SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 29,
1996
Sears Credit Account Master Trust II
(Exact name of registrant as specified in charter)
Illinois 33-79186-01 Not Applicable
(State of (Commission (IRS Employer
Organization) File Number) Identification
No.)
c/o Sears Receivables Financing Group, Inc.
3711 Kennett Pike
Greenville, Delaware 19807
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (302)
888-3176
Former name, former address and former fiscal year, if changed
since last report: Not Applicable
<PAGE>
Item 5. Other Events
Series 1996-4. On October 29, 1996, $500,000,000 aggregate
principal amount of 6.45% Class A Master Trust Certificates,
Series 1996-4, $22,500,000 aggregate principal amount of 6.65%
Class B Master Trust Certificates, Series 1996-4 and $39,330,000
aggregate principal amount of Class C Master Trust Certificates,
Series 1996-4, of the Sears Credit Account Master Trust II were
issued pursuant to the Pooling and Servicing Agreement dated as
of July 31, 1994, as amended, among Sears Receivables Financing
Group, Inc. as Seller ("SRFG"), Sears, Roebuck and Co. as
Servicer ("Sears") and The First National Bank of Chicago as
Trustee (the "Trustee") and the Series Supplement dated as of
October 29, 1996, among SRFG as Seller, Sears as Servicer and the
Trustee.
Item 7. Financial Statements, Pro Forma Financial
Information and Exhibits
Exhibit No.
Exhibit 1.1 Underwriting Agreement among Sears, SRFG and CS
First Boston as Representative of the several Underwriters for
the Class A Master Trust Certificates, dated October 17, 1996.
Exhibit 1.2 Underwriting Agreement among Sears, SRFG and CS
First Boston as Representative of the several Underwriters for
the Class B Master Trust Certificates, dated October 17, 1996.
Exhibit 1.3 Pricing Agreement among Sears, SRFG and CS
First Boston on behalf of the Underwriters for the Class A Master
Trust Certificates, dated October 17, 1996.
Exhibit 1.4 Pricing Agreement among Sears, SRFG and CS
First Boston on behalf of the Underwriters for the Class B Master
Trust Certificates, dated October 17, 1996.
Exhibit 4.1 Series 1996-4 Supplement among Sears as
Servicer, SRFG as Seller and the Trustee, dated October 29, 1996,
including the forms of Investor Certificates.
Exhibit 4.2 Letter of Representations among SRFG, the
Trustee and The Depository Trust Company, dated as of October 29,
1996.
Exhibit 5.1 Opinion of Robert J. Pence, Vice President, Law
of Sears, as counsel to SRFG and Sears.<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.
Sears Credit Account Master Trust II
(Registrant)
By: Sears Receivables Financing Group, Inc.
(Originator of the Trust)
By: /S/Gary D. Farrar
Gary D. Farrar
Vice President, Administration
Date: October 29, 1996
<PAGE>
EXHIBIT INDEX
Exhibit No.
Exhibit 1.1 Underwriting Agreement among Sears, SRFG and CS
First Boston as Representative of the several Underwriters for
the Class A Master Trust Certificates, dated October 17, 1996.
Exhibit 1.2 Underwriting Agreement among Sears, SRFG and CS
First Boston as Representative of the several Underwriters for
the Class B Master Trust Certificates, dated October 17, 1996.
Exhibit 1.3 Pricing Agreement among Sears, SRFG and CS
First Boston on behalf of the Underwriters for the Class A Master
Trust Certificates, dated October 17, 1996.
Exhibit 1.4 Pricing Agreement among Sears, SRFG and CS
First Boston on behalf of the Underwriters for the Class B
Master Trust Certificates, dated October 17, 1996.
Exhibit 4.1 Series 1996-4 Supplement among Sears as
Servicer, SRFG as Seller and the Trustee, dated October 29, 1996,
including the forms of Investor Certificates.
Exhibit 4.2 Letter of Representations among SRFG, the
Trustee and The Depository Trust Company, dated as of October 29,
1996.
Exhibit 5.1 Opinion of Robert J. Pence, Vice President, Law
of Sears, as counsel to SRFG and Sears.
Exhibit 1.1
SEARS CREDIT ACCOUNT MASTER TRUST II
Master Trust Certificates
Underwriting Agreement
October 17, 1996
CS First Boston Corporation
55 East 52nd Street
New York, New York 10055-0186
As Representative of the several Underwriters
Ladies and Gentlemen:
Sears Receivables Financing Group, Inc. (the
"Company"), as originator of Sears Credit Account Master Trust II
(the "Trust") and holder of the Seller Certificate, proposes,
subject to the terms and conditions stated herein, to cause to be
issued and sold from time to time certain of the Master Trust
Certificates registered under the registration statement referred
to in Section 2(a) (the "Securities"). The Company intends to
enter into one or more Pricing Agreements (each a "Pricing
Agreement") in the form attached hereto, with such additions and
deletions as the parties thereto may determine, and, subject to
the terms and conditions stated herein and therein, to issue and
sell to the firms named in Schedule I to the applicable Pricing
Agreement (such firms constituting the "Underwriters" with
respect to such Pricing Agreement and the securities specified
therein) the Securities specified in such Pricing Agreement (with
respect to such Pricing Agreement, the "Designated
Securities"). The Designated Securities will be issued by the
Trust pursuant to a Pooling and Servicing Agreement, dated as of
July 31, 1994, as amended (the "Pooling and Servicing
Agreement"), as supplemented by a Series Supplement (the "Series
Supplement") relating to the specific series of Certificates
issued thereunder, by and among the Company as Seller, Sears,
Roebuck and Co. ("Sears") as Servicer and The First National Bank
of Chicago as Trustee (the "Trustee"). To the extent not defined
herein, the capitalized terms used herein have the
meanings assigned in the Pooling and Servicing Agreement or the
Series Supplement, as the case may be.
1. Particular sales of Designated Securities may be
made from time to time to the Underwriters of such Securities,
for whom you will act as representatives. This Underwriting
Agreement shall not be construed as an obligation of the Company
to sell or cause to be sold any of the Securities or as an
obligation of any of the Underwriters to purchase the Securities.
The obligation of the Company to cause to be issued and sold any
of the Securities and the obligation of any of the Underwriters
to purchase any of the Securities shall be evidenced by the
Pricing Agreement with respect to the Designated Securities
specified therein. Each Pricing Agreement shall specify the
initial principal amount of such Designated Securities, the
public offering price of such Designated Securities or the method
by which the price at which such Securities will be sold will be
determined, the purchase price to the Underwriters of such
Designated Securities, the names of the Underwriters of such
Designated Securities and the principal amount of such
Designated Securities to be purchased by each Underwriter and
shall set forth the date, time and manner of delivery of such
Designated Securities and payment therefor. The Pricing
Agreement shall also describe, in a manner consistent with the
Pooling and Servicing Agreement, the Series Supplement relating
to the Designated Securities, and the registration statement and
prospectus with respect thereto, the principal terms of such
Designated Securities. A Pricing Agreement shall be in the form
of an executed writing (which may be in counterparts), and may be
evidenced by an exchange of telegraphic communications or any
other rapid transmission device designed to produce a written
record of communications transmitted. The obligations of the
Underwriters under this Agreement and each Pricing Agreement
shall be several and not joint.
2. The Company represents and warrants to, and agrees
with, each of the Underwriters that:
(a) A registration statement in respect of the
Securities has been filed with the Securities and Exchange
Commission (the "Commission"); such registration statement and
any post-effective amendment thereto, each in the form heretofore
delivered or to be delivered to you, excluding exhibits to such
registration statement, but including all documents incorporated
by reference in the prospectus included therein, to you for each
of the other Underwriters have been declared effective by the
Commission in such form (any preliminary prospectus included in
such registration statement being hereinafter called a
"Preliminary Prospectus;" the various parts of such registration
statement, including all exhibits thereto, each as amended at the
time such part became effective, being hereinafter
collectively called the "Registration Statement;" the prospectus
relating to the Securities, in the form in which it has most
recently been filed with the Commission on or prior to the date
of this Agreement, being hereinafter called the "Prospectus;" any
reference herein to any Preliminary Prospectus or the
Prospectus shall be deemed to include the documents, if any,
incorporated by reference therein pursuant to the applicable form
under the Securities Act of 1933, as amended (the "Act"), as of
the date of such Preliminary Prospectus or Prospectus, as the
case may be; any reference to any amendment or supplement to any
Preliminary Prospectus or the Prospectus shall be deemed to
include any documents filed after the date of such Preliminary
Prospectus or Prospectus, as the case may be, under the
Securities Exchange Act of 1934, as amended (the "Exchange Act")
and so incorporated by reference; and any reference to the
Prospectus as amended or supplemented shall be deemed to refer to
the Prospectus as amended or supplemented in relation to the
applicable Designated Securities in the form in which it is first
filed with the Commission pursuant to Rule 424(b) of
Regulation C under the Act, including any documents incorporated
by reference therein as of the date of such filing);
(b) Except for statements in such documents which
do not constitute part of the Registration Statement or the
Prospectus pursuant to Rule 412 of Regulation C under the Act and
after substituting therefor any statements modifying or
superseding such excluded statements (i) the documents
incorporated by reference in the Prospectus, when they became
effective or were filed with the Commission, as the case may be,
conformed in all material respects to the requirements of the Act
or the Exchange Act, as applicable, and the rules and regulations
of the Commission thereunder, and none of such documents, when
they became effective or were so filed, as the case may be,
contained, in the case of documents which became effective under
the Act, 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, and, in the case
of documents which were filed under the Exchange Act with the
Commission, an untrue statement of a material fact or omitted 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, and (ii) any further documents so filed and
incorporated by reference when they become effective or are filed
with the Commission, as the case may be, will conform in all
material respects to the requirements of the Act or the Exchange
Act, as applicable, and the rules and regulations of the
Commission thereunder and will not contain, in the case of
documents which become effective under the Act, an untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the
statements therein not misleading, and, in the case of documents
which are filed under the Exchange Act with the Commission, an
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 are made, not
misleading; provided, however, that this representation and
warranty shall not apply to any statements or omissions made in
reliance upon and in conformity with information furnished in
writing to the Company by an Underwriter of Designated
Securities through you expressly for use therein;
(c) Except for statements in documents
incorporated therein by reference which do not constitute part of
the Registration Statement or the Prospectus pursuant to Rule 412
of Regulation C under the Act and after substituting therefor any
statements modifying or superseding such excluded statements, the
Registration Statement and the Prospectus conformed, and any
amendments or supplements thereto will, when they become
effective or are filed with the Commission, as the case may be,
conform, in all material respects to the requirements of the Act
and the rules and regulations of the Commission thereunder and
did not, and will not, as of the applicable effective date as to
the Registration Statement and as of the applicable filing date
as to the Prospectus, contain an untrue statement of a material
fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not
misleading; provided, however, that this representation and
warranty shall not apply to any statements or omissions made in
reliance upon and in conformity with information furnished in
writing to the Company by an Underwriter of Designated
Securities through you expressly for use in the Prospectus as
amended or supplemented relating to such Securities.
(d) Upon payment therefor as provided herein and
in the Pricing Agreement relating to Designated Securities, such
Designated Securities will have been duly and validly authorized
and (assuming their due authentication by the Trustee) will have
been duly and validly issued, and will be entitled to the
benefits of the Pooling and Servicing Agreement and the Series
Supplement.
(e) The issue and sale of the Designated
Securities pursuant to any Pricing Agreement and the compliance
by the Company with all of the provisions of the Designated
Securities, the Pooling and Servicing Agreement, the Series
Supplement, the First Amended and Restated Purchase Agreement
dated as of July 31, 1994, as amended (the "Purchase Agreement"),
by and between the Company and Sears, the First Amended and
Restated Contribution Agreement dated as of July 31, 1994 (the
"Contribution Agreement"), by and between the Company and Sears,
the Receivables Warehouse Agreement dated as of December 21, 1995
(the "Receivables Warehouse Agreement"), by and between the
Company and Sears, this Agreement and such Pricing Agreement will
not (i) conflict with or result in any breach which would
constitute a material default under, or, except as contemplated
by the Pooling and Servicing Agreement or the Series Supplement,
result in the creation or imposition of any lien, charge or
encumbrance upon any of the property or assets of the Company
material to the Company, pursuant to the terms of, any
indenture, loan agreement or other agreement or instrument for
borrowed money to which the Company is a party or by which the
Company may be bound or to which any of the property or assets of
the Company may be bound or to which any of the property or
assets of the Company, material to the Company, is subject, (ii)
result in any violation of the provisions of the Certificate of
Incorporation or By-Laws of the Company or, (iii) to the best of
the Company's knowledge, result in any material violation of any
statute or any order, rule or regulation applicable to the
Company of any court or any federal, state or other regulatory
authority or other governmental body having jurisdiction over the
Company.
(f) No consent, approval, authorization or other
order of, or filing with, any court or any Federal, State or
other regulatory authority or other governmental body having
jurisdiction over the Company is required for the issue and sale
of the Securities except as may be required under the Act, the
Exchange Act, and securities laws of the various states and other
jurisdictions which are applicable to the issue and sale of the
Designated Securities and except for the filing of any financing
or continuation statement required to perfect or continue the
Trust's and the Company's respective interests in the
Receivables.
(g) The compliance by Sears with all of the
provisions of the Pooling and Servicing Agreement, the Series
Supplement, the Assignment of Accounts and Sale of Receivables
Agreement, dated as of September 15, 1994, as amended between
Sears National Bank (the "Bank") and Sears (the "Bank Assignment
Agreement"), the Purchase Agreement, the Contribution Agreement,
the Receivables Warehouse Agreement and this Agreement will not
(i) conflict with or result in any breach which would constitute
a material default under, or, except as contemplated by the
Pooling and Servicing Agreement, the Series Supplement, the Bank
Assignment Agreement, the Purchase Agreement and the Contribution
Agreement, result in the creation or imposition of any lien,
charge or encumbrance upon any of the property or assets of Sears
or any subsidiary thereof, material to Sears and its
subsidiaries (whether or not consolidated) considered as a
whole, pursuant to the terms of, any indenture, loan agreement or
other agreement or instrument for borrowed money to which Sears
and the Company, Sears Roebuck Acceptance Corp., Sears DC Corp.,
Sears National Bank or Sears Overseas Finance N.V.
(collectively, the "Designated Subsidiaries") is a party or by
which Sears or any Designated Subsidiary may be bound or to which
any of the property or assets of Sears or any Designated
Subsidiary, material to Sears and its subsidiaries (whether or
not consolidated) considered as a whole, is subject, (ii) result
in any violation of the provisions of the Restated Certificate of
Incorporation, as amended, or the By-Laws of Sears or, (iii) to
the best of the Company's knowledge, result in any material
violation of any statute or any order, rule or regulation
applicable to Sears of any court or any Federal, State or other
regulatory authority or other governmental body having
jurisdiction over Sears;
(h) The Principal Receivables conveyed by the
Company to the Trust under the Pooling and Servicing Agreement
had an aggregate outstanding balance determined as of the date
set forth in the Pricing Agreement of not less than the amount
set forth in the Pricing Agreement; and
(i) The Pooling and Servicing Agreement is not
required to be qualified under the Trust Indenture Act of 1939,
as amended (the "Trust Indenture Act"), and the Trust is not
required to be registered under the Investment Company Act of
1940, as amended (the "Investment Company Act").
3. Subject to the terms and conditions herein set
forth, the Company agrees to cause to be issued and sold to each
of the Underwriters, and each of the Underwriters agrees,
severally and not jointly, to purchase from the Company, at the
purchase price specified in the Pricing Agreement applicable to
any Designated Securities, the principal amount of Designated
Securities set forth in such Pricing Agreement.
4. (a) Upon the execution of the Pricing Agreement
applicable to any Designated Securities and the authorization by
you of the release of the Designated Securities, the several
Underwriters propose to offer the Designated Securities for sale
upon the terms and conditions set forth in the Prospectus as
amended or supplemented.
(b) Each Underwriter represents and agrees that
it will not offer or sell or deliver any of the Securities in any
jurisdiction except under circumstances that will result in
compliance with the applicable laws thereof.
(c) Each Underwriter represents and agrees that
it will not, at any time that such Underwriter is acting as an
"underwriter" (as defined in Section 2(11) of the Act) with
respect to any Designated Securities, transfer, deposit or
otherwise convey any such Designated Securities into a trust or
other type of special purpose vehicle that issues securities or
other instruments backed in whole or in part by, or that
represents interests in, such Designated Securities without the
prior written consent of the Company.
5. Unless otherwise specified in the Pricing
Agreement, Designated Securities to be purchased by each
Underwriter pursuant to the Pricing Agreement relating thereto
shall be delivered by or on behalf of the Company to you for the
account of such Underwriter, against payment by such Underwriter
or on its behalf of the purchase price thereof by wire transfer
to such account as the Company may designate of federal or other
immediately available funds. The place, time and date of such
delivery shall be set forth in the Pricing Agreement or at such
other place, time and date as you and the Company may agree upon
in writing, such time and date being herein called the "Time of
Delivery." Unless otherwise specified in the Pricing Agreement,
the Securities shall be represented by definitive certificates
registered in the name of Cede & Co., as nominee for The
Depository Trust Company. Such definitive certificates will be
made available for inspection at least twenty-four hours prior to
the Time of Delivery at the office of The First National Bank of
Chicago, One North State Street, 9th Floor, Chicago, Illinois
60602.
6. The Company agrees with each of the Underwriters
of Designated Securities:
(a) Immediately following the execution of each
Pricing Agreement, the Company will prepare a Prospectus
Supplement setting forth the amount of Securities covered thereby
and the terms thereof not otherwise specified in the Prospectus,
the price at which such Securities are to be purchased by the
Underwriters from the Company, either the initial public
offering price or the method by which the price at which such
Securities are to be sold will be determined, the selling
concessions and allowances, if any, and such other information as
the Company deems appropriate in connection with the offering of
such Securities, and after the date of the Pricing Agreement
relating to such Securities and prior to the Time of Delivery for
such Securities the Company will not make any further
amendment or any supplement to the Registration Statement or
Prospectus as amended or supplemented without first having
furnished you with a copy of the proposed form thereof and given
you a reasonable opportunity to review the same; to advise you
promptly of any such amendment or supplement after such Time of
Delivery and to furnish you with copies thereof for so long as
the delivery of a prospectus is required in connection with the
offering or sale of such Securities; and during such same period
to advise you, promptly after it receives notice thereof, of the
time when the Registration Statement, or any amendment thereto,
or any amended Registration Statement has become effective or any
supplement to the Prospectus or any amended Prospectus has been
filed, of the issuance by the Commission of any stop order or of
any order preventing or suspending the use of any
Prospectus, or the suspension of the qualification of such
Securities for offering or sale in any jurisdiction, or the
initiation or threatening of any proceeding for any such
purpose, or of any request by the Commission for the amending or
supplementing of the Registration Statement or Prospectus or for
additional information; and in the event of the issuance of any
such stop order or of any such order preventing or suspending the
use of any such Prospectus or suspending any such
qualification, to use promptly its best efforts to obtain its
withdrawal;
(b) Promptly from time to time to take such
action as you may reasonably request to qualify the Securities
for offering and sale under the securities laws of such
jurisdictions as you may request and to comply with such laws so
as to permit the continuance of sales and dealings therein in
such jurisdictions for as long as may be necessary to complete
the distribution of such Securities, provided, that in connection
therewith the Company shall not be required to qualify as a
foreign corporation or to file a general consent to service of
process in any jurisdiction;
(c) To furnish the Underwriters with copies of
the Prospectus as amended or supplemented in such quantities as
you may from time to time reasonably request and if at any time
the delivery of a prospectus is required by law in connection
with the offering or sale of such Securities and if at such time
any event shall have occurred as a result of which the Prospectus
as amended or supplemented would include an untrue statement of a
material fact or omit to state any material fact necessary in
order to make the statements therein, in the light of the
circumstances under which they were made when such Prospectus is
delivered, not misleading, or, if for any other reason it shall
be necessary during such same period to amend or supplement the
Prospectus in order to comply with the Act, to notify you and to
prepare and furnish without charge to each Underwriter and to any
dealer in securities as many copies as you may from time to time
reasonably request of an amended Prospectus or a supplement to
the Prospectus which will correct such statement or omission or
effect such compliance and in case any Underwriter is
required to deliver a prospectus in connection with sales of any
Securities at any time nine months or more after the effective
date of the Registration Statement, upon your request but at the
expense of such Underwriter, to prepare and deliver to such
Underwriter as many copies as you may request of an amended or
supplemented Prospectus complying with Section 10(a)(3) of the
Act;
(d) To cause the Trust to make generally
available to holders of the Securities, in accordance with Rule
158 under the Act or otherwise, as soon as practicable, but in
any event not later than forty-five days after the end of the
fourth full fiscal quarter (ninety days in the case of the last
fiscal quarter in any fiscal year) following the fiscal quarter
ending after the effective date of the Registration Statement, an
earning statement of the Trust (which need not be audited)
complying with Section 11(a) of the Act and covering a period of
at least twelve consecutive months beginning after the effective
date of such Registration Statement;
(e) To pay or cause to be paid all expenses
incident to the performance of its obligations hereunder,
including the cost of all qualifications of the Securities under
state securities laws (including reasonable fees of counsel to
the Underwriters in connection with such qualifications and in
connection with legal investment surveys) and the cost of
printing this Agreement and any blue sky and legal investment
memoranda.
The Company and Sears agree with each of the
Underwriters during the period beginning from the date of the
Pricing Agreement and continuing to and including the earlier of
(i) the termination of trading restrictions on the Designated
Securities, of which termination you agree to give the Company
prompt notice confirmed in writing, and (ii) the Time of
Delivery, not to offer, sell, contract to sell or otherwise
dispose of any securities of the Company or any other subsidiary
of Sears, or any other trust for which the Company or any other
subsidiary of Sears is depositor, which represent participation
interests in receivables arising under open end credit plans
offered by Sears, without your prior written consent, which
consent shall not be unreasonably withheld.
7. The obligations of the several Underwriters
hereunder and under the Pricing Agreement relating to Designated
Securities shall be subject, in their discretion, to the
condition that all representations and warranties and other
statements of the Company herein are, at and as of the Time of
Delivery for such Designated Securities, true and correct, the
condition that the Company shall have performed all of its
obligations hereunder theretofore to be performed, and the
following additional conditions:
(a) No stop order suspending the effectiveness of
the Registration Statement or any part thereof shall have been
issued and no proceeding for that purpose shall have been
initiated or threatened by the Commission; and all requests for
additional information on the part of the Commission shall have
been complied with to your reasonable satisfaction;
(b) All corporate proceedings and related matters
in connection with the organization of the Company, the validity
of the Bank Assignment Agreement, the Purchase Agreement, the
Contribution Agreement, the Receivables Warehouse Agreement, the
Pooling and Servicing Agreement and the Series Supplement and the
registration, authorization, issue, sale and delivery of the
Designated Securities shall have been satisfactory to counsel to
the Underwriters, and such counsel shall have been furnished with
such papers and information as they may reasonably have requested
to enable them to pass upon the matters referred to in this
subdivision (b);
(c) Counsel to the Company shall have furnished
to you such counsel's written opinion, dated the Time of
Delivery, in form and substance satisfactory to you in your
reasonable judgment, to the effect that:
(i) The Company and Sears have been duly
incorporated and are validly existing as corporations in good
standing under the laws of their respective states of
incorporation;
(ii) This Agreement and the Pricing Agreement
have been duly authorized, executed and delivered on the part of
the Company and Sears;
(iii) The issue and sale of the
Designated Securities and the compliance by the Company with all
of the provisions of the Designated Securities, this Agreement,
the Pricing Agreement, the Purchase Agreement, the Contribution
Agreement, the Receivables Warehouse Agreement, the Pooling and
Servicing Agreement and the Series Supplement will not (a)
conflict with or result in any breach which would constitute a
material default under, or, except as contemplated by the Pooling
and Servicing Agreement or the Series Supplement, result in the
creation or imposition of any lien, charge or encumbrance upon
any of the property or assets of the Company, material to the
Company, pursuant to the terms of, any indenture, loan agreement
or other agreement or instrument for borrowed money known to such
counsel to which the Company is a party or by which the Company
may be bound or to which any of the property or assets of the
Company, material to the Company, is subject, (b) result in any
violation of the provisions of the Certificate of
Incorporation or the By-Laws of the Company, or (c) to the best
knowledge of such counsel, result in any material violation of
any statute or any order, rule or regulation applicable to the
Company of any court or any Federal, State or other regulatory
authority or other governmental body having jurisdiction over the
Company, other than the Act, the Exchange Act, the Trust
Indenture Act and the Investment Company Act and the rules and
regulations under each such act and other than the securities
laws of the various states or other jurisdictions which are
applicable to the issue and sale of the Securities and other than
state laws pertaining to the perfection of security
interests;
(iv) To the best knowledge of such counsel,
no consent, approval, authorization or other order of, or filing
with, any court or any Federal, State or other regulatory
authority or other governmental body having jurisdiction over
Sears or the Company is required for the consummation by Sears
and the Company, as applicable, of the transactions contemplated
by the Bank Assignment Agreement, the Purchase Agreement, the
Contribution Agreement and the Receivables Warehouse Agreement or
for the issue and sale of the Securities except as may be
required under the Act, the Exchange Act, the Trust Indenture Act
and the Investment Company Act and securities laws of the various
states or other jurisdictions which are applicable to the issue
and sale of the Securities and except for the filing of any
financing or continuation statement required to perfect the
respective interests of the Trust, the Company and Sears in the
Receivables;
(v) The compliance by Sears with all of the
provisions of this Agreement, the Bank Assignment Agreement, the
Purchase Agreement, the Contribution Agreement, the Receivables
Warehouse Agreement, the Pooling and Servicing Agreement and the
Series Supplement will not (a) conflict with or result in any
breach which would constitute a material default under, or,
except as contemplated by the Bank Assignment Agreement, the
Pooling and Servicing Agreement, the Series Supplement, the
Purchase Agreement, the Contribution Agreement or the Receivables
Warehouse Agreement result in the creation or imposition of any
lien, charge or encumbrance upon any of the property or assets of
Sears or any subsidiary thereof, material to Sears and its
subsidiaries (whether or not consolidated) considered as a
whole, pursuant to the terms of, any indenture, loan agreement or
other agreement or instrument for borrowed money known to such
counsel to which Sears or any Designated Subsidiary is a party or
by which Sears or any Designated Subsidiary may be bound or to
which any of the property or assets of Sears or any Designated
Subsidiary, material to Sears and its subsidiaries (whether or
not consolidated) considered as a whole, is subject, (b) result
in any violation of the provisions of the Restated Certificate of
Incorporation or the By-Laws of Sears, or (c) to the best
knowledge of such counsel, result in any material
violation of any statute or any order, rule or regulation
applicable to Sears of any court or any Federal, State or other
regulatory authority or other governmental body having
jurisdiction over Sears, other than the Act, the Exchange Act,
the Trust Indenture Act and the Investment Company Act and the
rules and regulations under each such act and other than the
securities laws of the various states or other jurisdictions
which are applicable to the issue and sale of the Securities and
other than state laws pertaining to the perfection of security
interests;
(vi) Each of the Pooling and Servicing
Agreement, the Series Supplement, the Purchase Agreement, the
Contribution Agreement and the Receivables Warehouse Agreement
has been duly authorized, executed and delivered on the part of
the Company and Sears and, as to each of the Company and Sears,
is a valid and binding instrument enforceable in accordance with
its terms except as the foregoing may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws now or
hereafter in effect relating to creditors' rights generally or
general principles of equity (whether considered in a proceeding
at law or in equity) and the discretion of the court before which
any proceeding therefor may be brought; the Pooling and Servicing
Agreement is not required to be qualified under the Trust
Indenture Act; the Trust is not required to be registered under
the Investment Company Act; and the Securities have been duly
authorized and (assuming their due authentication by the Trustee)
have been duly executed, issued and delivered and
constitute valid and binding obligations of the Trust in
accordance with their terms, entitled to the benefits of the
Pooling and Servicing Agreement and the Series Supplement,
except as the foregoing may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws now or
hereafter in effect relating to creditors' rights generally or
general principles of equity (whether considered in a proceeding
at law or in equity) and the discretion of the court before which
any proceeding therefor may be brought;
(vii) The Bank Assignment Agreement has
been duly authorized, executed and delivered by Sears and, as to
Sears, is a valid and binding instrument enforceable in
accordance with its terms, except as the foregoing may be limited
by bankruptcy, insolvency, reorganization, moratorium or similar
laws now or hereafter in effect relating to creditors' rights
generally or general principles of equity (whether considered in
a proceeding at law or in equity) and the discretion of the court
before which any proceeding therefor may be brought;
(viii) Such counsel does not know of any
pending legal or governmental proceedings required to be
described in the Prospectus which are not described as required;
(ix) The documents incorporated by reference
in the Prospectus as amended or supplemented (other than
financial, statistical and accounting data therein, as to which
such counsel need express no opinion), when they became effective
or were filed with the Commission, as the case may be, complied
as to form in all material respects with the requirements of the
Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder;
(x) The Registration Statement and the
Prospectus as amended or supplemented (excluding the documents
incorporated by reference therein) (other than financial,
statistical and accounting data therein as to which such counsel
need express no opinion) comply as to form in all material
respects with the requirements of the Act and the rules and
regulations thereunder; and
(xi) Such counsel does not know of any
contract or other document to which the Company or Sears is a
party required to be filed as an exhibit to the Registration
Statement or required to be incorporated in the Prospectus as
amended or supplemented or required to be described in the
Prospectus as amended or supplemented which has not been so filed
or described.
