating Allocation Percentage of the Finance
Charge Collections for the prior Collection Period and deposit
such amount into the Collection Account as and when required
pursuant to Section 4.01; and
(iii) Allocations and Payments to the Holder of the
---------------------------------------------
Exchangeable Transferor Certificate and the Bridgestone/Firestone
-----------------------------------------------------------------
Certificate.
----------- Amounts to be allocated to the Holder of the
Exchangeable Transferor Certificate and the Bridgestone/Firestone
Certificate and payments with respect thereto shall be
determined and made only as provided in Sections 4.03(b)(i),
4.01(d) and 4.01(g).
The allocations to be made pursuant to this Section 4.03(b) also apply to
deposits into the Collection Account that are treated as Collections,
including Transfer Deposit Amounts, Adjustment Payments, proceeds from the
sale, disposition or liquidation of the Receivables pursuant to Section 9.02
or 12.01. Such deposits to be treated as Collections will be allocated
as Finance Charge Collections or Principal Collections as provided in the
Agreement.
Section 4.04. Determination of Monthly Interest for the Series
------------------------------------------------
1996-1 Certificates. (a) The amount of monthly interest (the "Class A
- -------------------
Monthly Interest") distributable from the Collection Account with respect
to the Class A Certificates of the Series 1996-1 Certificates on any
Distribution Date shall be an amount equal to one-twelfth of the product of
(i) the Class A Certificate Rate and (ii) the outstanding principal balance
of the Class A Certificates as of the preceding Distribution Date
(after subtracting therefrom the aggregate amount of all distributions of
Class A Monthly Principal made through such Distribution Date to the Class A
Certificateholders); provided, however, that with respect to the first
-------- -------
Distribution Date for the Series 1996-1 Certificates, Class A Monthly
Interest shall be equal to $____________.
On the Determination Date preceding each Distribution Date, the
Servicer shall determine an amount (the "Class A Interest Shortfall") equal
--------------------------
to the excess, if any, of (x) the aggregate Class A Monthly Interest for the
Interest Accrual Period applicable to the preceding Distribution Date
over
- ---- (y) the amount which was paid to the Class A Certificateholders in
respect of interest on such preceding Distribution Date. If there is a
Class A Interest Shortfall with respect to any Distribution Date, an
additional amount ("Class A Additional Interest") 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 Class A Certificateholders equal to
one-twelfth of the product of (i) the Class A Certificate Rate and (ii)
such Class A Interest Shortfall. Notwithstanding anything to the contrary
herein, Class A Additional Interest shall be payable or distributed to
Class A Certificateholders only to the extent permitted by applicable law.
(b) The amount of monthly interest (the "Class B Monthly Interest")
------------------------
distributable from the Collection Account with respect to the Class B
Certificates of the Series 1996-1 Certificates on any Distribution Date
shall be an amount equal to one-twelfth of the product of (i) the Class B
Certificate Rate and (ii) the outstanding principal balance of the Class B
Certificates as of the preceding Distribution Date (after subtracting
therefrom the aggregate amount of all distributions of Class B Monthly
Principal made through such Distribution Date to the Class B
Certificateholders); provided, however, that with respect
-------- ------- to the first Distribution Date for
the Series 1996-1 Certificates, Class B Monthly Interest shall be equal to
$ _____________.
On the Determination Date preceding each Distribution Date, the
Servicer shall determine an amount (the "Class B Interest Shortfall") equal
--------------------------
to the excess, if any, of (x) the aggregate Class B Monthly Interest for the
Interest Accrual Period applicable to the preceding Distribution Date
over
- ---- (y) the amount which was paid to the Class B Certificateholders in
respect of interest on such preceding Distribution Date. If there is a
Class B Interest Shortfall with respect to any Distribution Date, an
additional amount ("Class B Additional Interest") 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 Class B Certificateholders equal to one-twelfth of
the product of (i) the Class B Certificate Rate and (ii) such Class B
Interest Shortfall. Notwithstanding anything to the contrary herein, Class
B Additional Interest shall be payable or distributed to Class B
Certificateholders only to the extent permitted by applicable law.
(c) The amount of monthly interest (the "Collateral Interest Monthly
---------------------------
Interest") distributable from the Collection Account with respect to the
- --------
Collateral Interest of the Series 1996-1 Certificates on any Distribution
Date shall be an amount equal the product of (i) the Floating Rate Interest
Factor, (ii) the Collateral Interest Rate and (iii) the outstanding principal
balance of the Collateral Interest as of the preceding Distribution Date
(after subtracting therefrom the aggregate amount of all distributions of
Collateral Interest Monthly Principal made through such Distribution Date to
the Collateral Interest Holder); provided, however, that with respect to the
-------- ------- first Distribution
Date for the Series 1996-1 Certificates, Collateral Interest Monthly
Interest shall be equal to $________.
On the Determination Date preceding each Distribution Date, the
Servicer shall determine an amount (the "Collateral Interest Shortfall")
-----------------------------
equal to the excess, if any, of (x) the aggregate Class-C Monthly Interest
for the Collateral Interest Accrual Period applicable to the preceding
Distribution Date over (y) the amount which was paid to the Collateral
----
Interest Holder in respect of interest on such preceding Distribution Date.
If there is a Collateral Interest Shortfall with respect to any Distribution
Date, an additional amount ("Collateral Interest Additional Interest") 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 Shortfall is paid
to the Collateral Interest Holder equal to the product of (i) the Floating
Rate Interest Factor, (ii) the Collateral Interest Rate and (iii) such
Collateral Interest Shortfall. Notwithstanding anything to the contrary
herein, Collateral Interest Additional Interest shall be payable or
distributed to the Collateral Interest Holder only to the extent permitted by
applicable law.
Section 4.05. Determination of Monthly Principal. (a) The amount
----------------------------------
of monthly principal (the "Class A Monthly Principal") distributable from the
-------------------------
Collection Account with respect to the Class A Certificates on each
Distribution Date beginning with the Distribution Date related to the
Collection Period in which the Controlled Amortization Period or any Rapid
Amortization Period begins shall be equal to an amount calculated as follows:
the sum of (i) an amount equal to the Fixed Allocation Percentage of all
Principal Collections received during the Collection Period immediately
preceding such Distribution Date (or portion thereof, in the case of an
Amortization Event which occurs during such Collection Period) (other than
Reallocated Principal Collections used to pay the Required Amount due on the
Class A Certificates), (ii) the amount of Shared Principal Collections
allocated to the Series 1996-1 Certificates with respect to the preceding
Collection Period pursuant to Section 4.05(e), (iii) the amount, if any,
of Transfer Deposit Amounts and Adjustment Payments with respect to
such Distribution Date and (iv) the amount, if any, of Finance Charge
Collections and Excess Finance Charge Collections allocated and
available on such Distribution Date to (A) fund the Class A Investor
Default Amount and the Class B Investor Default Amount with respect to such
Distribution Date and (B) reimburse Class A Investor Charge-Offs and
previous reductions in the Class B Invested Amount; provided,
-------- however, that
for each Distribution Date with respect to the Controlled -------
Amortization Period (unless and until an Amortization Event shall have
occurred), Class A Monthly Principal shall not exceed the Controlled
Distribution Amount for such Distribution Date; provided, however, that with
-------- ------- respect to
the Final Series 1996-1 Termination Date, Class A Monthly Principal shall be
an amount equal to the Class A Invested Amount.
(b) The amount of monthly principal (the "Class B Monthly
---------------
Principal") distributable from the Collection Account with respect to the
- ---------
Class B Certificates on each Distribution Date, beginning with the
Distribution Date on which the Class A Invested Amount is paid in full,
shall be an amount equal to and calculated as follows: the sum of (a)(i) an
amount equal to the Fixed Allocation Percentage of Principal Collections
received during the Collection Period immediately preceding such Distribution
Date (or portion thereof, in the case of an Amortization Event which occurs
during such Collection Period), (ii) the amount of Shared Principal
Collections allocated to the Series 1996-1 Certificates with respect to the
preceding Collection Period pursuant to Section 4.05(e), and (iii) the
amount, if any, of Excess Finance Charge Collections to be distributed
pursuant to Section 4.09(c) and (d) with respect to such Distribution Date,
minus (b) the Class A Monthly Principal, if any, with respect to such
Distribution Date.
(c) The amount of monthly principal (the "Collateral Interest
-------------------
Monthly Principal") distributable from the Collection Account with respect
- -----------------
to the Collateral Interest on each Distribution Date, beginning with the
Distribution Date on which the Class B Invested Amount is paid in full,
shall be an amount equal to and calculated as follows: the sum of (a)(i) an
amount equal to the Fixed Allocation Percentage of Principal Collections
received during the Collection Period immediately preceding such Distribution
Date (or portion thereof, in the case of an Amortization Event which occurs
during such Collection Period), (ii) the amount of Shared Principal
Collections allocated to the Series 1996-1 Certificates with respect to the
preceding Collection Period pursuant to Section
4.05(e), and (iii) the amount, if any, of Excess Finance Charge Collections
to be distributed pursuant to Section 4.09(e) and (f) with respect to such
Distribution Date, minus (b) the Class B Monthly Principal, if any, with
respect to such Distribution Date.
(d) The amount of monthly principal (the "Subordinated Transferor
-----------------------
Monthly Principal") distributable from the Collection Account with respect
- -----------------
to the Subordinated Transferor Certificates on each Distribution Date,
beginning with the Distribution Date on which the Collateral Interest
Invested Amount is paid in full, shall be an amount equal to and calculated
as follows: the sum of (a)(i) an amount equal to the Fixed Allocation
Percentage of Principal Collections received during the Collection Period
immediately preceding such Distribution Date (or portion thereof, in the case
of an Amortization Event which occurs during
such Collection Period), (ii) the amount of Shared Principal Collections
allocated to the Series 1996-1 Certificate with respect to the preceding
Collection Period pursuant to Section 4.05(e), and (iii) the amount, if any,
of Excess Finance Charge Collections to be distributed pursuant to Section
4.09(g) and (h) with respect to such Distribution Date, minus (b)
the Collateral Interest Monthly Principal, if any, with respect to such
Distribution Date.
(e) Shared Principal Collections allocated to the Series 1996-1
Certificates for any Business Day with respect to the Amortization Period
shall mean an amount equal to the product of (x) Shared Principal
Collections for all Series for such Business Day and (y) a fraction, the
numerator of which is the Principal Shortfall for the Series 1996-1
Certificates for such Business Day and the denominator of which is the
aggregate amount of Principal Shortfalls for all Series for such Business
Day. For any Business Day with respect to the Revolving Period, Shared
Principal Collections allocated to the Series 1996-1 Certificates shall be
zero.
Section 4.06. Coverage of Required Amount for the Series 1996-1
-------------------------------------------------
Certificates. On each Determination Date, the Servicer shall determine the
- ------------
Required Amount, if any. In the event that the Required Amount for such
Distribution Date is greater than zero, the Servicer shall give written
notice to the Trustee of such positive Required Amount on the
Determination Date prior to such Distribution Date and all or a portion of
the Excess Finance Charge Collections with respect to such Distribution Date
in an amount equal to the Required Amount for such Distribution Date shall be
distributed from the Collection Account on such Distribution Date pursuant to
Section 4.09(a). In the event that the Required Amount for such Distribution
Date exceeds the amount of Excess Finance Charge Collections with respect to
such Distribution Date, first, all or a portion of the
-----
Subordinated Transferor Reallocated Principal Collections, second, the
------
Collateral Interest Reallocated Principal Collections, and third, the Class
-----
B Reallocated Principal Collections, in an amount equal to such excess shall
be distributed from the Collection Account on such Distribution Date to or
for the benefit of first, the Class A Certificateholders, second, the Class
----- ------
B Certificateholders and third, the Collateral Interest Holder pursuant to
-----
Section 4.10.
In the event that the Required Amount exceeds the amount of such
Excess Finance Charge Collections and Reallocated Principal Collections, the
Subordinated Transferor Invested Amount shall be reduced
by the amount of such remaining deficiency, but not to exceed the amount of
the Class A, Class B and Collateral Interest Investor Default Amount for the
related Collection Period. In the event that any such reduction would cause
the Subordinated Transferor Invested Amount to be a negative number, the
Collateral Interest Invested Amount shall be reduced as provided in Section
4.08. In the event that any such reduction would cause the Collateral
Interest Invested Amount to be a negative number, the Class B Invested Amount
shall be reduced as provided in Section 4.08.
In the event that any such reduction would cause the Class B Invested Amount
to be a negative number, the Class A Invested Amount shall be reduced as
provided in Section 4.08.
Section 4.07. Application of Funds on Deposit in the Collection
-------------------------------------------------
Account for the Series 1996-1 Certificates. The Servicer shall apply or
- ------------------------------------------
cause the Trustee to apply, on each Distribution Date funds on deposit in
the Collection Account with respect to such Distribution Date, to make the
following distributions:
(a) On each Distribution Date, an amount equal to the Class A
Floating Allocation Percentage of Finance Charge Collections deposited in
the Collection Account for the Collection Period immediately preceding such
Distribution Date shall be distributed in the following priority:
(i) an amount equal to Class A Monthly Interest for such
Distribution Date, plus the amount of any Class A Monthly Interest
----
previously due but not paid to Class A Certificateholders on a prior
Distribution Date, plus the amount of any Class A Additional Interest for
----
such Distribution Date, plus the amount of any Class A Additional Interest
----
previously due but not paid to the Class A Certificateholders on a prior
Distribution Date, shall be paid to the Class A Certificateholders;
(ii) an amount equal to the aggregate Class A Investor Default
Amount for such Distribution Date shall be distributed to the Transferor
on Distribution Dates with respect to the Revolving Period (unless such
amount has been previously netted against deposits to the Collection
Account) (but not exceeding the Transferor Interest after giving
effect to any new Receivables transferred to the Trust on such date)
and thereafter shall be included in the funds on deposit in the
Collection Account to be paid pursuant to Section 4.07(e) to the
Series 1996-1 Certificateholders on Distribution Dates with respect
to any Amortization Period;
(iii) an amount equal to the Class A Monthly Servicing Fee for such
Distribution Date shall be distributed to the Servicer (unless such
amount has been previously netted against deposits to the Collection
Account);
(iv) the balance, if any, shall constitute Excess Finance Charge
Collections and shall be allocated and distributed as set forth in
Section 4.09.
If Bridgestone/Firestone is not the Servicer, the priority of items
(ii) and (iii) above shall be reversed.
(b) On each Distribution Date, an amount equal to the Class B
Floating Allocation Percentage of Finance Charge Collections deposited in
the Collection Account for the Collection Period immediately preceding
such Distribution Date shall be distributed in the following priority:
(i) an amount equal to Class B Monthly Interest for such
Distribution Date, plus the amount of any Class B Monthly Interest
----
previously due but not paid to Class B Certificateholders on a prior
Distribution Date, plus the amount of any Class B Additional Interest for
----
such Distribution Date, plus the amount of any Class B Additional Interest
----
previously due but not paid to the Class B Certificateholders on a prior
Distribution Date, shall be paid to the Class B Certificateholders;
(ii) an amount equal to the Class B Monthly Servicing Fee for such
Distribution Date shall be distributed to the Servicer (unless such
amount has been previously netted against deposits to the Collection
Account);
(iii) the balance, if any, shall constitute Excess Finance Charge
Collections and shall be allocated and distributed as set forth in
Section 4.09.
(c) On each Distribution Date, an amount equal to the Collateral
Interest Floating Allocation Percentage of Finance Charge Collections
deposited in the Collection Account for the Collection Period
immediately preceding such Distribution Date shall be distributed in the
following priority:
(i) an amount equal to Collateral Interest Monthly Interest for
such Distribution Date, plus the amount of any Collateral Interest
----
Monthly Interest previously due but not paid to the Collateral Interest
Holder on a prior Distribution Date, plus the amount of any Collateral
----
Interest Additional Interest for such Distribution Date, plus the amount
----
of any Collateral Interest Additional Interest previously due but not paid
to the Collateral Interest Holder on a prior Distribution Date, shall be
paid to the Collateral Interest Holder;
(ii) an amount equal to the Collateral Interest Monthly Servicing
Fee for such Distribution Date shall be distributed to the
Servicer (unless such amount has been previously
netted against deposits to the Collection Account);
(iii) the balance, if any, shall constitute Excess Finance Charge
Collections and shall be allocated and distributed as set forth in
Section 4.09; and
(d) On each Distribution Date, an amount equal to the
Subordinated Transferor Floating Allocation Percentage of Finance Charge
Collections deposited in the Collection Account for the Collection Period
immediately preceding such Distribution Date shall be distributed in the
following priority;
(i) an amount equal to the Subordinated Transferor Monthly
Servicing Fee for such Distribution Date shall be distributed to the
Servicer (unless such amount has been previously netted against
deposits to the Collection Account); and
(ii) the balance, if any, shall constitute Excess Finance Charge
Collections and shall be allocated and distributed as set forth in
Section 4.09.
(e) On each Distribution Date with respect to the Controlled
Amortization Period or any Rapid Amortization Period, the remaining funds
on deposit in the Collection Account (other than Excess Finance Charge
Collections and any Reallocated Principal Collections which pursuant to
Section 4.09 or 4.10 are not to be included in the funds to be distributed
pursuant to this Section 4.07(e)) will be distributed in the following
priority:
(i) an amount equal to the Class A Monthly Principal for such
Distribution Date to the extent of the Class A Invested Amount, shall
be paid to the Class A Certificateholders;
(ii) for each Distribution Date, beginning with the Distribution
Date on which the Class A Invested Amount is paid in full, after giving
effect to the transactions referred to in clause (i) above, the amount
of any such remaining funds then on deposit in
the Collection Account, up to the amount of Class B Monthly Principal,
shall be paid to the Class B Certificateholders;
(iii) for each Distribution Date, beginning with the Distribution
Date on which the Class B Invested Amount is paid in full, after giving
effect to the transactions referred to in clauses
(i) and (ii) above, the amount of any such remaining funds then on deposit
in the Collection Account, up to the amount of Collateral Interest
Monthly Principal, shall be paid to the Collateral Interest Holder;
(iv) for each Distribution Date, beginning with the Distribution
Date on which the Collateral Interest Invested Amount is paid in full,
after giving effect to the transactions referred to
in clauses (i) to (iii) above, the amount of any such remaining funds
then on deposit in the Collection Account, up to the amount
of Subordinated Transferor Monthly Principal, shall be paid to the
Subordinated Transferor Certificateholder; and
(v) for each Distribution Date, after giving effect to the
transactions referred to in clauses (i) to (iv) above, an amount equal to
the balance, if any, of such remaining funds then on deposit in the
Collection Account and allocable to the Series 1996-1 Certificates
shall be treated as Shared Principal Collections and applied in
accordance with Article IV of the Agreement and thereafter be paid by the
Servicer or the Trustee to the Transferor but not exceeding the
Transferor Interest (after giving effect to any new Receivables
transferred to the Trust).
Section 4.08. Investor Charge-Offs. (a) On each Determination
--------------------
Date, the Servicer shall calculate the Class A Investor Default Amount, if
any, for the related Distribution Date. If on any Distribution Date, the
Required Amount for such Distribution Date exceeds the sum of (i) Excess
Finance Charge Collections with respect to the Collection Period immediately
preceding such Distribution Date, ((ii) the amount of the Transferor Interest
available to be written down, if any, to cover Class A Investor Charge-Offs,
Class B Investor Charge-Offs, Collateral Interest
Investor Charge-Offs and Subordinated Transferor Investor Charge-Offs) and
(iii) the amount of Reallocated Principal Collections with respect to such
Collection Period, the Subordinated Transferor Invested Amount shall
be reduced by the amount of such
excess, but not more than the Class A, Class B and Collateral Interest
Investor Default Amount for such Distribution Date second, the Collateral
------
Interest Invested Amount shall be reduced by the amount of such excess, but
not more than the Class A and Class B Investor Default Amount for such
Distribution Date, and third, the Class B Invested Amount shall be reduced
-----
by the amount of such excess, but not more than the Class A Investor Default
Amount for such Distribution Date. In the event that such reduction would
cause the Class B Invested Amount to be a negative number, the Class B
Invested Amount shall be reduced to zero, the Class A
Invested Amount shall be reduced by the amount by which the Class B Invested
Amount would have been reduced below zero, but not more than the
Class A Investor Default Amount for such Distribution Date (a "Class A
--------
Investor Charge-Off").
- --------------------
Class A Investor Charge-Offs shall thereafter be reimbursed (but
not by an amount in excess of the aggregate Class A Investor Charge-Offs)
(and the Class B, Collateral Interest and Subordinated Transferor Invested
Amount increased) by the amount of Excess Finance Charge Collections
allocated and available for that purpose pursuant to Section 4.09(b).
(b) On each Determination Date, the Servicer shall calculate the
Class B Investor Default Amount, if any, for the related Distribution
Date. If on any Distribution Date, the Class B Investor Default Amount, if
any, for such Distribution Date exceeds the sum of (i) Excess Finance Charge
Collections with respect to the Collection Period immediately preceding the
Distribution Date which are allocated and available to pay such amount
pursuant to Section 4.09(c) and (ii) the amount of Collateral
Interest and Subordinated Transferor Reallocated Principal Collections, then
the Class B Invested Amount shall be reduced by the aggregate amount
of such excess, but not more than the Class B Investor Default Amount for
such Distribution Date (a "Class B Investor Charge-Off"). Class B Investor
---------------------------
Charge-Offs shall thereafter be reimbursed (and the Class B Invested Amount
increased) on any Distribution Date by the amount of Excess Finance Charge
Collections allocated and available for that purpose pursuant to Section
4.09(d) (but only, in any case, to the extent such amount is not required to
reimburse Class A Investor Charge-Offs pursuant to Section 4.08(a) and not,
in any case, in excess of the unpaid principal balance of the Class B
Certificates).
(c) On each Determination Date, the Servicer shall calculate the
Collateral Interest Investor Default Amount, if any, for the related
Distribution Date. If on any Distribution Date, the Collateral Interest
Investor Default Amount, if any, for such Distribution Date exceeds the sum
of (i) Excess Finance Charge Collections with respect to the Collection
Period immediately preceding the Distribution Date which are allocated and
available to pay such amount pursuant to Section 4.09(e) and (ii) the amount
of Subordinated Transferor Reallocated Principal Collections, then the
Collateral Interest Invested Amount shall be reduced by the aggregate amount
of such excess, but not more than the Collateral Interest Investor Default
Amount for such Distribution Date (a "Collateral Interest Investor
----------------------------
Charge-Off"). Collateral Interest Investor Charge-Offs shall thereafter be
- ----------
reimbursed (and the Collateral Interest Invested Amount increased) on any
Distribution Date by the amount of Excess Finance Charge Collections
allocated and available for that purpose pursuant to Section 4.09(f) (but
only, in any case, to the extent such amount is not required to reimburse
Class A and Class B Investor Charge-Offs pursuant to Section 4.08(a) and (b)
and not, in any case, in excess of the unpaid principal balance of the
Collateral Interest).
(d) On each Determination Date, the Servicer shall calculate the
Subordinated Transferor Investor Default Amount, if any, for the related
Distribution Date. If on any Distribution Date, the Subordinated
Transferor Investor Default Amount, if any, for such Distribution Date
exceeds the amount of Excess Finance Charge Collections with respect to the
Collection Period immediately preceding the Distribution Date which are
allocated and available to pay such amount pursuant to Section 4.09(g), then
the Subordinated Transferor Invested Amount shall be reduced by the aggregate
amount of such excess, but not more than the Subordinated Transferor Investor
Default Amount for
such Distribution Date (a "Subordinated Transferor Investor Charge-Off").
Subordinated Transferor
-------------------------------------------
Investor Charge-Offs shall thereafter be reimbursed (and the Subordinated
Transferor Invested Amount increased) on any Distribution Date by the amount
of Excess Finance Charge Collections allocated and available for that purpose
pursuant to Section 4.09(h) (but only, in any case, to the extent such amount
is not required to reimburse Class A, Class B and
Collateral Interest Investor Charge-Offs pursuant to Section 4.08(a), (b)
and (c) and not, in any case, in excess of the unpaid principal balance of
the Subordinated Transferor Certificate).
Section 4.09. Excess Finance Charge Collections for the Series
------------------------------------------------
1996-1 Certificates. The Servicer shall apply or shall cause the Trustee to
- -------------------
apply, on each Distribution Date, Excess Finance Charge Collections for the
Series 1996-1 Certificates with respect to the Collection Period immediately
preceding such Distribution Date, to make the following distributions in the
following priority:
(a) an amount equal to the Class A Required Amount, if any,
with respect to such Distribution Date shall be distributed by the Servicer
or the Trustee to fund any deficiency pursuant to Sections 4.07(a)(i),
4.07(a)(ii) or 4.07(a)(iii); provided that in the event the Class A
Required Amount for such Distribution Date exceeds the amount of
Excess Finance Charge Collections, such Excess Finance Charge Collections
shall be applied first, to pay amounts due pursuant to Section 4.07(a)(i),
------
second, to pay the Class A Investor Default Amount, if any, pursuant to
- ------
Section 4.07(a)(ii), and third, to pay the Class A Monthly Servicing Fee to
-----
the Servicer pursuant to Section 4.07(a)(iii) (in the event that
Bridgestone/Firestone is not the Servicer, the Class A Monthly Servicing Fee
shall be paid prior to the Class A Investor Default Amount);
(b) an amount equal to the aggregate amount of Class A
Investor Charge-Offs which have not been previously reimbursed pursuant
to this Section 4.09(b) shall be distributed by the Servicer or the
Trustee to the Holder of the Exchangeable Transferor Certificate on
Distribution Dates with respect to the Revolving Period, but not exceeding
the Transferor Interest on such day (after giving effect to any new
Receivables transferred to the Trust on such date) and thereafter shall be
included in the funds on deposit in the Collection Account to be distributed
pursuant to Section 4.07(c) on Distribution Dates with respect to the
Amortization Period;
(c) an amount equal to the Class B Required Amount, if any, with
respect to such Distribution Date shall be distributed by the Servicer or the
Trustee to fund any deficiency pursuant to Sections 4.07(b)(i),
4.07(b)(ii) or 4.07(b)(iii); provided that in the event the Class B Required
Amount for such Distribution Date exceeds the amount of available Excess
Finance Charge Collections, such Excess Finance Charge Collections shall be
applied first, to pay amounts due pursuant to Section 4.07(b)(i), second, to
----- ------
pay the Class B Investor Default Amount, if any, pursuant to Section
4.07(b)(ii), and third, to pay the Class B Monthly Servicing Fee to the
-----
Servicer pursuant to Section 4.07(b)(iii) (in the event that
Bridgestone/Firestone is not the Servicer, the Class B Monthly Servicing Fee
shall be paid prior to the Class B Investor Default Amount);
(d) an amount equal to the aggregate amount by which the Class
B Invested Amount has been reduced below the Class B Initial Invested Amount
(other than by payments to the Class B Certificateholders) (but not in excess
of the aggregate amount of such reductions which have not been previously
reimbursed) shall be distributed by the Servicer or the Trustee to the Holder
of the Exchangeable Transferor Certificate on Distribution Dates with respect
to the Revolving Period, but not exceeding the Transferor Interest on
such day (after giving effect to any new Receivables transferred to the
Trust on such date) and thereafter shall be included in the funds on
deposit in the Collection Account to be distributed pursuant to Section
4.07(e) on Distribution Dates with respect to any Amortization Period;
(e) an amount equal to the aggregate Class B Investor Default
Amount for such Distribution Date shall be distributed to the Transferor on
Distribution Dates with respect to the Revolving Period (unless such amount
has been previously netted against deposits to the Collection Account) (but
not exceeding the Transferor Interest after giving effect to any new
Receivables transferred to the Trust on such date) and thereafter shall be
included in the funds on deposit in the Collection Account to be paid
pursuant to Section 4.07(e) to the Series 1996-1 Certificateholders on
Distribution Dates with respect to any Amortization
Period;
(f) an amount equal to the Collateral Interest Required Amount, if
any, with respect to such Distribution Date shall be distributed by the
Servicer or the Trustee to fund any deficiency pursuant to Sections
4.07(c)(i), 4.07(c)(ii) or 4.07(c)(iii); provided that in the event the
Collateral Interest Required Amount for such Distribution Date exceeds the
amount of available Excess Finance Charge Collections, such Excess
Finance Charge Collections shall be applied first,
----- to pay amounts due pursuant
to Section 4.07(c)(i), second, to pay the
------ Collateral Interest Investor Default Amount, if
any, pursuant to Section 4.07(c)(ii), and third, to pay the Collateral
Interest Monthly Servicing Fee ----- to the Servicer pursuant to
Section 4.07(c)(iii) (in the event that Bridgestone/Firestone is not the
Servicer, the Collateral Interest Monthly Servicing Fee shall be paid prior
to the Collateral Interest Investor Default Amount);
(g) an amount equal to the aggregate amount by which the
Collateral Interest Invested Amount has been reduced below the Collateral
Interest Initial Invested Amount (other than by payments to the Collateral
Interest Holder) (but not in excess of the aggregate amount of
such reductions which have not been previously reimbursed) shall be
distributed by the Servicer or the Trustee to the Holder of the Exchangeable
Transferor Certificate on Distribution Dates with respect to
the Revolving Period, but not exceeding the Transferor Interest on such day
(after giving effect to any new Receivables transferred to the Trust on such
date) and thereafter shall be included in the funds on deposit in
the Collection Account to be distributed pursuant to Section 4.07(e) on
Distribution Dates with respect to any Amortization Period;
(h) an amount equal to the aggregate Collateral Interest Investor
Default Amount for such Distribution Date shall be distributed to the
Transferor on Distribution Dates with respect to the Revolving Period (unless
such amount has been previously netted against deposits to
the Collection Account) (but not exceeding the Transferor Interest after
giving effect to any new Receivables transferred to the Trust on such date)
and thereafter shall be included in the funds on deposit in the Collection
Account to be paid pursuant to Section 4.07(e) to the Series 1996-1
Certificateholders on Distribution Dates with respect to any Amortization
Period;
(i) any additional amounts required to be paid on such
Distribution Date pursuant to the terms of the Loan Agreement;
(j) an amount equal to the aggregate Subordinated Transferor
Investor Default Amount, if any, for such Distribution Date shall be
distributed by the Servicer or the Trustee to the Holder of the Exchangeable
Transferor Certificate on Distribution Dates with respect to
the Revolving Period, but not exceeding the Transferor Interest on such day
(after giving effect to any new Receivables transferred to the Trust on such
date) and thereafter shall be included in the funds on deposit in
the Collection Account to be distributed pursuant to Section 4.07(e) on
Distribution Dates with respect to any Amortization Period;
(k) an amount equal to the aggregate amount by which the
Subordinated Transferor Invested Amount has been reduced below the
Subordinated Transferor Initial Invested Amount (other than by payments to
the Holder of the Subordinated Transferor Certificate) (but not in excess of
the aggregate amount of such reductions which have not been previously
reimbursed) shall be distributed by the Servicer or the Trustee to the Holder
of the Exchangeable Transferor Certificate on Distribution Dates with respect
to the Revolving Period, but not exceeding the Transferor Interest on such
day (after giving effect to any new Receivables transferred to the Trust on
such date) and thereafter shall be included in the funds on deposit in the
Collection Account to be distributed pursuant to Section 4.07(e) on
Distribution Dates with respect to any Amortization Period;
(l) the balance, if any, shall be treated as Shared Excess
Finance Charge Collections, to the extent necessary, and the Servicer shall
direct the Trustee in writing on such Determination Date to withdraw such
amounts from the Collection Account and to make such amounts available to pay
to Certificateholders of other Series to the extent of shortfalls, if any, in
amounts payable to such Certificateholders from Finance Charge Collections
allocated to such other Series;
(m) the balance, if any, shall be treated as Shared Principal
Collections to the extent necessary; and
(n) the balance, if any, shall be distributed by the Servicer or
the Trustee to Bridgestone/Firestone.
For each Business Day with respect to the Revolving Period, the
funds on deposit in the Collection Account to the extent of the product of
(i) the sum of the Class A Floating Allocation Percentage, the Class B
Floating Allocation Percentage and the Collateral Interest Floating
Allocation Percentage and (ii) Principal Collections with respect to such
Business Day (less the amount of Collateral Interest Reallocated Principal
Collections and Class B Reallocated Principal Collections on such Business
Day) will be treated as Shared Principal Collections and applied, pursuant to
the written direction of the Servicer in the Payment
Date Statement for such Business Day.
Section 4.10. Reallocated Principal Collections for the Series
------------------------------------------------
1996-1 Certificates. (a) The Servicer shall apply or cause the Trustee to
- -------------------
apply, on each Distribution Date, Subordinated Transferor Reallocated
Principal Collections with respect to the Collection Period immediately
preceding such Distribution Date, first to the components of the Class A
Required Amount, if any, then to the components of the Class B Required
Amount, if any, and then to the components of the Collateral Interest
Required Amount, if any, in the same priority as such amounts are applied
to such components from Excess Finance Charge Collections pursuant to
Section 4.09 herein.
(b) The Servicer shall apply or cause the Trustee to apply, on
each Distribution Date, Collateral Interest Reallocated Principal
Collections with respect to the Collection Period immediately preceding such
Distribution Date, first to the components of the Class A Required Amount, if
any, and then to the components of the Class B Required Amount, if any, in
the same priority as such amounts are applied to such components from Excess
Finance Charge Collections pursuant to Section 4.09 herein.
(c) The Servicer shall apply or cause the Trustee to apply, on
each Distribution Date, Class B Reallocated Principal Collections with
respect to the Collection Period immediately preceding such Distribution
Date to the components of the Class A Required Amount, if any, in the same
priority as such amounts are applied to such components from Excess Finance
Charge Collections pursuant to Section 4.09 herein.
SECTION 8. Article V of the Agreement. Article V of the Agreement
--------------------------
shall read in its entirety as follows:
ARTICLE V
DISTRIBUTIONS AND REPORTS TO
CERTIFICATEHOLDERS
Section 5.01. Distributions. (a) On each Distribution Date, the
-------------
Paying Agent shall distribute (in accordance with the Monthly Servicer's
Certificate) to each Class A, Class B, Collateral Interest and Subordinated
Transferor Certificateholder on the preceding Record Date (other than as
provided in Section 12.02 of the Agreement respecting a final distribution)
such Certificateholder's pro rata share (based on the
aggregate Undivided Interests represented by the Certificates held by such
Certificateholder) of the amounts on deposit in the Collection Account
pursuant to Section 4.07.
(b) Except as provided in Section 12.02 with respect to a final
distribution, distributions to Investor Certificateholders hereunder shall be
made by check mailed to each such Certificateholder at
such Certificateholder's address appearing in the Certificate Register
without presentation or surrender of any such Investor Certificate or the
making of any notation thereon; provided, however, that with respect to such
Investor Certificates registered in the name of a Clearing Agency, such
distributions shall be made to such Clearing Agency in immediately available
funds.
Section 5.02. Statements to Series 1996-1 Certificateholders. (a)
----------------------------------------------
On each Distribution Date, the Paying Agent, on behalf of the Trustee, shall
forward to each Class A, Class B and Collateral Interest Holder a statement
substantially in the form of Exhibit B (the "Payment Date Statement")
----------------------
prepared by the Servicer setting forth certain information relating to the
Trust and the Investor Certificates.