In rendering such opinion, such counsel may rely to the
extent such counsel deems appropriate upon certificates of
officers or other executives of the Company or Sears, its
business groups and its subsidiaries and of public officials as
to factual matters and upon opinions of other counsel. Such
counsel shall also state that: (a) nothing has come to such
counsel's attention which has caused such counsel to believe that
any of the documents referred to in subdivision (ix) above (other
than financial, statistical and accounting data therein, as to
which such counsel need express no belief), in each case after
excluding any statement in any such document which does not
constitute part of the Registration Statement or the Prospectus
as amended or supplemented pursuant to Rule 412 of Regulation C
under the Act and after substituting therefor any statement
modifying or superseding such excluded statement, when they
became effective or were filed, as the case may be, contained, in
the case of documents which became effective under the Act, 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, and, in the case of
documents which were filed under the Exchange Act with the
Commission, an untrue statement of a material fact or omitted 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, and (b) nothing has come to such counsel's
attention which has caused such counsel to believe that the
Registration Statement or the Prospectus as amended or
supplemented (other than financial, statistical and accounting
data therein, as to which such counsel need express no belief)
contains an untrue statement of a material fact or omits to state
a material fact required to be stated therein or necessary to
make the statements therein not misleading;
(d) Counsel to the Bank shall have furnished to
you such counsel's written opinion, dated the Time of Delivery,
in form and substance satisfactory to you in your reasonable
judgment, to the effect that:
(i) The Bank has been duly incorporated and
is validly existing as a national banking association in good
standing under the laws of the United States of America;
(ii) The compliance by the Bank with all of
the provisions of the Bank Assignment Agreement will not (a)
conflict with or result in any breach which would constitute a
material default, or except for that created by the Bank
Assignment Agreement, result in the creation or imposition of any
lien, charge or encumbrance upon any of the property or assets of
the Bank, material to the Bank, pursuant to the terms of, any
indenture, loan agreement or other agreement or instrument for
borrowed money known to such counsel to which the Bank is a
party, or by which the Bank may be bound, or to which any of the
property or assets of the Bank, material to the Bank, is subject,
(b) result in any violation of the provisions of the Articles of
Association or the By-Laws of the Bank, or (c) to the best
knowledge of such counsel, result in any material violation of
any statute or any order, rule or regulation applicable to the
Bank of any court or any Federal, State or other regulatory
authority or other governmental body having jurisdiction over the
Bank;
(iii) To the best knowledge of such
counsel, no consent, approval, authorization or other order of,
or filing with, any court or any Federal, State or other
regulatory authority or other governmental body having
jurisdiction over the Bank, which has not already been made or
obtained, is required for the consummation of the transactions
contemplated by the Bank Assignment Agreement, except for the
filing of any financing or continuation statement required to
perfect the interest of Sears in the Receivables; and
(iv) The Bank Assignment Agreement has been
duly authorized, executed and delivered on the part of the Bank
and, as to the Bank, is a valid and binding instrument
enforceable in accordance with its terms, except as the foregoing
may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws now or hereafter in effect relating to
creditors' rights generally, general principles of equity
(whether considered in a proceeding at law or in equity), or the
discretion of the court before which any proceeding therefor may
be brought.
In rendering such opinion, such counsel may rely to the
extent such counsel deems appropriate upon certificates of
officers or other executives of the Company or Sears, its
business groups and its subsidiaries and of public officials as
to factual matters and upon opinions of other counsel.
(e) At the Time of Delivery for such Designated
Securities, Deloitte & Touche LLP shall have furnished to you a
letter or letters, dated the respective date of delivery thereof,
in form and substance satisfactory to you as to such matters as
you may reasonably request;
(f) (i) Sears and its subsidiaries (whether or
not consolidated) considered as a whole, shall not have
sustained, since the date of the latest audited financial
statement previously delivered to you, any material loss or
interference with its business from fire, explosion, flood or
other calamity, whether or not covered by insurance, or from any
labor dispute or court or governmental action, order or decree
and (ii) since the date of the Pricing Agreement there shall not
have been any material change in the capital stock accounts or
long-term debt of Sears or any material adverse change in the
general affairs, financial position, shareholders' equity or
results of operations of Sears and its subsidiaries (whether or
not consolidated) considered as a whole, the effect of which in
any such case described in clause (i) or (ii), in your judgment
makes it impracticable or inadvisable to proceed with the public
offering or the delivery of the Designated Securities on the
terms and in the manner contemplated in the Prospectus as
amended or supplemented;
(g) Subsequent to the date of the Pricing
Agreement relating to such Designated Securities, no downgrading
shall have occurred in the rating accorded to Sears senior debt
securities by Moody's Investors Service, Inc. ("Moody's") or
Standard & Poor's Ratings Services ("Standard & Poor's");
provided, however, that this subdivision (g) shall not apply to
any such rating agencies which shall have notified you of the
rating of the Designated Securities prior to the execution of the
Pricing Agreement;
(h) Subsequent to the date of the Pricing
Agreement relating to such Designated Securities neither (i) the
United States shall have become engaged in the outbreak or
escalation of hostilities involving the United States or there
has been a declaration by the United States of a national
emergency or a declaration of war, (ii) a banking moratorium
shall have been declared by either Federal or New York State
authorities, nor (iii) trading in securities generally on the New
York Stock Exchange shall have been suspended or limited or
minimum prices shall have been established by such Exchange, any
of which events, in your judgment, renders it inadvisable to
proceed with the public offering or the delivery of the
Designated Securities;
(i) At or prior to the Time of Delivery, the
Certificates shall be assigned the ratings by Moody's and
Standard & Poor's set forth in the Pricing Agreement;
(j) The Company shall have furnished or caused to
be furnished to you at the Time of Delivery for the Designated
Securities certificates satisfactory to you as to the accuracy at
and as of such Time of Delivery of the representations,
warranties and agreements of the Company herein and as to the
performance by the Company of all its obligations hereunder to be
performed at or prior to such Time of Delivery and the
Company shall have also furnished you similar certificates
satisfactory to you as to the matters set forth in subdivision
(a) of this Section 7; and
(k) Counsel to the Company shall have furnished
to the Underwriters a letter stating that the Underwriters may
rely on the opinions of such counsel to the Company as delivered
to Moody's and Standard & Poor's in connection with the rating of
the Securities.
8. (a) The Company and Sears will jointly and
severally indemnify and hold harmless each Underwriter against
any losses, claims, damages or liabilities, joint or several, to
which such Underwriter may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus, the Registration
Statement, any prospectus relating to the Securities or the
Prospectus as amended or supplemented, or any amendment or
supplement thereto furnished by the Company, 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 (in the case of
the Registration Statement or the Prospectus as amended or
supplemented, or any amendment or supplement thereto) necessary
to make the statements therein not misleading or (in the case of
any Preliminary Prospectus) necessary to make the statements
therein, in the light of the circumstances under which they were
made, not misleading; and will reimburse each Underwriter for any
legal or other expenses reasonably incurred by such
Underwriter in connection with investigating or defending any
such action or claim; provided, however, that neither the
Company nor Sears shall be liable in any such case to the extent
that any such loss, claim, damage or liability arises out of or
is based upon an untrue statement or alleged untrue statement or
omission or alleged omission made in any Preliminary Prospectus,
the Registration Statement, the Prospectus or the Prospectus as
amended or supplemented or any such amendment or supplement in
reliance upon and in conformity with written information
furnished to the Company by any Underwriter of Designated
Securities through you expressly for use in the Prospectus as
amended or supplemented relating to such Securities; and
provided, further, that neither the Company nor Sears shall be
liable to any Underwriter or any person controlling such
Underwriter under the indemnity agreement in this subdivision (a)
with respect to the Preliminary Prospectus or the Prospectus or
the Prospectus as amended or supplemented, as the case may be, to
the extent that any such loss, claim, damage or liability of such
Underwriter or controlling person results solely from the fact
that such Underwriter sold Designated Securities to a person to
whom there was not sent or given, at or prior to the written
confirmation of such sale, a copy of the Prospectus (excluding
documents incorporated by reference) or of the
Prospectus as then amended or supplemented (excluding documents
incorporated by reference) if the Company has previously
furnished copies thereof to such Underwriter.
(b) Each Underwriter will indemnify and hold
harmless the Company and Sears against any losses, claims,
damages or liabilities to which the Company or Sears may become
subject, under the Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained in any Preliminary
Prospectus, the Registration Statement, the Prospectus, or the
Prospectus as amended or supplemented, or any amendment 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 (in the case of the
Registration Statement or the Prospectus or the Prospectus as
amended or supplemented, or any amendment or supplement thereto)
necessary to make the statements therein not misleading or (in
the case of any Preliminary Prospectus) necessary to make the
statements therein, in the light of the circumstances under which
they were made, not misleading in each case to the extent, but
only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in any
Preliminary Prospectus, the Registration Statement, the
Prospectus, or the Prospectus as amended or supplemented, or any
such amendment or supplement in reliance upon and in conformity
with written information furnished to the Company by such
Underwriter through you expressly for use therein; and will
reimburse the Company for any legal or other expenses reasonably
incurred by the Company in connection with investigating or
defending any such action or claim.
(c) Within a reasonable period after receipt by
an indemnified party under subdivision (a) or (b) above of notice
of the commencement of any action with respect to which
indemnification is sought under such subdivision or contribution
may be sought under subdivision (d) below, such indemnified party
shall notify the indemnifying party in writing of the
commencement thereof. In case any such action shall be brought
against any indemnified party, the indemnifying party shall be
entitled to participate in, and, to the extent that it shall
wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel
satisfactory to such indemnified party, and after notice from the
indemnifying party to such indemnified party of its election so
to assume the defense thereof, the indemnifying party shall not
be liable to such indemnified party for any legal or other
expenses subsequently incurred by such indemnified party in
connection with the defense thereof other than reasonable costs
of investigation.
(d) If the indemnification provided for in this
Section 8 is unavailable to an indemnified party under
subdivision (a) or (b) above in respect of any losses, claims,
damages or liabilities (or actions in respect thereof) referred
to therein, then each indemnifying party shall contribute to the
amount paid or payable by such indemnified party as a result of
such losses, claims, damages or liabilities (or actions in
respect thereof) in such proportion as is appropriate to reflect
the relative benefits received by the Company on the one hand and
the Underwriters of the Designated Securities on the other from
the offering of the Designated Securities to which such loss,
claim, damage or liability (or actions in respect thereof)
relates and also the relative fault of the Company on the one
hand and the Underwriters of the Designated Securities on the
other in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities (or
actions in respect thereof), as well as any other relevant
equitable considerations. The relative benefits received by the
Company on the one hand and such Underwriters on the other shall
be deemed to be in the same proportion as the total net proceeds
from the offering of such securities (before deducting expenses)
received by the Company bear to the total underwriting discounts
and commissions received by the Underwriters, in each case as set
forth on the cover page of the Prospectus as amended or
supplemented. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information
supplied by the Company on the one hand or the Underwriters on
the other and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement
or omission of the Company on the one hand or the Underwriters,
directly or through you, on the other hand. With respect to any
Underwriter, such relative fault shall also be determined by
reference to the extent (if any) to which such losses, claims,
damages or liabilities (or actions in respect thereof) with
respect to any Preliminary Prospectus result from the fact that
such Underwriter sold Designated Securities to a person to whom
there was not sent or given, at or prior to the written
confirmation of such sale, a copy of the Prospectus (excluding
documents incorporated by reference) or of the Prospectus as then
amended or supplemented (excluding documents incorporated by
reference) if the Company has previously furnished copies thereof
to such Underwriter. The Company, Sears and the
Underwriters agree that it would not be just and equitable if
contribution pursuant to this subdivision (d) were determined by
per capita allocation among the indemnifying parties (even if the
Underwriters were treated as one entity for such purpose) or by
any other method of allocation which does not take account of the
equitable considerations referred to above in this
subdivision (d). The amount paid or payable by an indemnified
party as a result of the losses, claims, damages or liabilities
(or actions in respect thereof) referred to above in this
subdivision (d) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or
claim. Notwithstanding the provisions of this subdivision (d),
no Underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which the
applicable Designated Securities underwritten by it and
distributed to the public were offered to the public exceeds the
amount of any damages which such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f)
of the Act) shall be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation. The
obligations of the Underwriters in this subdivision (d) to
contribute are several in proportion to their respective
underwriting obligations and not joint.
(e) The obligations of the Company and Sears
under this Section 8 shall be in addition to any liability which
the Company and Sears may otherwise have and shall extend, upon
the same terms and conditions, to each person, if any, who
controls any Underwriter within the meaning of the Act; and the
obligations of the Underwriters under this Section 8 shall be in
addition to any liability which the respective Underwriters may
otherwise have and shall extend, upon the same terms and
conditions, to each officer and director of the Company and to
each person, if any, who controls the Company within the meaning
of the Act.
9. (a) If any Underwriter shall default in its
obligation to purchase the Designated Securities which it has
agreed to purchase hereunder and under the Pricing Agreement
relating to such Designated Securities, you may in your
discretion arrange for yourselves or another party or other
parties to purchase such Designated Securities on the terms
contained herein. If within thirty-six hours after such default
by any Underwriter you do not arrange for the purchase of such
Designated Securities, then the Company shall be entitled to a
further period of thirty-six hours within which to procure
another party or other parties to purchase such Designated
Securities on such terms. In the event that, within the
respective prescribed periods, you notify the Company that you
have so arranged for the purchase of such Designated Securities,
or the Company notifies you that it has so arranged for the
purchase of such Designated Securities, you or the Company shall
have the right to postpone the Time of Delivery for such
Designated Securities for a period of not more than seven days,
in order to effect whatever changes may thereby be made necessary
in the Registration Statement or the Prospectus as amended or
supplemented, or in any other documents or arrangements, and the
Company agrees to file promptly any amendments or supplements to
the Registration Statement or the Prospectus which may thereby be
made necessary. The term "Underwriter" as used in this
Agreement shall include any person substituted under this
Section with like effect as if such person had originally been a
party to this Agreement with respect to such Designated
Securities.
(b) If, after giving effect to any arrangements
for the purchase of the Designated Securities of a defaulting
Underwriter or Underwriters by you and the Company as provided in
subdivision (a) above, the aggregate principal amount of such
Designated Securities which remains unpurchased does not exceed
one-eleventh of the aggregate principal amount of the Designated
Securities, then the Company shall have the right to require each
non-defaulting Underwriter to purchase the principal amount of
Securities which such Underwriter agreed to purchase
hereunder and under the Pricing Agreement relating to such
Designated Securities and, in addition, to require each
non-defaulting Underwriter to purchase its pro rata share (based
on the principal amount of the Designated Securities which such
Underwriter agreed to purchase hereunder and under such Pricing
Agreement) of the Designated Securities of such defaulting
Underwriter or Underwriters for which such arrangements have not
been made; but nothing herein shall relieve a defaulting
Underwriter from liability for its default.
(c) If, after giving effect to any arrangements
for the purchase of the Designated Securities of a defaulting
Underwriter or Underwriters by you and the Company as provided in
subdivision (a) above, the aggregate principal amount of
Designated Securities which remains unpurchased exceeds
one-eleventh of the aggregate principal amount of the Designated
Securities, as referred to in subdivision (b) above, or if the
Company shall not exercise the right described in subdivision
(b) above to require non-defaulting Underwriters to purchase
Designated Securities of a defaulting Underwriter or
Underwriters, then the Pricing Agreement relating to such
Designated Securities shall thereupon terminate, without
liability on the part of any non-defaulting Underwriter or the
Company, except for the expenses to be borne by the Company and
the Underwriters as provided in Section 6(e) hereof and the
indemnity and contribution agreements in Section 8 hereof; but
nothing herein shall relieve a defaulting Underwriter from
liability for its default.
10. The respective indemnities, agreements,
representations, warranties and other statements of the Company,
Sears and the several Underwriters, as set forth in this
Agreement or made by or on behalf of them, respectively, pursuant
to this Agreement, shall remain in full force and effect,
regardless of any investigation (or any statement as to the
results thereof) made by or on behalf of any Underwriter or any
controlling person of any Underwriter, or the Company, or any
officer or director or controlling person of the Company, and
shall survive delivery of and payment for the Securities.
Anything herein to the contrary notwithstanding, the
indemnity agreement of the Company and Sears in subdivisions (a)
and (e) of Section 8 hereof, the representations and warranties
in subdivisions (b) and (c) of Section 2 hereof and any
representation or warranty as to the accuracy of the
Registration Statement or the Prospectus as amended or
supplemented contained in any certificate furnished by the
Company pursuant to subdivision (i) of Section 7 hereof, insofar
as they may constitute a basis for indemnification for
liabilities (other than payment by the Company and Sears of
expenses incurred or paid in the successful defense of any
action, suit or proceeding) arising under the Act, shall not
extend to the extent of any interest therein of an Underwriter or
a controlling person of an Underwriter if a director, officer or
controlling person of the Company when the Registration
Statement becomes effective or a person who, with his consent, is
named in the Registration Statement as being about to become a
director of the Company, is a controlling person of such
Underwriter, except in each case to the extent that an interest
of such character shall have been determined by a court of
appropriate jurisdiction as not against public policy as
expressed in the Act. Unless in the opinion of counsel for the
Company and Sears the matter has been settled by controlling
precedent, the Company and Sears will, if a claim for such
indemnification is asserted, submit to a court of appropriate
jurisdiction the question whether such interest is against
public policy as expressed in the Act and will be governed by the
final adjudication of such issue.
11. If any Pricing Agreement shall be terminated
pursuant to Section 9 hereof, the Company shall not then be under
any liability to any Underwriter with respect to the Designated
Securities covered by such Pricing Agreement except as provided
in Section 6(e) and Section 8 hereof; but, if for any other
reason any Designated Securities are not delivered by or on
behalf of the Company as provided herein, the Company and Sears
will reimburse the Underwriters through you for all
out-of-pocket expenses approved in writing by you, including fees
and disbursements of counsel, reasonably incurred by the
Underwriters in making preparations for the purchase, sale and
delivery of such Designated Securities, but neither the Company
nor Sears shall then be under any further liability to any
Underwriter with respect to such Designated Securities except as
provided in Section 6(e) and Section 8 hereof.
12. In all dealings hereunder, you shall act on behalf
of each of the Underwriters of Designated Securities, and the
parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any
Underwriter made or given by you.
All statements, requests, notices and agreements
hereunder shall be in writing or by telegram or facsimile
transmission if promptly confirmed in writing and if to the
Underwriters shall be sufficient in all respects, if delivered or
sent by registered mail to the representative of the Underwriters
named in the Pricing Agreement at the address named therein; and
if to the Company or Sears shall be sufficient in all respects if
delivered or sent by registered mail to the Company at 3711
Kennett Pike, Greenville, Delaware 19807, Attention: Secretary.
13. This Agreement and each Pricing Agreement shall be
binding upon, and inure solely to the benefit of, the
Underwriters, Sears, the Company and, to the extent provided in
Section 8 and Section 10 hereof, the officers and directors of
the Company and each person who controls the Company or any
Underwriter, and their respective heirs, executors,
administrators, successors and assigns, and no other person shall
acquire or have any right under or by virtue of this Agreement or
any such Pricing Agreement. No purchaser of any of the
Securities from any Underwriter shall be deemed a successor or
assign by reason merely of such purchase.
14. Time shall be of the essence of this Agreement and
each Pricing Agreement.
15. This Agreement and each Pricing Agreement shall be
construed in accordance with the laws of the State of New York.
In the event of any conflict between this Agreement and the
Pricing Agreement, the Pricing Agreement shall govern.
16. This Agreement and each Pricing Agreement may be
executed by any one or more of the parties hereto and thereto in
any number of counterparts, each of which shall be deemed to be
an original, but all such respective counterparts shall together
constitute one and the same instrument.<PAGE>
If the foregoing is in accordance with your
understanding, please sign and return ten counterparts hereof and
upon the acceptance hereof by you, on behalf of each of the
Underwriters, this letter and such acceptance hereof shall
constitute a binding agreement between each of the Underwriters and the
Company.
Very truly yours,
SEARS RECEIVABLES FINANCING GROUP, INC.
By:
SEARS, ROEBUCK AND CO.
By:
Accepted as of the date hereof:
CS First Boston Corporation
___________________________________
Authorized Signatory
As Representative of the several Underwriters
<PAGE>
SEARS CREDIT ACCOUNT MASTER TRUST II
MASTER TRUST CERTIFICATES
PRICING AGREEMENT
Dated: _____________, 19__
To: Sears Receivables Financing Group, Inc., as Seller under the
Pooling and Servicing Agreement dated as of July 31, 1994, as
amended.
Re: Underwriting Agreement dated _____________, 19__
Title: Sears Credit Account Master Trust II, $______________
_______ Class ____, Master Trust Certificates, Series ____.
Initial Principal Amount of Certificates: $_______________
[State by Class if more than one Class]
Class A Expected Final Payment Date: __________________
Class B Expected Final Payment Date: __________________
Series and Class Designation Schedule: [insert relevant
description of Series and Classes of Certificates]
Series Cut-Off Date: The last day of the Due Period ending in
__________________
Certificate Rating: [" " by Moody's Investors Service, Inc.]
[" " by Standard and Poor's Ratings Services] [State by Class
if more than one Class]
Aggregate outstanding balance of Principal Receivables as of the
last day of the Due Period ending in ________________.
Date of Series Supplement: ____________, 199_.
Certificate Rate: ____% per annum. [State by Class if more than
one Class]
Terms of Sale: The purchase price for the Designated Securities
to the Underwriter[s] will be ____% of the aggregate principal
amount of the Certificates as of __________, 19__, plus accrued
interest at the Certificate Rate from ____________, 19__.
[State by Class if more than one Class.]
Initial Public Offering Price: The initial public offering price
for the Designated Securities will be ___% of the
aggregate principal amount of the Certificates as of
___________, 199_, plus accrued interest at the Certificate Rate
from _______________, 199_ [State by Class if more than one
Class.]
Closing Location: [Sears, Roebuck and Co., 3333 Beverly Road,
Hoffman Estates, Illinois 60179]
Time of Delivery: __:__ A.M., New York Time, on ___________,
19__, or at such other time as may be agreed upon in writing.
Address of Representative of the Underwriters for notices:
Notwithstanding anything in the Agreement or in this
Pricing Agreement to the Contrary, the Agreement and this Pricing
Agreement constitute the entire agreement and understanding among
the parties hereto with respect to the purchase and sale of the
Series ____-_ Certificates. This Pricing Agreement may be
amended only by written agreement of the parties hereto.
The Underwriters [named in Schedule 1 hereto agree,
severally and not jointly], subject to the terms and provisions
of the Agreement, which is incorporated by reference herein and
made a part hereof, to purchase the principal amount of
Designated Securities [set forth opposite their names in Schedule
1].
Very truly yours,
[UNDERWRITERS]
By:
By: ________________________________
On behalf of each of the Underwriters
Accepted:
SEARS RECEIVABLES FINANCING
GROUP, INC.
By: __________________________
<PAGE>
SCHEDULE I
Principal Principal
Amount of Amount of
Class _ Class _
Certificates Certificates
to be to be
Underwriter Purchased Purchased
. . . . . . . . . . .. $ $ . . . .
. . . . . . . . .. .. $ $
. . . . . . . . . . . . $ $
. . . . . . . . . . . . $ $
Total $ $
Exhibit 1.2
SEARS CREDIT ACCOUNT MASTER TRUST II
Master Trust Certificates
Underwriting Agreement
October 17, 1996
CS First Boston Corporation
55 East 52nd Street
New York, New York 10055--0186
Ladies and Gentlemen:
Sears Receivables Financing Group, Inc. (the
"Company"), as originator of Sears Credit Account Master Trust II
(the "Trust") and holder of the Seller Certificate, proposes,
subject to the terms and conditions stated herein, to cause to be
issued and sold from time to time certain of the Master Trust
Certificates registered under the registration statement referred
to in Section 2(a) (the "Securities"). The Company intends to
enter into one or more Pricing Agreements (each a "Pricing
Agreement") in the form attached hereto, with such additions and
deletions as the parties thereto may determine, and, subject to
the terms and conditions stated herein and therein, to issue and
sell to the firm or firms named in Schedule I to the applicable
Pricing Agreement (such firm or firms constituting the
"Underwriters" with respect to such Pricing Agreement and the
securities specified therein) the Securities specified in such
Pricing Agreement (with respect to such Pricing Agreement, the
"Designated Securities"). The Designated Securities will be
issued by the Trust pursuant to a Pooling and Servicing
Agreement, dated as of July 31, 1994, as amended (the "Pooling
and Servicing Agreement"), as supplemented by a Series
Supplement (the "Series Supplement") relating to the specific
series of Certificates issued thereunder, by and among the
Company as Seller, Sears, Roebuck and Co. ("Sears") as Servicer
and The First National Bank of Chicago as Trustee (the
"Trustee"). To the extent not defined herein, the capitalized
terms used herein have the meanings assigned in the Pooling and
Servicing Agreement or the Series Supplement, as the case may be.
1. Particular sales of Designated Securities may be
made from time to time to the Underwriters of such Securities,
for whom you will act as representatives. This Underwriting
Agreement shall not be construed as an obligation of the Company
to sell or cause to be sold any of the Securities or as an
obligation of any of the Underwriters to purchase the Securities.
The obligation of the Company to cause to be issued and sold any
of the Securities and the obligation of any of the Underwriters
to purchase any of the Securities shall be evidenced by the
Pricing Agreement with respect to the Designated Securities
specified therein. Each Pricing Agreement shall specify the
initial principal amount of such Designated Securities, the
public offering price of such Designated Securities or the method
by which the price at which such Securities will be sold will be
determined, the purchase price to the Underwriters of such
Designated Securities, the names of the Underwriters of such
Designated Securities and the principal amount of such
Designated Securities to be purchased by each Underwriter and
shall set forth the date, time and manner of delivery of such
Designated Securities and payment therefor. The Pricing
Agreement shall also describe, in a manner consistent with the
Pooling and Servicing Agreement, the Series Supplement relating
to the Designated Securities, and the registration statement and
prospectus with respect thereto, the principal terms of such
Designated Securities. A Pricing Agreement shall be in the form
of an executed writing (which may be in counterparts), and may
be evidenced by an exchange of telegraphic communications or any
other rapid transmission device designed to produce a written
record of communications transmitted. The obligations of the
Underwriters under this Agreement and each Pricing Agreement
shall be several and not joint.
2. The Company represents and warrants to, and agrees
with, each of the Underwriters that:
(a) A registration statement in respect of the
Securities has been filed with the Securities and Exchange
Commission (the "Commission"); such registration statement and
any post-effective amendment thereto, each in the form heretofore
delivered or to be delivered to you, excluding exhibits to such
registration statement, but including all documents incorporated
by reference in the prospectus included therein, to you for each
of the other Underwriters have been declared effective by the
Commission in such form (any preliminary prospectus included in
such registration statement being hereinafter called a
"Preliminary Prospectus;" the various parts of such registration
statement, including all exhibits thereto, each as amended at
the time such part became effective, being hereinafter
collectively called the "Registration Statement;" the prospectus
relating to the Securities, in the form in which it has most
recently been filed with the Commission on or prior to the date
of this Agreement, being hereinafter called the "Prospectus;"
any reference herein to any Preliminary Prospectus or the
Prospectus shall be deemed to include the documents, if any,
incorporated by reference therein pursuant to the applicable
form under the Securities Act of 1933, as amended (the "Act"),
as of the date of such Preliminary Prospectus or Prospectus, as
the case may be; any reference to any amendment or supplement to
any Preliminary Prospectus or the Prospectus shall be deemed to
include any documents filed after the date of such Preliminary
Prospectus or Prospectus, as the case may be, under the
Securities Exchange Act of 1934, as amended (the "Exchange Act")
and so incorporated by reference; and any reference to the
Prospectus as amended or supplemented shall be deemed to refer
to the Prospectus as amended or supplemented in relation to the
applicable Designated Securities in the form in which it is
first filed with the Commission pursuant to Rule 424(b) of
Regulation C under the Act, including any documents incorporated
by reference therein as of the date of such filing);
(b) Except for statements in such documents which
do not constitute part of the Registration Statement or the
Prospectus pursuant to Rule 412 of Regulation C under the Act and
after substituting therefor any statements modifying or
superseding such excluded statements (i) the documents
incorporated by reference in the Prospectus, when they became
effective or were filed with the Commission, as the case may be,
conformed in all material respects to the requirements of the Act
or the Exchange Act, as applicable, and the rules and regulations
of the Commission thereunder, and none of such documents, when
they became effective or were so filed, as the case may be,
contained, in the case of documents which became effective under
the Act, 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, and, in the case
of documents which were filed under the Exchange Act with the
Commission, an untrue statement of a material fact or omitted 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, and (ii) any further documents so filed
and incorporated by reference when they become effective or are
filed with the Commission, as the case may be, will conform in
all material respects to the requirements of the Act or the
Exchange Act, as applicable, and the rules and regulations of
the Commission thereunder and will not contain, in the case of
documents which become effective under the Act, an untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the
statements therein not misleading, and, in the case of documents
which are filed under the Exchange Act with the Commission, an
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 are made, not
misleading; provided, however, that this representation and
warranty shall not apply to any statements or omissions made in
reliance upon and in conformity with information furnished in
writing to the Company by an Underwriter of Designated
Securities through you expressly for use therein;
(c) Except for statements in documents
incorporated therein by reference which do not constitute part of
the Registration Statement or the Prospectus pursuant to Rule 412
of Regulation C under the Act and after substituting therefor any
statements modifying or superseding such excluded statements, the
Registration Statement and the Prospectus conformed, and any
amendments or supplements thereto will, when they become
effective or are filed with the Commission, as the case may be,
conform, in all material respects to the requirements of the Act
and the rules and regulations of the Commission thereunder and
did not, and will not, as of the applicable effective date as to
the Registration Statement and as of the applicable filing date
as to the Prospectus, contain an untrue statement of a material
fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not
misleading; provided, however, that this representation and
warranty shall not apply to any statements or omissions made in
reliance upon and in conformity with information furnished in
writing to the Company by an Underwriter of Designated
Securities through you expressly for use in the Prospectus as
amended or supplemented relating to such Securities.