(b) Annual Certificateholders' Statement. On or before January
------------------------------------
31 of each calendar year, beginning with calendar year 1997, the Paying
Agent, on behalf of Bridgestone/Firestone, shall furnish or cause to be
furnished to each Person who at any time during the preceding calendar year
was an Investor Certificateholder, a statement prepared by the Trustee on
behalf of Bridgestone/Firestone containing such
information as is required to be provided to a holder of indebtedness under
the Internal Revenue Code and such other information as may be reasonably
requested by the Investor Certificateholders to prepare their tax returns.
Such obligation of the Trustee 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.
(c) No later than the second business day prior to each
Distribution Date, the Servicer shall forward by facsimile (to be followed by
original confirmation in writing) or overnight delivery service to the
Trustee, the Paying Agent and each Rating Agency a certificate of a Servicing
Officer substantially in the form attached as Exhibit C (the "Monthly
-------
Servicer's Certificate").
- ----------------------
(END OF ARTICLE V)
SECTION 9. Article VI of the Agreement. Article VI shall, for
---------------------------
purposes of Series 1996-1, contain the following Section 6.14:
Section 6.14 Transfers of the Collateral Interest and the
--------------------------------------------
Subordinated Transferor Certificate.
- -----------------------------------
(a) The Collateral Interest shall not be listed for trading on
a recognized securities exchange.
(b) The Collateral Interest shall be issued in minimum
denominations of ($200,000). At any point in time, the Collateral Interest
shall not be held by more than (fifty) different investors.
(c) No transfer of any Collateral Interest shall be made pursuant
to an effective registration statement under the Securities Act of 1933, as
amended (the "1933 Act") or pursuant to a qualification under
applicable state securities laws. Each transfer of a Collateral Interest
shall be made in a transaction which does not require such registration or
qualification. If such a transfer is to be made without registration or
qualification, then the Certificate Registrar shall require, in order to
assure compliance with such laws, receipt of: (i) if such transfer is
of a Collateral Interest and is purportedly being made in reliance upon Rule
144A under the 1933 Act, a certificate from the Certificateholder desiring
to effect such transfer substantially in the form attached as Exhibit D
hereto and a certificate from such Certificateholder's prospective
transferee substantially in the form attached as Exhibit E hereto; and (ii)
in all other cases, (A) except where the Transferor or an Affiliate thereof
is the transferor or transferee, an Opinion of Counsel satisfactory to the
Trustee to the effect that such transfer may be made without such
registration or qualification (which Opinion of Counsel shall not be an
expense of the Trust Fund or the Transferor or the Trustee in their
respective capacities as such), (B) a certificate from the Certificateholder
desiring to effect such transfer substantially in the form attached as
Exhibit E hereto and (C) a certificate from such Certificateholder's
prospective transferee substantially in the form attached as Exhibit F
hereto. Neither the Transferor nor the Trustee shall register or qualify the
Collateral Interest under the 1933 Act or any other securities law or to take
any action not otherwise required under this Agreement to permit the transfer
of any Collateral Interest pursuant to a registration statement or
qualification. In addition, neither the Transferor nor the Trustee shall
transfer the Collateral Interest unless such transfer is made pursuant to an
effective exemption from registration. Any Collateral Interest Holder
desiring to effect such a transfer shall, and does hereby agree to, indemnify
the Trustee and the Transferor against any liability that may result if the
transfer is not so exempt from registration or qualification.
(d) No transfer of Collateral Interest shall be made unless the
prospective transferee represents (i) that it is acquiring the Certificate
for its own behalf and is not acting as agent or custodian for any other
person or entity in connection with such acquisition, and (ii) if the
prospective transferee is a partnership, grantor trust or S corporation for
federal income tax purposes (a "Flow-Through Entity"), any Collateral
Interest owned by such Flow-Through Entity will represent less than 50% of
the value of all the assets owned by such Flow-Through Entity and no special
allocation of income, gain, loss, deduction or credit from such Certificates
will be made among the beneficial owners of
such Flow-Through Entity. Such representation shall be made by the
transferee in the form attached as Exhibit D or F, as applicable.
(d) The Subordinated Transferor Certificate may not be sold,
assigned, transferred, participated, pledged, hypothecated, or otherwise
conveyed by the Transferor except that an interest in the Subordinated
Transferor Certificate may be participated to Bridgestone/Firestone.
SECTION 10. Consents of Series 1996-1 Certificateholders.
--------------------------------------------
Whenever the Agreement provides for the vote, consent or waiver of Series
1996-1 Certificateholders, such vote, consent or waiver shall be obtained
on the basis of the Investor Certificateholders on an aggregate basis,
except with respect to the votes, consents or waivers permitted or required
by the Sections indicated below, with respect to which such votes, consents
or waivers shall be obtained from either Class, or each and every Class, as a
separate Class, as specified below:
shall be required on
Section: the following basis:
- ---------------------------
6.13 Class A and B and Collateral Interest
9.02 Class A and B and Collateral Interest
10.01(b) and (c) Class A and B and Collateral Interest
10.04 Class A and B and Collateral Interest
13.01 Class A and B and Collateral Interest
13.07 Class A and B and Collateral Interest
SECTION 11. Amortization Events. If any one of the events
-------------------
specified in Section 9.01 of the Agreement (after any grace periods or
consents applicable thereto) or 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 (each, an "Amortization Event"):
------------------
(a) failure on the part of the Servicer, the Originator or the
Transferor, as applicable (i) to make any payment or deposit required by the
terms of the Agreement or Supplement on or before five Business 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 the covenant of the Transferor
set forth in Section 2.08(b) of the Agreement, or (iii) duly to observe or
perform in any material respect any other covenants or
agreements of the Transferor set forth in this Agreement or Supplement,
which, in the case of clause (iii), continues unremedied for a period of 60
days after the date on which written notice of such failure, requiring
the same to be remedied, shall have been given to the Servicer, the
Originator or the Transferor, as applicable by the Trustee, or to the
Transferor and the Trustee by the Holders of Investor Certificates evidencing
Undivided Interests aggregating not less than 10% of the Invested Amount of
either Class of the Series 1996-1 Certificates provided, however, that an
-------- -------
Amortization Event pursuant to this Section 12(a) shall not be deemed to
have occurred hereunder with respect to any such Series if the Transferor
has accepted the transfer of the Receivable, or all of such Receivables, if
applicable, during such period (or such longer period as the Trustee may
specify) in accordance with the provisions hereof;
(b) any representation or warranty made by the Servicer, the
Originator or the Transferor, as applicable in the Purchase and Sale
Agreement or this Supplement or any information contained in a list required
to be delivered by the Transferor pursuant to Section 2.01 or 2.05 of the
Agreement 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 Servicer, the Originator or the Transferor, as applicable by the
Trustee, or to the Transferor and the Trustee by the Holders of Investor
Certificates evidencing Undivided Interests aggregating not less than 10%
of the Invested Amount of any Class of the Series 1996-1 Certificates
and as a result of which the interests of such Series are materially and
adversely affected provided, however, that an Amortization Event
pursuant to this Section 12(b) shall not be deemed to have occurred
hereunder with respect to any such Series if the Transferor has accepted
the transfer of the Receivable, or all of such Receivables, if applicable,
during such period (or such longer period as the Trustee may specify) in
accordance with the provisions hereof;
(c) the Portfolio Yield averaged over any three consecutive
Collection Periods in less than the Base Rate of such Series;
(d) any Servicer Default shall occur which would have a material
adverse effect on the Holders of the Investor Certificates;
(e) the Transferor Amount (plus any amounts available under the
Transferor Letter of Credit or the Transferor Escrow Account and the B/F
Amount) is less than __% of the Aggregate Invested Amount of all Series each
on the last day of any Collection Period (such determination shall be made on
each Determination Date and reported in the Monthly Servicer's Certificate);
or
(f) the Transferor Amount plus the B/F Amount and the
Subordinated Transferor Invested Amount (plus the invested amount of any
other subordinated class of certificates of additional Series which is
retained by the Transferor and with respect to which no legal opinion is
delivered characterizing such certificates as indebtedness for federal
income tax purposes) is less than __% of Aggregate Receivables on the last
day of any Collection Period (such determination shall be made on each
Determination Date and reported in the Monthly Servicer's Certificate):
then, (x) in the case of any event described in subparagraphs (a),
(b) or (d) of this Section 12, after the applicable grace period, if
any, either the Trustee or the Investor Certificateholders evidencing
interest aggregating not less than 50% of the Invested Amount by written
notice to the Transferor (and to the Trustee if given by the Investor
Certificateholders) may declare that an Amortization Event has occurred with
respect to the Investor Certificates as of the date of such notice, or (y) in
the case of any event described in Section 9.01(a) or (b) of the Agreement an
Amortization Event with respect to all series of certificates, including the
Investor Certificates, or (z) in the case of subparagraphs (c), (e) or (f) of
this Section 12 an Amortization Event with respect to the Investor
Certificates, shall occur immediately upon
the occurrence of such event, without any notice or other action on the part
of the Trustee or the Certificateholders.
SECTION 12. Servicing Fee. Notwithstanding Section 3.02 of the
-------------
Agreement, the Monthly Servicing Fee shall equal the sum of the Class A
Monthly Servicing Fee, the Class B Monthly Servicing Fee, the Collateral
Interest Monthly Servicing Fee and the Subordinated Transferor Monthly
Servicing Fee.
SECTION 13. Ratification of Pooling and Servicing Agreement. As
-----------------------------------------------
supplemented or modified by this Supplement, the Agreement is in all
respects ratified and confirmed and the Agreement as so supplemented or
modified by this Supplement shall be read, taken, and construed as one and
the same instrument.
SECTION 14. Counterparts. This Supplement may be executed in any
------------
number of counterparts, each of which when so executed shall be deemed to
be an original, but all of which counterparts shall together constitute but
one and the same instrument.
SECTION 15. Governing Law. THIS SUPPLEMENT SHALL BE GOVERNED BY
-------------
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT
REFERENCE TO ITS CONFLICTS OF LAW PROVISIONS.
SECTION 16. Certain Amendments. In the event that federal
------------------
legislation creates a new type of entity for federal income tax purposes,
the "financial asset securitization investment trust" (a "FASIT"), the
Transferor may amend this Series Supplement in order to effect a "financial
asset securitization investment trust" (a "FASIT") election for all or a
portion of the Trust or the Investor Certificates; provided,
--------
that the Transferor delivers an opinion to the Trustee to the effect that
such election will not adversely affect the Federal or applicable state
income tax characterization of any outstanding Series of Investor
Certificates or the taxability of the Trust under Federal or applicable
state income tax laws or otherwise have a material adverse effect on any
class of Series 1996-1 Certificates.
IN WITNESS WHEREOF, the Transferor, the Servicer and the Trustee
have caused this Supplement to be duly executed by their respective officers
duly authorized as of the day and year first above written.
FIRESTONE RETAIL CREDIT
CORPORATION, as Transferor
By
----------------------------
Name:
Title:
BRIDGESTONE/FIRESTONE, INC.
as Servicer and individually
By
----------------------------
Name:
Title:
THE FUJI BANK AND TRUST
COMPANY, as Trustee
By
----------------------------
Name:
Title:
EXHIBIT 4.3
SECOND AMENDED AND RESTATED
PURCHASE AND SALE AGREEMENT
AMENDED AND RESTATED PURCHASE AND SALE AGREEMENT, as amended and
restated as of October __, 1996, among FIRESTONE RETAIL CREDIT CORPORATION,
a Massachusetts corporation (together with its successors and assigns, called
the "Company"), CREDIT FIRST NATIONAL ASSOCIATION, a national bank (together
with its successors and assigns, called "CFNA"), and BRIDGESTONE/FIRESTONE,
INC., an Ohio corporation (together with its successors and assigns, called
"FIRESTONE").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Company and Firestone Retail Credit Corporation, a
Delaware corporation ("FRCC"), purchased from Ameritrust Company National
Association ("Ameritrust") and Society National Bank ("Society"), successor
in interest by merger to Ameritrust, certain revolving open-ended charge card
receivables arising under credit cards issued by Ameritrust and Society (the
"Predecessor Cards") pursuant to credit card programs in which Ameritrust and
Society extend credit to Firestone customers and to customers of dealers of
Firestone and customers of certain other dealers and marketers of automotive
products in order to permit such customers to purchase goods and services
from Firestone stores, participating Firestone dealers, and other entities,
as the case may be (the "Predecessor Program");
WHEREAS, the Company, Firestone and Ameritrust were parties to that
certain purchase and sale agreement dated as of July 31, 1986, as amended
(the "Original Purchase Agreement");
WHEREAS, FRCC, Firestone and Ameritrust were parties to that
certain purchase and sale agreement, as amended and restated as of December
31, 1986, as further amended (the "FRCC" Purchase Agreement");
WHEREAS, FRCC, was merged into the Company and the Company
thereupon succeeded by operation of law to all the rights, properties and
obligation of FRCC;
WHEREAS, the Company, as successor by merger of the rights and
obligations of FRCC under the FRCC Purchase Agreement, and the other parties
to the FRCC Purchase Agreement and the Original Purchase Agreement
consolidated, amended and restated the FRCC Purchase Agreement and the
Original Purchase Agreement by executing the Purchase Agreement, amended and
restated as of October 3, 1989 (the "1989 Purchase Agreement");
WHEREAS, on July 13, 1992, Ameritrust was merged into Society and
Society succeeded by operation of law to all the
<PAGE>
rights, properties and obligations of Ameritrust, including, but not limited
to, the 1989 Purchase Agreement;
WHEREAS, the Company, Firestone and Society were parties to that
certain First Amendment to the Purchase and Sale Agreement, dated as of
November 1, 1992 (the "First Amendment"), and that certain Second Amendment
to the Purchase and Sale Agreement, dated as of October 1, 1993 (the "Second
Amendment") (the 1989 Purchase Agreement, as amended by the First Amendment
and Second Amendment is hereby collectively referred to as the "Amended
Purchase Agreement");
WHEREAS, Society has assigned and transferred all its right, title
and interest in and to the Amended Purchase Agreement to CFNA and CFNA has
assumed and agreed to perform all of the rights and obligations of Society
under the Amended Purchase Agreement pursuant to a Transfer Agreement, dated
as of October 1, 1993;
WHEREAS, the Company, Firestone and the Fuji Bank and Trust Company
(the "Trustee") were parties to that certain Pooling and Servicing Agreement,
dated as of November 1, 1992 (the "Original Pooling and Servicing
Agreement"), pursuant to which the Company has assigned its right, title and
interest in and to the Amended Purchase Agreement;
WHEREAS, the Company, Firestone and CFNA were parties to the
Amended and Restated Purchase and Sale Agreement, dated as of October 20,
1993, and amended on August 12, 1994 (as so amended, the "Amended and
Restated Purchase Agreement").
WHEREAS, the Company, Firestone and the Trustee desire to amend and
restate the Original Pooling and Servicing Agreement and supplement the
Pooling and Servicing Agreement with the Series 1996-1 Supplement, each dated
the date hereof (the Original Pooling and Servicing Agreement as so amended
and supplemented and as amended and supplemented from time to time (the
"Pooling and Servicing Agreement"); and
WHEREAS, the parties hereto wish to further amend and restate the
Amended and Restated Purchase Agreement;
NOW, THEREFORE, the parties hereto agree as follows:
2
<PAGE>
ARTICLE I
DEFINITION
SECTION 1.01. Definitions. For all purposes of this Agreement,
-----------
except as otherwise expressly provided herein or unless the context otherwise
requires, capitalized terms not otherwise defined herein or in Annex X
attached hereto shall have the meanings specified in the Pooling and
Servicing Agreement.
ARTICLE II
PURCHASE AND SALE AND ASSIGNMENT
Section 2.01. Sale of Eligible Trade Receivables to the Company.
-------------------------------------------------
Subject to and upon the terms and conditions herein set forth, CFNA does
hereby transfer, sell and assign to the Company, without recourse to CFNA
except as provided herein, and the Company does hereby acquire and purchase
all of CFNA's right, title and interest in, to and under the Eligible
Receivables now existing and hereafter created in any Eligible Accounts
whether now existing or hereafter created on or after the Cut-Off Date, all
amounts due or to become due on or after the Cut-Off Date and all amounts
received with respect thereto, including all Recoveries relating thereto (net
of related expenses), Insurance Proceeds (net of related expenses), and all
of its right, title and interest in, to any Insurance Premiums paid under any
Insurance Agreements and all proceeds of any Insurance Agreement to the
extent not previously purchased, at a purchase price equal to the face amount
of such Receivables. CFNA shall deliver to the Company on each Settlement
Date a Monthly Servicer Certificate substantially in the form of Annex A
attached hereto. The foregoing transfer, assignment, set-over and conveyance
does not constitute and is not intended to result in a creation or an
assumption by the Company of any obligation of CFNA or any other Person in
connection with the Accounts, the Receivables or under any agreement or
instrument relating thereto, including, without limitation, any obligation
to any merchants, Obligors or insurers.
Section 2.02. Assignment of Certain Rights Under the Participation
----------------------------------------------------
Agreement.
- ---------
(a) As further consideration for the transfer, sale and assignment
of the Receivables by CFNA to the Company pursuant to Section 2.01, the
Company hereby assigns to CFNA any and all of its rights to any amounts
payable to it by Firestone pursuant to Section 2(c)(ii) of the Amended and
Restated Participation Agreement dated as of the date hereof, between
3
<PAGE>
Firestone and the Company (the "Participation Agreement") and CFNA hereby
accepts such assignment.