(d) Upon payment therefor as provided herein and
in the Pricing Agreement relating to Designated Securities, such
Designated Securities will have been duly and validly authorized
and (assuming their due authentication by the Trustee) will have
been duly and validly issued, and will be entitled to the
benefits of the Pooling and Servicing Agreement and the Series
Supplement.
(e) The issue and sale of the Designated
Securities pursuant to any Pricing Agreement and the compliance
by the Company with all of the provisions of the Designated
Securities, the Pooling and Servicing Agreement, the Series
Supplement, the First Amended and Restated Purchase Agreement
dated as of July 31, 1994, as amended (the "Purchase Agreement"),
by and between the Company and Sears, the First Amended and
Restated Contribution Agreement dated as of July 31, 1994 (the
"Contribution Agreement"), by and between the Company and Sears,
the Receivables Warehouse Agreement dated as of December 21, 1995
(the "Receivables Warehouse Agreement"), by and between the
Company and Sears, this Agreement and such Pricing Agreement
will not (i) conflict with or result in any breach which would
constitute a material default under, or, except as contemplated
by the Pooling and Servicing Agreement or the Series Supplement,
result in the creation or imposition of any lien, charge or
encumbrance upon any of the property or assets of the Company
material to the Company, pursuant to the terms of, any
indenture, loan agreement or other agreement or instrument for
borrowed money to which the Company is a party or by which the
Company may be bound or to which any of the property or assets
of the Company may be bound or to which any of the property or
assets of the Company, material to the Company, is subject, (ii)
result in any violation of the provisions of the Certificate of
Incorporation or By-Laws of the Company or, (iii) to the best of
the Company's knowledge, result in any material violation of any
statute or any order, rule or regulation applicable to the
Company of any court or any federal, state or other regulatory
authority or other governmental body having jurisdiction over
the Company.
(f) No consent, approval, authorization or other
order of, or filing with, any court or any Federal, State or
other regulatory authority or other governmental body having
jurisdiction over the Company is required for the issue and sale
of the Securities except as may be required under the Act, the
Exchange Act, and securities laws of the various states and other
jurisdictions which are applicable to the issue and sale of the
Designated Securities and except for the filing of any financing
or continuation statement required to perfect or continue the
Trust's and the Company's respective interests in the
Receivables.
(g) The compliance by Sears with all of the
provisions of the Pooling and Servicing Agreement, the Series
Supplement, the Assignment of Accounts and Sale of Receivables
Agreement, dated as of September 15, 1994, as amended between
Sears National Bank (the "Bank") and Sears (the "Bank Assignment
Agreement"), the Purchase Agreement, the Contribution Agreement,
the Receivables Warehouse Agreement and this Agreement will not
(i) conflict with or result in any breach which would constitute
a material default under, or, except as contemplated by the
Pooling and Servicing Agreement, the Series Supplement, the Bank
Assignment Agreement, the Purchase Agreement and the Contribution
Agreement, result in the creation or imposition of any lien,
charge or encumbrance upon any of the property or assets of
Sears or any subsidiary thereof, material to Sears and its
subsidiaries (whether or not consolidated) considered as a
whole, pursuant to the terms of, any indenture, loan agreement
or other agreement or instrument for borrowed money to which
Sears and the Company, Sears Roebuck Acceptance Corp., Sears DC
Corp., Sears National Bank or Sears Overseas Finance N.V.
(collectively, the "Designated Subsidiaries") is a party or by
which Sears or any Designated Subsidiary may be bound or to
which any of the property or assets of Sears or any Designated
Subsidiary, material to Sears and its subsidiaries (whether or
not consolidated) considered as a whole, is subject, (ii) result
in any violation of the provisions of the Restated Certificate
of Incorporation, as amended, or the By-Laws of Sears or, (iii)
to the best of the Company's knowledge, result in any material
violation of any statute or any order, rule or regulation
applicable to Sears of any court or any Federal, State or other
regulatory authority or other governmental body having
jurisdiction over Sears;
(h) The Principal Receivables conveyed by the
Company to the Trust under the Pooling and Servicing Agreement
had an aggregate outstanding balance determined as of the date
set forth in the Pricing Agreement of not less than the amount
set forth in the Pricing Agreement; and
(i) The Pooling and Servicing Agreement is not
required to be qualified under the Trust Indenture Act of 1939,
as amended (the "Trust Indenture Act"), and the Trust is not
required to be registered under the Investment Company Act of
1940, as amended (the "Investment Company Act").
3. Subject to the terms and conditions herein set
forth, the Company agrees to cause to be issued and sold to each
of the Underwriters, and each of the Underwriters agrees,
severally and not jointly, to purchase from the Company, at the
purchase price specified in the Pricing Agreement applicable to
any Designated Securities, the principal amount of Designated
Securities set forth in such Pricing Agreement.
4. (a) Upon the execution of the Pricing Agreement
applicable to any Designated Securities and the authorization by
you of the release of the Designated Securities, the several
Underwriters propose to offer the Designated Securities for sale
upon the terms and conditions set forth in the Prospectus as
amended or supplemented.
(b) Each Underwriter represents and agrees that
it will not offer or sell or deliver any of the Securities in any
jurisdiction except under circumstances that will result in
compliance with the applicable laws thereof.
(c) Each Underwriter represents and agrees that
it will not, at any time that such Underwriter is acting as an
"underwriter" (as defined in Section 2(11) of the Act) with
respect to any Designated Securities, transfer, deposit or
otherwise convey any such Designated Securities into a trust or
other type of special purpose vehicle that issues securities or
other instruments backed in whole or in part by, or that
represents interests in, such Designated Securities without the
prior written consent of the Company.
5. Unless otherwise specified in the Pricing
Agreement, Designated Securities to be purchased by each
Underwriter pursuant to the Pricing Agreement relating thereto
shall be delivered by or on behalf of the Company to you for the
account of such Underwriter, against payment by such Underwriter
or on its behalf of the purchase price thereof by wire transfer
to such account as the Company may designate of federal or other
immediately available funds. The place, time and date of such
delivery shall be set forth in the Pricing Agreement or at such
other place, time and date as you and the Company may agree upon
in writing, such time and date being herein called the "Time of
Delivery." Unless otherwise specified in the Pricing Agreement,
the Securities shall be represented by definitive certificates
registered in the name of Cede & Co., as nominee for The
Depository Trust Company. Such definitive certificates will be
made available for inspection at least twenty-four hours prior
to the Time of Delivery at the office of The First National Bank
of Chicago, One North State Street, 9th Floor, Chicago, Illinois
60602.
6. The Company agrees with each of the Underwriters
of Designated Securities:
(a) Immediately following the execution of each
Pricing Agreement, the Company will prepare a Prospectus
Supplement setting forth the amount of Securities covered thereby
and the terms thereof not otherwise specified in the Prospectus,
the price at which such Securities are to be purchased by the
Underwriters from the Company, either the initial public
offering price or the method by which the price at which such
Securities are to be sold will be determined, the selling
concessions and allowances, if any, and such other information
as the Company deems appropriate in connection with the offering
of such Securities, and after the date of the Pricing Agreement
relating to such Securities and prior to the Time of Delivery
for such Securities the Company will not make any further
amendment or any supplement to the Registration Statement or
Prospectus as amended or supplemented without first having
furnished you with a copy of the proposed form thereof and given
you a reasonable opportunity to review the same; to advise you
promptly of any such amendment or supplement after such Time of
Delivery and to furnish you with copies thereof for so long as
the delivery of a prospectus is required in connection with the
offering or sale of such Securities; and during such same period
to advise you, promptly after it receives notice thereof, of the
time when the Registration Statement, or any amendment thereto,
or any amended Registration Statement has become effective or
any supplement to the Prospectus or any amended Prospectus has
been filed, of the issuance by the Commission of any stop order
or of any order preventing or suspending the use of any
Prospectus, or the suspension of the qualification of such
Securities for offering or sale in any jurisdiction, or the
initiation or threatening of any proceeding for any such
purpose, or of any request by the Commission for the amending or
supplementing of the Registration Statement or Prospectus or for
additional information; and in the event of the issuance of any
such stop order or of any such order preventing or suspending
the use of any such Prospectus or suspending any such
qualification, to use promptly its best efforts to obtain its
withdrawal;
(b) Promptly from time to time to take such
action as you may reasonably request to qualify the Securities
for offering and sale under the securities laws of such
jurisdictions as you may request and to comply with such laws so
as to permit the continuance of sales and dealings therein in
such jurisdictions for as long as may be necessary to complete
the distribution of such Securities, provided, that in connection
therewith the Company shall not be required to qualify as a
foreign corporation or to file a general consent to service of
process in any jurisdiction;
(c) To furnish the Underwriters with copies of
the Prospectus as amended or supplemented in such quantities as
you may from time to time reasonably request and if at any time
the delivery of a prospectus is required by law in connection
with the offering or sale of such Securities and if at such time
any event shall have occurred as a result of which the Prospectus
as amended or supplemented would include an untrue statement of a
material fact or omit to state any material fact necessary in
order to make the statements therein, in the light of the
circumstances under which they were made when such Prospectus is
delivered, not misleading, or, if for any other reason it shall
be necessary during such same period to amend or supplement the
Prospectus in order to comply with the Act, to notify you and to
prepare and furnish without charge to each Underwriter and to
any dealer in securities as many copies as you may from time to
time reasonably request of an amended Prospectus or a supplement
to the Prospectus which will correct such statement or omission
or effect such compliance and in case any Underwriter is
required to deliver a prospectus in connection with sales of any
Securities at any time nine months or more after the effective
date of the Registration Statement, upon your request but at the
expense of such Underwriter, to prepare and deliver to such
Underwriter as many copies as you may request of an amended or
supplemented Prospectus complying with Section 10(a)(3) of the
Act;
(d) To cause the Trust to make generally
available to holders of the Securities, in accordance with Rule
158 under the Act or otherwise, as soon as practicable, but in
any event not later than forty-five days after the end of the
fourth full fiscal quarter (ninety days in the case of the last
fiscal quarter in any fiscal year) following the fiscal quarter
ending after the effective date of the Registration Statement, an
earning statement of the Trust (which need not be audited)
complying with Section 11(a) of the Act and covering a period of
at least twelve consecutive months beginning after the effective
date of such Registration Statement;
(e) To pay or cause to be paid all expenses
incident to the performance of its obligations hereunder,
including the cost of all qualifications of the Securities under
state securities laws (including reasonable fees of counsel to
the Underwriters in connection with such qualifications and in
connection with legal investment surveys) and the cost of
printing this Agreement and any blue sky and legal investment
memoranda.
The Company and Sears agree with each of the
Underwriters during the period beginning from the date of the
Pricing Agreement and continuing to and including the earlier of
(i) the termination of trading restrictions on the Designated
Securities, of which termination you agree to give the Company
prompt notice confirmed in writing, and (ii) the Time of
Delivery, not to offer, sell, contract to sell or otherwise
dispose of any securities of the Company or any other subsidiary
of Sears, or any other trust for which the Company or any other
subsidiary of Sears is depositor, which represent participation
interests in receivables arising under open end credit plans
offered by Sears, without your prior written consent, which
consent shall not be unreasonably withheld.
7. The obligations of the several Underwriters
hereunder and under the Pricing Agreement relating to Designated
Securities shall be subject, in their discretion, to the
condition that all representations and warranties and other
statements of the Company herein are, at and as of the Time of
Delivery for such Designated Securities, true and correct, the
condition that the Company shall have performed all of its
obligations hereunder theretofore to be performed, and the
following additional conditions:
(a) No stop order suspending the effectiveness of
the Registration Statement or any part thereof shall have been
issued and no proceeding for that purpose shall have been
initiated or threatened by the Commission; and all requests for
additional information on the part of the Commission shall have
been complied with to your reasonable satisfaction;
(b) All corporate proceedings and related matters
in connection with the organization of the Company, the validity
of the Bank Assignment Agreement, the Purchase Agreement, the
Contribution Agreement, the Receivables Warehouse Agreement, the
Pooling and Servicing Agreement and the Series Supplement and
the registration, authorization, issue, sale and delivery of the
Designated Securities shall have been satisfactory to counsel to
the Underwriters, and such counsel shall have been furnished
with such papers and information as they may reasonably have
requested to enable them to pass upon the matters referred to in
this subdivision (b);
(c) Counsel to the Company shall have furnished
to you such counsel's written opinion, dated the Time of
Delivery, in form and substance satisfactory to you in your
reasonable judgment, to the effect that:
(i) The Company and Sears have been duly
incorporated and are validly existing as corporations in good
standing under the laws of their respective states of
incorporation;
(ii) This Agreement and the Pricing Agreement
have been duly authorized, executed and delivered on the part of
the Company and Sears;
(iii) The issue and sale of the
Designated Securities and the compliance by the Company with all
of the provisions of the Designated Securities, this Agreement,
the Pricing Agreement, the Purchase Agreement, the Contribution
Agreement, the Receivables Warehouse Agreement, the Pooling and
Servicing Agreement and the Series Supplement will not (a)
conflict with or result in any breach which would constitute a
material default under, or, except as contemplated by the Pooling
and Servicing Agreement or the Series Supplement, result in the
creation or imposition of any lien, charge or encumbrance upon
any of the property or assets of the Company, material to the
Company, pursuant to the terms of, any indenture, loan agreement
or other agreement or instrument for borrowed money known to
such counsel to which the Company is a party or by which the
Company may be bound or to which any of the property or assets
of the Company, material to the Company, is subject, (b) result
in any violation of the provisions of the Certificate of
Incorporation or the By-Laws of the Company, or (c) to the best
knowledge of such counsel, result in any material violation of
any statute or any order, rule or regulation applicable to the
Company of any court or any Federal, State or other regulatory
authority or other governmental body having jurisdiction over
the Company, other than the Act, the Exchange Act, the Trust
Indenture Act and the Investment Company Act and the rules and
regulations under each such act and other than the securities
laws of the various states or other jurisdictions which are
applicable to the issue and sale of the Securities and other
than state laws pertaining to the perfection of security
interests;
(iv) To the best knowledge of such counsel,
no consent, approval, authorization or other order of, or filing
with, any court or any Federal, State or other regulatory
authority or other governmental body having jurisdiction over
Sears or the Company is required for the consummation by Sears
and the Company, as applicable, of the transactions contemplated
by the Bank Assignment Agreement, the Purchase Agreement, the
Contribution Agreement and the Receivables Warehouse Agreement
or for the issue and sale of the Securities except as may be
required under the Act, the Exchange Act, the Trust Indenture
Act and the Investment Company Act and securities laws of the
various states or other jurisdictions which are applicable to
the issue and sale of the Securities and except for the filing
of any financing or continuation statement required to perfect
the respective interests of the Trust, the Company and Sears in
the Receivables;
(v) The compliance by Sears with all of the
provisions of this Agreement, the Bank Assignment Agreement, the
Purchase Agreement, the Contribution Agreement, the Receivables
Warehouse Agreement, the Pooling and Servicing Agreement and the
Series Supplement will not (a) conflict with or result in any
breach which would constitute a material default under, or,
except as contemplated by the Bank Assignment Agreement, the
Pooling and Servicing Agreement, the Series Supplement, the
Purchase Agreement, the Receivables Warehouse Agreement or the
Contribution Agreement, result in the creation or imposition of
any lien, charge or encumbrance upon any of the property or
assets of Sears or any subsidiary thereof, material to Sears and
its subsidiaries (whether or not consolidated) considered as a
whole, pursuant to the terms of, any indenture, loan agreement
or other agreement or instrument for borrowed money known to
such counsel to which Sears or any Designated Subsidiary is a
party or by which Sears or any Designated Subsidiary may be
bound or to which any of the property or assets of Sears or any
Designated Subsidiary, material to Sears and its subsidiaries
(whether or not consolidated) considered as a whole, is subject,
(b) result in any violation of the provisions of the Restated
Certificate of Incorporation, or the By-Laws of Sears, or (c) to
the best knowledge of such counsel, result in any material
violation of any statute or any order, rule or regulation
applicable to Sears of any court or any Federal, State or other
regulatory authority or other governmental body having
jurisdiction over Sears, other than the Act, the Exchange Act,
the Trust Indenture Act and the Investment Company Act and the
rules and regulations under each such act and other than the
securities laws of the various states or other jurisdictions
which are applicable to the issue and sale of the Securities and
other than state laws pertaining to the perfection of security
interests;
(vi) Each of the Pooling and Servicing
Agreement, the Series Supplement, the Purchase Agreement, the
Contribution Agreement and the Receivables Warehouse Agreement
has been duly authorized, executed and delivered on the part of
the Company and Sears and, as to each of the Company and Sears,
is a valid and binding instrument enforceable in accordance with
its terms except as the foregoing may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws now or
hereafter in effect relating to creditors' rights generally or
general principles of equity (whether considered in a proceeding
at law or in equity) and the discretion of the court before
which any proceeding therefor may be brought; the Pooling and
Servicing Agreement is not required to be qualified under the
Trust Indenture Act; the Trust is not required to be registered
under the Investment Company Act; and the Securities have been
duly authorized and (assuming their due authentication by the
Trustee) have been duly executed, issued and delivered and
constitute valid and binding obligations of the Trust in
accordance with their terms, entitled to the benefits of the
Pooling and Servicing Agreement and the Series Supplement,
except as the foregoing may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws now or
hereafter in effect relating to creditors' rights generally or
general principles of equity (whether considered in a proceeding
at law or in equity) and the discretion of the court before
which any proceeding therefor may be brought;
(vii) The Bank Assignment Agreement has
been duly authorized, executed and delivered by Sears and, as to
Sears, is a valid and binding instrument enforceable in
accordance with its terms, except as the foregoing may be limited
by bankruptcy, insolvency, reorganization, moratorium or similar
laws now or hereafter in effect relating to creditors' rights
generally or general principles of equity (whether considered in
a proceeding at law or in equity) and the discretion of the court
before which any proceeding therefor may be brought;
(viii) Such counsel does not know of any
pending legal or governmental proceedings required to be
described in the Prospectus which are not described as required;
(ix) The documents incorporated by reference
in the Prospectus as amended or supplemented (other than
financial, statistical and accounting data therein, as to which
such counsel need express no opinion), when they became effective
or were filed with the Commission, as the case may be, complied
as to form in all material respects with the requirements of the
Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder;
(x) The Registration Statement and the
Prospectus as amended or supplemented (excluding the documents
incorporated by reference therein) (other than financial,
statistical and accounting data therein as to which such counsel
need express no opinion) comply as to form in all material
respects with the requirements of the Act and the rules and
regulations thereunder; and
(xi) Such counsel does not know of any
contract or other document to which the Company or Sears is a
party required to be filed as an exhibit to the Registration
Statement or required to be incorporated in the Prospectus as
amended or supplemented or required to be described in the
Prospectus as amended or supplemented which has not been so filed
or described.
In rendering such opinion, such counsel may rely to the
extent such counsel deems appropriate upon certificates of
officers or other executives of the Company or Sears, its
business groups and its subsidiaries and of public officials as
to factual matters and upon opinions of other counsel. Such
counsel shall also state that: (a) nothing has come to such
counsel's attention which has caused such counsel to believe that
any of the documents referred to in subdivision (ix) above (other
than financial, statistical and accounting data therein, as to
which such counsel need express no belief), in each case after
excluding any statement in any such document which does not
constitute part of the Registration Statement or the Prospectus
as amended or supplemented pursuant to Rule 412 of Regulation C
under the Act and after substituting therefor any statement
modifying or superseding such excluded statement, when they
became effective or were filed, as the case may be, contained,
in the case of documents which became effective under the Act,
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, and, in the case of
documents which were filed under the Exchange Act with the
Commission, an untrue statement of a material fact or omitted 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, and (b) nothing has come to such counsel's
attention which has caused such counsel to believe that the
Registration Statement or the Prospectus as amended or
supplemented (other than financial, statistical and accounting
data therein, as to which such counsel need express no belief)
contains an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary
to make the statements therein not misleading;
(d) Counsel to the Bank shall have furnished to
you such counsel's written opinion, dated the Time of Delivery,
in form and substance satisfactory to you in your reasonable
judgment, to the effect that:
(i) The Bank has been duly incorporated and
is validly existing as a national banking association in good
standing under the laws of the United States of America;
(ii) The compliance by the Bank with all of
the provisions of the Bank Assignment Agreement will not (a)
conflict with or result in any breach which would constitute a
material default, or except for that created by the Bank
Assignment Agreement, result in the creation or imposition of any
lien, charge or encumbrance upon any of the property or assets of
the Bank, material to the Bank, pursuant to the terms of, any
indenture, loan agreement or other agreement or instrument for
borrowed money known to such counsel to which the Bank is a
party, or by which the Bank may be bound, or to which any of the
property or assets of the Bank, material to the Bank, is subject,
(b) result in any violation of the provisions of the Articles of
Association or the By-Laws of the Bank, or (c) to the best
knowledge of such counsel, result in any material violation of
any statute or any order, rule or regulation applicable to the
Bank of any court or any Federal, State or other regulatory
authority or other governmental body having jurisdiction over
the Bank;
(iii) To the best knowledge of such
counsel, no consent, approval, authorization or other order of,
or filing with, any court or any Federal, State or other
regulatory authority or other governmental body having
jurisdiction over the Bank, which has not already been made or
obtained, is required for the consummation of the transactions
contemplated by the Bank Assignment Agreement, except for the
filing of any financing or continuation statement required to
perfect the interest of Sears in the Receivables; and
(iv) The Bank Assignment Agreement has been
duly authorized, executed and delivered on the part of the Bank
and, as to the Bank, is a valid and binding instrument
enforceable in accordance with its terms, except as the foregoing
may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws now or hereafter in effect relating to
creditors' rights generally, general principles of equity
(whether considered in a proceeding at law or in equity), or the
discretion of the court before which any proceeding therefor may
be brought.
In rendering such opinion, such counsel may rely to the
extent such counsel deems appropriate upon certificates of
officers or other executives of the Company or Sears, its
business groups and its subsidiaries and of public officials as
to factual matters and upon opinions of other counsel.
(e) At the Time of Delivery for such Designated
Securities, Deloitte & Touche shall have furnished to you a
letter or letters, dated the respective date of delivery thereof,
in form and substance satisfactory to you as to such matters as
you may reasonably request;
(f) (i) Sears and its subsidiaries (whether or
not consolidated) considered as a whole, shall not have
sustained, since the date of the latest audited financial
statement previously delivered to you, any material loss or
interference with its business from fire, explosion, flood or
other calamity, whether or not covered by insurance, or from any
labor dispute or court or governmental action, order or decree
and (ii) since the date of the Pricing Agreement there shall not
have been any material change in the capital stock accounts or
long-term debt of Sears or any material adverse change in the
general affairs, financial position, shareholders' equity or
results of operations of Sears and its subsidiaries (whether or
not consolidated) considered as a whole, the effect of which in
any such case described in clause (i) or (ii), in your judgment
makes it impracticable or inadvisable to proceed with the public
offering or the delivery of the Designated Securities on the
terms and in the manner contemplated in the Prospectus as
amended or supplemented;
(g) Subsequent to the date of the Pricing
Agreement relating to such Designated Securities, no downgrading
shall have occurred in the rating accorded to Sears senior debt
securities by Moody's Investors Service, Inc. ("Moody's") or
Standard & Poor's Ratings Services ("Standard & Poor's");
provided, however, that this subdivision (g) shall not apply to
any such rating agencies which shall have notified you of the
rating of the Designated Securities prior to the execution of the
Pricing Agreement;
(h) Subsequent to the date of the Pricing
Agreement relating to such Designated Securities neither (i) the
United States shall have become engaged in the outbreak or
escalation of hostilities involving the United States or there
has been a declaration by the United States of a national
emergency or a declaration of war, (ii) a banking moratorium
shall have been declared by either Federal or New York State
authorities, nor (iii) trading in securities generally on the New
York Stock Exchange shall have been suspended or limited or
minimum prices shall have been established by such Exchange, any
of which events, in your judgment, renders it inadvisable to
proceed with the public offering or the delivery of the
Designated Securities;
(i) At or prior to the Time of Delivery, the
Certificates shall be assigned the ratings by Moody's and
Standard & Poor's set forth in the Pricing Agreement;
(j) The Company shall have furnished or caused to
be furnished to you at the Time of Delivery for the Designated
Securities certificates satisfactory to you as to the accuracy
at and as of such Time of Delivery of the representations,
warranties and agreements of the Company herein and as to the
performance by the Company of all its obligations hereunder to
be performed at or prior to such Time of Delivery and the
Company shall have also furnished you similar certificates
satisfactory to you as to the matters set forth in subdivision
(a) of this Section 7; and
(k) Counsel to the Company shall have furnished
to the Underwriters a letter stating that the Underwriters may
rely on the opinions of such counsel to the Company as delivered
to Moody's and Standard & Poor's in connection with the rating of
the Securities.
8. (a) The Company and Sears will jointly and
severally indemnify and hold harmless each Underwriter against
any losses, claims, damages or liabilities, joint or several, to
which such Underwriter may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus, the Registration
Statement, any prospectus relating to the Securities or the
Prospectus as amended or supplemented, or any amendment or
supplement thereto furnished by the Company, 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 (in the case of
the Registration Statement or the Prospectus as amended or
supplemented, or any amendment or supplement thereto) necessary
to make the statements therein not misleading or (in the case of
any Preliminary Prospectus) necessary to make the statements
therein, in the light of the circumstances under which they were
made, not misleading; and will reimburse each Underwriter for
any legal or other expenses reasonably incurred by such
Underwriter in connection with investigating or defending any
such action or claim; provided, however, that neither the
Company nor Sears shall be liable in any such case to the extent
that any such loss, claim, damage or liability arises out of or
is based upon an untrue statement or alleged untrue statement or
omission or alleged omission made in any Preliminary Prospectus,
the Registration Statement, the Prospectus or the Prospectus as
amended or supplemented or any such amendment or supplement in
reliance upon and in conformity with written information
furnished to the Company by any Underwriter of Designated
Securities through you expressly for use in the Prospectus as
amended or supplemented relating to such Securities; and
provided, further, that neither the Company nor Sears shall be
liable to any Underwriter or any person controlling such
Underwriter under the indemnity agreement in this subdivision
(a) with respect to the Preliminary Prospectus or the Prospectus
or the Prospectus as amended or supplemented, as the case may
be, to the extent that any such loss, claim, damage or liability
of such Underwriter or controlling person results solely from
the fact that such Underwriter sold Designated Securities to a
person to whom there was not sent or given, at or prior to the
written confirmation of such sale, a copy of the Prospectus
(excluding documents incorporated by reference) or of the
Prospectus as then amended or supplemented (excluding documents
incorporated by reference) if the Company has previously
furnished copies thereof to such Underwriter.
(b) Each Underwriter will indemnify and hold
harmless the Company and Sears against any losses, claims,
damages or liabilities to which the Company or Sears may become
subject, under the Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained in any Preliminary
Prospectus, the Registration Statement, the Prospectus, or the
Prospectus as amended or supplemented, or any amendment 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 (in the case of the
Registration Statement or the Prospectus or the Prospectus as
amended or supplemented, or any amendment or supplement thereto)
necessary to make the statements therein not misleading or (in
the case of any Preliminary Prospectus) necessary to make the
statements therein, in the light of the circumstances under
which they were made, not misleading in each case to the extent,
but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission was made in any
Preliminary Prospectus, the Registration Statement, the
Prospectus, or the Prospectus as amended or supplemented, or any
such amendment or supplement in reliance upon and in conformity
with written information furnished to the Company by such
Underwriter through you expressly for use therein; and will
reimburse the Company for any legal or other expenses reasonably
incurred by the Company in connection with investigating or
defending any such action or claim.
(c) Within a reasonable period after receipt by
an indemnified party under subdivision (a) or (b) above of notice
of the commencement of any action with respect to which
indemnification is sought under such subdivision or contribution
may be sought under subdivision (d) below, such indemnified
party shall notify the indemnifying party in writing of the
commencement thereof. In case any such action shall be brought
against any indemnified party, the indemnifying party shall be
entitled to participate in, and, to the extent that it shall
wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel
satisfactory to such indemnified party, and after notice from
the indemnifying party to such indemnified party of its election
so to assume the defense thereof, the indemnifying party shall
not be liable to such indemnified party for any legal or other
expenses subsequently incurred by such indemnified party in
connection with the defense thereof other than reasonable costs
of investigation.
(d) If the indemnification provided for in this
Section 8 is unavailable to an indemnified party under
subdivision (a) or (b) above in respect of any losses, claims,
damages or liabilities (or actions in respect thereof) referred
to therein, then each indemnifying party shall contribute to the
amount paid or payable by such indemnified party as a result of
such losses, claims, damages or liabilities (or actions in
respect thereof) in such proportion as is appropriate to reflect
the relative benefits received by the Company on the one hand and
the Underwriters of the Designated Securities on the other from
the offering of the Designated Securities to which such loss,
claim, damage or liability (or actions in respect thereof)
relates and also the relative fault of the Company on the one
hand and the Underwriters of the Designated Securities on the
other in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities (or
actions in respect thereof), as well as any other relevant
equitable considerations. The relative benefits received by the
Company on the one hand and such Underwriters on the other shall
be deemed to be in the same proportion as the total net proceeds
from the offering of such securities (before deducting expenses)
received by the Company bear to the total underwriting discounts
and commissions received by the Underwriters, in each case as
set forth on the cover page of the Prospectus as amended or
supplemented. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information
supplied by the Company on the one hand or the Underwriters on
the other and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement
or omission of the Company on the one hand or the Underwriters,
directly or through you, on the other hand. With respect to any
Underwriter, such relative fault shall also be determined by
reference to the extent (if any) to which such losses, claims,
damages or liabilities (or actions in respect thereof) with
respect to any Preliminary Prospectus result from the fact that
such Underwriter sold Designated Securities to a person to whom
there was not sent or given, at or prior to the written
confirmation of such sale, a copy of the Prospectus (excluding
documents incorporated by reference) or of the Prospectus as
then amended or supplemented (excluding documents incorporated
by reference) if the Company has previously furnished copies
thereof to such Underwriter. The Company, Sears and the
Underwriters agree that it would not be just and equitable if
contribution pursuant to this subdivision (d) were determined by
per capita allocation among the indemnifying parties (even if
the Underwriters were treated as one entity for such purpose) or
by any other method of allocation which does not take account of
the equitable considerations referred to above in this
subdivision (d). The amount paid or payable by an indemnified
party as a result of the losses, claims, damages or liabilities
(or actions in respect thereof) referred to above in this
subdivision (d) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or
claim. Notwithstanding the provisions of this subdivision (d),
no Underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which the
applicable Designated Securities underwritten by it and
distributed to the public were offered to the public exceeds the
amount of any damages which such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
The obligations of the Underwriters in this subdivision (d) to
contribute are several in proportion to their respective
underwriting obligations and not joint.