(b) Firestone hereby acknowledges and agrees to the assignment set
forth in Section 2.02(a) and hereby agrees that CFNA shall have full recourse
against it for the payment of any amounts payable to the Company pursuant to
Section 2(c)(ii) of the Participation Agreement.
(c) CFNA hereby acknowledges and agrees that it shall not have any
claim nor have any recourse available to it against the Company for payment
of any amount under Section 2.01 which is in respect of the Discount Amount.
Section 2.03. Customer Service Adjustments. CFNA may accept a
----------------------------
return of goods for full or partial credit or make a daily adjustment in the
principal amount or finance or other charges accrued or payable with respect
to the account of a customer who has purchased merchandise or services on
credit under a Credit Card Agreement, provided that such adjustment is
--------
permitted under CFNA's applicable Credit Card Guidelines. The aggregate
amount of all such adjustments made by CFNA during any Collection Period
shall be payable to the Company by CFNA and shall be due no later than the
Transfer Date at the end of such Collection Period.
Section 2.04 Addition of Accounts.
--------------------
(a) All accounts created after the Series 1996-1 Closing Date
which meet the definition of Eligible Accounts shall be included as Accounts
from and after the date upon which such Eligible Accounts are created and all
Receivables in such Eligible Accounts, whether such Receivables are existing
or thereafter created, shall be transferred automatically to the Trust upon
purchase by the Transferor from the Originator.
(b) Subject to Section 2.04(c) and (d), CFNA may, but shall not
be obligated to, designate from time to time additional credit card accounts
with respect to Receivables arising from Alternative Programs ("Eligible
Alternative Accounts") to be included as Accounts and convey the Eligible
Alternative Receivables arising from such Eligible Alternative Accounts to
the Trust.
(c) CFNA shall be permitted to designate and assign Eligible
Alternative Receivables from Eligible Alternative Accounts only upon
satisfaction of the following conditions.
(i) CFNA shall designate only Eligible Alternative Accounts;
4
<PAGE>
(ii) On or prior to each Addition Date in respect of Eligible
Alternative Accounts, CFNA shall have executed and delivered to the Company
a written assignment in substantially the form of Exhibit _ (the
"Assignment") and a true and complete list identifying all such Eligible
Alternative Accounts specifying for each such Account, as of the Addition
Notice Date, its account number. Such list shall be as of the Addition Date
with respect to such Assignment and shall be incorporated into and made a
part of such Assignment and this Agreement;
(iii) CFNA represents and warrants (x) as of each Addition
Date with respect to Eligible Alternative Accounts added pursuant to Section
2.04(b) and 2.04(c) that (a) the list of Eligible Alternative Accounts, as
of the Addition Notice Date, complies in all material respects with the
requirements of paragraph (ii) above and (b) no selection procedure was
utilized by CFNA in selecting the Eligible Alternative Accounts which is
adverse to the interests of the Company and (y) as of the Addition Notice
Date and as of the Addition Date, is not insolvent;
(iv) The Company has received written confirmation from each
Rating Agency that such Rating Agency will not reduce or withdraw its rating
on any outstanding Series as a result of such addition;
(v) On or before each Addition Date, CFNA shall deliver a
certificate of a Vice President or more senior officer confirming the items
set forth in paragraphs (ii), (iii) and (iv) above. The Company may
conclusively rely on such certificate, shall have not duty to make inquiries
with regard to matters set forth therein and shall incur no liability in so
relying; and
(vi) On or before each Addition Date, the Company shall
deliver to the Trustee and each Rating Agency, an Opinion of Counsel (which,
in this instance, shall be outside counsel to the Transferor) with respect
to the Receivables in the Eligible Alternative Accounts substantially in the
form of Exhibit F to the Pooling and Servicing Agreement.
Upon satisfaction of the above conditions, CFNA shall execute and
deliver the Assignment to the Company, and the Eligible Alternative
Receivables from the Eligible Alternative Accounts shall be conveyed to the
Company as provided in the Assignment.
(d) CFNA shall be permitted to designate Eligible Alternative
Accounts and convey such Eligible Alternative Accounts and the Eligible
Alternative Receivables arising out of such Eligible Alternative Accounts
pursuant to Sections 2.04(b)
5
<PAGE>
and (c) until either (i) the number of Eligible Alternative Accounts equals
10% of the number of Eligible Accounts and Eligible Alternative Accounts (the
"Ten Percent Number Test") or (ii) the aggregate dollar amount of Eligible
Alternative Accounts equals 10% of the aggregate dollar amount of Eligible
Accounts and Eligible Alternative Accounts (the "Ten Percent Aggregate Test")
together with the Ten Percent Number Test, the "Ten Percent Tests"). When
either Ten Percent Test has been met, CFNA shall not convey Eligible
Alternative Receivables to the Transfer until the earlier of date on which
the Ten Percent Test is no longer met or the Company receives written
confirmation from each Rating Agency that such Rating Agency will not reduce
or withdraw its then current rating on any outstanding Series as a result of
such conveyance.
When the Company has received written confirmation from each Rating
Agency that such Rating Agency will not reduce or withdraw its then current
rating on any outstanding series as a result of the continued inclusion of
Eligible Alternative Accounts from a Designated Alternative Program, CFNA may
continue to transfer Eligible Alternative Accounts from a designated
Alternative Program to the Company, provided that (i) the number of Eligible
Alternative Accounts relating to a Designated Alternative Program does not
exceed 20% of the number of Eligible Accounts and Eligible Alternative
Accounts, calculated as of December 31, of each calendar year (the "Twenty
Percent Yearly Cap") and (ii) the number of Eligible Alternative Accounts
relating to a Designated Alternative Program does not exceed 15% of the
number of Eligible Accounts and Eligible Alternative Accounts, calculated as
of March 31, June 30, September 30 and December 31 of each year for the
preceding three Collection Periods (the "Fifteen Percent Quarterly Cap").
In addition, CFNA may continue to transfer Eligible Alternative Accounts from
Non-Designated Alternative Programs, subject to the Ten Percent Maximum
Number Test and the Ten Percent Aggregate Test.
Section 2.05 Transfer of Merchant Fees
-------------------------
In consideration of its agreement to accept the transfer or
Receivables hereunder, CFNA agrees to transfer to the Company on each
Determination Date, commencing on the Determination Date related to the
December 1996 Distribution Date, an amount of merchant fees received by CFNA
from authorized merchants pursuant to credit card program agreements during
the calendar month preceding such Determination Date equal to the lesser of
(x) $350,000 and (y) the total amount of merchant fees received by CFNA
during such Collection Period from such authorized merchants pursuant to
credit card program agreements.
6
<PAGE>
ARTICLE III
REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 3.01. Representations, Warranties of Firestone. Firestone
----------------------------------------
represents and warrants to the Company that:
(a) Firestone has been duly organized and is validly existing and
in good standing as a corporation under the laws of the State of Ohio, with
full corporate power and authority to own its properties and to transact the
business in which it is now engaged.
(b) The performance of its obligations under this Agreement and
the consummation of the transactions herein contemplated have been duly
authorized by all requisite corporate action and will not conflict with or
result in a breach of any of the terms or provisions of, or constitute a
default under, or result in the creation or imposition of any lien, charge
or encumbrance upon any of its property or assets in the United States or
upon that of any of its Significant Subsidiaries pursuant to the terms of,
any indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which it or any of its Significant Subsidiaries is a party or
by which it or any of its Significant Subsidiaries is bound or to which any
of its property or assets in the United States is subject, nor will such
action result in any violation of the provisions of its articles of
incorporation and regulations or of any statute or any order, rule or
regulation of any court or governmental agency subdivision of either having
jurisdiction over it or any of its properties; and no consent, approval,
authorization, order, registration or qualification of or with any such court
or any such regulatory authority or other such governmental agency or body
is required to be obtained by or with respect to Firestone for the
consummation of the transactions contemplated by this Agreement.
(c) This Agreement has been duly executed and delivered by
Firestone and constitutes its valid and legally binding obligation,
enforceable against it in accordance with its terms, subject as to
enforcement to bankruptcy, insolvency, reorganization and other similar laws
of general applicability relating to or affecting creditors' rights' and to
general equity principles.
Section 3.02. Representations and Warranties of CFNA. CFNA
--------------------------------------
represents and warrants to the Company that:
(a) CFNA has been duly organized and is validly existing and in
good standing as a national bank under the laws of the United States.
7
<PAGE>
(b) The sale by CFNA of Receivables pursuant to this Agreement and
the performance of its obligations under this Agreement have been duly
authorized by all requisite corporate action and will not conflict with or
resulting a breach of any of the terms or provisions or, or constitute a
default under, or result in the creation or imposition of any lien, charge
or encumbrance upon any of its property or assets pursuant to the terms of,
any indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which it is a party or by which it is bound or to which any of
its property of assets is subject, nor will such action result in any
violation of the provisions of its articles of association and by-laws or of
any statute or any order, rule or regulation of any court or governmental
agency or body of the United States, any State or any political subdivision
having jurisdiction over it or any of its properties; and o consent,
approval, authorization, order, registration or qualification of or with any
such court or any such regulatory authority or other such governmental agency
or body is required to be obtained by or with respect to CFNA for the sale
of Receivables to the Company hereunder.
(c) This Purchase Agreement has been duly executed and delivered
by CFNA and constitutes its valid and legally binding obligation, enforceable
against it in accordance with its terms, subject as to enforcement to
bankruptcy, insolvency, reorganization and other similar laws of general
applicability relating to or affecting creditors' rights, to debt moratorium
laws relating to national banking associations and to general equity
principles.
(d) CFNA will be, as to each Receivable sold by it to the Company,
the owner immediately prior to the sale of such Receivable free from any
lien, security interest, encumbrance or other right, title or interest of any
Person.
(e) There is no effective financing statement (or similar
statement or instrument of registration under the law of any jurisdiction)
now on file or registered in any public office filed by CFNA or purporting
to be filed on behalf of CFNA covering any interest of any kind in the
Receivables except any financing statements filed in respect of and covering
the purchase of the Receivables by the Company pursuant to this Purchase
Agreement.
(f) All filings and recordings (including pursuant to the Uniform
Commercial Code) required to perfect the title of the Company in each
Receivable sold hereunder have been accomplished and are in full force and
effect.
(g) The chief executive office of CFNA is located in Cuyahoga
County, Ohio. Originals or duplicates of documents evidencing all
Receivables are kept in Cuyahoga County and Summit County.
8
<PAGE>
Section 3.03. Representations and Warranties of the Company. The
---------------------------------------------
Company represents and warrants to each of Firestone and CFNA that:
(a) The Company has been duly organized and is validly existing
and in good standing as a corporation under the laws of the Commonwealth of
Massachusetts, with full corporate power and authority to own its properties
and to transact the business in which it is now engaged or in which it
proposes to engage.
(b) The purchase by the Company of Receivables pursuant to this
Agreement and the consummation of the transactions herein contemplated will
not conflict with or result in a breach of any of the terms or provisions of,
or constitute a default under or, except as contemplated hereby and by the
Pooling and Servicing Agreement, result in the creation or imposition of any
lien, charge or encumbrance upon any of the property or assets of the Company
pursuant to the terms of, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which the Company is a party
or by which it is bound or to which any of the property or assets of the
Company is subject, nor will such action result in any violation of the
provisions of the certificate of incorporation or the by-laws of the Company
or of any statue or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company or any of
its properties; and no consent, approval, authorization, order, registration
or qualification of or with any court or any such regulatory authority or
other governmental agency or body is required for the purchase of Receivables
by the Company.
(c) This Agreement has been duly authorized, executed and
delivered by the Company and constitutes the valid and legally binding
obligation of the Company enforceable against the Company in accordance with
its terms, subject, as to enforcement, to bankruptcy, insolvency,
reorganization and other similar law of general applicability relating to or
affecting creditors' rights and to general equity principles.
Section 3.04. Covenants of CFNA. CFNA covenants and agrees with
-----------------
the Company and Firestone as follows:
(a) CFNA will not move its chief executive office or cause the
documents and books evidencing the Receivables to be moved from Cuyahoga
County, Ohio unless (i) it shall have given to the Company and Firestone not
less than 45 days written notice of its intentions so to do, clearly
describing the new location, and (ii) it shall have taken such action,
satisfactory to the Company, to maintain any security interest of, or any
filing in respect of title of, the Company or the Trustee for
9
<PAGE>
the benefit of the Certificateholders in the Receivables at all times fully
perfected and in full force and effect.
(b) CFNA shall duly fulfill all obligations on its part to be
fulfilled under or in connection with the Receivables and will do nothing to
impair the right, title and interest of the Company in the Receivables.
(c) CFNA shall make, execute or endorse, acknowledge, and file or
deliver to the Company from time to time such vouchers, invoices, schedules,
confirmatory assignments, conveyances, transfer endorsements, powers of
attorney, certificates, reports and other assurances or instruments and take
such further steps relating to the Receivables and other property or rights
covered by the security interest granted pursuant to the Pooling and
Servicing Agreement as the Company may reasonably request.
(d) CFNA agrees that, in the event that is changes its name, place
of business or corporate structure so that the financing statements on file
with respect to the Receivables become misleading, it will notify the Company
and Firestone and cooperate with the Company and Firestone to file amendments
to such financing statements to evidence, perfect, maintain and enforce the
title or the security interest of the Company or the Trustee in the
Receivables and the priority thereof.
(e) CFNA agrees to indemnify, defend and hold the Company harmless
from and against any and all loss, liability, damage, judgment, claim,
deficiency or expense including interest, penalties, reasonable attorneys'
fees and disbursements and amounts paid in settlement to which the Company
may become subject insofar as such loss, liability, damage, judgment, claim,
deficiency or expense arise out of, or is based upon or relates to, a breach
by CFNA of any warranty, representation, covenant or agreement contained in
this Agreement.
(f) CFNA shall defend the Receivables sold by it to the Company
against all claims and demands of all Persons at any time claiming the same
or any interest therein adverse to the Company.
(g) CFNA will not execute nor will there be on file in any public
office any effective financing statement (or similar statement or instrument
of registration under the laws of any jurisdiction) or statements relating
to the Receivables, except any financing statements filed or to be filed in
respect of and covering the purchase of the Receivables by the Company
pursuant to this Agreement and the security interest created in favor of the
Trustee pursuant to the Pooling and Servicing Agreement and any financing
statements assigned to the Trustee
10
<PAGE>
for the benefit of the Certificateholders in connection herewith or
therewith.
(h) CFNA shall at its expense perform all acts and execute all
documents reasonably requested by the Company at any time to evidence,
perfect, maintain and enforce the title or the security interest of the
Company in the Receivables and the priority thereof. CFNA will, at the
reasonable request of a duly authorized officer of the Company, execute and
deliver financing statements relating to or covering the Receivables
(reasonably satisfactory in form and substance to the Company) and, where
permitted by law, CFNA authorizes the Company to file one or more financing
statements signed only by the Company.
(i) Until such time as it shall notify the Company and Firestone
in writing of the revocation of such authority, CFNA hereby agrees that
payments in respect of Receivables made by the obligors thereunder may be
collected pursuant to the CFNA credit card agreements between each obligor
and CFNA in the name of CFNA. In addition, upon the written request of the
Company, CFNA agrees to notify all obligors under Receivables to make payment
thereof to a bank account(s) designated by the Company and specified in such
notice.
(j) Upon the occurrence of a Liquidation Event with respect to
CFNA, CFNA shall immediately cease to sell Receivables to the Company and
immediately notify the Company of the occurrence thereof.
(k) CFNA hereby covenants and agrees that, except as otherwise
required by law or as is deemed by CFNA, in its sole discretion, based upon
a good faith assessment by it of the nature of its competition, to be
necessary or advisable, it will not (i) reduce the annual percentage rate of
the monthly finance charge assessed on the Receivables, if as a result of
such reduction, its reasonable expectation is that (x) the Portfolio Yield
would be a rate less than the Base Rate, or (ii) reduce the minimum payment
terms or otherwise alter the terms of the Accounts or the policies applicable
thereto, if, as a result of such change, in its reasonable expectation, an
Amortization Event with respect to the Certificates or any other Series of
Certificates would occur.
(l) CFNA hereby agrees that it may transfer or otherwise convey
its interest in Accounts, including the Receivables in such Accounts (subject
to the interest of the Company and the Trustee on behalf of the
Certificateholders), otherwise than pursuant to this Agreement, in whole or
in part only upon satisfaction of the following condition: (i) the acquiring
person shall (a) be organized and existing under the laws of the United
States of America or any state or the District of Columbia, and be a bank or
other entity that is not subject to the Bankruptcy Code of 1978, which may
be established by and owned by Firestone, and (b) expressly assume by an
agreement supplemental to this Agreement the performance of CFNA's
obligations with respect to such Accounts; (ii) the
11
<PAGE>
Company shall deliver to the Trustee opinions of counsel (a) stating that all
conditions precedent to the conveyance have been complied with and (b) to the
effect that the conveyance shall not adversely affect the treatment of the
Certificates as debt for Federal and applicable state income tax purposes or
materially adversely impact the Federal income tax consequences that affect
any Certificateholder and generally to the effect that the transfer would not
affect the Federal income tax ownership of the Receivables; and (iii) the
Company shall obtain from each Rating Agency a letter confirming that the
rating of the Certificates, after such conveyance, will not be lowered or
withdrawn.
Section 3.05 Representations and Warranties Deemed Made. The sale
------------------------------------------
of Receivables on each Purchase Date pursuant to Section 2.01 of this
agreement shall be deemed to constitute a representation and warranty by
Firestone that the representations and warranties made under Section 3.01 of
this Agreement and by CFNA that the representations and warranties made under
Section 3.02 of this Agreement are true and correct on such Purchase Date,
as if made on such Purchase Date.