(e) The obligations of the Company and Sears
under this Section 8 shall be in addition to any liability which
the Company and Sears may otherwise have and shall extend, upon
the same terms and conditions, to each person, if any, who
controls any Underwriter within the meaning of the Act; and the
obligations of the Underwriters under this Section 8 shall be in
addition to any liability which the respective Underwriters may
otherwise have and shall extend, upon the same terms and
conditions, to each officer and director of the Company and to
each person, if any, who controls the Company within the meaning
of the Act.
9. (a) If any Underwriter shall default in its
obligation to purchase the Designated Securities which it has
agreed to purchase hereunder and under the Pricing Agreement
relating to such Designated Securities, and the aggregate
principal amount of such Designated Securities which remains
unpurchased does not exceed one-eleventh of the aggregate
principal amount of the Designated Securities, then the Company
shall have the right to require each non-defaulting Underwriter
to purchase the principal amount of Securities which such
Underwriter agreed to purchase hereunder and under the Pricing
Agreement relating to such Designated Securities and, in
addition, to require each non-defaulting Underwriter to purchase
its pro rata share (based on the principal amount of the
Designated Securities which such Underwriter agreed to purchase
hereunder and under such Pricing Agreement) of the Designated
Securities of such defaulting Underwriter or Underwriters for
which such arrangements have not been made; but nothing herein
shall relieve a defaulting Underwriter from liability for its
default.
(b) If the aggregate principal amount of
Designated Securities which remains unpurchased exceeds one-
eleventh of the aggregate principal amount of the Designated
Securities as referred to in subdivision (a) above, or if the
Company shall not exercise the right described in subdivision (a)
above to require non-defaulting Underwriters to purchase
Designated Securities of a defaulting Underwriter or
Underwriters, then the Pricing Agreement relating to such
Designated Securities shall thereupon terminate, without
liability on the part of any non-defaulting Underwriter or the
Company, except for the expenses to be borne by the Company and
the Underwriters as provided in Section 6(e) hereof and the
indemnity and contribution agreements in Section 8 hereof; but
nothing herein shall relieve a defaulting Underwriter from
liability for its default.
10. The respective indemnities, agreements,
representations, warranties and other statements of the Company,
Sears and the several Underwriters, as set forth in this
Agreement or made by or on behalf of them, respectively, pursuant
to this Agreement, shall remain in full force and effect,
regardless of any investigation (or any statement as to the
results thereof) made by or on behalf of any Underwriter or any
controlling person of any Underwriter, or the Company, or any
officer or director or controlling person of the Company, and
shall survive delivery of and payment for the Securities.
Anything herein to the contrary notwithstanding, the
indemnity agreement of the Company and Sears in subdivisions (a)
and (e) of Section 8 hereof, the representations and warranties
in subdivisions (b) and (c) of Section 2 hereof and any
representation or warranty as to the accuracy of the
Registration Statement or the Prospectus as amended or
supplemented contained in any certificate furnished by the
Company pursuant to subdivision (i) of Section 7 hereof, insofar
as they may constitute a basis for indemnification for
liabilities (other than payment by the Company and Sears of
expenses incurred or paid in the successful defense of any
action, suit or proceeding) arising under the Act, shall not
extend to the extent of any interest therein of an Underwriter
or a controlling person of an Underwriter if a director, officer
or controlling person of the Company when the Registration
Statement becomes effective or a person who, with his consent,
is named in the Registration Statement as being about to become
a director of the Company, is a controlling person of such
Underwriter, except in each case to the extent that an interest
of such character shall have been determined by a court of
appropriate jurisdiction as not against public policy as
expressed in the Act. Unless in the opinion of counsel for the
Company and Sears the matter has been settled by controlling
precedent, the Company and Sears will, if a claim for such
indemnification is asserted, submit to a court of appropriate
jurisdiction the question whether such interest is against
public policy as expressed in the Act and will be governed by
the final adjudication of such issue.
11. If any Pricing Agreement shall be terminated
pursuant to Section 9 hereof, the Company shall not then be under
any liability to any Underwriter with respect to the Designated
Securities covered by such Pricing Agreement except as provided
in Section 6(e) and Section 8 hereof; but, if for any other
reason any Designated Securities are not delivered by or on
behalf of the Company as provided herein, the Company and Sears
will reimburse the Underwriters through you for all
out-of-pocket expenses approved in writing by you, including
fees and disbursements of counsel, reasonably incurred by the
Underwriters in making preparations for the purchase, sale and
delivery of such Designated Securities, but neither the Company
nor Sears shall then be under any further liability to any
Underwriter with respect to such Designated Securities except as
provided in Section 6(e) and Section 8 hereof.
12. In all dealings hereunder, you shall act on behalf
of each of the Underwriters of Designated Securities, and the
parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any
Underwriter made or given by you.
All statements, requests, notices and agreements
hereunder shall be in writing or by telegram or facsimile
transmission if promptly confirmed in writing and if to the
Underwriters shall be sufficient in all respects, if delivered or
sent by registered mail to the representative of the Underwriters
named in the Pricing Agreement at the address named therein; and
if to the Company or Sears shall be sufficient in all respects if
delivered or sent by registered mail to the Company at 3711
Kennett Pike, Greenville, Delaware 19807, Attention: Secretary.
13. This Agreement and each Pricing Agreement shall be
binding upon, and inure solely to the benefit of, the
Underwriters, Sears, the Company and, to the extent provided in
Section 8 and Section 10 hereof, the officers and directors of
the Company and each person who controls the Company or any
Underwriter, and their respective heirs, executors,
administrators, successors and assigns, and no other person shall
acquire or have any right under or by virtue of this Agreement or
any such Pricing Agreement. No purchaser of any of the
Securities from any Underwriter shall be deemed a successor or
assign by reason merely of such purchase.
14. Time shall be of the essence of this Agreement and
each Pricing Agreement.
15. This Agreement and each Pricing Agreement shall be
construed in accordance with the laws of the State of New York.
In the event of any conflict between this Agreement and the
Pricing Agreement, the Pricing Agreement shall govern.
16. This Agreement and each Pricing Agreement may be
executed by any one or more of the parties hereto and thereto in
any number of counterparts, each of which shall be deemed to be
an original, but all such respective counterparts shall together
constitute one and the same instrument.
If the foregoing is in accordance with your
understanding, please sign and return ten counterparts hereof and
upon the acceptance hereof by you, on behalf of each of the
Underwriters, this letter and such acceptance hereof shall
constitute a binding agreement between each of the Underwriters
and the Company.
Very truly yours,
SEARS RECEIVABLES FINANCING GROUP, INC.
By:
SEARS, ROEBUCK AND CO.
By:
Accepted as of the date hereof:
CS First Boston Corporation
By:
As Representative of the several Underwriters<PAGE>
SEARS CREDIT ACCOUNT MASTER TRUST II
MASTER TRUST CERTIFICATES
PRICING AGREEMENT
Dated: _____________, 19__
To: Sears Receivables Financing Group, Inc., as Seller under the
Pooling and Servicing Agreement dated as of July 31, 1994, as
amended.
Re: Underwriting Agreement dated _____________, 19__
Title: Sears Credit Account Master Trust II, $______________
_______ Class ____, Master Trust Certificates, Series ____.
Initial Principal Amount of Certificates: $_______________
[State by Class if more than one Class]
Class A Expected Final Payment Date: __________________
Class B Expected Final Payment Date: __________________
Series and Class Designation Schedule: [insert relevant
description of Series and Classes of Certificates]
Series Cut-Off Date: The last day of the Due Period ending in
__________________
Certificate Rating: [" " by Moody's Investors Service, Inc.]
[" " by Standard and Poor's Ratings Services] [State by
Class if more than one Class]
Aggregate outstanding balance of Principal Receivables as of the
last day of the Due Period ending in ________________.
Date of Series Supplement: ____________, 199_.
Certificate Rate: ____% per annum. [State by Class if more
than one Class]
Terms of Sale: The purchase price for the Designated Securities
to the Underwriter[s] will be ____% of the aggregate principal
amount of the Certificates as of __________, 19__, plus accrued
interest at the Certificate Rate from ____________, 19__.
[State by Class if more than one Class.]
Initial Public Offering Price: The initial public offering
price for the Designated Securities will be ___% of the
aggregate principal amount of the Certificates as of
___________, 199_, plus accrued interest at the Certificate Rate
from _______________, 199_ [State by Class if more than one
Class.]
Closing Location: [Sears, Roebuck and Co., 3333 Beverly Road,
Hoffman Estates, Illinois 60179]
Time of Delivery: __:__ A.M., New York Time, on ___________,
19__, or at such other time as may be agreed upon in writing.
Address of Representative of the Underwriters for notices:
Notwithstanding anything in the Agreement or in this
Pricing Agreement to the Contrary, the Agreement and this Pricing
Agreement constitute the entire agreement and understanding
among the parties hereto with respect to the purchase and sale
of the Series ____-_ Certificates. This Pricing Agreement may
be amended only by written agreement of the parties hereto.
The Underwriters [named in Schedule 1 hereto agree,
severally and not jointly], subject to the terms and provisions
of the Agreement, which is incorporated by reference herein and
made a part hereof, to purchase the principal amount of
Designated Securities [set forth opposite their names in Schedule
1].
Very truly yours,
[UNDERWRITERS]
By:
By: ________________________________
On behalf of each of the Underwriters
Accepted:
SEARS RECEIVABLES FINANCING
GROUP, INC.
By: __________________________
<PAGE>
SCHEDULE I
Principal Principal
Amount of Amount of
Class _ Class _
Certificates Certificates
to be to be
Underwriter Purchased Purchased
. . . . . . . . . . . . . . . . . . $ $
. . . . . . . . . . . . . . . . . $ $
. . . . . . . . . . . . . . . . . $ $
. . . . . . . . . . . . . . . . . $ $
Total $ $
Exhibit 1.3
SEARS CREDIT ACCOUNT MASTER TRUST II
MASTER TRUST CERTIFICATES
PRICING AGREEMENT
Dated: October 17, 1996
To: Sears Receivables Financing Group, Inc., as Seller under the
Pooling and Servicing Agreement dated as of July 31, 1994, as
amended.
Re: Underwriting Agreement dated October 17, 1996 (a copy of
which is attached hereto)
Title: Sears Credit Account Master Trust II, $500,000,000
6.45% Class A Master Trust Certificates, Series 1996-4
Initial Principal Amount of Certificates:
$500,000,000 Class A Master Trust Certificates, Series 1996-4
Class A Expected Final Payment Date: October 15, 2002
Series and Class Designation of Designated Securities:
6.45% Class A Master Trust Certificates, Series 1996-4 (the
"Class A Certificates")
Series Cut-Off Date:
Last day of the Due Period ending in September 1996
Certificate Rating:
Class A Certificates: Aaa by Moody's Investors Service, Inc.
AAA by Standard & Poor's Ratings Services
Aggregate outstanding balance of Principal Receivables as of the
last day of the Due Period ending in September
1996: $7,027,629,788.95
Date of Series Supplement: October 29, 1996
Certificate Rate: Class A Certificates: 6.45% per annum
Terms of Sale: The purchase price for the Designated Securities
to the Underwriters will be the percentage of the aggregate
initial principal amount of the Certificates set forth below,
plus accrued interest at the applicable Certificate Rate from
October 29, 1996.
Class A Certificates: 99.275686%
Initial Public Offering Price: The initial public offering
price for the Designated Securities will be the percentage of
the aggregate initial principal amount of the Certificates set
forth below, plus accrued interest at the applicable Certificate
Rate from October 29, 1996.
Class A Certificates: 99.575686%
Closing Location:
Sears, Roebuck and Co., 3333 Beverly Road, Hoffman Estates,
Illinois 60179
Time of Delivery: 10:00 A.M., New York Time, on October 29,
1996, or at such other time as may be agreed upon in writing.
Address of Representative of the Underwriters for notices:
CS First Boston Corporation
55 East 52nd Street
New York, New York 10055-0186
Attention: Scott J. Ulm
Facsimile: (212) 909-2000
Additional Agreements
(a) Notwithstanding anything in the Agreement or in
this Pricing Agreement to the contrary, the Agreement and this
Pricing Agreement constitute the entire agreement and
understanding among the parties hereto with respect to the
purchase and sale of the Class A Certificates. This Pricing
Agreement may be amended only by written agreement of the
parties hereto.
(b) Notwithstanding anything in the Agreement to the
contrary, the Underwriters named in Schedule 1 hereto (the "Class
A Underwriters") agree that the Company and Sears may enter into
that certain underwriting agreement and pricing agreement, each
of even date herewith (collectively, the "Class B Underwriting
Agreement"), with respect to the purchase and sale of the Class
B Master Trust Certificates, Series 1996-4 (the "Class B
Certificates") and may consummate the transactions contemplated
thereby. It is a condition to the effectiveness of the Pricing
Agreement and the Agreement (collectively, the "Class A
Underwriting Agreement") that the Class B Underwriting Agreement
be duly executed and delivered by the parties thereto
(c) If an underwriter under the Class B Underwriting
Agreement (a "Class B Underwriter") shall default in its
obligations to purchase the Class B Certificates and the Class B
Underwriting Agreement terminates in accordance with its terms,
the Class A Underwriters shall have the right to purchase the
Class B Certificates on the same terms that the Class B
Underwriters were entitled to purchase such Class B Certificates
prior to the expiration of the Class B Underwriting Agreement and
in the same proportions that the Class A Underwriters have agreed
to purchase the Class A Certificates hereunder; provided,
however, the Company shall have the right to postpone the Time of
Delivery for the Class A Certificates and the Class B
Certificates for a period of not more than seven days, to effect
whatever changes may thereby be made necessary in the
Registration Statement or Prospectus as amended or supplemented,
or in any other documents or arrangements, and the Company
agrees to file promptly any amendments or supplements to the
Registration Statement or the Prospectus which may thereby be
necessary.
(d) If (i) a Class B Underwriter shall default in its
obligations to purchase the Class B Certificates, (ii) the Class
B Underwriting Agreement terminates in accordance with its terms
and (iii) the Class A Underwriters do not agree to purchase the
Class B Certificates on the terms and in the proportions
described in paragraph (c) above, the Company shall have the
right to postpone the Time of Delivery for the Class A
Certificates for a period of not more than ten days, in order to
procure another party or other parties to purchase such Class B
Certificates and to effect whatever changes may thereby be made
necessary in the Registration Statement or Prospectus as amended
or supplemented, or in any other documents or arrangements, and
the Company agrees to file promptly any amendments or
supplements to the Registration Statement or the Prospectus
which may thereby be necessary.
(e) The purchase and sale of the Class A Certificates
shall occur concurrently with, and shall be conditioned on, the
purchase and sale of the Class B Certificates. Notwithstanding
anything in the Agreement to the contrary, unless the Class A
Underwriters purchase the Class B Certificates as described in
paragraph (c) above, if the Class B Underwriting Agreement
terminates because of the default of a Class B Underwriter, the
Company shall not be under any liability to any Underwriter with
respect to the Class A Certificates covered hereby except as
provided in Section 6(e) and Section 8 of the Agreement.
(f) In addition to the representations, warranties and
agreements of the Company in Section 2(a) of the Agreement, the
Company represents and warrants to, and agrees with, each of the
Underwriters that the Series Term Sheet dated October 16, 1996
relating to the Designated Securities has been or will be filed
with the Commission as an exhibit to a Current Report on Form
8-K within two business days of its first use, and will be or
has been incorporated by reference in the Prospectus as amended
or supplemented.
The Underwriters named in Schedule 1 hereto agree,
severally and not jointly, subject to the terms and provisions of
the Agreement, which is incorporated by reference herein and made
a part hereof, to purchase the principal amount of the Designated
Securities set forth opposite their name in Schedule 1. It is
understood that our execution of this letter on behalf of each
of the Underwriters is pursuant to the authority set forth in a
form of Agreement among Underwriters, the form of which shall be
supplied to the Company upon request. We represent that we are
authorized on behalf of ourselves and on behalf of each of the
Underwriters named in Schedule 1 hereto to enter into this
Agreement.
Very truly yours,
CS FIRST BOSTON CORPORATION
By:
On behalf of each of the
Underwriters
Accepted:
SEARS RECEIVABLES FINANCING
GROUP, INC.
By: ________________________________
SEARS, ROEBUCK AND CO.
By:
<PAGE>
SCHEDULE I
Principal
Amount of
Class A
Certificates
to be
Underwriter Purchased
CS First Boston Corporation . . . . . . . . . $100,000,000
Bear, Stearns & Co. Inc. . . . . . . . . . $100,000,000
Goldman, Sachs & Co.. . . . . . . . . . . . $100,000,000
Merrill Lynch, Pierce, Fenner & Smith
Incorporated. . . . . . . . . $100,000,000
Salomon Brothers Inc . . . . . . . . . . . . $100,000,000
Total $500,000,000
Exhibit 1.4
SEARS CREDIT ACCOUNT MASTER TRUST II
MASTER TRUST CERTIFICATES
PRICING AGREEMENT
Dated: October 17, 1996
To: Sears Receivables Financing Group, Inc., as Seller under the
Pooling and Servicing Agreement dated as of July 31, 1994, as
amended.
Re: Underwriting Agreement dated October 17, 1996 (a copy of
which is attached hereto)
Title: Sears Credit Account Master Trust II, $22,500,000 6.65%
Class B Master Trust Certificates, Series 1996-4.
Initial Principal Amount of Certificates:
$22,500,000 Class B Master Trust Certificates, Series 1996-4
Class B Expected Final Payment Date: November 15, 2002
Series and Class Designation of Designated Securities:
6.65% Class B Master Trust Certificates, Series 1996-4 (the
"Class B Certificates")
Series Cut-Off Date: Last day of the Due Period ending in
September 1996
Certificate Rating: Class B Certificates: A1 by Moody's
Investors Service, Inc.
A by Standard & Poor's Ratings Services
Aggregate outstanding balance of Principal Receivables as of the
last day of the Due Period ending in September
1996: $7,027,629,788.95
Date of Series Supplement: October 29, 1996
Certificate Rate: Class B Certificates: 6.65% per annum
Terms of Sale: The purchase price for the Designated Securities
to the Underwriters will be the percentage of the aggregate
initial principal amount of the Certificates set forth below,
plus accrued interest at the applicable Certificate Rate from
October 29, 1996.
Class B Certificates: 99.293750%
Initial Public Offering Price: The initial public offering
price for the Designated Securities will be the percentage of
the aggregate initial principal amount of the Certificates set
forth below, plus accrued interest at the applicable Certificate
Rate from October 29, 1996.
Class B Certificates: 99.593750%
Closing Location: Sears, Roebuck and Co., 3333 Beverly Road,
Hoffman Estates, Illinois
60179
Time of Delivery: 10:00 A.M., New York Time, on October 29,
1996, or at such other time as may be agreed upon in writing.
Address of Representative of the Underwriters for notices:
CS First Boston Corporation
55 East 52nd Street
New York, New York 10055-0186
Attention: Scott J. Ulm
Facsimile: (212) 909-2000
Additional Agreements
(a) Notwithstanding anything in the Agreement or in this
Pricing Agreement to the contrary, the Agreement and this
Pricing Agreement constitute the entire agreement and
understanding among the parties hereto with respect to the
purchase and sale of the Class B Certificates. This Pricing
Agreement may be amended only by written agreement of the
parties hereto.
(b) Notwithstanding anything in the Agreement to the contrary,
the Underwriters named in Schedule 1 hereto (the "Class B
Underwriters") agree that the Company and Sears may enter into
that certain underwriting agreement and pricing agreement, each
of even date herewith (collectively, the "Class A Underwriting
Agreement"), with respect to the purchase and sale of the Class
A Master Trust Certificates, Series 1996-4 (the "Class A
Certificates") and may consummate the transactions contemplated
thereby. It is a condition to the effectiveness of the Pricing
Agreement and the Agreement (collectively, the "Class B
Underwriting Agreement") that the Class A Underwriting Agreement
be duly executed and delivered by the parties thereto.
(c) If an underwriter under the Class A Underwriting Agreement
(a "Class A Underwriter") shall default in its obligations to
purchase the Class A Certificates, the Company shall have the
right to postpone the Time of Delivery for the Class B
Certificates for a period of not more than ten days, in order to
procure another party or other parties to purchase such Class A
Certificates and to effect whatever changes may thereby be made
necessary in the Registration Statement or Prospectus as amended
or supplemented, or in any other documents or arrangements, and
the Company agrees to file promptly any amendments or
supplements to the Registration Statement or the Prospectus
which may thereby be necessary.
(d) The purchase and sale of the Class B Certificates shall
occur concurrently with, and shall be conditioned on, the
purchase and sale of the Class A Certificates. Notwithstanding
anything in the Agreement to the contrary, if the Class A
Underwriting Agreement terminates because of the default of a
Class A Underwriter, the Company shall not be under any
liability to any Underwriter with respect to the Class B
Certificates covered hereby except as provided in Section 6(e)
and Section 8 of the Agreement.
(e) In addition to the representations, warranties and
agreements of the Company in Section 2(a) of the Agreement, the
Company represents and warrants to, and agrees with, each of the
Underwriters that the Series Term Sheet dated October 16, 1996
relating to the Designated Securities has been or will be filed
with the Commission as an exhibit to a Current Report on Form
8-K within two business days of its first use, and will be or
has been incorporated by reference in the Prospectus as amended
or supplemented.
<PAGE>
The Underwriters named in Schedule 1 hereto agree, subject to
the terms and provisions of the Agreement, which is incorporated
by reference herein and made a part hereof, to purchase the
principal amount of the Designated Securities set forth opposite
their name in Schedule 1. We represent that we are authorized
to enter into this Agreement.
Very truly yours,
CS FIRST BOSTON CORPORATION
By:
Accepted:
SEARS RECEIVABLES FINANCING GROUP, INC.
By: __________________________________
SEARS, ROEBUCK AND CO.
By:
<PAGE>
SCHEDULE I
Principal
Amount of
Class B
Certificates
to be
Underwriter Purchased
CS First Boston Corporation . . . . . . . . . . . . . . . . . .
. . . . . . . . . . $22,500,000
Exhibit 4.1
SEARS CREDIT ACCOUNT MASTER TRUST II
MASTER TRUST CERTIFICATES, SERIES 1996-4
This Series of Master Trust Certificates is established pursuant
to Section 6.07 of that certain Pooling and Servicing Agreement
dated as of July 31, 1994, as amended (the "Pooling and Servicing
Agreement"), by and among SEARS RECEIVABLES FINANCING GROUP,
INC., a Delaware corporation ("SRFG") as Seller, SEARS, ROEBUCK
AND CO., a New York corporation ("Sears") as Servicer, and THE
FIRST NATIONAL BANK OF CHICAGO, a national banking association,
organized and existing under the laws of the United States (the
"Trustee"). This SERIES TERM SHEET and the ANNEX attached
hereto, by and among SRFG, Sears and the Trustee, constitute the
SERIES SUPPLEMENT (the "Series Supplement") and, together with
the Pooling and Servicing Agreement, establish the Series of
Master Trust Certificates to be known as SEARS CREDIT ACCOUNT
MASTER TRUST II, MASTER TRUST
CERTIFICATES, SERIES 1996-4.
SERIES TERM SHEET
Date of Series Term Sheet October 16, 1996.
Group One.
Series Initial Investor Interest $561,830,000.
Class Initial Investor Interest Class A - $500,000,000
of each Class of Investor Certificates Class B - $22,500,000.
Class C - $39,330,000.
Seller Retained Class Class C.
Type of Structure Controlled Amortizing
Stucture.
Certificate Rates
Class A - 6.45% per annum calculated on the basis of a 360-
day year of twelve 30-day months (or in the case of the first
interest payment, calculated on the basis of the number of days
elapsed from and including the Series Closing Date to but
excluding the 15th day of the calendar month in which the first
interest payment occurs (assuming a 30-day month) and a 360-day
year of twelve 30-day months).
Class B - 6.65% per annum calculated on the basis of a 360-
day year of twelve 30-day months (or in the case of the first
interest payment, calculated on the basis of the number of days
elapsed from and including the Series Closing Date to but
excluding the 15th day of the calendar month in which the first
interest payment occurs (assuming a 30-day month) and a 360-day
year of twelve 30-day months).
Class C - 0%.
LIBOR Determination Date
Not applicable.
Embedded Coupon Cap
Class A - Not applicable.
Class B - Not applicable.
Class C - Not applicable.
Class Coupon Cap
Class A - Not applicable.
Class B - Not applicable.
Class C - Not applicable.
Series Yield Factor
Initially zero, but may be increased pursuant to Section 19.
Date from which Interest for First Series Closing Date.
Interest Payment Date Shall Accrue
Distribution Dates
November 15, 1996 and the 15th day of each calendar
month thereafter, or, if such day is not a Business Day, the next
succeeding Business Day.
Interest Payment Dates
The 15th day of each month (or, if such day is not a
Business Day, the next succeeding Business Day), commencing in
November 1996.
Principal Payment Date
The 15th day of each month (or, if such day is not a
Business Day, the next succeeding Business Day), commencing in
November 2000, and each Special Payment Date.
Class A Expected Final Payment Date
The Distribution Date in October 2002.
Class B Expected Final Payment Date
The Distribution Date in November 2002.
Class C Expected Final Payment Date
The Distribution Date in December 2002.
Series Cut-Off Date September 1996.
Series Closing Date October 29, 1996.
Revolving Period
From, but excluding, the Series Cut-Off Date to, but
excluding, the earlier to occur of (i) the first day of the Due
Period related to the November 2000 Distribution Date or (ii) the
Rapid Amortization Commencement Date.
Controlled Amortization Period
Unless a Rapid Amortization Event shall have occurred
prior thereto, the period commencing on the first day of the Due
Period related to the Distribution Date in November 2002 and
ending upon the earliest to occur of (x) the Rapid Amortization
Commencement Date, (y) the payment in full of the Series Invested
Amount and (z) the Series Termination Date.
Class A Controlled Amortization Amount
$20,833,333.34
Class B Controlled Amortization Amount
$22,500,000.
Class C Controlled Amortization Amount
Unless a Rapid Amortization Event shall have occurred,
$16,854,900.
Type of Credit Enhancement
Class A - Subordination.
Class B - Subordination.
Class C - None.
Investor Servicing Fee Percentage
2.0% per annum calculated on the basis of a 360-day year
of twelve 30-day months.
Series Monthly Servicing Fee Additional Funds Portion Percentage
Not applicable.
Amount of Additional Funds
Initially, zero, but subject to being increased pursuant
to Section 4.03(e) of the Pooling and Servicing Agreement.
Eligible for Finance Charge Collections Reallocations to and from
other Series in the Group Yes.
Eligible for Principal Collections Reallocations to and from
other Series in the Group Yes.
Paired Series No.
Subject to being part of a Paired Series Yes.
Series Termination Date
The day following the October 2006 Distribution Date.
Variable Funded Series No.
Classes, if any, subject to ERISA restrictions (as set forth in
Section 6.06(a)(ii) of the Pooling and Servicing Agreement)
Class B and Class C.
PFA Special Reserve Required Percentage Not applicable.
Series Pre-Funding Account Not applicable.
Series Pre-Funding Amount Not applicable.
Series Pre-Funding Deadline Not applicable.
Pre-Funding Special Reserve Account Not applicable.
Class A Early Termination Premium Not applicable.
Class B Early Termination Premium Not applicable.
Pre-Funding Special Reserve Required Amount Not applicable.
Class A Investor Certificate
Any one of the certificates executed by the Seller and
authenticated by the Trustee, substantially in the form of
Exhibit A-1.
Class B Investor Certificate
Any one of the certificates executed by the Seller and
authenticated by the Trustee, substantially in the form of
Exhibit A-2.
Class C Investor Certificate
Any one of the certificates executed by the Seller and
authenticated by the Trustee, substantially in the form of
Exhibit A-3.
IN WITNESS WHEREOF, the Seller, the Servicer and the Trustee have
caused this Series Supplement to be duly executed by their
respective officers as of the day and year first above written.
SEARS RECEIVABLES FINANCING GROUP, INC.
as Seller
By:______________________________________
Stephen D. Carp
President and Chief Executive Officer
SEARS, ROEBUCK AND CO.
as Servicer
By:___________________________________________
Alice M. Peterson
Vice President and Treasurer
THE FIRST NATIONAL BANK OF CHICAGO
as Trustee
By:___________________________________________
<PAGE>
ANNEX
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:
SECTION 1. Definitions.
(a) Capitalized terms not otherwise defined in this
Series Supplement (including the Series Term Sheet) shall have
the meanings ascribed to them in the Pooling and Servicing
Agreement. Capitalized terms that refer to a Series or Class
refer to the Series or Class of the Series established hereby, as
applicable, unless the context otherwise clearly requires.
(b) The following terms have the definitions set forth
below with respect to the Series established hereby, unless the
context otherwise clearly requires:
"Additional Certificate" shall have the meaning
specified in Section 20(a).
"Additional Certificate Date" shall have the meaning
specified in Section 20(a).
"Additional Funds," if applicable, shall have the
meaning set forth in the Series Term Sheet and in the Pooling and
Servicing Agreement.
"Available Expected Principal" for any Determination
Date with respect to each Due Period and the Group to which the
Series established hereby belongs shall be equal to the excess of
(a) the Expected Monthly Principal for such Due Period over (b)
the sum of, without duplication, (i) all class controlled
amortization amounts and class controlled accumulation amounts
for all Non-Variable Accumulation Series in the Group to which
the Series established hereby belongs that are not scheduled to
be in their revolving periods as of such Due Period and (ii) the
portion of such Expected Monthly Principal projected by the
Servicer to be allocable to any other series in the Group to
which the Series established hereby belongs with respect to which
a Rapid Amortization Event shall have occurred on or prior to
such Determination Date.
"Base Rate" for each Distribution Date shall mean the
sum of (A) the weighted average Certificate Rate for all Classes
in the Series and (B) the Investor Servicing Fee Percentage.
"Calculation Period," if applicable, shall have the
meaning specified in the applicable Class Coupon Cap Agreement
between the Trustee and the Coupon Cap Provider.
"Certificate Interest" for any Class shall mean, for any
Distribution Date, the product of (a) the Class Invested Amount
for such Class for such Distribution Date and (b) a fraction the
numerator of which is (1) with respect to each Class that has no
Subclasses, the Certificate Rate for such Class or (2) with
respect to each Class that has two or more Subclasses, the Class
Weighted Average Certificate Rate, and the denominator (which may
be
calculated separately for each Subclass pursuant to subsection
(x) or (y)) of which is (x) if the relevant Certificate Rate is
to be calculated on the basis of the actual number of days
elapsed and a 360-day year, 360 divided by the actual number of
days from and including the immediately preceding Distribution
Date (or, in the case of the first Distribution Date, 360 divided
by the number of days from and including the Series Closing Date
to but excluding such Distribution Date (and assuming a 30-day
month)) to but excluding the current Distribution Date or (y) if
the relevant Certificate Rate is to be calculated on the basis of
a 360-day year of twelve 30-day months, twelve (or, in the case
of the first Distribution Date, 360 divided by the number of days
from and including the Series Closing Date to but excluding such
Distribution Date (and assuming a 30-day month)).
"Certificate Principal" shall mean, with respect to each
Class, the principal payable in respect of such Class of Investor
Certificates.
"Certificate Rate," with respect to any Class or
Subclass, shall mean the certificate rate set forth in the Series
Term Sheet with respect to such Class or Subclass, as such rate
may be adjusted as of the beginning of each Interest Accrual
Period, if applicable; provided, however, that the Certificate
Rate for any Class or Subclass that does not have a fixed
Certificate Rate shall not exceed the Embedded Coupon Cap, if
any, for such Class or Subclass.
"Class A Early Termination Premium," if applicable,
shall be as set forth in the Series Term Sheet.
"Class A Early Termination Premium Shortfall," if
applicable, for any Distribution Date, shall mean the positive
difference, if any, between (i) the Class A Early Termination
Premium and (ii) the amount deposited with respect to the Class A
Early Termination Premium pursuant to Section 8(b)(16) less
amounts previously deposited with respect to the Class A Early
Termination Premium Shortfall pursuant to Section 8(b)(42),
8(c)(13) or 8(c)(41). The Class A Early Termination Premium
Shortfall initially shall be zero.
"Class Alternative Deficiency Amount" shall mean, with
respect to each Class, on any Payment Date, the Class Deficiency
Amount that would have been calculated for such Class on such
Payment Date if the aggregate unreimbursed Investor Losses on
such Payment Date equalled zero.
"Class B Early Termination Premium," if applicable,
shall be as set forth in the Series Term Sheet.
"Class B Early Termination Premium Shortfall," if
applicable, for any Distribution Date, shall mean the positive
difference, if any, between (i) the Class B Early Termination
Premium and (ii) the amount deposited pursuant to Section
8(b)(17) less amounts previously deposited with respect to the
Class B Early Termination Premium Shortfall pursuant to Section
8(b)(43), 8(c)(14) or 8(c)(42). The Class B Early Termination
Premium Shortfall initially shall be zero.
"Class C Fixing Deadline" shall mean the earliest to
occur of (i) a Rapid Amortization Event, (ii) the Seller Retained
Class Purchase Date with respect to Class C, or (iii) the date on
which the Class C Invested Amount becomes less than or equal to
3% of the Series Initial Investor Interest; provided, however,
that such percentage may be decreased without the consent of the
Certificateholders, if the Seller shall have received written
notice from the Rating Agencies that such a decrease will not
result in a Ratings Event.
"Class C Permitted Controlled Amortization Amount," if
applicable, for any Distribution Date shall mean an amount equal
to the sum of (a) the product of (i) a fraction the numerator of
which is the Class C Initial Investor Interest and the
denominator of which is the Series Initial Investor Interest
(less the Class C Initial Investor Interest) and (ii) the Class A
Controlled Amortization Amount or the Class A Controlled
Accumulation Amount, as applicable, and (b) the Class C Permitted
Controlled Amortization Amount Shortfall, if any; provided,
however, that the Class C Permitted Controlled Amortization
Amount may be increased without the consent of the
Certificateholders, if the Seller shall have received written
notice from the Rating Agencies that such an increase will not
result in a Ratings Event; and provided, further, that the Class
C Permitted Controlled Amortization Amount shall equal zero for
all Distribution Dates on or after the Class C Fixing Deadline.
"Class C Permitted Controlled Amortization Amount
Shortfall," if applicable, with respect to each Distribution Date
shall have the meaning set forth in Sections 8(b)(46) and
8(c)(47). The Class C Permitted Controlled Amortization Amount
Shortfall initially shall be zero.
"Class Controlled Accumulation Amount," if applicable,
with respect to such Class on any Distribution Date with respect
to the Controlled Accumulation Period, shall mean the sum of (i)
the amount specified in the Series Term Sheet with respect to
such Class of the Series established hereby (reduced for each
such Distribution Date pro-rata by the aggregate amount paid to
such Class pursuant to Section 9(a)(10)) and (ii) the Class
Controlled Accumulation Amount Shortfall for such Class;
provided, however, that if the commencement of the Controlled
Accumulation Period is to be modified pursuant to Section 18,
then the Class Controlled Accumulation Amount shall mean an
amount equal to the product of (i) Available Expected Principal
for the related Due Period and (ii) a fraction the numerator of
which is the Series Initial Investor Interest less the Class
Initial Investor Interest for any Seller Retained Class and the
denominator of which is the sum of (a) the Series Initial
Investor Interest less the Class Initial Investor Interest for
any Seller Retained Class and (b) the series initial investor
interests less the class initial investor interests for any
seller retained classes of all other Variable Accumulation Series
in the Group to which the Series established hereby belongs that
are not scheduled to be in their revolving periods as of such Due
Period; and provided, further, that, for purposes of this
definition, the commencement date of the accumulation period of
each such Variable Accumulation Series shall be deemed to have
been postponed to the latest permissible date determined as of
the date of calculation and determined as if the provisions of
Section 18 applied to each such Variable Accumulation Series with
such changes as may be specified with respect to such Variable
Accumulation Series (applying such provisions first to the
Variable Accumulation Series in the Group to which the Series
established hereby belongs with the latest Class Expected Final
Payment Date and next to each additional such Variable
Accumulation Series in reverse chronological order based on the
latest Class Expected Final Payment Date of each such Series).
The sum of the aggregate Class Controlled Accumulation Amounts
for all Classes of such Series for all Due Periods during the
Controlled Accumulation Period as modified pursuant to Section 18
shall not be less than the Series Initial Investor Interest less
the Class Initial Investor Interest for any Seller Retained
Class.
"Class Controlled Accumulation Amount Shortfall," if
applicable, with respect to each Class and any Distribution Date
shall have the meaning set forth in Section 8(c)(46), 8(c)(48) or
8(c)(49).
"Class Controlled Amortization Amount," if applicable,
with respect to such Class or any Distribution Date with respect
to the Controlled Amortization Period, shall mean the sum of (i)
amount set forth in the Series Term Sheet with respect to each
Class of the Series established hereby (reduced for each such
Distribution Date pro-rata by the aggregate amount paid to such
Class pursuant to Section 9(a)(10)) and (ii) any existing Class
Controlled Amortization Amount Shortfalls for such Class;
provided, however, that the Class Controlled Amortization Amount
shall not be less than zero and shall not exceed an amount equal
to, with respect to each Class, the Class Invested Amount for
such Class.
"Class Controlled Amortization Amount Shortfall," if
applicable, with respect to each Class and any Distribution Date
shall have the meaning set forth in Section 8(c)(46), 8(c)(48) or
8(c)(49).
"Class Coupon Cap," if applicable, shall mean the rate
that is specified as such in the Series Term Sheet and in the
Class Coupon Cap Agreement.
"Class Coupon Cap Agreement," if applicable, shall mean
the interest rate cap agreement or other interest rate protection
for the benefit of the Investor Certificateholders of such Class
or Subclass, dated on or before the Series Closing Date, between
the Trustee, acting on behalf of the Trust, and the Coupon Cap
Provider, or any Replacement Class Coupon Cap or Qualified
Substitute Cap Arrangement.
"Class Coupon Cap Payment," if applicable, shall mean
with respect to any Interest Payment Date, any payment required
to be made on such Interest Payment Date by the Coupon Cap
Provider with respect to the Class Coupon Cap Agreement.
"Class Cumulative Investor Charged-Off Amount" with
respect to each Class for any Distribution Date, shall mean the
Class Cumulative Investor Charged-Off Amount as of the end of the
Due Period related to the prior Distribution Date, plus the Class
Investor Charged-Off Amount for such Class for the Due Period
related to such Distribution Date; provided, however, that the
Class Cumulative Investor Charged-Off Amount shall further be
adjusted in accordance with the successive steps set forth in
Section 8 on such Distribution Date. The Class Cumulative
Investor Charged-Off Amount with respect to each Class initially
shall be zero.
"Class Deficiency Amount" shall mean, with respect to
each Class, on any Payment Date, the amount, if any, by which (a)
the sum of (i) Certificate Interest for such Class accrued since
the immediately preceding Payment Date, (ii) if, since the
immediately preceding Payment Date and prior to the current
Payment Date, a Reimbursed Loss Event has occurred, the sum of
(A) the Reimbursed Loss Interest for such Class for each previous
Distribution Date since the last Distribution Date on which
Investor Losses for such Class equalled zero and (B) the
Reimbursed Loss Interest Gross-up Amount for such Class for each
previous Distribution Date since the last Distribution Date on
which the aggregate amount of unreimbursed Investor Losses for
such Class equalled zero, (iii) the Class Deficiency Amount on
the immediately preceding Payment Date, and (iv) the Class
Deficiency Amount on the immediately preceding Payment Date
multiplied by the product of (A) a fraction the numerator of
which is the weighted average of the Certificate Rates or of the
Class Weighted Average Certificate Rates, as applicable, for such
Class for the relevant Due Periods and the denominator of which
is (x) if the relevant Certificate Rate is to be calculated on
the basis of the actual number of days elapsed and a 360-day
year, 360 divided by the actual number of days from and including
the immediately preceding Distribution Date to but excluding the
current Distribution Date or (y) if the relevant Certificate Rate
is to be calculated on the basis of a 360-day year of twelve 30-
day months, twelve, and (B) the number of Distribution Dates from
and including the preceding Payment Date to but excluding the
current Payment Date exceeds (b) the amount deposited since the
immediately preceding Payment Date into the Series
Interest Funding Account pursuant to Section 8 with respect to
such Class.
"Class Expected Final Payment Date" with respect to each
Class, shall mean the date designated as such in the Series Term
Sheet.
"Class Finance Charge Collections" shall mean, with
respect to any Class, with respect to any day or any Distribution
Date, an amount equal to the product of (x) the Class Percentage
with respect to Finance Charge Collections for the related
Distribution Date and (y) the amount of Finance Charge
Collections for such day or for the related Due Period, as
applicable.
"Class Initial Investor Interest" shall mean, with
respect to each Class, the aggregate face amount of Investor
Certificates of such Class initially authenticated and delivered
pursuant to Section 6 as specified in the Series Term Sheet, plus
the aggregate face amount of any additional Investor Certificates
authenticated and delivered pursuant to Section 20, minus (i)
prior amounts paid to such Class pursuant to Section 9(a)(10) and
(ii) the aggregate face amount of any Investor Certificates
cancelled pursuant to
Section 6.16 of the Pooling and Servicing Agreement.
"Class Invested Amount" shall mean, with respect to any
Class for any Distribution Date, an amount equal to the Class
Initial Investor Interest minus the sum of (a) the aggregate
amount of Certificate Principal paid to the Investor
Certificateholders of such Class prior to such Distribution Date
(without duplication with respect to any amounts paid to such
Class pursuant to Section 9(a)(10)), (b) the Investor Loss for
such Class, if any, at the beginning of such Distribution Date
and (c) the aggregate amount of losses on investments of
principal of funds on deposit for the benefit of such Class in
the Series Principal Funding Account.
"Class Investor Charged-Off Amount" shall mean, with
respect to each Class for any Distribution Date, an amount equal
to the product of (a) the Charged-Off Amount for such
Distribution Date and (b) the Class Percentage with respect to
the Charged-Off Amount.
"Class Investor Interest" shall mean, with respect to
any Class for any Distribution Date, an amount equal to the Class
Invested Amount for such Class for such Distribution Date minus,
if applicable, the aggregate amount on deposit in the Series
Principal Funding Account for the benefit of such Class in
respect of Principal Collections.
"Class Modified Required Amount" with respect to any
Class on any Distribution Date, shall mean the Class Required
Amount for such Distribution Date minus the sum of all accrued
but unpaid Class Monthly Servicing Fees.
"Class Modified Required Amount Shortfall" with respect
to any Class on any Distribution Date, shall mean the positive
difference, if any, between (i) the Class Modified Required
Amount and (ii) the sum of the (A) Series Finance Charge
Collections allocable to such Class and (B) Series Additional
Allocable Amounts allocable to such Class for such Distribution
Date. The Class Modified Required Amount Shortfall initially
shall be zero.
"Class Monthly Deficiency Amount" with respect to any
Class on any Distribution Date, shall mean the amount set forth
in Section 9. The Class Monthly Deficiency Amount for each Class
initially shall be zero.
"Class Monthly Servicing Fee" with respect to any Class
for any Distribution Date, shall mean an amount equal to the
product of (x) a fraction the numerator of which shall be the
Class Investor Interest and the denominator of which shall be the
Series Investor Interest, in each case on the first day of the
related Due Period (or in the case of the first Distribution Date
for the Series established hereby, the Series Initial Investor
Interest) and (y) the amount of the Investor Servicing Fee for
the related Due Period.
"Class Percentage" shall mean, with respect to any Class
with respect to any Distribution Date:
(a) when used with respect to the Charged-Off
Amount, the percentage equivalent of a fraction the numerator of
which shall be the amount of the Class Investor Interest minus
the Supplemental Cash allocable to such Class and the denominator
of which shall be the greater of (i) the amount of Principal
Receivables in the Trust and (ii) the Aggregate Investor Interest
minus the sum of the (A) Excess Funding Amount (General), (B)
Excess Funding Amount (SRC) and (C) sum of the series pre-funding
amounts, if any, for all outstanding series, in each case on the
first day of the related Due Period; or
(b) when used with respect to Principal
Collections prior to the occurrence of a Fixed Principal
Allocation Event, the percentage equivalent of a fraction the
numerator of
which shall be the amount of the Class Investor Interest minus
the Supplemental Cash allocable to such Class on the first day of
the related Due Period and the denominator of which shall be the
greater of (i) the amount of Principal Receivables in the Trust
on the first day of the related Due Period or (ii) the sum of
the
numerators used in calculating the components of the series
percentage with respect to Principal Collections for each series
then outstanding (including the Series established hereby) as of
such Distribution Date; or
(c) when used with respect to Principal
Collections on and after the occurrence of a Fixed Principal
Allocation Event (unless a Fixed Principal Allocation Adjustment
shall have occurred), the percentage equivalent of a fraction the
numerator of which shall be the amount of the Class Investor
Interest minus the Supplemental Cash allocable to such Class on
the first day of the Due Period prior to the occurrence of a
Fixed Principal Allocation Event and the denominator of which
shall be the greater of (i) the amount of Principal Receivables
in the Trust on the first day of the related Due Period or (ii)
the sum of the numerators used in calculating the components of
the Series Percentage with respect to Principal Collections for
each Series then outstanding (including the Series established
hereby) as of such Distribution Date; provided, however, that
because such Class is subject to being paired with a Class of a
Paired Series, if a Rapid Amortization Event occurs with respect
to such Paired Series during the Controlled Accumulation Period,
Controlled Amortization Period or Rapid Amortization Period with
respect to the Series established hereby, the Seller may, by
written notice delivered to the Trustee and the Servicer,
designate a different numerator for the foregoing fraction,
provided that (A) such numerator shall not be less than the Class
Investor Interest minus the Supplemental Cash allocable to such
Class as of the last day of the revolving period for such Paired
Series and (B) the Seller shall have delivered to the Trustee an
Officer's Certificate to the effect that, based on the facts
known to such officer at the time, in the reasonable belief of
the Seller, such numerator designation would not cause a Rapid
Amortization Event or an event that, after the giving of notice
or the lapse of time, would constitute a Rapid
Amortization Event to occur with respect to the Series
established hereby; and provided, further, that should a Rapid
Amortization Event with respect to the Series established hereby
nonetheless occur, then, on each Distribution Date beginning with
the Distribution Date related to the Due Period in which the
Rapid Amortization Event occurs, such numerator shall not be less
than the Class Investor Interest minus the Supplement Cash
allocable to such Class as of the first day of the Due Period in
which such Rapid Amortization Event occurs; or
(d) when used with respect to Principal
Collections on and after the occurrence of a Fixed Principal
Allocation Adjustment, the percentage equivalent of a fraction
(a) the numerator of which shall be the greater of (i) the amount
of Class Investor Interest minus Supplemental Cash allocable to
such Class on the first day of the Due Period prior to the
occurrence of a Fixed Principal Allocation Event multiplied by
the Fixed Principal Allocation Adjustment Factor and (ii) the
amount of the Class Investor Interest minus the Supplemental Cash
allocable to such Class on the first day of the related Due
Period and (b) the denominator of which shall be the greater of
(i) the amount of Principal Receivables in the Trust on the first
day of the related Due Period or (ii) the sum of the numerators
used in calculating the components of the Series Percentage with
respect to Principal Collections for each Series then outstanding
(including the Series established hereby) as of such Distribution
Date; provided, however, that following the occurrence of a Rapid
Amortization Event, then, on each Distribution Date beginning
with the Distribution Date related to the Due Period in which the
Rapid Amortization Event occurs, such numerator shall be the
Class Investor Interest minus the Supplemental Cash allocable to
such Class on the first day of the Due Period in which such Rapid
Amortization Event occurs; or
(e) when used with respect to Finance Charge
Collections during the Revolving Period, the Controlled
Accumulation Period or the Controlled Amortization Period, as
applicable, the percentage equivalent of a fraction the numerator
of which shall be the amount of the Class Investor Interest minus
the Supplemental Cash allocable to such Class on the first day of
the related Due Period and the denominator of which shall be the
greater of (i) the amount of Principal Receivables in the Trust
on the first day of the related Due Period and (ii) the sum of
the numerators used in calculating the components of the Series
Percentage with respect to Finance Charge Collections for each
series then outstanding (including the Series established hereby)
as of such Distribution Date; or
(f) when used with respect to Finance Charge
Collections during the Rapid Amortization Period, on each
Distribution Date beginning with the Distribution Date related to
the Due Period in which such Rapid Amortization Event occurs, the
percentage equivalent of a fraction the numerator of which shall
be the amount of the Class Investor Interest minus the
Supplemental Cash allocable to such Class on the last day of the
Due Period prior to the occurrence of a Rapid Amortization Event,
and the denominator of which shall be the greater of (i) the
amount of Principal Receivables in the Trust on the first day of
the related Due Period or (ii) the sum of the numerators used in
calculating the components of the series percentage with respect
to Finance Charge Collections for each series then outstanding
(including the Series established hereby) as of such Distribution
Date.
"Class Principal Collections" shall mean, with respect
to any Class with respect to any day or any Distribution Date, an
amount equal to the product of (x) the Class Percentage with
respect to Principal Collections for the related Distribution
Date and (y) the amount of Principal Collections for such day or
for the related Due Period, as applicable.
"Class Rapid Amortization Amount," if applicable, with
respect to each Class and any Distribution Date during the Rapid
Amortization Period shall mean the Class Investor Interest.
"Class Rapid Amortization Amount Shortfall," if
applicable, with respect to each Class and any Distribution Date
during the Rapid Amortization Period shall have the meaning set
forth in Section 8(d)(45), 8(d)(46) or 8(d)(47).
"Class Required Amount" with respect to any Class on any
Distribution Date, shall mean the sum of (i) Certificate Interest
with respect to such Class for such Distribution Date, (ii) the
Class Monthly Deficiency Amount on the immediately preceding
Distribution Date, (iii) the Class Deficiency Amount on the
immediately preceding Payment Date multiplied by a fraction the
numerator of which is the weighted average of the Certificate
Rates or of the Class Weighted Average Certificate Rates, as
applicable, for such Class plus two percent per annum for each
Due Period subsequent to the immediately preceding Payment Date
and the denominator of which is (x) if the relevant Certificate
Rate is to be calculated on the basis of the actual number of
days elapsed and a 360-day year, 360 divided by the actual number
of days from and including the immediately preceding Distribution
Date (or, in the case of the first Distribution Date, from and
including the Series Closing Date) to but excluding the current
Distribution Date or (y) if the relevant Certificate Rate is to
be calculated on the basis of a 360-day year of twelve 30-day
months, twelve (or, in the case of the first Distribution Date,
360 divided by the number of days from and including the Series
Closing Date), (iv) if on the immediately preceding Distribution
Date a Reimbursed Loss Event occurred, the sum of (A) the
Reimbursed Loss Interest for each previous Distribution Date
since the last Distribution Date on which the aggregate amount of
unreimbursed Investor Losses for such Class equalled zero, (B)
the Reimbursed Loss Interest Gross-up Amount for each previous
Distribution Date since the last Distribution Date on which the
aggregate amount of unreimbursed Investor Losses for such Class
equalled zero and (C) for any Distribution Date following the
Distribution Date immediately following the Reimbursed Loss Event
to and including the next Payment Date, the Reimbursed Loss
Interest Gross-up Amount for such Distribution Date and (v) the
sum of all accrued but unpaid Class Monthly Servicing Fees.
"Class Weighted Average Certificate Rate," if
applicable, shall mean, for any Class composed of two or more
Subclasses, for any Distribution Date, the percentage equivalent
of a fraction the numerator of which is the sum of, for each
Subclass of such Class, the product of the Class Invested Amount
for such Subclass and the Certificate Rate for such Subclass for
such Distribution Date, and the denominator of which is the Class
Invested Amount for such Class.
"Commercial Paper Determination Date," if applicable,
shall have the meaning set forth in the Series Term Sheet.
"Commercial Paper Rate," if applicable, shall mean, with
respect to any Commercial Paper Determination Date, the rate
equal to the Money Market Yield on such Commercial Paper
Determination Date of the rate for commercial paper having a
maturity of 30 days as published by the Board of Governors of the
Federal Reserve System in "Statistical Release H.15 (519),
Selected Interest Rates," or any successor publication, the rate
for dealers under the heading "Commercial Paper." In the event
that such rate is not published on such date, then the Commercial
Paper Rate will be the Money Market Yield on such date of the
rate for Commercial Paper having a maturity of 30 days as
published by the Federal Reserve Bank of New York in the daily
statistical release "Composite 3:30 p.m. Quotations for U.S.
Government Securities" ("Composite Quotations") under the heading
"Commercial Paper." If on such date the rate for commercial
paper is not yet published in either H.15 (519) or Composite
Quotations, the Commercial Paper Rate for such date shall be
calculated by the Trustee and shall be the Money Market Yield of
the arithmetic mean (rounded to the nearest one-hundredth of a
percent, with five hundred one-thousandths of a percent rounded
upward) of the offered rates, as of 11:00 a.m., New York City
time, of three leading dealers of commercial paper in New York
City selected by the Trustee on such date, for commercial
paper having a maturity of 30 days placed for an industrial
issuer whose bond rating is "AA" or the equivalent, from either
Rating Agency. In the event that such rates are not available on
such date, then the Commercial Paper Rate shall be the Money
Market Yield of the rate for commercial paper so provided in a
comparable source. The Commercial Paper Rate shall be determined
by the Trustee. For purposes of this definition of Commercial
Paper Rate, the term "Money Market Yield" shall mean a yield
(expressed as a percentage rounded to the nearest one-hundredth
of a percent, with five hundred one-thousandths of a percent
rounded upwards) calculated in accordance with the following
formula:
Money Market Yield = D x 360 x 100
360 - (D x M)
where "D" refers to the per annum rate for commercial paper
quoted on a bank discount basis and expressed as a decimal, and
"M" refers to the actual number of days in the related Interest
Accrual Period.
"Controlled Accumulation Period," if applicable, shall
have the meaning set forth in the Series Term Sheet, subject in
the case of any Variable Accumulation Series to variation in
accordance with Section 18 hereof.
"Controlled Accumulation Period Length," if applicable,
shall have the meaning set forth in Section 18.
"Controlled Amortization Period," if applicable, shall
have the meaning set forth in the Series Term Sheet.
"Coupon Cap Provider," if any, shall mean the entity
listed as such in the Series Term Sheet, in its capacity as
obligor under the Class Coupon Cap Agreement, or if any
Replacement Class Coupon Cap Agreement or Qualified Substitute
Cap Arrangements are obtained pursuant to Section 13, the obligor
with respect to such Replacement Class Coupon Cap Agreement or
Qualified Substitute Cap Arrangements.
"Credit Enhancement" shall have the meaning set forth in
the Series Term Sheet.
"Determination Date" for any month shall mean the second
Business Day preceding the Distribution Date for such month.
"Distribution Date" shall have the meaning set forth in
the Series Term Sheet.
"Drawing Date" shall mean the first Business Day
preceding each Distribution Date.
"Embedded Coupon Cap," if applicable, shall have the
meaning set forth in the Series Term Sheet with respect to any
Class or Subclass.
"Excess Funding Amount (General)" for any Distribution
Date shall mean the amount on deposit in the Excess Funding
Account (General) less investment earnings.
"Excess Funding Amount (SRC)" for any Distribution Date
shall mean the amount on deposit in the Excess Funding Account
(SRC) less investment earnings.
"Expected Monthly Principal" for the Group to which the
Series established hereby belongs shall be no greater than the
product of (i) the lowest of the monthly principal payment rates
(determined by dividing Principal Collections during a Due Period
by the amount of Principal Receivables in the Trust as of the
last day of the preceding Due Period), expressed as a decimal for
the 12 calendar months preceding the date of such calculation;
provided, however, that such calculation period may be shortened
by the Servicer if payment terms have been materially changed
during such 12 calendar month period with respect to the
Accounts, and (ii) the sum of the Series Invested Amounts for all
outstanding series in the Group to which the Series established
hereby belongs, minus the sum of all Class Invested Amounts for
any Seller Retained Classes for all outstanding series in the
Group to which the Series established hereby belongs.
"Fixed Accumulation Series" shall mean each outstanding
Series for which the commencement date of the Controlled
Accumulation Period may not be changed at the option of the
Servicer.
"Fixed Principal Allocation Adjustment" shall have the
meaning specified in Section 23.
"Fixed Principal Allocation Adjustment Factor" with
respect to any Class with respect to any Distribution Date shall
mean (i) in the case of any Class of any Variable Accumulation
Series, a fraction the numerator of which is the Controlled
Accumulation Period Length (as recalculated solely for the
purpose of determining the Fixed Principal Allocation Adjustment
Factor on the first Determination Date following the day notice
is given pursuant to Section 23) and the denominator of which is
the number of months (including the current month) remaining
until the Class Expected Final Payment Date for such Class, and
(ii) in the case of any Class having a Controlled Amortization
Amount or any Class of a Fixed Accumulation Series, a fraction
the numerator of which is the Controlled Amortization Amount or
the Controlled Accumulation Amount, as applicable, and the
denominator of which is the sum of (a) the Controlled
Amortization Amount or the Controlled Accumulation Amount, as
applicable, and (b) the Group Available Principal Amount (as
adjusted to deduct any portion of the Group Available Principal
Amount used, in the discretion of the Servicer, to determine the
Fixed Principal Allocation Adjustment Factor with respect to any
Class of any other Series in the Group to which the Series
established hereby belongs) on such Distribution Date.
"Fixed Principal Allocation Event" shall mean the
earliest of (a) the beginning of the Due Period immediately
following the Due Period related to the Distribution Date during
the Controlled Amortization Period or the Controlled Accumulation
Period, as applicable, with respect to the Series established
hereby on which the Series Available Principal Amount is less
than zero; (b) the date on which a Rapid Amortization Event with
respect to the Series established hereby occurs; or (c) a date
selected by the Servicer, if any, provided that the Servicer
provides notification of such date to the Seller, the Trustee,
the Third Party Credit Enhancement Provider, if any, and the
Rating Agencies no later than two Business Days prior to such
selected date.
"Funded Third Party Credit Enhancement" shall mean any
Third Party Credit Enhancement that consists of funds on deposit
in one or more segregated trust accounts in the corporate trust
department of an office or branch of a Qualified Trust
Institution or an Eligible Institution for the benefit of the
Investor Certificateholders and, if so specified, the Third Party
Credit Enhancement Provider, of the Series established hereby,
including, without limitation, a reserve account or a cash
collateral account.