Section 3.06 Firestone Covenant. Firestone covenants and agrees
------------------
with CFNA and the Company that it will, on behalf of the Company, maintain
records of the Receivables assigned pursuant to this Agreement which are
sufficient to identify the specific accounts that constitute the Receivables
sold and assigned hereunder.
ARTICLE IV
CONDITIONS PRECEDENT
Section 4.01 Conditions to the Obligations of the company. The
--------------------------------------------
obligations of the Company hereunder on each Purchase Date shall be subject
to the satisfaction of the following conditions:
(a) All representations and warranties of CFNA and Firestone
contained in this Agreement shall be true and correct on such Purchase Date
and CFNA and Firestone shall be in compliance in all material respects with
all of their respective obligations hereunder.
(b) On or prior to such Purchase Date, there shall have been made
and there shall be in full force and effect all filings (including, without
limitation, Uniform Commercial Code filings), recordings and/or
registrations, and there shall have been given, or taken, any notice or any
other similar action, as may be necessary or, to the extent requested by the
Company, advisable, in order to establish, perfect, protect and preserve the
right, title and interest, remedies, powers, privileges,
12
<PAGE>
liens and security interests of the Company and/or to the Trustee for the
benefit of the Certificateholders granted pursuant to this Agreement or the
Pooling and Servicing Agreement, as the case may be, and the Company and the
Trustee shall have received evidence satisfactory to them of all of the
foregoing.
(c) All corporate and legal proceedings and all instruments in
connection with the transactions contemplated by this Agreement shall be
satisfactory in form and substance to the Company and the Company shall have
received copies of all documents (including without limitation, records or
corporate proceedings) relevant to the transactions herein contemplated as
the Company may have reasonably requested.
(d) No Servicer Default or Liquidation Event with respect to CFNA
shall have occurred.
(e) The Final Trust Termination Date shall have not occurred.
ARTICLE V
MISCELLANEOUS
Section 5.01. Notices, etc. Except where telephonic instructions
-------------
or notices are authorized herein to be given, all notices, demands,
instructions and other communications required or permitted to be given to
or made upon any party hereto shall be in writing and shall be personally
delivered or sent by registered, certified or express mail, postage prepaid,
return receipt requested, or by prepaid facsimile, Telex, TWX or telegram
(with messenger delivery specified in the case of a telegram) and shall be
deemed to be given for purposes of this Agreement on the day that such
writing is delivered or sent to the intended recipient thereof in accordance
with the provisions of this Section. Unless otherwise specified in a notice
sent or delivered in accordance with the foregoing provisions of this
Section, notices, demands, instructions and other communications in writing
shall be given to or made upon the respective parties hereto at their
respective addresses (or to their respective facsimile, Telex or TWX numbers)
indicated below, and, in the case of telephonic instructions or notices, by
calling the telephone number or numbers indicated for such party below:
If to the Company:
Firestone Retail Credit Corporation
c/o J.H. Management Corporation, Room 5/10
One International Place
Boston, Massachusetts 02110-2624
Attention: Nancy D. Smith, President
Tel. No. (617) 951-7727
13
<PAGE>
Facsimile No. (617) 951-7050
If to CFNA:
Credit First National Association
6275 Eastland Road
Brook Park, Ohio 44142
Attention: President
Tel. No. (216) 362-5005
Facsimile No. (216) 362-5069
If to Firestone:
Bridgestone/Firestone, Inc.
50 Century Boulevard
Nashville, Tennessee 37214
Attention: Treasurer
Tel. No. (615) 872-5000
Facsimile No. (615) 872-1599
Section 5.02. Successors and Assigns. This Agreement shall be
----------------------
binding upon CFNA, Firestone and the Company and their respective successors
and assigns and shall inure to the benefit of CFNA, Firestone and the Company
and their respective successors and assigns, provided that neither CFNA nor
--------
Firestone shall assign any of its rights or obligations hereunder without the
prior written consent of the Company other than an assignment by Firestone
of its rights and obligations hereunder to the Trust which assignment is
hereby acknowledged and consented to by the Company and CFNA. Except as
expressly permitted hereunder or in any of the Company Documents, the Company
shall not assign any of its rights or obligations hereunder without the prior
written consent of Firestone and CFNA.
Section 5.03. Severability Clause. Any provisions of this
-------------------
Agreement which are prohibited or unenforceable in any jurisdiction shall,
as to such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and
any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other jurisdiction.
Section 5.04. Amendments; Governing Law. This Agreement and the
-------------------------
rights and obligations of the parties hereunder may not be changed orally but
only by an instrument in writing signed by the party against which
enforcement is sought and shall be construed in accordance with and governed
by the laws of the State of New York. So long as this Agreement is in
effect, the Company and Firestone shall not amend the Pooling and Servicing
Agreement without the prior written consent of CFNA.
14
<PAGE>
Section 5.05. Counterparts. This Agreement my be executed in any
------------
number of copies, and by the different parties hereto on the same or separate
counterparts, each of which shall be deemed to be an original instrument.
Section 5.06. Costs and Expenses. CFNA agrees to pay all
------------------
reasonable costs and expenses of the Company and CFNA in connection with the
negotiation, preparation, printing, typing, reproduction, execution and
delivery of this Agreement, any amendments or modifications of (or
supplements to) this Agreement and any and all other documents furnished
pursuant hereto or in connection herewith, relative hereto, as well as all
costs and expenses (including without limitation, attorneys' fees and
expenses), if any, in connection with the enforcement of this Agreement or
any other agreement furnished pursuant hereto or in connection herewith.
Section 5.07. Bankruptcy Petition Against the Company. CFNA
---------------------------------------
covenants and agrees that prior to the date which is one year and one day
after the payment in full of all Certificates issued pursuant to the Pooling
and Servicing Agreement it shall not institute against, or join any other
person in instituting against, the Company any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings, or other proceedings
under any Federal or state bankruptcy or similar law.
Section 5.08. Remedies. In addition to any rights and remedies
--------
now or hereafter granted under applicable law, and not by way of litigation
of any such rights and remedies, the Company shall have all of the rights and
remedies under the Uniform Commercial Code as enacted in any applicable
jurisdiction in addition to the rights and remedies provided in this
Agreement.
Section 5.09. CFNA Obligations. The Company shall have no
----------------
obligations or liabilities to any obligor under a CFNA Card nor shall the
Company be required or obligated in any manner to perform or fulfill any of
the obligations of CFNA under or pursuant to any Receivable. It is further
expressly agreed that CFNA shall have no obligations to the Company except
as expressly set forth in this Purchase Agreement.
Section 5.10. Company's Fee. In consideration of its agreement
-------------
to accept Receivables hereunder, CFNA agrees to pay to the Company a fee of
$16,500 per year, which fee shall be payable in advance on the ( )
and on each anniversary thereof.
Section 5.11. Consent to Jurisdiction. Any legal action or
-----------------------
proceeding with respect to this Agreement may be brought in the courts of the
State of New York or of the United States of America for the Southern
District of New York, and, by
15
<PAGE>
execution and delivery of this Agreement, each of CFNA and Firestone hereby
accepts for itself and in respect of this property, generally and
unconditionally, the jurisdiction of the aforesaid courts and hereby
irrevocably waives, to the fullest extent permitted by law, any objection
which it my now or hereafter have to the laying of the venue of any legal
action or proceeding arising out of or relating to this Agreement, as the
case my be, in the State of New York and hereby further irrevocably waives
any clams that the State of New York is not a convenient forum for any such
legal action or proceeding. Bach of CFNA and Firestone hereby irrevocably
designates CT Corporation System, Inc., a New York corporation located at
1633 Broadway, New York, New York 10019, as its designee, appointee and agent
respectively, to receive, for and on behalf of it, service of process in such
respective jurisdictions in any legal action or proceeding with respect to
this Agreement, and such service shall be deemed completed 10 days after
delivery thereof to said agent. It is understood that a copy of such process
served on any such agent will be promptly forwarded by first class mail to
CFNA or Firestone, as the case my be, at its address set forth in Section
5.01, but the failure of CFNA or Firestone, as the case my be, to receive
such copy shall not affect in any way the service of such process. Each of
CFNA and Firestone, further irrevocably consents to the service of process
out of any of the aforementioned courts in any such action or proceedings by
the mailing of copies thereof by registered or certified first class mail,
postage prepaid, to CFNA or Firestone, as the case my be, at its said
address, such service to become effective 30 days after such mailing.
Nothing herein shall affect the right of the Company or the Trustee to serve
process in any other manner permitted by law or to commence legal proceedings
or otherwise proceed against either CFNA or Firestone in any other
jurisdiction.
Section 5.12. No Recourse. The obligations of the Company under
-----------
this Agreement are solely the corporate obligations of the Company. No
recourse shall be had for the payment of any amount owing in respect of any
fee hereunder or any other obligation or claim arising out of or based upon
this Agreement against any stockholder, employee, officer, director or
incorporator of the Company.
Section 5.13. Acknowledgment of Assignment. CFNA hereby
----------------------------
acknowledges and consents to the assignment by the Company of its rights
under this Agreement to the Trustee on behalf of the Certificateholders
pursuant to the Pooling and Servicing Agreement, which shall in no way limit
the assignment set forth in Section 2.02(a).
16
<PAGE>
IN WITNESS WHEREOF, each of the parties hereto has caused this
Purchase Agreement to be duly executed and delivered as of the date first
above written.
FIRESTONE RETAIL CREDIT
CORPORATION
By
----------------------------------
Authorized Signatory
BRIDGESTONE/FIRESTONE, INC.
By
-----------------------------------
Authorized Signatory
CREDIT FIRST NATIONAL ASSOCIATION
By
-------------------------------------
uthorized Signatory
ACKNOWLEDGED AND AGREED:
THE FUJI BANK AND TRUST COMPANY
By _____________________________
Authorized Signatory
16
<PAGE>
ANNEX X
DEFINITIONS
"Account"
-------
"Amortization Event" shall have the meaning set forth in Section
------------------
10 of the applicable Supplement.
"Bridgestone/Firestone Certificate"
---------------------------------
"Closing Date" shall mean December 2, 1992.
------------
"Discount Amount" shall mean with respect to any Receivable
---------------
purchased by the Company pursuant to Section 2.01 after the exercise by the
Company of the Discount Option, the product of the face amount of such
Receivable and the Discount Percentage.
"Discount Option" shall mean the Company's option under Section
---------------
2.11 of the Pooling and Servicing Agreement.
"Liquidation Event" shall mean, with respect to any Person, that
-----------------
such Person voluntarily seeks, consents to or acquiesces in the benefit or
benefits of any Debtor Relief Law or become a party to (or is made the
subject of) any proceeding provided for in any Debtor Relief Law, other than
as a creditor or claimant, and in the event such proceeding is involuntary,
the petition instituting same is not dismissed within 90 days of its filing.
"Monthly Servicer Certificate" shall mean the document reflecting
----------------------------
the daily sales transactions originated by CFNA and all other transactions
including, without limitation, amounts payable for Periodic Finance Charges,
Late Fees, Returned Check Fees and miscellaneous adjustments, for the
Collection Period.
"Pooling and Servicing Agreement" shall mean the Amended and
-------------------------------
Restated Pooling and Servicing Agreement dated as of ________ __, 1996, by
and among the Company, Firestone and the Trustee, and all amendments thereof
and supplements thereto, including any Supplement.
"Series 1996-1 Supplement" shall mean the Series 1996-1 Supplement
------------------------
to the Pooling and Servicing Agreement, dated as of _______ __, 1996 by and
among the Company, Firestone and the Trustee, on behalf of the Series 1996-1
Certificateholders.
<PAGE>
"Service Agreement" shall mean the Service Agreement, dated as of
-----------------
October 20, 1993, between CFNA and Firestone and all amendments thereof and
supplements thereto.
"Settlement Date" shall mean the Determination Date (as defined
---------------
in the Pooling and Servicing Agreement).
"Significant Subsidiary or Subsidiaries" shall mean on any date
--------------------------------------
a Subsidiary incorporated under the law of any State of the United States (i)
whose total assets as of the end of its next preceding fiscal quarter shall
be at least $7,500,000 or (ii) whose total sales during the four fiscal
quarters then ended shall be at least $7,500,000 or (iii) which is engaged
in manufacturing.
"Subsidiary" shall mean any corporation at least a majority of
----------
whose securities having ordinary voting power for the election of directors
(other than securities having such power only by reason of the happening of
a contingency) are at the time owned by Firestone and/or one or more of its
other Subsidiaries.
"Transfer Agreement" shall mean the Transfer Agreement, dated as
------------------
of October 1, 1993, by and between Society and CFNA.
2
EXHIBIT 4.4
AMENDED AND RESTATED
--------------------
PARTICIPATION AGREEMENT
-----------------------
This Participation Agreement, as amended and restated, dated as of
October __, 1996 is between Firestone Retail Credit Corporation, a
corporation organized and existing under the laws of the Commonwealth of
Massachusetts ("FRCC"), and Bridgestone/Firestone, Inc., a corporation
----
organized and existing under the laws of the State of Ohio
("Bridgestone/Firestone").
---------------------
WHEREAS, Credit First National Association, a national banking
association ("CFNA"), pursuant to the Second Amended and Restated Purchase
----
and Sale Agreement, dated as of October __, 1996 among CFNA, FRCC and
Bridgestone/Firestone (as amended, the "Purchase Agreement"), will sell to
------------------
FRCC certain receivables (the "Receivables"); and
-----------
WHEREAS, FRCC, as Transferor, Bridgestone/Firestone, as Servicer,
and The Fuji Bank and Trust Company, as Trustee (the "Trustee") have entered
-------
into a Pooling and Servicing Agreement, as supplemented by the Series 1992-A
Supplement and the Series 1992-B Supplement, each dated as of November 1,
1992 (collectively, the "Original Pooling and Servicing Agreement"), pursuant
----------------------------------------
to which Receivables have been conveyed to the Bridgestone/Firestone Master
Trust (the "Trust") in exchange for ceratin investor certificates and
certificates of beneficial interest that have been either sold to investors
or held by FRCC (those held by FRCC, the "Class B Certificates"), and an
--------------------
exchangeable transferor certificate (together with any successor exchangeable
transferor certificate the "Exchangeable Transferor Certificate") that is
-----------------------------------
held by FRCC;
WHEREAS, in order to facilitate and fund the transaction described
above, FRCC sold, and Bridgestone/Firestone purchased, an undivided
participation interest in the Exchangeable Transferor Certificate and the
Class B Certificates pursuant to a Participation Agreement, dated December
2, 1992 between FRCC and Bridgestone/Firestone;
WHEREAS, pursuant to the Original Pooling and Servicing Agreement,
as amended and restated, and as supplemented by the Series 1996-1 Supplement,
each dated as of the date hereof and each by and among FRCC, as Transferor,
Bridgestone/Firestone, as Servicer and the Trustee (as amended and
supplemented from time to time, the "Pooling and Servicing Agreement") the
Transferor will tender the Exchangeable Transferor Certificate to the Trustee
in exchange for a new series of investor certificates, a new Exchangeable
Transferor Certificate that will be held by FRCC and a subordinated
transferor certificate (the "Subordinated Transferor Certificate") that will
be held by FRCC; and
WHEREAS, in order to facilitate and fund the transaction described
in the preceding clause, FRCC wishes to sell, and Bridgestone/Firestone
wishes to purchase, an undivided participation interest in the Subordinated
Transferor Certificate and confirm its purchase of an undivided participation
interest in the Exchangeable Transferor Certificate and the Class B
Certificates on the terms and subject to the conditions set forth in this
Agreement;
NOW, THEREFORE, the parties hereby agree as follows:
Section 1. Definitions.
-----------
(a) The following terms, when capitalized in this Agreement and
used either in the singular of the plural, shall have the following meanings:
"Participation" means the undivided ownership interest in the
-------------
Exchangeable Transferor Certificate, the Subordinated Transferor Certificate
and the Class B Certificates purchased by Bridgestone/Firestone pursuant to
Section 2(a) hereof on the Purchase Date.
"Participation Percentage" means, as of any day, in respect of the
------------------------
Participation acquired by Bridgestone/Firestone in the Exchangeable
Transferor Certificate, the Subordinated Transferor Certificate and the Class
B Certificates, 100%.
"Purchase Date" shall mean ________ __, 1996.
-------------
"Transferor Interest" shall mean the interest in the Trust not
-------------------
represented by any Series of investor Certificates or the
Bridgestone/Firestone Certificate then outstanding, including the right to
receive Collections and other amounts to be paid to the Transferor at the
times and in the amounts specified in Article IV to the Pooling and Servicing
Agreement.
(b) Capitalized terms not otherwise defined in this Agreement
shall have the same meanings when used in the Pooling and Servicing
Agreement.
Section 2. Sales of Participation.
----------------------
(a) FRCC hereby agrees to sell to Bridgestone/Firestone, without
recourse, representation or warranty whatsoever except as expressly provided
herein, and Bridgestone/Firestone hereby agrees to purchase from FRCC on the
Purchase Date, or such other date as the parties may agree, an undivided
ownership interest in the Subordinated Transferor Certificate equal to the
Participation Percentage thereof, including all amounts allocated to the
holder of the Subordinated Transferor Certificate pursuant to Article IV of
the Pooling and Servicing Agreement and the benefit of all representations,
warranties and agreements made for the benefit of the holder of the
Subordinated Transferor Certificate therein.
(b) FRCC hereby confirms that it sold to Bridgestone/Firestone,
without recourse, representation or warranties except as expressly provided
herein and Bridgestone/Firestone confirms that it purchased from FRCC on
December 2, 1992 an undivided ownership interest in the Exchangeable
Transferor Certificate, the Class B Certificates and the Transferor Interest
equal to the Participation Percentage, including all amounts allocated to the
holders of the Exchangeable Transferor Certificate and the holders of the
Class B Certificates pursuant to Article IV of the Pooling and Servicing
Agreement and the benefit of all representations, warranties, and agreements
made for the benefit of the holder of the Exchangeable Transferor Certificate
and the Class B Certificates therein.