"Group Available Principal Amount" shall mean, with
respect to each Distribution Date, (i) the amount remaining on
deposit in the Group Principal Collections Reallocation Account
on such Distribution Date after all withdrawals have been made
from such account for the benefit of any Series in the same Group
as the Series established hereby (including the Series
established hereby), but before such amount is withdrawn from the
Group Principal Collections Reallocation Account and paid to the
Seller pursuant to Section 8(b)(49), 8(c)(58) or 8(d)(53) minus
(ii) (x) the amount deposited in the Group Principal Collections
Reallocation Account pursuant to any provisions similar to
Section 8(b)(47) with respect to any series in the Group to which
the Series established hereby is a member from any series that
has a controlled amortization period or controlled accumulation
period, as applicable, beginning before the latest Class Expected
Final Payment Date for the Series established hereby, (y) the
amount deposited in the Group Principal Collections Reallocation
Account pursuant to any provisions similar to Section 8(c)(56)
with respect to any series in the Group to which the Series
established hereby is a member from any series that has a
controlled amortization period or controlled accumulation period,
as applicable, ending before the latest Class Expected Final
Payment Date for the Series established hereby and (z) the amount
deposited in the Group Principal Collections Reallocation Account
pursuant to any provisions similar to Section 8(d)(51).
"Group Excess Funding Amount" shall mean an amount equal
to the product of (i) the Aggregate Excess Funding Amount and
(ii) a fraction (a) the numerator of which is the sum of the
numerators used in calculating the class percentage with respect
to the principal collections for all classes of all series
(including the Classes of the Series established hereby) in the
Group to which the Series established hereby belongs and (b) the
denominator of which is the sum of the numerators used in
calculating the Class Percentage with respect to the principal
collections for all classes (including the Classes of the Series
established hereby) of all outstanding series.
"Group Finance Charge Collections Reallocation Account"
shall have the meaning specified in Section 7(b).
"Group Pre-Funding Reallocation Account," if applicable,
shall have the meaning specified in Section 7(b).
"Group Principal Collections Reallocation Account" shall
have the meaning specified in Section 7(b).
"Initial Scheduled Controlled Accumulation Period
Length," if applicable, shall have the meaning set forth in the
Series Term Sheet.
"Interest Accrual Period" shall mean, with respect to
any Interest Payment Date, the period from and including the
Interest Payment Date immediately preceding such Interest Payment
Date (or, in the case of the first Interest Payment Date, from
and including the Series Closing Date) to but excluding such
Interest Payment Date.
"Interest Payment Date" shall mean each date designated
as such in the Series Term Sheet.
"Investor Accounts" shall mean, in addition to Investor
Accounts established pursuant to the Pooling and Servicing
Agreement, the Series Collections Account, the Series Principal
Collections Account, the Series Principal Funding Account, the
Series Interest Funding Account, the Series Pre-Funding Account
(if applicable), the Pre-Funding Special Reserve Account (if
applicable), the PFA Special Reserve Account, the Series
Distribution Account, the Group Finance Charge Collections
Reallocation Account, the Group Principal Collections
Reallocation Account and the Group Pre-Funding Reallocation
Account.
"Investor Loss" with respect to each Class, shall mean
the amount determined pursuant to Section 11(b) and, in the event
the Receivables are sold pursuant to Section 12.01(b) of the
Pooling and Servicing Agreement, the amount, if any, by which the
Class Investor Interest (determined immediately prior to such
sale) exceeds the net proceeds of such sale payable to such
Class.
"Investor Servicing Fee" shall mean, with respect to any
Distribution Date, an amount equal to the product of (i) the
Investor Servicing Fee Percentage and (ii) the Series Investor
Interest minus the Supplemental Cash allocable to such Series on
the first day of the related Due Period (or in the case of the
first Distribution Date for the Series established hereby, the
Series Initial Investor Interest less the Series Pre-Funding
Amount, if any).
"Investor Servicing Fee Percentage" shall mean the
percentage identified as such in the Series Term Sheet.
"LIBOR," if applicable, shall mean, with respect to any
LIBOR Determination Date, the rate for deposits in United States
dollars for a period equal to the relevant Interest Accrual
Period that appears on Telerate Page 3750 as of 11:00 a.m.,
London time, on such day. If such rate does not appear on
Telerate Page 3750, the rate will be determined by the Trustee on
the basis of the rates at which deposits in United States dollars
are offered by four major banks in the London interbank market,
selected by the Trustee, at approximately 11:00 a.m., London
time, on such day to prime banks in the London interbank market
for a period equal to the relevant Interest Accrual Period
commencing on that day. The Trustee will request the principal
London office of each such bank to provide a quotation of its
rate. If at least two such quotations are provided, the rate
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 four major banks in
New York City, selected by the Trustee, at approximately 11:00
a.m., New York City time, on that day for loans in United States
dollars to leading European banks for a period equal to the
relevant Interest Accrual Period commencing on that day.
"LIBOR Business Day," if applicable, shall mean a day
other than a Saturday or a Sunday on which banking institutions
in the City of London, England and in New York, New York are not
required or authorized by law to be closed.
"LIBOR Determination Date," if applicable, shall have
the meaning set forth in the Series Term Sheet.
"Minimum Controlled Accumulation Period Length" shall
mean, for any Variable Accumulation Series, the number of months
so specified in the Series Term Sheet.
"Minimum Seller Interest," for any day or Distribution
Date shall mean an amount equal to the positive difference, if
any, between (i) the Minimum Principal Receivables Balance and
(ii) (A) the Aggregate Investor Interest minus (B) the sum of (x)
the series pre-funding amounts, if any, for all outstanding
series, (y) the Excess Funding Amount (General) and (z) the
Excess Funding Amount (SRC), for such day or Distribution Date.
"Net Adjusted Yield" shall mean, with respect to any
Distribution Date, the average of the percentages obtained for
each of the three preceding Due Periods by subtracting the Base
Rate from the Net Yield for such Due Period.
"Net Yield" shall mean, with respect to any Due Period
or any Distribution Date, the annualized percentage equivalent of
a fraction (a) the numerator of which is the sum of the (i)
Series Finance Charge Collections, (ii) Series Additional
Allocable Amounts, (iii) finance charge collections and
additional allocable amounts, if any, reallocated to the Series
established hereby pursuant to Sections 8(b)(26-31), 8(c)(23-28)
and 8(d)(24-29) minus (iv) the Series Investor Charged-Off
Amount, and (b) the denominator of which is the Series Invested
Amount.
"Non-Variable Accumulation Series" shall mean each
outstanding Series that is not a Variable Accumulation Series.
"Paired Series," if applicable, shall have the meaning
set forth in Section 22.
"PFA Covered Amount," if applicable, for any
Distribution Date with respect to the Controlled Accumulation
Period will be equal to (A) if the Investor Certificates are
fixed rate certificates, one-twelfth of the product of (i) the
Class Weighted Average Certificate Rate and (ii) the amount on
deposit in the Series Principal Funding Account, if any, as of
the preceding Distribution Date or (B) if the Investor
Certificates are floating rate certificates, the product of (i) a
fraction, the numerator of which is the actual number of days in
the interest period and the denominator of which is 360, (ii) the
Class Weighted Average Certificate Rate and (iii) the amount on
deposit in the Series Principal Funding Account, if any, as of
the preceding Distribution Date.
"PFA Special Reserve Account," if applicable, shall have
the meaning set forth in Section 7(g)(1).
"PFA Special Reserve Account Factor," if applicable,
shall mean, with respect to any Determination Date, the
percentage equivalent of a fraction, the numerator of which is
the number of Due Periods scheduled to be included in the
Controlled Accumulation Period as of such date and the
denominator of which is the Initial Scheduled Controlled
Accumulation Period Length (which percentage shall never exceed
100%).
"PFA Special Reserve Account Funding Date," if
applicable, shall mean the Distribution Date with respect to the
Due Period that commences 12 months prior to the first Due Period
of the Controlled Accumulation Period (as such may be postponed
pursuant to Section 18), provided that, upon notice to the
Servicer and the Trustee, the Seller may delay the PFA Special
Reserve Account Funding Date to the Distribution Date related to
the Due Period that occurs not later than the number of months
prior to the scheduled commencement date of the Controlled
Accumulation Period determined in accordance with the following
schedule:
Number of Months
Net Adjusted Yield (rounded up to nearest whole number)
Less than 2%
The product of (i) the PFA Special Reserve
Required Percentage divided by 1%, (ii) the PFA
Special Reserve Account Factor and (iii) 12
2% or more, but less
than 3 The product of (i) the PFA Special Reserve
Required Percentage divided by 2%, (ii) the PFA
Special Reserve Account Factor and (iii) 12
3% or more, but less
than 4% The product of (i) the PFA Special Reserve
Required Percentage divided by 3%, (ii) the PFA
Special Reserve Account Factor and (iii) 12
4% or more The product of (i) the PFA Special Reserve
Required Percentage divided by 4%, (ii) PFA
Special Reserve Account Factor and (iii) 12
"PFA Special Reserve Required Amount," if applicable,
shall mean, with respect to any Distribution Date prior to the
PFA Special Reserve Account Funding Date, $0, and on or after the
PFA Special Reserve Account Funding Date, the product of (a) the
product of (i) the PFA Special Reserve Required Percentage and
(ii) the Series Invested Amount less the Class Invested Amount of
all Seller Retained Classes as of the preceding Distribution Date
(after giving effect to all changes therein on such date) and (b)
the PFA Special Reserve Account Factor as of such Distribution
Date.
"PFA Special Reserve Required Amount Shortfall," if
applicable, shall mean the positive difference, if any, between
the PFA Special Reserve Required Amount and the amount on deposit
in the PFA Special Reserve Account.
"PFA Special Reserve Required Percentage," if
applicable, shall be the percentage set forth in the Series Term
Sheet.
"Pre-Funding Covered Amount," if applicable, with
respect to the Pre-Funding Period will be equal to (A) if the
Investor Certificates are fixed rate certificates, one-twelfth of
the product of (i) the Class Weighted Average Certificate Rate
and (ii) the amount on deposit in the Series Pre-Funding Account,
if any, as of the preceding Distribution Date or (B) if the
Investor Certificates are floating rate certificates, the product
of (i) a fraction, the numerator of which is 360 and the
denominator of which is the actual number of days in the interest
period, (ii) the Class Weighted Average Certificate Rate and
(iii) the amount on deposit in the Series Pre-Funding Account, if
any, as of the preceding Distribution Date.
"Pre-Funding Period," if applicable, shall have the
meaning set forth in Section 7(h)(3).
"Pre-Funding Special Reserve Account," if applicable,
shall have the meaning set forth in Section 7(h)(1).
"Pre-Funding Special Reserve Amount," if applicable, for
any Distribution Date shall mean the amount on deposit in the
Pre-Funding Special Reserve Account for such Distribution Date.
"Pre-Funding Special Reserve Amount Shortfall," if
applicable, shall mean the positive difference, if any between
the Pre-Funding Special Reserve Required Amount and the Pre-
Funding Special Reserve Amount.
"Pre-Funding Special Reserve Required Amount," if
applicable, shall have the meaning set forth in the Series Term
Sheet.
"Principal Payment Date," if applicable, shall mean each
date designated as such in the Series Term Sheet.
"Purchased Class" shall have the meaning specified in
Section 21.
"Qualified Substitute Cap Arrangement," if applicable,
shall have the meaning specified in Section 13.
"Qualified Third Party Credit Enhancement Provider," if
applicable, shall mean (i) if the Third Party Credit Enhancement
is not Funded Third Party Credit Enhancement, an institution that
meets the Qualified Third Party Credit Enhancement Provider
rating requirements set forth in the Series Term Sheet at the
time of the funding of such Third Party Credit Enhancement, or
(ii) if the Third Party Credit Enhancement is a Funded Credit
Enhancement, an institution that meets the Qualified Third Party
Credit Enhancement Provider rating requirements set forth in the
Series Term Sheet (or, in either subsection (i) or (ii) such
lesser requirements as the applicable Rating Agency shall allow);
provided, however, that in the event the Servicer elects to
obtain Third Party Credit Enhancement that is not Funded Third
Party Credit Enhancement and is unable after the exercise of its
best efforts to obtain from a Qualified Third Party Credit
Enhancement Provider as so defined such Third Party Credit
Enhancement with respect to which the representations set forth
in Section 10(a) shall be true, the term "Qualified Third Party
Credit Enhancement Provider" shall mean a Person who satisfies
such requirements except that its long-term unsecured debt rating
by any nationally recognized rating agency may be lower than that
set forth in such requirements, but shall not be lower than the
highest credit rating of any Person who otherwise satisfies said
requirements and from whom the Servicer is able to obtain such a
Third Party Credit Enhancement.
"Rapid Amortization Commencement Date" shall mean the
earlier of the date on which a Rapid Amortization Event is deemed
to occur pursuant to Section 9.01 of the Pooling and Servicing
Agreement or pursuant to Section 16 hereof.
"Rapid Amortization Event" shall mean any event
specified in Section 9.01 of the Pooling and Servicing Agreement
or in Section 16 hereof.
"Rapid Amortization Period" shall mean the period from,
and including, the Rapid Amortization Commencement Date to, and
including, the earlier of (i) the date of the final distribution
to Investor Certificateholders of the Series established hereby
or
(ii) the Series Termination Date. The first Distribution Date of
the Rapid Amortization Period shall be the Distribution Date in
the calendar month following the Rapid Amortization Commencement
Date.
"Rating Agency" shall mean Moody's or Standard & Poor's.
"Rating Agencies" shall mean both Moody's and Standard & Poor's.
"Reimbursed Loss Event" shall mean, with respect to each
Class, any Distribution Date on which the aggregate amount of
unreimbursed Investor Losses for such Class is reduced to zero in
accordance with Section 11(b), provided that if the Class
Invested Amounts for all Classes senior to such Class have been
reduced to zero and such Reimbursed Loss Event occurs on such
Class's Final Expected Payment Date, the Reimbursed Loss Event
shall be deemed to occur on the current Distribution Date for the
purposes of calculation of such Class's Modified Required Amount.
"Reimbursed Loss Interest" shall mean, with respect to
each Class for any Distribution Date, an amount equal to the
product of (i) the aggregate amount of Investor Losses that have
not been reimbursed prior to the commencement of the related Due
Period and (ii) a fraction the numerator of which is the
Certificate Rate or the Class Weighted Average Certificate Rate,
as applicable, for such Class for the related Due Period and the
denominator of which is (x) if the relevant Certificate Rate is
to be calculated on the basis of the actual number of days
elapsed and a 360-day year, 360 divided by the actual number of
days from and including the immediately preceding Distribution
Date to but excluding the current Distribution Date or (y) if the
relevant Certificate Rate is to be calculated on the basis of a
360-day year of twelve 30-day months, twelve.
"Reimbursed Loss Interest Gross-up Amount" shall mean,
with respect to each Class for any Distribution Date, an amount
equal to the product of (i) the positive difference, if any,
between the Class Alternative Deficiency Amount for the
immediately preceding Payment Date and the Class Deficiency
Amount for the immediately preceding Payment Date and (ii) a
fraction the numerator of which is the Certificate Rate or the
Class Weighted Average Certificate Rate, as applicable, for such
Class for the related Due Period and the denominator of which is
(x) if the relevant Certificate Rate is to be calculated on the
basis of the actual number of days elapsed and a 360-day year,
360 divided by the actual number of days from and including the
immediately preceding Distribution Date to but excluding the
current Distribution Date or (y) if the relevant Certificate Rate
is to be calculated on the basis of a 360-day year of twelve 30-
day months, twelve.
"Replacement Class Coupon Cap Agreement," if any, shall
mean an interest rate cap agreement or other interest rate
protection having substantially the same terms and conditions as
the Class Coupon Cap Agreement that it replaces, and otherwise
satisfying the conditions set forth in Section 13.
"Required Daily Deposit" for any Business Day shall mean
an amount equal to:
(a) during the Revolving Period, an amount
equal to the lesser of (A) the Series Finance Charge Collections
for such Business Day and (B) the difference between (i) the
Class Modified Required Amounts (plus, if Sears is not the
Servicer, the Series Monthly Servicing Fee for each Business Day)
for all Classes of such Series and (ii) amounts previously
deposited in the Collections Account with respect to such amounts
with respect to the current Due Period pursuant to this
subsection (a);
(b) during the Controlled Amortization Period
or Controlled Accumulation Period, as applicable, an amount equal
to the sum of:
(1) the amount set forth in subsection (a); and
(2) the lesser of (A) the Class Principal
Collections for all Classes of such Series for such Business Day
minus any Seller Retained Class Principal Collections for such
Business Day and (B) the positive difference, if any, between (i)
the Class Controlled Amortization Amount or the Class Controlled
Accumulation Amount, as applicable, for each Class and (ii)
amounts previously deposited in the Collections Account with
respect to such amounts with respect to the current Due Period
pursuant to this subsection (b); provided, however, that such
amount shall not exceed the Class Controlled Amortization Amount
or Class Controlled Accumulation Amount, as applicable; and
(c) during the Rapid Amortization Period, an
amount equal to the sum of (i) the Series Finance Charge
Collections for such Business Day and (ii) the Class Principal
Collections for each Class of such Series minus (iii) any Seller
Retained Class Principal Collections for such Business Day;
provided, however, that the Series Finance Charge Collections and
Series Principal Collections received each Business Day shall be
estimated in accordance with the terms of the Pooling and
Servicing Agreement.
"Revolving Period" shall have the meaning set forth in
the Series Term Sheet.
"Seller Retained Class," as specified in the Series Term
Sheet, shall mean any Class of Investor Certificates owned by the
Seller.
"Seller Retained Class Principal Collections" shall
mean, with respect to any day or any Distribution Date, an amount
equal to the Class Percentage of a Seller Retained Class
multiplied by the Series Principal Collections for such day or
Distribution Date.
"Seller Retained Class Purchase Date" shall have the
meaning set forth in Section 21.
"Series Additional Allocable Amounts," if any, shall
mean, for any Distribution Date, the sum of the (i) Series Yield
Collections, (ii) Series Investment Income, (iii) Class Coupon
Cap Payment, if any, (iv) Series Additional Investor Funds, (v)
amounts withdrawn from the PFA Special Reserve Account pursuant
to Section 7(g)(3), and (vi) amounts withdrawn from the Pre-
Funding Special Reserve Account pursuant to Section 7(h)(3).
"Series Additional Funds," if applicable, shall mean,
for any Distribution Date, the Additional Funds deposited into
the Series Collections Account for the Series established hereby
on such Distribution Date.
"Series Additional Investor Funds," if applicable, shall
mean, for any Distribution Date, the Series Additional Funds, if
any, that are not applied to the payment of the Investor Monthly
Servicing Fee pursuant to Section 12.
"Series Aggregate Excess Funding Amount" shall mean an
amount equal to (i) a fraction (a) the numerator of which is the
Series Investor Interest and (b) the denominator of which is the
sum of the Series Investor Interests for all outstanding Series
multiplied by (ii) the Group Excess Funding Amount.
"Series Allocable Investment Amount" shall mean, with
respect to any Distribution Date, the sum of (i) the product of
(a) the investment income on funds on deposit in the Collections
Account for the related Due Period and (b) a fraction the
numerator of which is the sum of the numerators for all Classes
in this Series used in calculating the Class Percentage with
respect to Finance Charge Collections and the denominator of
which is the sum of the numerators used in calculating the class
percentage with respect to Finance Charge Collections for all
classes of all outstanding series and (ii) the product of (x) the
investment income on funds on deposit in the Group Collections
Account for the Group to which the Series established hereby is a
member for the related Due Period and (y) a fraction the
numerator of which is the sum of the numerators for all Classes
in the Series established hereby used in calculating the Class
Percentage with respect to Finance Charge Collections and the
denominator of which is the sum of the numerators used in
calculating the class percentage with respect to Finance Charge
Collections for all classes of all series in the Group to which
the Series established hereby is a member.
"Series Available Principal Amount" shall mean, for any
Distribution Date, for each series that is a member of the same
Group as the Series established hereby (including the Series
established hereby) that is in its Controlled Amortization Period
or Controlled Accumulation Period, as applicable, an amount
calculated as follows: For each such series, seriatim, beginning
with the series with the largest series investor interest as of
such Distribution Date (and if more than one series has the same
series investor interest on such Distribution Date, beginning
with whichever of such series has the longest time remaining in
its controlled amortization period or controlled accumulation
period, as applicable (assuming that no rapid amortization event
occurs with respect to such series)), an amount equal to (x) the
Group Available Principal Amount less (y) the difference between
the series required principal amount and the amount of such
series' controlled amortization amount or controlled accumulation
amount, as applicable, that was funded on such Distribution Date
(including any portion of such amount that was funded by amounts
withdrawn from the Group Principal Collections Reallocation
Account pursuant to Sections 8(c)(50-52)). For purposes of
calculating the series available principal amount for each other
such series, the Group Available Principal Amount shall be
reduced by the amount calculated in clause (y) above for each
prior series for which the series available principal amount was
calculated.
"Series Closing Date" shall mean the date designated as
such in the Series Term Sheet.
"Series Collections Account" shall have the meaning
specified in Section 7(a).
"Series Cut-Off Date" shall mean the last day of the Due
Period occurring in the month specified in the Series Term Sheet.
"Series Distribution Account" shall have the meaning
specified in Section 7(a).
"Series Excess Funding Amount (SRC)" shall mean an
amount equal to the product of (i) the Group Excess Funding
Amount (SRC) and (ii) a fraction (a) the numerator of which is
the numerator used in calculating the Class Percentage with
respect to Principal Collections for the Seller Retained Class
and (b) the denominator of which is the sum of the numerators
used in calculating the class percentage with respect to
principal collections for all seller retained classes in the
Group (including the Series established hereby) to which the
Series established hereby is a member.
"Series Excess Servicing," for any Distribution Date,
shall have the meaning set forth in Section 8(b)(18), 8(c)(15) or
8(d)(16), as applicable, for such Distribution Date.
"Series Finance Charge Collections" shall mean, with
respect to any day or any Distribution Date, the sum of the
amount of Class Finance Charge Collections for each Class of such
Series for such day or for the related Due Period, as applicable.
"Series Initial Investor Interest" shall mean an amount
equal to the sum of the Class Initial Investor Interests for all
Classes of the Series established hereby.
"Series Initial Pre-Funding Amount," if applicable,
shall mean the amount specified in the Series Term Sheet.
"Series Interest Funding Account" shall have the meaning
specified in Section 7(d).
"Series Invested Amount" with respect to any
Distribution Date, shall mean the sum of the Class Invested
Amounts for each
Class of the Series established hereby on such Distribution Date.
"Series Investment Income" with respect to any
Distribution Date, shall mean the sum of (a) the income from the
investment of funds on deposit in (i) the Series Principal
Funding Account, (ii) the Series Interest Funding Account, (iii)
the Pre-Funding Special Reserve Account, if any, (iv) the PFA
Special Reserve Account, if any, and (v) the Series Pre-Funding
Account, if any, (b) the income from the investment of funds with
respect to the Series Aggregate Excess Funding Amount and (c) the
Series Allocable Investment Amount.
"Series Investor Charged-Off Amount" shall mean an
amount equal to the sum of the Class Investor Charged-Off Amounts
for all Classes of the Series established hereby.
"Series Investor Interest" with respect to any
Distribution Date, shall mean the sum of the Class Investor
Interests for each Class of the Series established hereby on such
Distribution Date.
"Series Minimum Principal Receivables Balance" shall
mean, with respect to the Series established hereby, on any
Determination Date, the greater of (i) the Series Investor
Interest minus Supplemental Cash on such Determination Date,
divided by .909, or (ii) if a Fixed Principal Allocation Event
has occurred (and a Fixed Principal Allocation Adjustment has not
occurred), the Series Investor Interest minus Supplemental Cash
as of the first day of the Due Period prior to the occurrence of
the Fixed Principal Allocation Event, subject to reduction, in
the event that a Rapid Amortization Event occurs with respect to
any series with which this Series is paired, to an amount equal
to the sum of the then applicable numerators for the Class
Percentages with respect to all classes in such series with
respect to Principal Collections, or (iii) if a Fixed Principal
Allocation Adjustment has occurred, the Series Investor Interest
minus Supplemental Cash as of the first day of the Due Period
prior to the Fixed Principal Allocation Event multiplied by the
Fixed Principal Allocation Adjustment Factor;
provided, however, that following the occurrence of a Rapid
Amortization Event, the amount in clause (iii) shall equal the
Series Investor Interest minus Supplemental Cash as of the first
day of the Due Period prior to the occurrence of such Rapid
Amortization Event; and provided, further, that the Seller may,
upon 30 days' prior notice to the Trustee, the Rating Agencies
and the Third Party Credit Enhancement Provider, if any, reduce
the Series Minimum Principal Receivables Balance by increasing
the divisors set forth above, subject to the condition that the
Seller shall have been notified by the Rating Agencies that such
reduction would not result in a Ratings Event for any Series then
outstanding; and provided, further, that the divisor used in the
calculation of Series Minimum Principal Receivables Balance may
not be increased to more than .980.
"Series Monthly Servicing Fee" shall mean, with respect
to any Distribution Date, the sum of the Class Monthly Servicing
Fees for each Class of the Series established hereby on such
Distribution Date.
"Series Monthly Servicing Fee Additional Funds Portion,"
if applicable, shall mean the product of (i) the Series Monthly
Servicing Fee Additional Funds Portion Percentage and (ii) Series
Investor Interest minus the Supplemental Cash allocable to such
Series on the first day of the related Due Period (or in the case
of the first Distribution Date for the Series established hereby,
the Series Initial Investor Interest less the Series Pre-Funding
Amount, if any).
"Series Monthly Servicing Fee Additional Funds Portion
Percentage," if applicable, shall mean the percentage set forth
in the Series Term Sheet.
"Series Monthly Servicing Fee Additional Funds Portion
Shortfall," if applicable, shall have the meaning set forth in
Section 8(b)(6), 8(c)(4) or 8(d)(8).
"Series Percentage" shall mean, with respect to any
specified category, with respect to any Distribution Date, the
sum of the Class Percentages with respect to such category for
each Class of the Series established hereby on such Distribution
Date.
"Series Pre-Funding Account" shall have the meaning
specified in Section 7(f).
"Series Pre-Funding Amount," if applicable, for any
Distribution Date shall mean the principal amount on deposit in
the Series Pre-Funding Account for such Distribution Date.
"Series Pre-Funding Deadline," if applicable, shall mean
the date set forth in the Series Term Sheet.
"Series Principal Collections" shall mean, with respect
to any day or any Distribution Date, the sum of the amount of
Class Principal Collections for each Class of the Series
established hereby for such day or for the related Due Period, as
applicable.
"Series Principal Collections Account" shall have the
meaning specified in Section 7(a).
"Series Principal Funding Account" shall mean the Series
Principal Funding Account established pursuant to Section 7(c).
Amounts "on deposit in" the Series Principal Funding Account
shall be deemed to be on deposit for the benefit of (i) the Class
A Certificateholders for the period up to and including the
earlier of the (a) Class A Expected Final Payment Date or (b) the
date on which the Class A Invested Amount is paid in full, (ii)
the Class B Certificateholders for the period beginning
immediately after the date specified in subsection (i) and ending
on the earlier of (a) the Class B Expected Final Payment Date and
(b) the date the Class B Invested Amount is paid in full and
(iii) the Class C Certificateholders for the period beginning
immediately after the date specified in subsection (ii) and
ending on the earlier of (a) the Class C Expected Final Payment
Date and (b) the date on which the Class C Invested Amount is
paid in full. Amounts "on deposit in" the Series Principal
Funding Account shall be deemed to include amounts invested in
Permitted Investments pursuant to Section 7(c) unless the context
clearly requires otherwise.
"Series Required Principal Amount" shall mean, with
respect to each Distribution Date, with respect to each Series
that is a member of the same Group as the Series established
hereby (including the Series established hereby) that is in its
controlled amortization period or controlled accumulation period,
as applicable, the product of (x) 1.20 and (y) the Class
Controlled Amortization Amount or the Class Controlled
Accumulation Amount, as applicable, for such series for each such
Distribution Date.
"Series Term Sheet" shall mean the Series Term Sheet
setting forth the terms of the Series of Investor Certificates
issued hereby, to which this Annex is attached.
"Series Termination Date" shall mean the date designated
as such in the Series Term Sheet.
"Series Yield Collections" shall mean, with respect to
any day or any Distribution Date, as applicable, an amount equal
to the product of the Series Yield Factor and the amount of
Series Principal Collections for such day or the related Due
Period, as applicable.
"Series Yield Factor" shall mean the number identified
as such in the Series Term Sheet, as such number may be changed
from time to time pursuant to Section 19.
"Special Payment Date" shall mean each Distribution Date
with respect to the Rapid Amortization Period, including the
Distribution Dates with respect to each Class Expected Final
Payment Date, and all Distribution Dates after any Class Expected
Final Payment Date (in either the Controlled Accumulation Period
or the Rapid Amortization Period) if the Class Invested Amount
has not been reduced to zero on or before such Class Expected
Final Payment Date.
"Stated Controlled Accumulation Period Commencement
Date" shall mean, for any Variable Accumulation Series, the date
so specified in the Series Term Sheet.
"Subclass" with respect to any Class shall mean, if
applicable, each portion of such Class that has a different
Certificate Rate or method of calculating its Certificate Rate.
"Subordinate Class or Classes" shall mean, with respect
to any Class or Classes, the Class or Classes, if any, identified
by the letter or letters of the alphabet succeeding the letter
designating such Class or Classes (e.g., the Subordinate Classes
with respect to Class A are Class B and Class C).
"Subordinate Series" shall mean any Series that is
subordinated in right of payment, in whole or in part, pursuant
to the Series Supplement with respect to such Series, to the
Series established hereby.
"Substitute Index," if applicable, shall have the
meaning specified in Section 13.