(c) The initial price to be paid by Bridgestone/Firestone for the
Participation acquired by it shall be an amount agreed between the parties
at the time such sale occurs pursuant to this Agreement and shall be paid on
the Purchase Date. In addition, Bridgestone/Firestone shall pay to FRCC (i)
on each day on which it has been determined that the Transferor Amount has
increased (each, a "Settlement Date") the amount of such increase and (ii)
---------------
on any day after the exercise by FRCC of the option set forth in Section 2.11
of the Pooling and Servicing Agreement (the "Discount Option"), an amount
equal to the product of (x) the face amount of all Receivables conveyed to
the Trust on such day and (y) the Discount Percentage.
(d) Bridgestone/Firestone shall be required to purchase from FRCC
(i) on any day, any Ineligible Receivables removed from the Trust pursuant
to Section 2.06 of the Pooling and Servicing Agreement and any Receivables
in Removed Accounts pursuant to Section 2.10 of the Pooling and Servicing
Agreement or (ii) any Investor Certificates purchased by FRCC pursuant to
Section 2.07 of the Pooling and Servicing Agreement. The amount to be paid
by Bridgestone/Firestone in the case of clause (i) and (ii) shall be equal
to the amount required to be paid by FRCC pursuant to Section 2.06, 2.07 or
2.10 of the Pooling and Servicing Agreement, respectively.
(e) In consideration of the acquisition by Bridgestone/Firestone
of the Participation and of its obligation to purchase Ineligible
Receivables, Receivables in Removed Accounts and, in certain circumstances,
Investor Certificates, hereunder, FRCC agrees to pay to
Bridgestone/Firestone, on each day on which FRCC receives a payment in
respect of the Exchangeable Transferor Certificate, the Subordinated
Transferor Certificate or the Class B Certificates (each such day also a
"Settlement Date"), an amount equal to the product of
---------------
Bridgestone/Firestone'sParticipation Percentage as of such date and the
amount of any decrease in the Transferor Amount occurring as a result of
payments received by FRCC as Holder of the Exchangeable Transferor
Certificate, as Holder of the Subordinated Transferor Certificate or as
Holder of the Class B Certificates from the Servicer, the Trustee or any
other person, in respect of the Exchangeable Transferor Certificate, the
Subordinated Transferor Certificate or the Class B Certificates, as the case
may be (including, in the case of the Exchangeable Transferor Certificate,
any proceeds from the sale of Investor Certificates of any Series issued
following the tender of the Exchangeable Transferor Certificate and the
reissue thereof as part of any Exchange pursuant to Section 6.09 of the
Pooling and Servicing Agreement) during the period since the immediately
preceding Settlement Date, in the same funds as received by FRCC. FRCC shall
only engage in any Exchange pursuant to Section 6.09 of the Pooling and
Servicing Agreement, a removal of accounts pursuant to Section 2.10 of the
Pooling and Servicing Agreement or the exercise of the Discount Option at the
written request of Bridgestone/Firestone.
(f) There shall be allocated to Bridgestone/Firestone with respect
to each Collection Period a portion of the Defaulted Amount with respect to
such Collection Period equal to the product of Bridgestone/Firestone's
Participation Percentage and the Defaulted Amount allocated to FRCC as Holder
of the Exchangeable Transferor Certificate with respect to such Collection
Period. There shall be allocated to Bridgestone/Firestone with respect to
each Collection Period a portion of all reductions to the Class B Invested
Amount as defined in the Series 1992-A Supplement, the Class B Invested
Amount as defined in the Series 1992-B Supplement and the Subordinated
Transferor Invested Amount (to the extent not attributable to principal
payments covered by paragraph (e) above) with respect to each Collection
Period equal to the amount of Bridgestone/Firestone's Participation
Percentage and the amount of such reductions with respect to such Collection
Period.
(g) All amounts payable to the Transferor pursuant to Section
4.01(b) of the Pooling and Servicing Agreement shall be paid by the
Transferor to Bridgestone/Firestone.
(h) Notwithstanding anything in clauses 2(c) and 2(e) hereof, the
parties may agree to settle monthly on each Distribution Date under the
Pooling and Servicing Agreement or another date, so long as there is at least
one Settlement Date occurring in each calendar month during the term of this
Agreement; provided, however, that amounts owed pursuant to
-------- -------
Section 2(e) above shall be paid on the day on which FRCC receives such
payment referred to in Section 2(e).
Section 3. Delivery of Documents; Procedure. On the Purchase
--------------------------------
Date, FRCC shall submit to Bridgestone/Firestone a copy of the Purchase
Agreement, the Series 1996-1 Supplement, the Pooling and Servicing Agreement
and all other documents relating to the transactions contemplated therein,
together with a Participation Certificate in the form set forth in Annex I
-------
hereto, dated such Purchase Date and representing an undivided interest, to
the extent of the Participation Percentage, in all of FRCC's right, title and
interest in and to the Exchangeable Transferor Certificate, the Class B
Certificates and the Transferor Interest. On each Settlement Date, FRCC
shall deliver a statement (the "Settlement Statement") in the form of Annex
--------------------
II hereof, setting forth the net amount of funds owing by FRCC to
Bridgestone/Firestone or by Bridgestone/Firestone to FRCC. Such statement
shall be appropriately modified if there are settlements occurring more
frequently than monthly on Distribution Dates under the Pooling and Servicing
Agreement.
Section 4. FRCC Required to Furnish Certain Information.
--------------------------------------------
Bridgestone/Firestone shall have the right from time to time at reasonable
intervals to require FRCC to supply such information as Bridgestone/Firestone
may reasonably request respecting the Exchangeable Transferor Certificate,
the Class B Certificates and Bridgestone/Firestone's participation interest
therein, including but not limited to the information and documents with
respect to the Investor Certificateholders of any Series provided to FRCC by
the Trustee. FRCC shall deliver to Bridgestone/Firestone copies of all
reports, notices, certificates, etc. received or delivered by it pursuant to
the Pooling and Servicing Agreement. FRCC hereby agrees to consult with and
take direction from Bridgestone/Firestone prior to exercising any rights as
Holder of the Exchangeable Transferor Certificate, as Holder of the Class B
Certificates or as Transferor under the Pooling and Servicing Agreement or
any Series Supplement related thereto.
Section 5. Termination. This Agreement shall terminate following
-----------
the surrender of the Exchangeable Transferor Certificate, the Subordinated
Transferor Certificate and the Class B Certificates and termination of the
Trust pursuant to Article XII of the Pooling and Servicing Agreement.
Section 6. Representations and Warranties of and Agreement By
--------------------------------------------------
Bridgestone/Firestone.
- ---------------------
(a) Bridgestone/Firestone is a corporation duly organized and
validly existing in good standing under the laws of the State of Ohio, and
has full corporate power, authority and legal right to execute, deliver and
perform its obligations under this Agreement and the transactions
contemplated under this Agreement and, in all material respects, to own its
properties and conduct its business as such properties are presently owned
and such business is presently conducted.
(b) The execution and delivery of this Agreement and the
consummation of the transactions provided for in this Agreement have been
duly authorized by Bridgestone/Firestone by all necessary corporate action
on the part of Bridgestone/Firestone.
(c) This Agreement constitutes a legal, valid and binding
obligation of Bridgestone/Firestone, enforceable in connection with its
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws nor or hereafter
in effect affecting the enforcement of creditors' rights in general and
except as such enforceability may be limited by general principles of equity
(whether considered in a proceeding at law or in equity).
(d) Bridgestone/Firestone represents and warrants that it is
acquiring the Participation for its own account and not with a view toward,
or for sale in connection with, any distribution thereof.
Section 7. Representations and Warranties of FRCC.
--------------------------------------
(a) FRCC is a corporation duly organized and validly existing in
good standing under the laws of the Commonwealth of Massachusetts, and has
full corporate power, authority and legal right to execute, deliver and
perform its obligations under this Agreement and the transactions
contemplated under this Agreement and, in all material respects, to own its
properties and conduct its business as such properties are presently owned
and such business is presently conducted.
(b) The execution and delivery of this Agreement and the
consummation of the transactions provided for in this Agreement have been
duly authorized by FRCC by all necessary corporate action on the part of
FRCC.
(c) This Agreement constitutes a legal, valid and binding
obligation of FRCC, enforceable in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws nor or hereafter in effect
affecting the enforcement of creditors' rights in general and except as such
enforceability may be limited by general principles of equity (whether
considered in a proceeding at law or in equity).
(d) FRCC represents that this Agreement, together with the
Participation Certificate provided for in Section 3, will vest in
Bridgestone/Firestone an undivided interest, to the extent of the
Participation Percentage, in all of its right, title and interest in and to,
the Exchangeable Transferor Certificate, the Subordinated Transferor
Certificate and the Class B Certificates and in and to the proceeds thereof,
including proceeds, with respect to the Exchangeable Transferor Certificate,
resulting from any Exchange, free from liens, encumbrances or claims of third
parties.
Section 8. Maintenance of Records.
----------------------
FRCC agrees to maintain or cause to be maintained accurate and
complete record with respect to the Exchangeable Transferor Certificate and
the Class B Certificates and to deliver to Bridgestone/Firestone on demand
copies of any records required by Bridgestone/Firestone in connection with
Bridgestone/Firestone's enforcement of its rights under this Agreement.
Section 9. Exculpation.
-----------
Except as otherwise set forth in this Agreement, FRCC's sole
obligation hereunder shall be to distribute, as aforesaid, to
Bridgestone/Firestone the Participation Percentage of any payment received
by FRCC relating to the Exchangeable Transferor Certificate, the Subordinated
Transferor Certificate and the Class B Certificates, as and when received by
FRCC. No other obligation or duty is assumed by FRCC beyond the foregoing,
nor shall any other obligation or duty be deemed to be implied. FRCC shall
not have any fiduciary relationship with Bridgestone/Firestone by virtue of
this Agreement or the transactions contemplated hereby. Without limiting the
generality of the foregoing, it is agreed that, except with respect to
representations and warranties set forth in this Agreement, FRCC does not
assume, nor shall FRCC or any of its officers, directors, employees or agents
have any responsibility or liability, expressed or implied, for:
(a) any action taken or omitted, whether by FRCC, the Servicer,
Society or any other Person in connection with any Receivable except for
FRCC's own gross negligence or willful misconduct;
(b) the authorization, execution, effectiveness, enforceability,
genuineness or validity of any Receivable, the Pooling and Servicing
Agreement, the Purchase Agreement, the Series 1992-A Supplement, the Series
1992-B Supplement, the Series 1996-1 Supplement or any document, instrument
or other writing in connection therewith, except with respect to the
authorization, execution, effectiveness, enforceability, genuineness or
validity by or against FRCC of any such document, instrument or other writing
executed by FRCC;
(c) the genuineness, truthfulness or accuracy of any recitals,
statements, representations or warranties made in or in connection with any
Receivable, the Pooling and Servicing Agreement, the Purchase Agreement, the
Series 1992-A Supplement, the Series 1992-B Supplement, the Series 1996-1
Supplement or any other document, instrument or other writing in connection
therewith, except for any representation and warranty of FRCC made in any
such document, instrument or writing executed by FRCC;
(d) the financial condition of any Obligor or CFNA or for any
credit or other information regarding any Obligor or card issuer; or
(e) the performance of any of the obligations of any person
(including any Obligor) primarily or secondarily labile with respect to any
Receivable.
Section 10. No Petition. Bridgestone/Firestone agrees that, prior
-----------
to the date which is one year and one day after the payment in full of all
Investor Certificates issued pursuant to the Pooling and Servicing Agreement,
it shall not institute against, or join any other person in instituting
against, FRCC any bankruptcy, reorganization, insolvency or liquidation
proceedings or other similar proceeding under the laws of the United States
or any state thereof.
Section 11. Modification; Successors and Assigns. No amendment
------------------------------------
or modification of this Agreement shall be effective unless in writing and
signed by the party against whom enforcement of such amendment or
modification is sought. No amendment or modification to this Agreement shall
amend or modify the definition of "Participation Percentage" unless there
shall have been delivered to the Trustee an Opinion of Counsel hat such
amendment or modification shall not have any material adverse impact on the
Federal income tax characterization of any outstanding Series of Investor
Certificates. FRCC shall promptly provide to each Rating Agency a copy of
any amendment or modification made to this Agreement. This Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns. Bridgestone/Firestone may not
assign, transfer or participate any of its rights or obligations hereunder
or the Participation without the prior written consent of FRCC.
Section 12. Acknowledgment of Assignment. Bridgestone/Firestone
----------------------------
hereby acknowledges and consents to the assignment by FRCC of its rights
under Section 2(c)(ii) of this Agreement to CFNA pursuant to the Purchase
Agreement.
Section 13. Notices. Any notice required or permitted by this
-------
Agreement shall be deemed to have been duly and properly given if addressed
to FRCC at:
Firestone Retail Credit Corporation
c/o Ropes & Gray
One International Place
Boston, Massachusetts 02110
Telephone No: (617) 423-7900
Telecopier No: (617) 423-7901
Attention: ( )
or to Bridgestone/Firestone at:
Bridgestone/Firestone, Inc.
50 Century Boulevard
Nashville, Tennessee 37214
Telephone No. (615) 872-1542
Telecopier No. (615) 872-1545
Attention: Assistant Treasurer
and delivered by hand or sent by first class mail or sent by telecopier with
a written confirmation sent by first class mail on the same day (unless
notice by telephone is expressly authorized herein) to such officer at the
address hereinabove specified or such other address as either party hereto
may furnish to the other in writing at any time.
Section 14. Miscellaneous. This Agreement shall be governed by
-------------
and construed in accordance with the law of the State of New York. There are
no restrictions, promises, warranties, covenants, undertakings or
representations other than those expressly set forth herein. Nothing in this
Agreement or otherwise shall be construed as making Bridgestone/Firestone or
FRCC responsible in any way or to any extent for the payment of any
principal, interest or premium on the Exchangeable Transferor Certificate,
the Subordinated Transferor Certificate or the Class B Certificates, the
Participation or any Receivable or for the fulfillment of any obligation or
commitment of the Trustee or the Servicer under the Pooling and Servicing
Agreement, the Series 1992-A Supplement, the Series 1992-B Supplement or the
Series 1996-1 Supplement or CFNA under the Purchase Agreement, except to the
extent of FRCC's obligations herein or under any such documents, instruments
or other writings.
IN WITNESS WHEREOF, the parties hereto have caused this
Participation Agreement to be duly executed by their respective officers
hereunto duly authorized, as of the day and year first above written.
FIRESTONE RETAIL CREDIT
CORPORATION
By_______________________________
Name:
Title:
BRIDGESTONE/FIRESTONE, INC.
By________________________________
Name:
Title:
(Participation Agreement)
PARTICIPATION CERTIFICATE
FIRESTONE RETAIL CREDIT CORPORATION ("FRCC") has transferred and
----
assigned to BRIDGESTONE/FIRESTONE, INC., pursuant to and on the terms and
conditions set forth in the Amended and Restated Participation Agreement
dated as of ________ __, 1996 (terms capitalized but undefined herein being
used as defined in said Agreement), an undivided interest equal to the
Participation Percentage in all of the right, title and interest of FRCC in
and to the Exchangeable Transferor Certificate, the Subordinated Transferor
Certificate, the Class B Certificates and the Transferor Interest, and all
representations and warranties and agreements made for the benefit of the
Holder of the Exchangeable Transferor Certificate, the Subordinated
Transferor Certificate and the Class B Certificates in the Pooling and
Servicing Agreement, and any proceeds of any of the foregoing, and to any
successor Exchangeable Transferor Certificate and proceeds thereof, issued
as the result of any Exchange pursuant to Section 6.09 of the Pooling and
Servicing Agreement.
FIRESTONE RETAIL CREDIT CORPORATION
By:___________________________________
Name:
Title:
EXHIBIT 4.5
Date: December 2, 1992
IRREVOCABLE SERVICER LETTER OF CREDIT
NO. LG/MIS/NY-430646
The Fuji Bank and Trust Company
Two World Trade Center
81st Floor
New York, New York 10048
Attention: Trust Administration Department
Gentlemen:
At the request and for the account of our customer,
Bridgestone/Firestone, an Ohio corporation (the "Corporation"), we (the
"Bank") hereby establish in your favor this Irrevocable Letter of Credit No.
LG/MIS/NY-430646 wherein you, as trustee (the "Trustee") under the Amended
and Restated Pooling and Servicing Agreement, as supplemented (collectively,
the "Pooling and Servicing Agreement") among the Corporation, as servicer,
Firestone Retail Credit Corporation, as transferor and you, pursuant to which
the Bridgestone/Firestone Master Trust, Series 1992-A and Series 1992-B
Certificates (the "Certificates") have been issued, are hereby irrevocably
authorized, to draw (i) as required under Section 4.01A(a) of the Pooling and
Servicing Agreement or (ii) Section 4.01A(e) of the Pooling and Servicing
Agreement (a "Special Drawing"), upon the terms and conditions hereinafter
set forth, in an aggregate amount not exceeding $45,000,000 (hereinafter, as
reduced from time to time in accordance with the provisions hereof, the
"Stated Amount").
Funds under this Letter of Credit are available to you only against your
written certificate signed by a person purporting to be your authorized
officer, appropriately completed, in the form of Annex 1 or Annex 2 hereto
for payment of certain amounts due from, but unpaid by, the Corporation under
the Pooling and Servicing Agreement.
We hereby agree that each demand made under and in compliance with the
terms of this Letter of Credit will be duly honored by us upon due delivery
of the certificate(s), as specified above, appropriately completed (together
with the enclosures, if any, required thereby), if presented as specified
on or before the expiration date hereof. If a presentation in respect of
payment is made by you hereunder at or prior to 12:00 P.M., New York City
time, on a Business Day, and provided that the documents so presented conform
to the terms and conditions hereof, payment shall be made to you of the
amount specified, in immediately available funds, not later than 3:00 P.M.,
New York City time, on the same Business Day. If a presentation in respect
of payment is made by you hereunder after 3:00 P.M., New York City time, on
a Business Day, such presentation shall be deemed to have been made prior to
3:00 P.M., New York City time, on the next succeeding Business Day. You
agree to use your best efforts to provide us telephonic notice at the time
any presentation in respect of payment is made hereunder; provided, however,
-------- -------
that failure to provide such telephonic notice shall not affect our
obligation to make payment in respect of any such presentation in respect of
payment. If requested by you, payment under this Letter of Credit will be
wire transferred to an account in New York, New York specified in the related
certificate. As used herein, "Business Day" shall mean any day other than
a Saturday, a Sunday, or a day on which banking institutions in New York, New
York shall be authorized or obligated by law, executive order or governmental
decree to be closed.
If a drawing made by you hereunder does not, in any instance, conform
to the terms and conditions of this Letter of Credit, we shall give you
prompt notice that the purported drawing was not effected in accordance with
the terms and conditions of this Letter of Credit, stating the reasons
therefor and that we are holding any documents presented in connection
therewith at your disposal or are returning the same to you, as we may elect.
Except as otherwise specified in Annex 2, each drawing under this Letter
of Credit shall be verified to Account No. 30492-01/0.1 maintained by the
Trustee (the "Collection Account").
Only you, as Trustee, may make a drawing under this Letter of Credit.
Upon the payment of the amount specified in the related certificate(s)
presented hereunder, we shall be fully discharged of our obligation under
this Letter of Credit with respect to such certificate(s) and we shall not
thereafter be obligated to make any further payments under this Letter of
Credit in respect of such certificate(s) to you or any other person. By
paying to you an amount demanded in accordance herewith, we make no
representation as to the correctness of the amount demanded.
This Letter of Credit shall expire at our close of business in New York,
New York on the first to occur of the following dates (the "Termination
Date"): (x) November 30, 1993 or, if said date shall not be a Business Day,
on the Business Day next succeeding said date, or (y) the date the Corporation
ceases to be the Servicer under the Pooling and Servicing Agreement, as
provided in a written notice to us from the Trustee, or (z) the date of
receipt by us of your written certificate signed by a person purporting to
be your authorized officer, appropriately completed, in the form of Annex 3
hereto. This Letter of Credit shall be promptly surrendered to us upon
expiration.
Drawings in respect of payments hereunder honored by us shall not, in
the aggregate, exceed the Stated Amount in effect immediately prior to such
drawing. Each drawing honored by us hereunder shall pro tanto reduce the
--- -----
Stated Amount in effect immediately prior to such drawing.
This Letter of Credit is subject to, and shall be governed by, the
Uniform Customs and Practice for Documentary Credits (1983 Revision),
International Chamber of Commerce, Publication No. 400 (the "Uniform
Customs"). This Letter of Credit shall be deemed to be made under the laws
of the State of New York, including Article 5 of the Uniform Commercial Code
of such State, and shall, as to matters not governed by the Uniform Customs,
be governed by and construed in accordance with the laws of the State of New
York.
Notwithstanding anything in Article 54(e) of the Uniform Customs to the
contrary, this Letter of Credit is transferable in its entirety (but not in
part) only to a successor Trustee under the Pooling and Servicing Agreement
upon presentation to us of this Letter of Credit accompanied by the transfer
form attached hereto as Annex 4, to the transferee specified therein.
All documents presented to us in connection with any demand for payment
hereunder, as well as all notices and other communications to us in respect
of this Letter of Credit, shall be in writing and addressed and presented to
us at our office at One World Trade Center, New York, New York 10048
Attention: Loan Administration and shall make specific reference to this
Letter of Credit by number. Such documents, notices and other communication
shall be personally delivered to us, or may be sent to us by tested telex or
over a telecopier (promptly confirmed by delivery of the written document,
notice or other communication, as the case may be, provided that such
confirmation shall not be a condition to the effectiveness of such demand for
payment, notice or other communication) to the following numbers, as
applicable:
Telex No.: 420575 (Answerback: SMTBK)
Telecopier No.: (212) 524-0612
This Letter of Credit sets forth in full our undertaking, and such
undertaking shall not in any way be modified, amended, amplified or limited
by reference to any document, instrument or agreement referred to herein
(including, without limitation, the certificates), except only Annex 1 through
4 hereto; and any such reference shall not be deemed to incorporate herein by
reference any document, instrument or agreement except as set forth above.
Very truly yours,
The Sumitomo Bank, Limited
By: /S/ Natsud Okada
-----------------------
Name: Natsud Okada
Title: Joint General Manager
ANNEX 1 T0
LETTER OF CREDIT NO. LG/MIS/NY-430646
-------------------------------------
LG/MIS/NY-430646 FOR "ANNEX 1 DRAWING"
The undersigned, as Trustee (the "Trustee"), acting through the
undersigned duly authorized officer of the Trustee, hereby certifies to The
Sumitomo Bank, Limited (the "Bank"), with reference to the Bank's Irrevocable
Letter of Credit No. LG/MIS/NY-430646 (the "Letter of Credit"; any
capitalized term used herein and not defined shall have its respective
meaning as set forth in the Letter of Credit) issued in favor of the Trustee,
that:
(1) The Trustee is the Trustee under the Pooling and Servicing
Agreement.
(2) The Corporation, as servicer (the "Servicer") under the
Pooling and Servicing Agreement, has notified us, as Trustee under
the Pooling and Servicing Agreement, pursuant to a Monthly Servicer's
Certificate (as defined in the Pooling and Servicing Agreement) (a
copy of which is attached hereto) furnished pursuant to Section
3.04(b) of the Pooling and Servicing Agreement, that the following
amount was required to be remitted by the Corporation to the
Collection Account pursuant to Section 4.01(g) of the Pooling end
Servicing Agreement with respect to the Distribution Date (as
defined in the Pooling and Servicing Agreement) occurring on
(insert applicable Distribution Date): $(insert amount required
------------------------------------ ----------------------
to be remitted pursuant to Section 4.01(g)).
------------------------------------------
(3) The Corporation has failed to deposit the following portion
of amounts owed by it with respect to such Distribution Date as set
forth in paragraph (2) above: $(insert amount of deficiency).
---------------------------
(4) The Trustee is making a drawing under the Letter of Credit in
the amount of $_________ which amount equals the lesser of (a) the
amount set forth in paragraph (3) and (b) the amount identified by
the Servicer in the Monthly Servicer's Certificate referred to in
paragraph (2) above as being available on the date hereof (and after
giving effect to any contemporaneous demand for payment under the
Letter of Credit being made by the Trustee) to be drawn under the
Letter of Credit.
(5) The Trustee has not received notice from the Corporation or any
other person or entity contesting the accuracy of such Monthly
Servicer's Certificate.
(6) The account to which payment under the Letter of Credit is to
be wire transferred is Account No. 30492-01/0.1, maintained at The
Fuji Bank and Trust Company.
IN WITNESS WHEREOF, the Trustee has executed and delivered this
certificate as of the _____ day of _____________.
THE FUJI BANK, AND
TRUST COMPANY, as Trustee
By ___________________________
Name:
Title:
ANNEX 2 TO
LETTER OF CREDIT NO. LG/MIS/NY-430646
--------------------------------------
CERTIFICATE FOR "SPECIAL DRAWING"
---------------------------------
___________, 19__
The Sumitomo Bank, Limited
One World Trade Center, 95th Floor
New York, New York 10048
Attention:
Re: Irrevocable Letter of Credit No. LG/MIS/NY-430646
Gentlemen:
The undersigned, a duly authorized officer of The Fuji Bank and Trust
Company (the "Trustee"), hereby certifies to The Sumitomo Bank, Limited with
reference to irrevocable Letter of Credit No. LG/MIS/NY-430646 (the "Letter
of Credit") (any capitalized term used herein and not defined shall have the
meaning set forth in the Letter of Credit) issued by The Sumitomo Bank,
Limited (the "Bank"), in favor of the Trustee, that:
(1) The Trustee is the Trustee under the Pooling and Servicing
Agreement.
(2) The Trustee has been instructed by the Servicer to make a Special
Drawing.
(3) A Responsible Officer of the Trustee has obtained knowledge that the
short-term debt rating of the Bank has been reduced, suspended or withdrawn.
(4) The Trustee hereby demands payment under the Letter of Credit in the
amount of $_____, which amount equals the Available Letter of Credit Amount
on the Business Day preceding the date hereof, as specified in the Monthly
Servicer's Certificate delivered by the Servicer pursuant to Section 3.04(b)
of the Pooling and Servicing Agreement (and after giving effect to any
contemporaneous demand for payment under the Letter of Credit being made with
respect to such date).
(5) All amounts received by the Trustee from the Bank in respect of this
certificate shall be applied in accordance with Section 4.01A(e) of the
Pooling and Servicing Agreement.
(6) The Trustee directs that such amounts be deposited in Account No.
____________ at The Fuji Bank and Trust Company.
IN WITNESS WHEREOF, the Trustee has executed and delivered this
certificate as of this _____ day of ____________, 19__.
THE FUJI BANK AND
TRUST COMPANY, as Trustee
By: ________________________
Authorized Signatory
ANNEX 3 TO
LETTER OF CREDIT NO. LG/MIS/NY-430646
-------------------------------------
CERTIFICATE FOR THE TERMINATION
OF LETTER OF CREDIT NO. LG/MIS/NY-430646
The Sumitomo Bank, Limited
One World Trade Center
New York, New York 10048
Attention:
The undersigned, a duly authorized officer of The Fuji Bank and Trust
Company (the "Trustee"), hereby certifies to The Sumitomo Bank, Limited, with
reference to Irrevocable Letter of Credit No. LG/MIS/NY-430646 (the "Letter
of Credit"; any capitalized terms used herein and not defined shall have the
meaning set forth in the Letter of Credit) issued by The Sumitomo Bank,
Limited in favor of the Trustee, that the Letter of Credit shall terminate
on _________________. Accordingly, we herewith return to you for
cancellation the Letter of Credit, which is terminated, as of the date
hereof, pursuant to its terms.
Date: _______________ THE FUJI BANK AND TRUST COMPANY,
as Trustee
By ___________________________
Authorized Officer
ANNEX 4 TO
LETTER OF CREDIT NO. LG/MIS/NY-430646
-------------------------------------
___________, 19__
The Sumitomo Bank, Limited
One World Trade Center
New York, New York 10048
Attention: Loan Administration
Re: Irrevocable Letter of Credit No.
LG/MIS/NY-430646
of The Sumitomo Bank, Limited
Gentlemen:
For value received, the undersigned beneficiary hereby irrevocably
transfers to:
_________________________________________
(Name of Transferee)
_________________________________________
(Address)
all rights of the undersigned beneficiary to draw under the above-captioned
Letter of Credit (the "Letter of Credit"). The transferee has succeeded the
undersigned as Trustee under the Pooling and Servicing Agreement (as defined
in the Letter of Credit).
By this transfer, all rights of the undersigned beneficiary in the
Letter of Credit are transferred to the transferee and the transferee shall
hereafter have the sole rights as beneficiary thereof; provided, however,
-------- -------
that no rights shall be deemed to have been transferred to the transferee
until such transfer complies with the requirements of the Letter of Credit
pertaining to transfers.
The Letter of Credit is returned herewith and in accordance therewith
we ask that this transfer be effective and that you cause the transfer of the
Letter of Credit to our transferee or that, if so requested by the
transferee, you cause the issuance of a new irrevocable Letter of Credit in
favor of the transferee with provisions consistent with the Letter of Credit.
Very truly yours,
__________________________
as predecessor Trustee
By _______________________
(Name and Title)
AMENDMENT TO LETTER OF CREDIT
-----------------------------
This AMENDMENT TO LETTER OF CREDIT is made as of June 5, 1995, to
Irrevocable Servicer Letter of Credit No. LC/MIS/NY-430646, dated as of
December 2, 1992 (the "Letter of Credit") and issued by The Sumitomo Bank,
Limited, New York Branch to The Fuji Bank and Trust Company, as trustee, for
the account of Bridgestone/Firestone, Inc. in the stated amount of
$45,000,000.
The first paragraph of the Letter of Credit is hereby amended by
amending and restating such paragraph in its entirety as follows:
At the request and for the account of our customer,
Bridgestone/Firestone, an Ohio corporation (the "Corporation"), we (the
"Bank") hereby establish in your favor this Irrevocable Letter of Credit
No. LG/MIS/NY-430646 wherein you, as trustee (the "Trustee") under the
Pooling and Servicing Agreement dated November 1, 1992, as supplemented
by (i) the Series 1992-A Supplement, dated as of November 1, 1992 and
amended as of June 5, 1995, (ii) the Series 1992-B Supplement, dated
as of November 1, 1992 and amended and restated as of January 4, 1993,
and (iii) the Series 1995-A Supplement dated as of June 5, 1995
(collectively, the "Pooling and Servicing Agreement"), among the
Corporation, as servicer, Firestone Retail Credit Corporation,
as transferor and you, pursuant to which the Bridgestone/Firestone
Master Trust, Series 1992-A, Series 1992-B and Series 1995-A
Certificates (collectively, the "Certificates") have been issued, are
hereby irrevocably authorized, to draw (i) as required under Section
4.01A(a) of the Pooling and Servicing Agreement or (ii) Section 4.01A(e)
of the Pooling and Servicing Agreement (a "Special Drawing"), upon the
terms and conditions hereinafter set forth, in an aggregate amount not
exceeding $45,000,000 (hereinafter, as reduced from time to time in
accordance with the provisions hereof, the "Stated Amount").
Except as expressly amended hereby, the Letter of Credit remains in full
force and effect.
THE SUMITOMO BANK, LIMITED,
NEW YORK BRANCH
By:___________________________
Name:
Title:
EXHIBIT 4.6
Date: December 2, 1992
IRREVOCABLE TRANSFEROR LETTER OF CREDIT
NO. LG/MIS/NY-430647
The Fuji Bank and Trust Company
Two World Trade Center
81st Floor
New York, New York 10048
Attention: Trust Administration Department
Gentlemen:
At the request and for the account of our customer,
Bridgestone/Firestone, an Ohio corporation (the "Corporation"), we (the
"Bank") hereby establish in your favor this Irrevocable Letter of Credit No.
LG/MIS/NY-430647 wherein you, as trustee (the "Trustee") under the Pooling
and Servicing Agreement, as supplemented by the Series 1992-A and Series
1992-B Supplements, each dated as of November 1, 1992 (collectively, the
"Pooling and Servicing Agreement") among the Corporation, as servicer,
Firestone Retail Credit Corporation, as transferor and you, pursuant to which
the Bridgestone/Firestone Master Trust, Series 1992-A and Series 1992-B
Certificates (the "Certificates") have been issued, are hereby irrevocably
authorized, to draw (i) as required under Section 4.01B(a) of the Pooling and
Servicing Agreement or (ii) Section 4.01B(d) of the Pooling and Servicing
Agreement (a "Special Drawing"), upon the terms and conditions hereinafter
set forth, in an aggregate amount not exceeding $15,000,000 (hereinafter, as
reduced from time to time in accordance with the provisions hereof, the
"Stated Amount").
Funds under this Letter of Credit are available to you only against your
written certificate signed by a person purporting to be your authorized
officer, appropriately completed, in the form of Annex 1 or Annex 2 hereto
for payment of certain amounts due from, but unpaid by, the Corporation under
the Pooling and Servicing Agreement.
We hereby agree that each demand made under and in compliance with the
terms of this Letter of Credit will be duly honored by us upon due delivery
of the certificate(s), as specified above, appropriately completed (together
with the enclosures, if any, required thereby), if presented as specified
on or before the expiration date hereof. If a presentation in respect of
payment is made by you hereunder at or prior to 12:00 P.M., New York City
time, on a Business Day, and provided that the documents so presented conform
to the terms and conditions hereof, payment shall be made to you of the
amount specified, in immediately available funds, not later than 3:00 P.M.,
New York City time, on the same Business Day. If a presentation in respect
of payment is made by you hereunder after 3:00 P.M., New York City time, on
a Business Day, such presentation shall be deemed to have been made prior to
3:00 P.M., New York City time, on the next succeeding Business Day. You
agree to use your best efforts to provide us telephonic notice at the time
any presentation in respect of payment is made hereunder; provided, however,
-------- -------
that failure to provide such telephonic notice shall not affect our
obligation to make payment in respect of any such presentation in respect of
payment. If requested by you, payment under this Letter of Credit will be
wire transferred to an account in New York, New York specified in the related
certificate. As used herein, "Business Day" shall mean any day other than
a Saturday, a Sunday, or a day on which banking institutions in New York, New
York shall be authorized or obligated by law, executive order or governmental
decree to be closed.
If a drawing made by you hereunder does not, in any instance, conform
to the terms and conditions of this Letter of Credit, we shall give you
prompt notice that the purported drawing was not effected in accordance with
the terms and conditions of this Letter of Credit, stating the reasons
therefor and that we are holding any documents presented in connection
therewith at your disposal or are returning the same to you, as we may elect.
Except as otherwise specified in Annex 2, each drawing under this Letter
of Credit shall be verified to Account No. 30492-01/0.1 maintained by the
Trustee (the "Collection Account").
Only you, as Trustee, may make a drawing under this Letter of Credit.