"Substitute Index Determination Date," if applicable,
shall have the meaning set forth in the Series Term Sheet.
"Supplemental Cash" for any Distribution Date shall mean
an amount equal to the sum of the Series Pre-Funding Amount and
the Series Aggregate Excess Funding Amount for such Distribution
Date. For purposes of this Series Supplement, allocations of
Supplemental Cash for any Class shall be made according to the
following calculation: the product of (a) the Supplemental Cash
and (b) a fraction the numerator of which is the Class Investor
Interest for such Class and the denominator of which is the
Series Investor Interest.
"Telerate Page 3750," if applicable, shall mean the
display page 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).
"Third Party Credit Enhancement," if applicable, shall
mean any credit enhancement obtained by the Servicer in
accordance with Section 10.
"Third Party Credit Enhancement Account," if applicable,
shall have the meaning specified in Section 7(e).
"Third Party Credit Enhancement Agreement," if
applicable, shall mean the Agreement among the Seller, the
Servicer, the Trustee and the Third Party Credit Enhancement
Provider with respect to the Third Party Credit Enhancement.
"Third Party Credit Enhancement Amount," if applicable,
shall mean the amount on deposit in the Third Party Credit
Enhancement Account as set forth in the Series Term Sheet.
"Third Party Credit Enhancement Drawing," if applicable,
shall mean any drawing made under the Third Party Credit
Enhancement.
"Third Party Credit Enhancement Fee," if applicable,
shall mean, on any Distribution Date, the sum of all fees, costs
and interest payable to the Third Party Credit Enhancement
Provider or the Trustee as administrator of the Third Party
Credit Enhancement for the related Due Period pursuant to the
Third Party Credit Enhancement Agreement.
"Third Party Credit Enhancement Provider," if
applicable, shall have the meaning set forth in the Series Term
Sheet.
"Total Available Third Party Credit Enhancement Amount,"
if applicable, shall mean the amount set forth as such in the
Third Party Credit Enhancement Agreement.
"Variable Accumulation Series" shall mean each
outstanding Series that is not a Fixed Accumulation Series.
SECTION 2. Subordination.
(a) Subordination of Certain Classes.
(i) The Holders of each Class B Investor
Certificate, by their acceptance of such Investor Certificate,
hereby subordinate, for the benefit of the Holders of Class A
Investor Certificates, to the extent and in the manner set forth
in Section 8, all of such Investor Certificateholders' right,
title and interest in and to future distributions due on such
Holders' Investor Certificates.
(ii) The Holders of each Class C Investor
Certificate, by their acceptance of such Investor Certificate,
hereby subordinate, for the benefit of the Holders of Class A
Investor Certificates and the Class B Investor Certificates, to
the extent and in the manner set forth in Section 8, all of such
Investor Certificateholders' right, title and interest in and to
future distributions due on such Holders' Investor Certificates.
(b) No Subordination of Series. The Investor
Certificates of the Series established hereby shall not be
subordinated in right of payment to any other Series, whether
currently outstanding or to be issued in the future. One or more
other Series, however, may be subordinated in right of payment to
the Series established hereby, although the Seller shall have no
obligation to issue such a Subordinate Series. If any
Subordinate Series is issued, such Subordinate Series shall be
subordinate in right of payment to the Series established hereby
only to the extent set forth in the Series Supplement with
respect to such Subordinate Series.
SECTION 3. Representations and Warranties of the
Seller. The representations and warranties of the Seller
contained in Section 2.04 of the Pooling and Servicing Agreement
and the corresponding sections of any Assignment are true on and
as of the date hereof and/or the date set forth in the Pooling
and Servicing Agreement, as applicable. The Seller also
represents and warrants to the Trust as of the date hereof that
the execution, delivery and performance of this Series Supplement
by the Seller have been duly authorized by all necessary
corporate action, do not require any approval or consent of any
governmental agency or authority, do not and will not conflict
with any material provision of the Certificate of Incorporation
or By-Laws of the Seller, do not and will not conflict with, or
result in a breach that would constitute a material default
under, any agreement for borrowed money binding upon or
applicable to it or such of its property that is material to it,
or, to the best of the Seller's knowledge, any law or
governmental regulation or court decree applicable to it or such
material property, and this Series Supplement is the valid,
binding and enforceable obligation of the Seller, except as the
same may be limited by receivership, insolvency, reorganization,
moratorium or similar laws now or hereafter in effect relating to
creditors' rights generally or general principles of equity
(whether considered in a proceeding at law or in equity) and the
discretion of the court before which any proceeding therefor may
be brought.
SECTION 4. Representations and Warranties of the
Servicer. The representations and warranties of the Servicer
contained in Section 3.03 of the Pooling and Servicing Agreement
are true on and as of the date hereof. The Servicer also
represents and warrants to the Trust as of the date hereof that
the execution, delivery and performance of this Series Supplement
by the Servicer have been duly authorized by all necessary
corporate action, do not require any approval or consent of any
governmental agency or authority, do not and will not conflict
with any material provision of the Certificate of Incorporation
or By-Laws of the
Servicer, do not and will not conflict with, or result in a
breach that would constitute a material default under, any
agreement for borrowed money binding upon or applicable to it or
such of its property that is material to it, or, to the best of
the Servicer's knowledge, any law or governmental regulation or
court decree applicable to it or such material property, and this
Series Supplement is the valid, binding and enforceable
obligation of the Servicer, except as the same may be limited by
receivership, insolvency, reorganization, moratorium or similar
laws now or hereafter in effect relating to creditors' rights
generally or general principles of equity (whether considered in
a proceeding at law or in equity) and the discretion of the court
before which any proceeding therefor may be brought.
SECTION 5. Representations and Warranties of the
Trustee. The representations and warranties of the Trustee
contained in Section 11.15 of the Pooling and Servicing Agreement
are true on and as of the date hereof. The Trustee also
represents and warrants as of the date hereof that the Trustee
has full power, authority and right to execute, deliver and
perform this Series Supplement, and has taken all necessary
action to authorize the execution, delivery and performance by it
of this Series Supplement, and this Series Supplement has been
duly executed and delivered by the Trustee.
SECTION 6. Authentication of Certificates.
Pursuant to the request of the Seller, the Trustee shall cause
Investor Certificates in authorized denominations evidencing the
Series established hereby to be duly authenticated and delivered
as of the Series Closing Date to or upon the order of the Seller
pursuant to Section 6.05 of the Pooling and Servicing Agreement.
SECTION 7. Establishment and Administration of
Investor Accounts and the Third Party Credit Enhancement Account.
(a) The Series Distribution Account, the Series
Collections Account and the Series Principal Collections Account.
The Trustee, for the benefit of the Certificateholders of this
Series, shall establish or maintain or cause to be established
and maintained in the name of the Trust, either (i) three non-
interest bearing segregated trust accounts with the corporate
trust department of an office or branch of a Qualified Trust
Institution or (ii) three non-interest bearing segregated demand
deposit accounts at an Eligible Institution (the "Series
Distribution Account," the "Series Collections Account" and the
"Series Principal Collections Account"), each bearing a
designation clearly indicating that the funds deposited therein
are held for the benefit of the Certificateholders of this
Series. The Trust shall possess all right, title and interest in
all funds on deposit in the Series Distribution Account, the
Series Collections Account and the Series Principal Collections
Account. Pursuant to authority granted to it under Section
3.01(b) of the Pooling and Servicing Agreement, the Servicer
shall have the revocable power to instruct the Trustee to
withdraw funds from the Series Distribution Account, the Series
Collections Account and the Series Principal Collections Account
for the purpose of carrying out the duties of the Servicer
hereunder. The Servicer at all times shall maintain accurate
records reflecting each transaction in the Series Distribution
Account, the Series Collections Account and the Series Principal
Collections Account. The Paying Agent also shall have the
revocable authority to make withdrawals from the Series
Distribution Account.
(b) Reallocation Accounts. The Trustee, for the
benefit of the Certificateholders, shall establish and maintain
or cause to be established and maintained in the name of the
Trust, either (i) three non-interest bearing segregated trust
accounts with the corporate trust department of an office or
branch of a Qualified Trust Institution or (ii) three non-
interest bearing segregated demand deposit accounts at an
Eligible Institution, for the Group to which the Series
established hereby belongs (the "Group Finance Charge Collections
Reallocation Account," the "Group Principal Collections
Reallocation Account" and the "Group Pre-Funding Reallocation
Account," if applicable, collectively, the "Reallocation
Accounts"), each bearing a designation clearly indicating that
the funds deposited therein are held for the benefit of the
Certificateholders. The Trust shall possess all right, title and
interest in all funds on deposit from time to time in the
Reallocation Accounts and in all proceeds thereof.
Pursuant to authority granted to it under Section 3.01(b) of the
Pooling and Servicing Agreement, the Servicer shall have the
revocable power to instruct the Trustee to withdraw funds from
the Reallocation Accounts for the purpose of carrying out the
duties of the Servicer hereunder. The Servicer at all times
shall maintain accurate records reflecting each transaction in
each of the Reallocation Accounts.
(c) The Series Principal Funding Account.
(1) The Trustee, for the benefit of the
Certificateholders of this Series, shall establish and maintain
or cause to be established and maintained in the name of the
Trust, either (i) a non-interest bearing segregated trust account
with the corporate trust department of an office or branch of a
Qualified Trust Institution or (ii) a non-interest bearing
segregated demand deposit account at an Eligible Institution (the
"Series Principal Funding Account"), bearing a designation
clearly indicating that the funds deposited therein are held for
the benefit of the Certificateholders of this Series. The Trust
shall possess all right, title and interest in all funds on
deposit from time to time in the Series Principal Funding Account
and in all proceeds thereof. The Series Principal Funding
Account shall be under the sole dominion and control of the
Trustee for the benefit of the Certificateholders of this Series.
Pursuant to authority granted to it under Section 3.01(b) of the
Pooling and Servicing Agreement, the Servicer shall have the
revocable power to instruct the Trustee to withdraw funds from
the Series Principal Funding Account for the purpose of carrying
out the duties of the Servicer hereunder. Any funds on deposit
in the Series Principal Funding Account for more than one
Business Day shall be invested in Permitted Investments under
Section 4.02(c) of the Pooling and Servicing Agreement. The
Servicer at all times shall maintain accurate records reflecting
each transaction in the Series Principal Funding Account. The
Paying Agent also shall have the revocable authority to make
withdrawals from the Series Principal Funding Account.
(2) On or before each Distribution Date with
respect to the Controlled Accumulation Period and the Rapid
Amortization Period, if any, a withdrawal will be made from the
Series Principal Funding Account in an amount equal to the income
from the investment of funds on deposit in the Series Principal
Funding Account. Such amount withdrawn shall be deposited into
the Series Collections Account and shall be treated as a "Series
Additional Allocable Amount."
(d) The Series Interest Funding Account. The Trustee,
for the benefit of the Certificateholders of this Series, shall
establish and maintain or cause to be established and maintained
in the name of the Trust, either (i) a non-interest bearing
segregated trust account in the corporate trust department of an
office or branch of a Qualified Trust Institution or (ii) a non-
interest bearing segregated demand deposit account at an Eligible
Institution (the "Series Interest Funding Account"), bearing a
designation clearly indicating that the funds deposited therein
are held for the benefit of the Certificateholders of this
Series. The Trust shall possess all right, title and interest in
all funds on deposit from time to time in the Series Interest
Funding Account and in all proceeds thereof. Pursuant to
authority granted to it under Section 3.01(b) of the Pooling and
Servicing Agreement, the Servicer shall have the revocable power
to instruct the Trustee to withdraw funds from the Series
Interest Funding Account for the purpose of carrying out the
duties of the Servicer hereunder. The Servicer at all times
shall maintain accurate records reflecting each transaction in
the Series Interest Funding Account. The Paying Agent shall also
have the revocable authority to make withdrawals from the Series
Interest Funding Account.
(e) The Third Party Credit Enhancement Account.
(1) If the Third Party Credit Enhancement is
Funded Third Party Credit Enhancement, the Servicer, for the
benefit of the Certificateholders of this Series and the Third
Party Credit Enhancement Provider, shall establish and maintain
or cause to be established and maintained in the name of the
Trust, either (i) a non-interest bearing segregated trust account
with the corporate trust department of an office or branch of a
Qualified Trust Institution or (ii) a non-interest bearing
segregated demand deposit account at an Eligible Institution (the
"Third Party Credit Enhancement Account"), bearing a designation
clearly indicating that the funds deposited therein are held for
the benefit of the Certificateholders of this Series and the
Third Party Credit Enhancement Provider. The Trust shall possess
all right, title and interest in all funds on deposit from time
to time in the Third Party Credit Enhancement Account and in all
proceeds thereof. The Third Party Credit Enhancement Account
shall be under the sole dominion and control of the Trustee as
the administrator of the Third Party Credit Enhancement for the
benefit of the Certificateholders of this Series and the Third
Party Credit Enhancement Provider. The interest of the Third
Party Credit Enhancement Provider in the Third Party Credit
Enhancement Account shall be subordinated to the interests of the
Certificateholders of this Series to the extent provided herein
and in the Third Party Credit Enhancement Agreement. The Third
Party Credit Enhancement Provider shall not be entitled to
reimbursement from the assets of the Trust for any withdrawals
from the Third Party Credit Enhancement Account except as
specifically provided in this Series Supplement. Pursuant to
authority granted to it under Section 3.01(b) of the Pooling and
Servicing Agreement, the Servicer shall have the revocable power
to instruct the Trustee to withdraw funds from the Third Party
Credit Enhancement Account for the purpose of carrying out the
duties of the Servicer hereunder. Any funds on deposit in the
Third Party Credit Enhancement Account for more than one Business
Day shall be invested in Permitted Investments under Section
4.02(c) of the Pooling and Servicing Agreement. The
Servicer at all times shall maintain accurate records reflecting
each transaction in the Third Party Credit Enhancement Account.
The Paying Agent also shall have the revocable authority to make
withdrawals from the Third Party Credit Enhancement Account.
(2) On each Distribution Date, all interest
and investment earnings (net of losses and investment expenses)
accrued since the preceding Distribution Date on funds on deposit
in the Third Party Credit Enhancement Account shall be paid to
the Trustee as administrator of the Third Party Credit
Enhancement for application in accordance with the provisions of
the Third Party Credit Enhancement Agreement. For purposes of
determining the availability of funds or the balances in the
Third Party Credit Enhancement Account, all such investment
earnings on such funds shall be deemed not to be available or on
deposit. If, on any Distribution Date, after giving effect to
all other deposits to and withdrawals from the Third Party Credit
Enhancement Account as of such Distribution Date, the amount on
deposit in the Third Party Credit Enhancement Account is greater
than the maximum credit enhancement amount provided by the
related Third Party Credit Enhancement Agreement, then the excess
representing such amount shall be withdrawn from the Third Party
Credit Enhancement Account and paid to the Trustee as
administrator of the Third Party Credit Enhancement for
application in accordance with the provisions of the Third Party
Credit Enhancement Agreement.
(3) Upon the earliest to occur of (i) the
termination of the Trust, (ii) the Series Termination Date or
(iii) the day on which the Class Invested Amount for each Class
of the Series established hereby is paid in full, and after
payment of all amounts to be paid on such day from the Third
Party Credit Enhancement Account to or for the benefit of
Investor Certificateholders of the Series established hereby, all
amounts remaining on deposit in the Third Party Credit
Enhancement Account shall be withdrawn from such account and paid
to the Trustee as administrator of the Third Party Credit
Enhancement for application in accordance with the provisions of
the Third Party Credit Enhancement Agreement.
(f) The Series Pre-Funding Account. If the Series Term
Sheet for the Series established hereby so provides, the Trustee,
for the benefit of the Certificateholders of this Series, shall
establish and maintain or cause to be established and maintained
in the name of the Trust, either (i) a non-interest bearing
segregated trust account in the corporate trust department of an
office or branch of a Qualified Trust Institution or (ii) a non-
interest bearing segregated demand deposit account at an Eligible
Institution (the "Series Pre-Funding Account"), bearing a
designation clearly indicating that the funds deposited therein
are held for the benefit of the Certificateholders of this
Series. The Trust shall possess all right, title and interest in
all funds on deposit from time to time in the Series Pre-Funding
Account and in all proceeds thereof. The Series Pre-Funding
Account shall be under the sole dominion and control of the
Trustee for the benefit of the Certificateholders of this Series.
Pursuant to authority granted to it under Section 3.01(b) of the
Pooling and Servicing Agreement, the Servicer shall have the
revocable power to instruct the Trustee to withdraw funds from
the Series Pre-Funding Account for the purpose of carrying out
the duties of the Servicer hereunder. Any funds on deposit in
the Series Pre-Funding Account for more than one Business Day
shall be invested in Permitted Investments under Section 4.02(c)
of the Pooling and Servicing Agreement. The Servicer at all
times shall maintain accurate records reflecting each transaction
in the Series Pre-Funding Account. The Paying Agent shall also
have the revocable authority to make withdrawals from the Series
Pre-Funding Account. On the Series Closing Date, the Seller
shall cause to be deposited into the Series Pre-Funding Account
an amount equal to the Series Initial Pre-Funding Amount. In
connection with such Series Initial Pre-Funding Amount, and on or
before the Series Closing Date, the Servicer shall deliver to the
Trustee, the Seller and the Rating Agencies, a certificate of an
officer of the Servicer stating the size of such Series Pre-
Funding Amount, and certifying that the Servicer reasonably
believes that the establishment and funding of the Series Pre-
Funding Amount will not result in any delay in the payment of
principal to the Investor Certificateholders of any Series then
outstanding.
(g) The PFA Special Reserve Account.
(1) If the Series Term Sheet for the Series
established hereby so provides, the Trustee, for the benefit of
the Certificateholders of this Series, shall establish and
maintain or cause to be established and maintained in the name of
the Trust, either (i) a non-interest bearing segregated trust
account in the corporate trust department of an office or branch
of a Qualified Trust Institution or (ii) a non-interest bearing
segregated demand deposit account at an Eligible Institution (the
"PFA Special Reserve Account"), bearing a designation clearly
indicating that the funds deposited therein are held for the
benefit of the Certificateholders of this Series. The Trust
shall possess all right, title and interest in all funds on
deposit from time to time in the PFA Special Reserve Account and
in all proceeds thereof. The PFA Special Reserve Account shall
be under the sole dominion and control of the Trustee for the
benefit of the Certificateholders of this Series. Pursuant to
authority granted to it under Section 3.01(b) of the Pooling and
Servicing Agreement, the Servicer shall have the revocable power
to instruct the Trustee to withdraw funds from the PFA Special
Reserve Account for the purpose of carrying out the duties of the
Servicer hereunder. Any funds on deposit in the PFA Special
Reserve Account for more than one Business Day shall be invested
in Permitted Investments under Section 4.02(c) of the Pooling and
Servicing Agreement. The Servicer at all times shall maintain
accurate records reflecting each transaction in the PFA Special
Reserve Account. The Paying Agent shall also have the revocable
authority to make withdrawals from the PFA Special Reserve
Account.
(2) Upon the earlier to occur of (i) the Series
Termination Date or (ii) the day on which the Series Invested
Amount is paid in full, the Trustee, acting in accordance with
the instructions of the Servicer, after the prior payment of all
amounts owing to the Investor Certificateholders that are payable
from the PFA Special Reserve Account as provided herein, shall
withdraw from the PFA Special Reserve Account and pay to or at
the direction of the Seller, all amounts, if any, on deposit in
the PFA Special Reserve Account and the PFA Special Reserve
Account shall have terminated for purposes of this Series
Supplement.
(3) On or before each Distribution Date with
respect to the Controlled Accumulation Period, a withdrawal will
be made from the PFA Special Reserve Account in an amount equal
to the lesser of (a) the amount on deposit in the PFA Special
Reserve Account with respect to such Distribution Date and (b)
the excess, if any, of the PFA Covered Amount with respect to
such Distribution Date over the amount of investment earnings on
the amount on deposit in the Series Principal Funding Account
with respect to such Distribution Date. Such amount withdrawn
shall be deposited into the Series Collections Account and
treated as a "Series Additional Allocable Amount."
(h) The Pre-Funding Special Reserve Account.
(1) If the Series Term Sheet for the Series
established hereby so provides, the Trustee, for the benefit of
the Certificateholders of this Series, shall establish and
maintain or cause to be established and maintained in the name of
the Trust, either (i) a non-interest bearing segregated trust
account in the corporate trust department of an office or branch
of a Qualified Trust Institution or (ii) a non-interest bearing
segregated demand deposit account at an Eligible Institution (the
"Pre-Funding Special Reserve Account"), bearing a designation
clearly indicating that the funds deposited therein are held for
the benefit of the Certificateholders of this Series. The
Trust shall possess all right, title and interest in all funds on
deposit from time to time in the Pre-Funding Special Reserve
Account and in all proceeds thereof. The Pre-Funding Special
Reserve Account shall be under the sole dominion and control of
the Trustee for the benefit of the Certificateholders of this
Series. Pursuant to authority granted to it under Section
3.01(b) of the Pooling and Servicing Agreement, the Servicer
shall have the revocable power to instruct the Trustee to
withdraw funds from the Pre-Funding Special Reserve Account for
the purpose of carrying out the duties of the Servicer hereunder.
Any funds on deposit in the Pre-Funding Special Reserve Account
for more than one Business Day shall be invested in Permitted
Investments under Section 4.02(c) of the Pooling and Servicing
Agreement. The Servicer at all times shall maintain accurate
records reflecting each transaction in the Pre-Funding Special
Reserve Account. The Paying Agent shall also have the revocable
authority to make withdrawals from the Pre-Funding Special
Reserve Account.
(2) Upon the earlier to occur of (i) the Series
Termination Date or (ii) the day on which the amount on deposit
in the Series Pre-Funding Account is reduced to zero, the
Trustee, acting in accordance with the instructions of the
Servicer, after the prior payment of all amounts owing to the
Investor Certificateholders that are payable from the Pre-Funding
Special Reserve Account as provided herein, shall withdraw from
the Pre-Funding Special Reserve Account and pay to or at the
direction of the Seller, all amounts, if any, on deposit in the
Pre-Funding Special Reserve Account and the Pre-Funding Special
Reserve Account shall have terminated for purposes of this Series
Supplement.
(3) On or before each Distribution Date with
respect to the period between the Series Closing Date and date
that occurs upon the earlier of (i) the Series Pre-Funding
Deadline and (ii) the date upon which there are no longer funds
on deposit in the Series Pre-Funding Account (the "Pre-Funding
Period"), a withdrawal will be made from the Pre-Funding Special
Reserve Account in an amount equal to the lesser of (a) the
amount on deposit in the Pre-Funding Special Reserve Account with
respect to such Distribution Date and (b) the excess, if any, of
the Pre-Funding Covered Amount with respect to such Distribution
Date over the amount of investment earnings on the amount on
deposit in the Series Pre-Funding Account with respect to such
Distribution Date. Such amount shall be treated as a "Series
Additional Allocable Amount."
(i) Transfer of Investor Accounts. If, at any time any
of the Investor Accounts established in Sections 7(a) - 7(h)
shall be located at an institution that fails to meet the
qualification requirements for an Eligible Institution or a
Qualified Trust Institution, as applicable, the Trustee shall
move or cause to be moved such Investor Account to an institution
meeting the requisite qualifications requirements within ten
Business Days of the date the Trustee becomes aware of such lack
of qualification; provided, however, that if (i) such Account is
a Third Party Credit Enhancement Account and (ii) such Account is
not Funded Third Party Credit Enhancement, then the Trustee shall
move or cause to be moved such Account to an institution meeting
the requisite qualifications requirements within thirty Business
Days of the date the Trustee becomes aware of such lack of
qualification.
SECTION 8. Allocations of Collections.
(a) Deposits into the Series Collections Account. On
or before each Distribution Date, the Servicer shall direct the
Trustee to withdraw from the Group Collections Account and
deposit into the Series Collections Account an amount equal to
(i) the sum of the Series Finance Charge Collections and the
Series Principal Collections and (ii) the Series Excess Funding
Amount (SRC), each for the related Due Period. On or before each
Distribution Date, the Servicer also shall direct the Trustee to
deposit the Series Additional Allocable Amounts, if any, which
have not previously been deposited into the Series Collections
Account.
(b) During the Revolving Period. On or before each
Distribution Date during the Revolving Period, the Servicer shall
direct the Trustee that funds be paid or deposited, and the
Trustee shall apply such funds in the following amounts, to the
extent such funds are available and in the order of priority
specified, to the account or Person indicated, in each case as
set forth below.
(1) Pre-Funding Account. If applicable, on or before
the first Distribution Date following a Series Pre-Funding
Deadline, all amounts on deposit in the Series Pre-Funding
Account shall be deposited into the Series Distribution Account.
(2) Pre-Funding Special Reserve Account. If
applicable, on or before the first Distribution Date following a
Series Pre-Funding Deadline, an amount equal to the Pre-Funding
Special Reserve Amount shall be withdrawn from the Pre-Funding
Special Reserve Account and shall be deposited into the Series
Collections Account as a "Series Additional Allocable Amount."
(3) Class A Monthly Interest. An amount equal to the
lesser of
(A) the Class A Modified Required Amount and
(B) the sum of Series Finance Charge
Collections and Series Additional Allocable Amounts
shall be withdrawn from the Series Collections Account and
deposited into the Series Distribution Account.
(4) Class B Monthly Interest. An amount equal to the
lesser of
(A) the Class B Modified Required Amount and
(B) the sum of any remaining Series Finance
Charge Collections and any remaining Series Additional Allocable
Amounts
shall be withdrawn from the Series Collections Account and
deposited into the Series Distribution Account.
(5) Class C Monthly Interest. An amount equal to the
lesser of
(A) the Class C Modified Required Amount, if
any, and
(B) the sum of any remaining Series Finance
Charge Collections and any remaining Series Additional Allocable
Amounts
shall be withdrawn from the Series Collections Account and
deposited into the Series Distribution Account.
(6) Series Monthly Servicing Fee Additional Funds
Portion. An amount equal to the lesser of
(A) the Series Monthly Servicing Fee Additional
Funds Portion and
(B) Series Additional Funds
shall be withdrawn from the Series Collections Account and
deposited into the Series Distribution Account. The positive
difference, if any, between the amount in (A) and the amount in
(B) shall be the "Series Monthly Servicing Fee Additional Funds
Portion Shortfall."
(7) Series Monthly Servicing Fee. An amount equal to
the lesser of
(A) the sum of the Series Monthly Servicing Fee
and all accrued but unpaid Series Monthly Servicing Fees as of
the prior Distribution Date less the Series Monthly Servicing Fee
Additional Funds Portion, if any, and
(B) the sum of any remaining Series Finance
Charge Collections and any remaining Series Additional Allocable
Amounts
shall be withdrawn from the Series Collections Account and
deposited into the Series Distribution Account.
(8) Reimbursement of Class A Cumulative Investor
Charged-Off Amounts. An amount equal to the lesser of
(A) the Class A Cumulative Investor Charged-Off
Amount and
(B) the sum of any remaining Series Finance
Charge Collections and any remaining Series Additional Allocable
Amounts
shall be withdrawn from the Series Collections Account and
deposited into the Group Principal Collections Reallocation
Account. The Class A Cumulative Investor Charged-Off Amount
shall be reduced by the amount of such deposit.
(9) Reimbursement of Class B Cumulative Investor
Charged-Off Amounts. An amount equal to the lesser of
(A) the Class B Cumulative Investor Charged-Off
Amount and
(B) the sum of any remaining Series Finance
Charge Collections and any remaining Series Additional Allocable
Amounts
shall be withdrawn from the Series Collections Account and
deposited into the Group Principal Collections Reallocation
Account. The Class B Cumulative Investor Charged-Off Amount
shall be reduced by the amount of such deposit.
(10) Series Monthly Servicing Fee Additional Funds
Portion Shortfall. An amount equal to the lesser of
(A) the Series Monthly Servicing Fee Additional
Funds Portion Shortfall and
(B) the sum of any remaining Series Finance
Charge Collections and any remaining Series Additional Allocable
Amounts
shall be withdrawn from the Series Collections Account and
deposited into the Series Distribution Account.
(11) Reimbursement of Class C Cumulative Investor
Charged-Off Amounts. An amount equal to the lesser of
(A) the Class C Cumulative Investor Charged-Off
Amount and
(B) the sum of any remaining Series Finance
Charge Collections and any remaining Series Additional Allocable
Amounts
shall be withdrawn from the Series Collections Account and
deposited into the Group Principal Collections Reallocation
Account. The Class C Cumulative Investor Charged-Off Amount
shall be reduced by the amount of such deposit.
(12) Shortfalls in the Pre-Funding Special Reserve
Amount. If applicable, an amount equal to the lesser of
(A) the Pre-Funding Special Reserve Amount
Shortfall and
(B) the sum of any remaining Series Finance
Charge Collections and any remaining Series Additional Allocable
Amounts
shall be withdrawn from the Series Collections Account and
deposited into the Pre-Funding Special Reserve Account. The Pre-
Funding Special Reserve Amount Shortfall shall be reduced by the
amount of such deposit.
(13) Shortfalls in the PFA Special Reserve Required
Amount. If applicable, an amount equal to the lesser of
(A) the PFA Special Reserve Required Amount
Shortfall and
(B) the sum of any remaining Series Finance
Charge Collections and any remaining Series Additional Allocable
Amounts
shall be withdrawn from the Series Collections Account and
deposited into the PFA Special Reserve Account. The PFA Special
Reserve Required Amount Shortfall shall be reduced by the amount
of such deposit.
(14) Reimbursement of prior Third Party Credit
Enhancement Drawings. If applicable, an amount equal to the
lesser of
(A) the sum of all unreimbursed Third Party
Credit Enhancement Drawings and
(B) the sum of any remaining Series Finance
Charge Collections and any remaining Series Additional Allocable
Amounts
shall be withdrawn from the Series Collections Account and
deposited into the Third Party Credit Enhancement Account. The
amount of unreimbursed Third Party Credit Enhancement Drawings
shall be reduced by the amount of such deposit.