Upon the payment of the amount specified in the related certificate(s)
presented hereunder, we shall be fully discharged of our obligation under
this Letter of Credit with respect to such certificate(s) and we shall not
thereafter be obligated to make any further payments under this Letter of
Credit in respect of such certificate(s) to you or any other person. By
paying to you an amount demanded in accordance herewith, we make no
representation as to the correctness of the amount demanded.
This Letter of Credit shall expire at our close of business in New York,
New York on the first to occur of the following dates (the "Termination
Date"): (x) November 30, 1993 or, if said date shall not be a Business Day,
on the Business Day next succeeding said date, or (y) the date the Corporation
ceases to be the Servicer under the Pooling and Servicing Agreement, as
provided in a written notice to us from the Trustee, or (z) the date of
receipt by us of your written certificate signed by a person purporting to
be your authorized officer, appropriately completed, in the form of Annex 3
hereto. This Letter of Credit shall be promptly surrendered to us upon
expiration.
Drawings in respect of payments hereunder honored by us shall not, in
the aggregate, exceed the Stated Amount in effect immediately prior to such
drawing. Each drawing honored by us hereunder shall pro tanto reduce the
--- -----
Stated Amount in effect immediately prior to such drawing.
This Letter of Credit is subject to, and shall be governed by, the
Uniform Customs and Practice for Documentary Credits (1983 Revision),
International Chamber of Commerce, Publication No. 400 (the "Uniform
Customs"). This Letter of Credit shall be deemed to be made under the laws
of the State of New York, including Article 5 of the Uniform Commercial Code
of such State, and shall, as to matters not governed by the Uniform Customs,
be governed by and construed in accordance with the laws of the State of New
York.
Notwithstanding anything in Article 54(e) of the Uniform Customs to the
contrary, this Letter of Credit is transferable in its entirety (but not in
part) only to a successor Trustee under the Pooling and Servicing Agreement
upon presentation to us of this Letter of Credit accompanied by the transfer
form attached hereto as Annex 4, to the transferee specified therein.
All documents presented to us in connection with any demand for payment
hereunder, as well as all notices and other communications to us in respect
of this Letter of Credit, shall be in writing and addressed and presented to
us at our office at One World Trade Center, New York, New York 10048
Attention: Loan Administration and shall make specific reference to this
Letter of Credit by number. Such documents, notices and other communication
shall be personally delivered to us, or may be sent to us by tested telex or
over a telecopier (promptly confirmed by delivery of the written document,
notice or other communication, as the case may be, provided that such
confirmation shall not be a condition to the effectiveness of such demand for
payment, notice or other communication) to the following numbers, as
applicable:
Telex No.: 420575 (Answerback: SMTBK)
Telecopier No.: (212) 524-0612
This Letter of Credit sets forth in full our undertaking, and such
undertaking shall not in any way be modified, amended, amplified or
limited by reference to any document, instrument or agreement
referred to herein (including, without limitation, the Certificates), except
only Annex 1 through 4 hereto; and any such reference shall not be deemed to
incorporate herein by reference any document, instrument or agreement except
as set forth above.
Very truly yours,
The Sumitomo Bank, Limited
By: _________________________
Name:
Title:
ANNEX 1 TO
LETTER OF CREDIT NO. LG/MIS/NY-430647
-------------------------------------
CERTIFICATE FOR "ANNEX 1 DRAWING"
---------------------------------
The undersigned, as Trustee (the "Trustee"), acting through the
undersigned duly authorized officer of the Trustee, hereby certifies to The
Sumitomo Bank, Limited (the "Bank"), with reference to the Bank's Irrevocable
Letter of Credit No. LG/MIS/NY-430647 (the "Letter of Credit"; any
capitalized term used herein and not defined shall have its respective
meaning as set forth in the Letter of Credit) issued in favor of the Trustee,
that:
(1) The Trustee is the Trustee under the Pooling and Servicing
Agreement.
(2) The Corporation, a servicer (the "Servicer") under the Pooling
and Servicing Agreement, has notified us, as Trustee under the Pooling
and Servicing Agreement, pursuant to a Monthly Servicer's Certificate
(as defined in the Pooling and Servicing Agreement) (a copy of which
is attached hereto) furnished pursuant to Section 3.04(b) of the Pooling
and Servicing Agreement, that the following amount was required to be
remitted by the Corporation to the Collection Account pursuant to
Section 3.09(a) of the Pooling and Servicing Agreement with respect
to the Distribution Date (as defined in the Pooling and Servicing
Agreement) occurring on (insert applicable Distribution Date):
------------------------------------
$(insert amount required to be remitted pursuant to Section 3.09(a)).
-----------------------------------------------------------------
(3) The Corporation has failed to deposit the following portion
of amounts owed by it with respect to such Distribution Date as set forth
in paragraph (2) above: $(insert amount of deficiency).
---------------------------
(4) The Trustee is making a drawing under the Letter of Credit in
the amount of $_________ which amount equals the lesser of (a) the amount
set forth in paragraph (3) and (b) the amount identified by the Servicer
in the Monthly Servicer's Certificate referred to in paragraph (2) above
as being available on the date hereof (and after giving effect to any
contemporaneous demand for payment under the Letter of Credit being made
by the Trustee) to be drawn under the Letter of Credit.
(5) The Trustee has not received notice from the Corporation or
any other person or entity contesting the accuracy of such Monthly
Servicer's Certificate.
(6) The account to which payment under the Letter of Credit is to
be wire transferred is Account No. 30492-01/0.1, maintained at The
Fuji Bank and Trust Company.
IN WITNESS WHEREOF, the Trustee has executed and delivered this
certificate as of the _____ day of _____________.
THE FUJI BANK, AND TRUST COMPANY,
as Trustee
By ______________________________
Name:
Title:
ANNEX 2 TO
LETTER OF CREDIT NO. LG/MIS/NY-430647
-------------------------------------
CERTIFICATE FOR "SPECIAL DRAWING"
---------------------------------
___________, 19__
The Sumitomo Bank, Limited
One World Trade Center
New York, New York 10048
Attention:
Re: Irrevocable Letter of Credit No. LG/MIS/NY-430647
Gentlemen:
The undersigned, a duly authorized officer of The Fuji Bank and Trust
Company (the "Trustee"), hereby certifies to The Sumitomo Bank, Limited with
reference to irrevocable Letter of Credit No. LG/MIS/NY-430647 (the "Letter
of Credit") (any capitalized term used herein and not defined shall have the
meaning set forth in the Letter of Credit) issued by The Sumitomo Bank,
Limited (the "Bank"), in favor of the Trustee, that:
(1) The Trustee is the Trustee under the Pooling and Servicing
Agreement.
(2) The Trustee has been instructed by the Servicer to make a Special
Drawing.
(3) A Responsible Officer of the Trustee has obtained knowledge that the
short-term debt rating of the Bank has been reduced, suspended or withdrawn.
(4) The Trustee hereby demands payment under the Letter of Credit in the
amount of $_____, which amount equals the Available Letter of Credit Amount
on the Business Day preceding the date hereof, as specified in the Monthly
Servicer's Certificate delivered by the Servicer pursuant to Section 3.04(b)
of the Pooling and Servicing Agreement (and after giving effect to any
contemporaneous demand for payment under the Letter of Credit being made with
respect to such date).
(5) All amounts received by the Trustee from the Bank in respect of this
certificate shall be applied in accordance with Section 4.01A(e) of the
Pooling and Servicing Agreement.
(6) The Trustee directs that such amounts be deposited in Account No.
30492-01/0.1 at The Fuji Bank and Trust Company.
IN WITNESS WHEREOF, the Trustee has executed and delivered this
certificate as of this _____ day of ________, 19__.
THE FUJI BANK AND TRUST COMPANY,
as Trustee
By: ___________________________
Authorized Signatory
ANNEX 3 TO
LETTER OF CREDIT NO. LG/MIS/NY-430647
-------------------------------------
CERTIFICATE FOR THE TERMINATION
OF LETTER OF CREDIT NO. LG/MIS/NY-430647
The Sumitomo Bank, Limited
One World Trade Center
New York, New York 10048
Attention: Loan Administration
The undersigned, a duly authorized officer of The Fuji Bank and Trust
Company (the "Trustee"), hereby certifies to The Sumitomo Bank, Limited, with
reference to Irrevocable Letter of Credit No. LG/MIS/NY-430647 (the "Letter
of Credit"; any capitalized terms used herein and not defined shall have the
meaning set forth in the Letter of Credit) issued by The Sumitomo Bank,
Limited in favor of the Trustee, that the Letter of Credit shall terminate
on _________________. Accordingly, we herewith return to you for
cancellation the Letter of Credit, which is terminated, as of the date
hereof, pursuant to its terms.
Date: ____________ THE FUJI BANK AND
TRUST COMPANY, as Trustee
By ________________________
Authorized Officer
ANNEX 4 TO
LETTER OF CREDIT NO. LG/MIS/NY-430647
-------------------------------------
___________, 19__
The Sumitomo Bank, Limited
One World Trade Center
New York, New York 10048
Attention: Loan Administration
Re: Irrevocable Letter of Credit No. LG/MIS/NY-430647
of The Sumitomo Bank, Limited
Gentlemen:
For value received, the undersigned beneficiary hereby irrevocably
transfers to:
---------------------------
(Name of Transferee)
---------------------------
(Address)
all rights of the undersigned beneficiary to draw under the above-captioned
Letter of Credit (the "Letter of Credit"). The transferee has succeeded the
undersigned as Trustee under the Pooling and Servicing Agreement (as defined
in the Letter of Credit).
By this transfer, all rights of the undersigned beneficiary in the
Letter of Credit are transferred to the transferee and the transferee shall
hereafter have the sole rights as beneficiary thereof; provided, however,
-------- -------
that no rights shall be deemed to have been transferred to the transferee
until such transfer complies with the requirements of the Letter of Credit
pertaining to transfers.
The Letter of Credit is returned herewith and in accordance therewith
we ask that this transfer be effective and that you cause the transfer of the
Letter of Credit to our transferee or that, if so requested by the
transferee, you cause the issuance of a new irrevocable Letter of Credit in
favor of the transferee with provisions consistent with the Letter of Credit.
Very truly yours,
_____________________________
as predecessor Trustee
By ____________________________
(Name and Title)
AMENDMENT TO LETTER OF CREDIT
-----------------------------
This AMENDMENT TO LETTER OF CREDIT is made as of June 5, 1995, to
Irrevocable Transferor Letter of Credit No. LG/MIS/NY-430647, dated as of
December 2, 1992 (the "Letter of Credit") and issued by the Sumitomo Bank,
Limited, New York Branch to The Fuji Bank and Trust Company, as trustee, for
the account of Bridgestone/Firestone, Inc. in the stated amount of
$15,000,000.
The first paragraph of the Letter of Credit is hereby amended by
amending and restating such paragraph in its entirety as follows:
At the request and for the account of our customer,
Bridgestone/Firestone, an Ohio corporation (the "Corporation"), we (the
"Bank") hereby establish in your favor this Irrevocable Letter of Credit
No. LG/MIS/NY-430647 wherein you, as trustee (the "Trustee") under the
Pooling and Servicing Agreement dated November 1, 1992, as supplemented
by (i) the Series 1992-A Supplement, dated as of November 1, 1992 and
amended as of June 5, 1995, (ii) the Series 1992-B Supplement, dated as
of November 1, 1992 and amended and restated as of January 4, 1993,
and (iii) the Series 1995-A Supplement dated as of June 5, 1995
(collectively, the "Pooling and Servicing Agreement"), among the
Corporation, as servicer, Firestone Retail Credit Corporation,
as transferor and you, pursuant to which the Bridgestone/Firestone
Master Trust, Series 1992-A, Series 1992-B and Series 1995-A
Certificates (collectively, the "Certificates") have been issued, are
hereby irrevocably authorized, to draw (i) as required under Section
4.01B(a) of the Pooling and Servicing Agreement or (ii) Section
4.01B(d) of the Pooling and Servicing Agreement (a "Special Drawing"),
upon the terms and conditions hereinafter set forth, in an aggregate
amount not exceeding $15,000,000 (hereinafter, as reduced from time
to time in accordance with the provisions hereof, the "Stated Amount").
Except as expressly amended hereby, the Letter of Credit shall
remain in full force and effect.
THE SUMITOMO BANK, LIMITED,
NEW YORK BRANCH
By:___________________________
Name:
Title:
EXHIBIT 5.1
October 28, 1996
Firestone Retail Credit Corporation
One International Place
Boston, Massachusetts 02110-2624
Re: Bridgestone/Firestone Master Trust
----------------------------------
Ladies and Gentlemen:
We have been asked to deliver this opinion in connection with the preparation
of the registration statement on Form S-1 (No. 33-07185) (the "Registration
Statement") relating to the issuance by Bridgestone/Firestone Master Trust
(the "Trust") of Class A and Class B Asset Backed Certificates, Series 1996-1
(the "Certificates") pursuant to a Pooling and Servicing Agreement and the
Series 1996-1 Supplement hereto, each dated as of October , 1996 (collectively,
the "Pooling and Servicing Agreement"), among Firestone Retail Credit
Corporation, as transferor (the "Transferor"), Bridgestone/Firestone, Inc.
("Bridgestone"), as Servicer, and The Fuji Bank and Trust Company, as trustee
(in such capacity, the "Trustee"). The Registration Statement has been filed
with the Securities and Exchange Commission (the "Commission") under the
Securities Act of 1933, as amended (the "Act"). All capitalized terms used
but not specifically defined herein have the meaning assigned to such terms
in the Agreement.
In connection with this opinion, we have examined original, reproduced or
certified copies of the Certificate of Incorporation and By-Laws of the
Transferor, each as amended to date, the Registration Statement, records of
actions taken by the Board of Directors of the Transferor and a form of the
Agreement. We have also examined such other documents, papers, statutes and
authorities as we have deemed necessary as a basis for the opinions
hereinafter set forth. In all such examinations made by us in connection
with this opinion, we have assumed the genuineness of all signatures, the
completeness and authenticity of all records and all documents submitted to
us as originals, and the conformity with the originals of all documents
submitted to us as copies thereof. As to various matters of fact relevant
to the opinions hereinafter expressed, we have relied, to the extent we
deemed appropriate, upon representations, statements and certificates of
officers and representatives of the Transferor, Bridgestone and others.
Attorneys involved in the preparation of this opinion are admitted to
practice law in the State of New York and we do not express any opinion
herein concerning any law other than the federal laws of the United States
of America and the laws of the State of New York.
<PAGE>
Based upon and subject to the foregoing, we are of the opinion that when the
issuance, execution and delivery of the Certificates have been authorized by
all necessary corporate action of the Transferor in accordance with the
provisions of the Pooling and Servicing Agreement, and when such Certificates
have been duly executed and delivered, authenticated by the Trustee and sold
as described in the Registration Statement assuming that the terms of such
Certificates are otherwise in compliance with applicable law at such time,
such Certificates will be legally issued, fully paid and non-assessable and
entitled to the benefits of the Pooling and Servicing Agreement. This
opinion is subject to the effect of bankruptcy, insolvency, moratorium,
fraudulent conveyance and similar laws relating to or affecting creditors'
rights generally and court decisions with respect thereto and we express no
opinion with respect to the application of equitable principles or remedies
in any proceeding, whether at law or in equity.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the references to this firm under the caption
"Legal Matters" in the Prospectus which forms a part of the Registration
Statement. In giving such consent, we do not admit hereby that we come
within the category of persons whose consent is required under Section 7 of
the Act or the Rules and Regulations of the Commission thereunder.
Very truly yours,
/s/ Stroock & Stroock & Lavan
STROOCK & STROOCK & LAVAN
EXHIBIT 8.1
(Letterhead of Brown & Wood LLP)
October 28, 1996
Firestone Retail Credit Corporation
c/o JH Management Company
One International Place, Suite 520
Boston, Massachusetts 02110-2624
Re: Bridgestone/Firestone Master Trust
Asset Backed Certificates, Series 1996-1
Registration Statement on Form S-1
(Registration No. 333-07185)
--------------------------------------------
Ladies and Gentlemen:
We have acted as special federal income tax counsel to Firestone Retail
Credit Corporation, a Massachusetts corporation (the "Registrant"), in
connection with the issuance and sale of its Asset Backed Certificates,
Series 1996-1, Class A and Class B that evidence interests in a trust
consisting primarily of a portfolio of account balances generated or to be
generated under a private label credit card program established by Credit
First National Association (the "Certificates"). The Certificates will be
issued pursuant to a Pooling and Servicing Agreement among the Registrant,
Bridgestone/Firestone, Inc., as servicer, and The Fuji Bank and Trust
Company, as trustee. We have advised the Registrant with respect to certain
federal income tax consequences of the proposed issuance of the Certificates.
This advice is summarized under the headings "Summary of Terms -- Certain
Federal Income Tax Consequences" and "Federal
<PAGE>
Income Tax Consequences" in the form of prospectus forming a part of the
Registration Statement on Form S-1 (the "Registration Statement"), filed with
the Securities and Exchange Commission under the Securities Act of 1933, as
amended (the "Act"), on the date hereof for the registration of such
Certificates under the Act. Such description does not purport to discuss all
possible federal income tax ramifications of the proposed issuance, but with
respect to those tax consequences which are discussed, in our opinion, the
description is accurate in all material respects.
We hereby consent to the filing of this letter as an exhibit to the
Registration Statement and to a reference to this firm (as special federal
income tax counsel to the Registrant) under the headings "Federal Income Tax
Consequences" and "Legal Matters" in the Prospectus forming a part of the
Registration Statement, without implying or admitting that we are "experts"
within the meaning of the Act or the rules and regulations of the Commission
issued thereunder, with respect to any part of the Registration Statement,
including this exhibit.
Very truly yours,
/s/ Brown & Wood LLP