(15) Third Party Credit Enhancement Fee. If
applicable, an amount equal to the lesser of
(A) the Third Party Credit Enhancement Fee and
(B) the sum of any remaining Series Finance
Charge Collections and any remaining Series Additional Allocable
Amounts
shall be withdrawn from the Series Collections Account and
deposited into the Series Distribution Account.
(16) The Class A Early Termination Premium or the Class
A Early Termination Premium Shortfall, as applicable. If
applicable, on or after the Series Pre-Funding Deadline, an
amount equal to the lesser of
(A) the Class A Early Termination Premium or
the Class A Early Termination Premium Shortfall, as applicable,
and
(B) the sum of any remaining Series Finance
Charge Collections and any remaining Series Additional Allocable
Amounts
shall be withdrawn from the Series Collections Account and
deposited into the Series Distribution Account.
(17) The Class B Early Termination Premium or the
Class B Early Termination Premium Shortfall, as applicable. If
applicable, on or after the Series Pre-Funding Deadline, an
amount equal to the lesser of
(A) the Class B Early Termination Premium or
the Class B Early Termination Premium Shortfall, as applicable,
and
(B) the sum of any remaining Series Finance
Charge Collections and any remaining Series Additional Allocable
Amounts
shall be withdrawn from the Series Collections Account and
deposited into the Series Distribution Account.
(18) Series Excess Servicing. An amount equal to any
remaining Series Finance Charge Collections and any remaining
Series Additional Allocable Amounts (together, "Series Excess
Servicing") shall be withdrawn from the Series Collections
Account and deposited into the Group Finance Charge Collections
Reallocation Account.
(19) Third Party Credit Enhancement Drawing. If
applicable, an amount equal to the lesser of
(A) the Class C Modified Required Amount
Shortfall and
(B) the amount on deposit in the Third Party
Credit Enhancement Account
shall be withdrawn from the Third Party Credit Enhancement
Account and deposited into the Series Distribution Account. The
Class C Modified Required Amount Shortfall and the Third Party
Credit
Enhancement both shall be reduced by the amount of such deposit.
(20) Payment of the Class A Modified Required Amount
Shortfall from a Subordinate Series. If applicable, an amount
equal to the lesser of
(A) the Class A Modified Required Amount
Shortfall and
(B) funds, if any, available to pay such Class
A Modified Required Amount Shortfall from funds initially
allocated to any Subordinate Series
shall be deposited into the Series Distribution Account. The
Class A Modified Required Amount Shortfall shall be reduced by
the amount of such deposit.
(21) Payment of the Class B Modified Required Amount
Shortfall from a Subordinate Series. If applicable, an amount
equal to the lesser of
(A) the Class B Modified Required Amount
Shortfall and
(B) funds, if any, available to pay such Class
B Modified Required Amount Shortfall from funds initially
allocated to any Subordinate Series
shall be deposited into the Series Distribution Account. The
Class B Modified Required Amount Shortfall shall be reduced by
the amount of such deposit.
(22) Payment of the Class C Modified Required Amount
Shortfall from a Subordinate Series. If applicable, an amount
equal to the lesser of
(A) the Class C Modified Required Amount
Shortfall and
(B) funds, if any, available to pay such Class
C Modified Required Amount Shortfall from funds initially
allocated to any Subordinate Series
shall be deposited into the Series Distribution Account. The
Class C Modified Required Amount Shortfall shall be reduced by
the amount of such deposit.
(23) Reimbursement of the Class A Cumulative Investor
Charged-Off Amount from a Subordinate Series. If applicable, an
amount equal to the lesser of
(A) the Class A Cumulative Investor Charged-Off
Amount and
(B) funds, if any, available to pay such Class
A Cumulative Investor Charged-Off Amount from funds initially
allocated to any Subordinate Series
shall be deposited into the Group Principal Collections
Reallocation Account. The Class A Cumulative Investor Charged-
Off Amount shall be reduced by the amount of such deposit.
(24) Reimbursement of the Class B Cumulative Investor
Charged-Off Amount from a Subordinate Series. If applicable, an
amount equal to the lesser of
(A) the Class B Cumulative Investor Charged-Off
Amount and
(B) funds, if any, available to pay such Class
B Cumulative Investor Charged-Off Amount from funds initially
allocated to any Subordinate Series
shall be deposited into the Group Principal Collections
Reallocation Account. The Class B Cumulative Investor Charged-
Off Amount shall be reduced by the amount of such deposit.
(25) Reimbursement of the Class C Cumulative Investor
Charged-Off Amount from a Subordinate Series. If applicable, an
amount equal to the lesser of
(A) the Class C Cumulative Investor Charged-Off
Amount and
(B) funds, if any, available to pay such Class
C Cumulative Investor Charged-Off Amount from funds initially
allocated to any Subordinate Series
shall be deposited into the Group Principal Collections
Reallocation Account. The Class C Cumulative Investor Charged-
Off Amount shall be reduced by the amount of such deposit.
(26) Reallocations for the Class A Modified Required
Amount Shortfall from the Group Finance Charge Collections
Reallocation Account. An amount equal to the lesser of
(A) the Class A Modified Required Amount
Shortfall and
(B) the product of
(x) a fraction the numerator of which
is the Class A Modified Required Amount Shortfall and the
denominator of which is the sum of the class modified required
amount
shortfalls for all classes with the same alphabetical designation
for all series in the Group to which the Series established
hereby belongs (after giving effect to provisions in the
applicable Series Supplements substantially similar to the
clauses preceding this
clause (26)) and
(y) the amount on deposit in the Group
Finance Charge Collections Reallocation Account before any
withdrawals therefrom with respect to any other series pursuant
to a comparable clause in the applicable Series Supplements
shall be withdrawn from the Group Finance Charge Collections
Reallocation Account and deposited into the Series Distribution
Account. The Class A Modified Required Amount Shortfall shall be
reduced by the amount of such deposit.
(27) Reallocations for the Class B Modified Required
Amount Shortfall from the Group Finance Charge Collections
Reallocation Account. An amount equal to the lesser of
(A) the Class B Modified Required Amount
Shortfall and
(B) the product of
(x) a fraction the numerator of which
is the Class B Modified Required Amount Shortfall and the
denominator of which is the sum of the class modified required
amount
shortfalls for all classes with the same alphabetical designation
for all series in the Group to which the Series established
hereby belongs (after giving effect to provisions in the
applicable Series Supplements substantially similar to the
clauses preceding this
clause (27)) and
(y) the amount on deposit in the Group
Finance Charge Collections Reallocation Account before any
withdrawals therefrom with respect to any other series pursuant
to a comparable clause for any class with the same alphabetical
designation and after any withdrawals therefrom for the benefit
of all classes designated by higher letters of the alphabet of
such other series in the applicable Series Supplements
shall be withdrawn from the Group Finance Charge Collections
Reallocation Account and deposited into the Series Distribution
Account. The Class B Modified Required Amount Shortfall shall be
reduced by the amount of such deposit.
(28) Reallocations for the Class C Modified Required
Amount Shortfall from the Group Finance Charge Collections
Reallocation Account. An amount equal to the lesser of
(A) the Class C Modified Required Amount
Shortfall and
(B) the product of
(x) a fraction the numerator of which
is the Class C Modified Required Amount Shortfall and the
denominator of which is the sum of the class modified required
amount shortfalls for all classes not initially rated by the Rating
Agencies for all series in the Group to which the Series
established hereby belongs (after giving effect to provisions in
the applicable Series Supplements substantially similar to the
clauses preceding this clause (28)); provided, however, that if
any other series (or multiple other series) shall have more than
one unrated class, the class modified required amount shortfall
to be used in the denominator for each such other series shall be
the class modified required amount shortfall for the most senior
unrated class for such series for which the class modified
required amount shortfall is greater than zero and
(y) the amount on deposit in the Group
Finance Charge Collections Reallocation Account before any
withdrawals therefrom with respect to any other series pursuant
to a comparable clause for any class with the same alphabetical
designation and after any withdrawals therefrom for the benefit
of all classes designated by higher letters of the alphabet of
such other series in the applicable Series Supplements
shall be withdrawn from the Group Finance Charge Collections
Reallocation Account and deposited into the Series Distribution
Account. The Class C Modified Required Amount Shortfall shall be
reduced by the amount of such deposit.
(29) Reallocations for the Class A Cumulative Investor
Charged-Off Amount from the Group Finance Charge Collections
Reallocation Account. An amount equal to the lesser of
(A) the Class A Cumulative Investor Charged-Off
Amount and
(B) the product of
(x) a fraction the numerator of which
is the Class A Cumulative Investor Charged-Off Amount and the
denominator of which is the sum of the class cumulative investor
charged-off amounts for all classes with the same alphabetical
designation for all series in the Group to which the Series
established hereby belongs (after giving effect to provisions in
the applicable Series Supplements substantially similar to the
clauses preceding this clause (29)) and
(y) the amount on deposit in the Group
Finance Charge Collections Reallocation Account before any
withdrawals therefrom with respect to any other series pursuant
to a comparable clause in the applicable Series Supplements
shall be withdrawn from the Group Finance Charge Collections
Reallocation Account and deposited into the Group Principal
Collections
Reallocation Account. The Class A Cumulative Investor Charged-
Off Amount shall be reduced by the amount of such deposit.
(30) Reallocations for the Class B Cumulative Investor
Charged-Off Amount from the Group Finance Charge Collections
Reallocation Account. An amount equal to the lesser of
(A) the Class B Cumulative Investor Charged-Off
Amount and
(B) the product of
(x) a fraction the numerator of which
is the Class B Cumulative Investor Charged-Off Amount and the
denominator of which is the sum of the class cumulative investor
charged-off amounts for all classes with the same alphabetical
designation for all series in the Group to which the Series
established hereby belongs (after giving effect to provisions in
the applicable Series Supplements substantially similar to the
clauses preceding this clause (30)) and
(y) the amount on deposit in the Group
Finance Charge Collections Reallocation Account before any
withdrawals therefrom with respect to any other series pursuant
to a comparable clause for any class with the same alphabetical
designation and after any withdrawals therefrom for the benefit
of all classes designated by higher letters of the alphabet of
such other series in the applicable Series Supplements
shall be withdrawn from the Group Finance Charge Collections
Reallocation Account and deposited into the Group Principal
Collections Reallocation Account. The Class B Cumulative
Investor Charged-Off Amount shall be reduced by the amount of
such deposit.
(31) Allocations from the Group Finance Charge
Collections Reallocation Account for the payment of accrued
Series Monthly Servicing Fees. An amount equal to the lesser of
(A) all accrued but unpaid Series Monthly
Servicing Fees and
(B) the product of
(x) a fraction the numerator of which
is all accrued but unpaid Series Monthly Servicing Fees and the
denominator of which is the sum of all accrued but unpaid monthly
servicing fees for all series in the Group to which the Series
established hereby belongs (after giving effect to provisions in
the applicable Series Supplements substantially similar to the
clauses preceding this clause (31)) and
(y) the amount on deposit in the Group
Finance Charge Collections Reallocation Account before any
withdrawals therefrom with respect to any other series pursuant
to a comparable clause in the applicable Series Supplements
shall be withdrawn from the Group Finance Charge Collections
Reallocation Account and deposited into the Series Distribution
Account.
(32) Reallocations for the Class C Cumulative Investor
Charged-Off Amount from the Group Finance Charge Collections
Reallocation Account. An amount equal to the lesser of
(A) the Class C Cumulative Investor Charged-Off
Amount and
(B) the product of
(x) a fraction the numerator of which
is the Class C Cumulative Investor Charged-Off Amount and the
denominator of which is the sum of the class cumulative investor
charged-off amounts for all classes unrated by the Rating
Agencies for all series in the Group to which the Series
established hereby belongs (after giving effect to provisions in
the applicable Series Supplements substantially similar to the
clauses preceding this clause (32)); provided, however, that if
any other series (or multiple other series) shall have more than
one unrated class, the class cumulative investor charged-off
amount to be used in the denominator for each such other series
shall be the class cumulative investor charged-off amount for the
most senior unrated class for such series for which the class
cumulative investor charged-off amount is greater than zero and
(y) the amount on deposit in the Group
Finance Charge Collections Reallocation Account before any
withdrawals therefrom with respect to any other series pursuant
to a comparable clause for any class with the same alphabetical
designation and after any withdrawals therefrom for the benefit
of all classes designated by higher letters of the alphabet of
such other series in the applicable Series Supplements
shall be withdrawn from the Group Finance Charge Collections
Reallocation Account and deposited into the Group Principal
Collections Reallocation Account. The Class C Cumulative
Investor Charged-Off Amount shall be reduced by the amount of
such deposit.
(33) Payment of the Class A Modified Required Amount
Shortfall from Class C Principal Collections. An amount equal to
the lesser of
(A) the Class A Modified Required Amount
Shortfall and
(B) the sum of the Series Excess Funding Amount
(SRC) and Class C Principal Collections less Series Yield
Collections allocable to the Class C Investor Interest
shall be withdrawn from the Series Collections Account and
deposited into the Series Distribution Account. The Class A
Modified Required Amount Shortfall shall be reduced by the amount
of such deposit, and the Class C Cumulative Investor Charged-Off
Amount shall be increased by the amount of such deposit.
(34) Payment of the Class A Modified Required Amount
Shortfall from Class B Principal Collections. An amount equal to
the lesser of
(A) the Class A Modified Required Amount
Shortfall and
(B) the Class B Principal Collections less
Series Yield Collections allocable to the Class B Investor
Interest
shall be withdrawn from the Series Collections Account and
deposited into the Series Distribution Account. The Class A
Modified Required Amount Shortfall shall be reduced by the amount
of such deposit, and the Class B Cumulative Investor Charged-Off
Amount shall be increased by the amount of such deposit.
(35) Payment of the Class B Modified Required Amount
Shortfall from Class C Principal Collections. An amount equal to
the lesser of
(A) the Class B Modified Required Amount
Shortfall and
(B) the sum of any remaining Series Excess
Funding Amounts (SRC) and any remaining Class C Principal
Collections less Series Yield Collections allocable to the Class
C Investor Interest
shall be withdrawn from the Series Collections Account and
deposited into the Series Distribution Account. The Class B
Modified Required Amount Shortfall shall be reduced by the amount
of such deposit, and the Class C Cumulative Investor Charged-Off
Amount shall be increased by the amount of such deposit.
(36) Reimbursement of the Class A Cumulative Investor
Charged-Off Amount from Class C Principal Collections. An amount
equal to the lesser of
(A) the Class A Cumulative Investor Charged-Off
Amount and
(B) the sum of any remaining Series Excess
Funding Amounts (SRC) and any remaining Class C Principal
Collections less Series Yield Collections allocable to the Class
C Investor Interest
shall be withdrawn from the Series Collections Account and
deposited into the Group Principal Collections Reallocation
Account. The Class A Cumulative Investor Charged-Off Amount
shall be reduced by the amount of such deposit, and the Class C
Cumulative Investor Charged-Off Amount shall be increased by the
amount of such deposit.
(37) Reallocation of the Class C Investor Interest to
reimburse the Class A Cumulative Investor Charged-Off Amount.
The Class A Cumulative Investor Charged-Off Amount shall be
reduced by an amount equal to the lesser of
(A) the Class A Cumulative Investor Charged-Off
Amount and
(B) the Class C Investor Interest
and the Class C Cumulative Investor Charged-Off Amount shall be
increased by such amount; provided, however, that the Class C
Cumulative Investor Charged-Off Amount would not, as a result,
exceed the Class C Initial Investor Interest.
(38) Reimbursement of the Class A Cumulative Investor
Charged-Off Amount from Class B Principal Collections. An amount
equal to the lesser of
(A) the Class A Cumulative Investor Charged-Off
Amount and
(B) any remaining Class B Principal Collections
less Series Yield Collections allocable to the Class B Investor
Interest
shall be withdrawn from the Series Collections Account and
deposited into the Group Principal Collections Reallocation
Account. The Class A Cumulative Investor Charged-Off Amount
shall be reduced by the amount of such deposit, and the Class B
Cumulative Investor Charged-Off Amount shall be increased by the
amount of such deposit.
(39) Reallocation of the Class B Investor Interest to
reimburse the Class A Cumulative Investor Charged-Off Amount.
The Class A Cumulative Investor Charged-Off Amount shall be
reduced by an amount equal to the lesser of
(A) the Class A Cumulative Investor Charged-Off
Amount and
(B) the Class B Investor Interest
and the Class B Cumulative Investor Charged-Off Amount shall be
increased by such amount; provided, however, that the Class B
Cumulative Investor Charged-Off Amount would not, as a result,
exceed the Class B Initial Investor Interest.
(40) Reimbursement of the Class B Cumulative Investor
Charged-Off Amount from Class C Principal Collections. An amount
equal to the lesser of
(A) the Class B Cumulative Investor Charged-Off
Amount and
(B) the sum of any remaining Series Excess
Funding Amounts (SRC) and any remaining Class C Principal
Collections less Series Yield Collections allocable to the Class
C Investor Interest
shall be withdrawn from the Series Collections Account and
deposited into the Group Principal Collections Reallocation
Account. The Class B Cumulative Investor Charged-Off Amount
shall be reduced by the amount of such deposit, and the Class C
Cumulative Investor Charged-Off Amount shall be increased by the
amount of such deposit.
(41) Reallocation of the Class C Investor Interest to
reimburse the Class B Cumulative Investor Charged-Off Amount.
The Class B Cumulative Investor Charged-Off Amount shall be
reduced by an amount equal to the lesser of
(A) the Class B Cumulative Investor Charged-Off
Amount and
(B) the Class C Investor Interest
and the Class C Cumulative Investor Charged-Off Amount shall be
increased by such amount; provided, however, that the Class C
Cumulative Investor Charged-Off Amount would not, as a result,
exceed the Class C Initial Investor Interest.
(42) Reallocations for the Class A Early Termination
Premium Shortfall from the Group Finance Charge Collections
Reallocation Account. If applicable, an amount equal to the
lesser of
(A) the Class A Early Termination Premium
Shortfall and
(B) the product of
(x) a fraction the numerator of which
is the Class A Early Termination Premium Shortfall and the
denominator of which is the sum of all class early termination
premium
shortfalls with the same alphabetical designation for all series
in the Group to which the Series established hereby belongs
(after
giving effect to provisions in the applicable Series Supplements
substantially similar to the clauses preceding this clause (42))
and
(y) the amount on deposit in the Group
Finance Charge Collections Reallocation Account before any
withdrawals therefrom with respect to any other series pursuant
to a comparable clause in the applicable Series Supplements
shall be withdrawn from the Group Finance Charge Collections
Reallocation Account and deposited into the Series Distribution
Account.
(43) Reallocations for the Class B Early Termination
Premium Shortfall from the Group Finance Charge Collections
Reallocation Account. If applicable, an amount equal to the
lesser of
(A) the Class B Early Termination Premium
Shortfall and
(B) the product of
(x) a fraction the numerator of which
is the Class B Early Termination Premium Shortfall and the
denominator of which is the sum of all class early termination
premium
shortfalls with the same alphabetical designation for all series
in the Group to which the Series established hereby belongs
(after giving effect to provisions in the applicable Series
Supplements substantially similar to the clauses preceding this
clause (43)) and
(y) the amount on deposit in the Group
Finance Charge Collections Reallocation Account before any
withdrawals therefrom with respect to any other series pursuant
to a comparable clause for any class with the same alphabetical
designation and after any withdrawals therefrom for the benefit
of all classes designated by higher letters of the alphabet of
such other series in the applicable Series Supplements
shall be withdrawn from the Group Finance Charge Collections
Reallocation Account and deposited into the Series Distribution
Account.
(44) Allocations of remaining amounts from the Group
Finance Charge Collections Reallocation Account to the Seller.
An amount equal to all remaining amounts on deposit in the Group
Finance Charge Collections Reallocation Account, after all other
allocations from such Account pursuant to the Series Supplements
for any series in the Group to which the Series established
hereby belongs, shall be withdrawn from the Group Finance Charge
Collections Reallocation Account and paid to the Seller.
(45) Allocations from the Excess Funding Account
(General) to the Group Principal Collections Reallocation
Account. If no series is in its Rapid Amortization Period, or if
amounts remain on deposit in the Excess Funding Account (General)
after all allocations to any other series that are in their Rapid
Amortization Periods, an amount equal to the product of
(A) a fraction the numerator of which is the
sum of the series investor interests less the sum of class
investor interests with respect to seller retained classes for
all series in the Group to which the Series established hereby
belongs and the denominator of which is the Aggregate Investor
Interest less the sum of all class investor interests with
respect to seller retained classes for all outstanding series
(after giving effect to provisions in the applicable Series
Supplements substantially similar to the clauses preceding this
clause (45)) and
(B) the amount on deposit in the Excess Funding
Account (General) before any withdrawals therefrom with respect
to any other series pursuant to a comparable clause in the
applicable Series Supplements shall be withdrawn from the Excess
Funding Account (General) and deposited into the Group Principal
Collections Reallocation Account.
(46) Class C Permitted Controlled Amortization Amount.
An amount equal to the lesser of
(A) the Class C Permitted Controlled
Amortization Amount and
(B) remaining amounts on deposit in the Series
Collections Account shall be withdrawn from the Series
Collections Account and deposited into the Series Distribution
Account. The amount by which the Class C Permitted Controlled
Amortization Amount exceeds such deposit shall be the "Class C
Permitted Controlled Amortization Amount Shortfall."
(47) Allocations of Series Principal Collections. An
amount equal to the remaining Series Principal Collections minus
the (i) Series Yield Collections, if any, and (ii) remaining
Seller Retained Class Principal Collections shall be withdrawn
from the Series Collections Account and deposited into the Group
Principal Collections Reallocation Account.
(48) Payment to the Seller. An amount equal to the
lesser of
(A) the positive difference, if any, between
the amount of the Seller Interest and the Minimum Seller Interest
(after giving effect to all similar provisions in other Series
Supplements, beginning with the series (including the Series
established hereby) having the earliest series closing date and
continuing seriatim) and
(B) any remaining amounts on deposit in the
Series Collections Account
shall be withdrawn from the Series Collections Account and paid
to the Seller. If after such payment, amounts remain on deposit
in the Series Collections Account, such amounts shall be
deposited into the Excess Funding Account (SRC).
(49) Additional payment to the Seller. An amount equal
to the lesser of
(A) the positive difference, if any, between
the amount of the Seller Interest and the Minimum Seller Interest
and
(B) the product of (i) any remaining amounts
on deposit in the Group Principal Collections Reallocation
Account and (ii) a fraction the numerator of which is the
remaining amounts on deposit in the Group Principal Collections
Reallocation Account and the denominator of which is the sum of
the remaining amounts on deposit in all group principal
collections reallocation accounts (including the Group Principal
Collections Reallocation Account for the Group to which the
Series established hereby belongs)
shall be withdrawn from the Group Principal Collections
Reallocation Account and paid to the Seller. If after such
payment, amounts remain on deposit in the Group Principal
Collections Reallocation Account, such amounts shall be deposited
into the Excess Funding Account (General).
(50) Allocations from the Series Pre-Funding Account to
the Group Pre-Funding Reallocation Account. If applicable, an
amount equal to the amount on deposit in the Series Pre-Funding
Account shall be withdrawn from the Series Pre-Funding Account
and deposited into the Group Pre-Funding Reallocation Account;
provided, however, that such amount shall be used only to fund
principal shortfalls for other series in their controlled
accumulation or controlled amortization periods, as applicable,
in the Group to which the Series established hereby belongs.
(51) Further payment to the Seller. An amount equal to
the lesser of
(A) the positive difference, if any, between
the amount of the Seller Interest and the Minimum Seller Interest
and
(B) the product of (i) any remaining amounts on
deposit in the Group Pre-Funding Reallocation Account and (ii) a
fraction the numerator of which is the amount on deposit the
Group Pre-Funding Reallocation Account and the denominator of
which is the sum of all amounts on deposit in all group pre-
funding reallocation accounts (after giving effect to provisions
in the applicable Series Supplements substantially similar to
Sections 8(c)(53), 8(c)(54) and 8(c)(55), and including the Group
Pre-Funding Reallocation Account to which the Series established
hereby is a member).
shall be withdrawn from the Group Pre-Funding Reallocation
Account and paid to the Seller. Any remaining amounts on deposit
in the Group Pre-Funding Reallocation Account shall be allocated
to each Series in the Group based on a fraction, the numerator of
which is the amount deposited pursuant to Section 8(b)(50) and
the denominator of which is the sum of all such deposits pursuant
to similar provisions in the series supplements for the Group to
which the Series established hereby belongs. Such amounts
reallocated to the Series established hereby pursuant to the
prior sentence shall be deposited into the Series Pre-Funding
Account.
(c) Deposits During the Controlled Accumulation Period
or Controlled Amortization Period, if applicable. On or before
each Distribution Date during the Controlled Accumulation Period
or Controlled Amortization Period, as applicable, the Servicer
shall direct the Trustee that funds be paid or deposited, and the
Trustee shall apply such funds in the following amounts, to the
extent such funds are available and in the order of priority
specified, to the account or Person indicated, in each case as
set forth below.
(1) Class A Monthly Interest. An amount equal to the
lesser of
(A) the Class A Modified Required Amount and
(B) the sum of Series Finance Charge
Collections and Series Additional Allocable Amounts shall be
withdrawn from the Series Collections Account and deposited into
the Series Distribution Account.
(2) Class B Monthly Interest. An amount equal to the
lesser of
(A) the Class B Modified Required Amount and
(B) the sum of any remaining Series Finance
Charge Collections and any remaining Series Additional Allocable
Amounts
shall be withdrawn from the Series Collections Account and
deposited into the Series Distribution Account.
(3) Class C Monthly Interest. An amount equal to the
lesser of
(A) the Class C Modified Required Amount, if
any, and
(B) the sum of any remaining Series Finance
Charge Collections and any remaining Series Additional Allocable
Amounts
shall be withdrawn from the Series Collections Account and
deposited into the Series Distribution Account.
(4) Series Monthly Servicing Fee Additional Funds
Portion. An amount equal to the lesser of
(A) the Series Monthly Servicing Fee Additional
Funds Portion and
(B) Series Additional Funds
shall be withdrawn from the Series Collections Account and
deposited into the Series Distribution Account. The positive
difference, if any, between the amount in (A) and the amount in
(B) shall be the "Series Monthly Servicing Fee Additional Funds
Portion Shortfall."
(5) Series Monthly Servicing Fee. An amount equal to
the lesser of
(A) the sum of the Series Monthly Servicing Fee
and all accrued but unpaid Series Monthly Servicing Fees as of
the prior Distribution Date less the Series Monthly Servicing Fee
Additional Funds Portion, if any, and
(B) the sum of any remaining Series Finance
Charge Collections and any remaining Series Additional Allocable
Amounts
shall be withdrawn from the Series Collections Account and
deposited into the Series Distribution Account.
(6) Reimbursement of Class A Cumulative Investor
Charged-Off Amounts. An amount equal to the lesser of
(A) the Class A Cumulative Investor Charged-Off
Amount and
(B) the sum of any remaining Series Finance
Charge Collections and any remaining Series Additional Allocable
Amounts
shall be withdrawn from the Series Collections Account and
deposited into the Series Principal Collections Account. The
Class A Cumulative Investor Charged-Off Amount shall be reduced
by the amount of such deposit.
(7) Reimbursement of Class B Cumulative Investor
Charged-Off Amounts. An amount equal to the lesser of
(A) the Class B Cumulative Investor Charged-Off
Amount and
(B) the sum of any remaining Series Finance
Charge Collections and any remaining Series Additional Allocable
Amounts
shall be withdrawn from the Series Collections Account and
deposited into the Series Principal Collections Account. The
Class B Cumulative Investor Charged-Off Amount shall be reduced
by the amount of such deposit.
(8) Series Monthly Servicing Fee Additional Funds
Portion Shortfall. An amount equal to the lesser of
(A) the Series Monthly Servicing Fee Additional
Funds Portion Shortfall and
(B) the sum of any remaining Series Finance
Charge Collections and any remaining Series Additional Allocable
Amounts
shall be withdrawn from the Series Collections Account and
deposited into the Series Distribution Account.
(9) Reimbursement of Class C Cumulative Investor
Charged-Off Amounts. An amount equal to the lesser of
(A) the Class C Cumulative Investor Charged-Off
Amount and
(B) the sum of any remaining Series Finance
Charge Collections and any remaining Series Additional Allocable
Amounts.
shall be withdrawn from the Series Collections Account and
deposited into the Series Principal Collections Account. The
Class C Cumulative Investor Charged-Off Amount shall be reduced
by the amount of such deposit.
(10) Shortfalls in the PFA Special Reserve Required
Amount. If applicable, an amount equal to the lesser of
(A) the PFA Special Reserve Required Amount
Shortfall and
(B) the sum of any remaining Series Finance
Charge Collections and any remaining Series Additional Allocable
Amounts
shall be withdrawn from the Series Collections Account and
deposited into the PFA Special Reserve Account. The PFA Special
Reserve Required Amount Shortfall shall be reduced by the amount
of such deposit.
(11) Reimbursement of prior Third Party Credit
Enhancement Drawings. If applicable, an amount equal to the
lesser of
(A) the sum of all unreimbursed Third Party
Credit Enhancement Drawings and
(B) the sum of any remaining Series Finance
Charge Collections and any remaining Series Additional Allocable
Amounts
shall be withdrawn from the Series Collections Account and
deposited into the Third Party Credit Enhancement Account. The
amount of unreimbursed Third Party Credit Enhancement Drawings
shall be reduced by the amount of such deposit.
(12) Third Party Credit Enhancement Fee. If
applicable, an amount equal to the lesser of
(A) the Third Party Credit Enhancement Fee and
(B) the sum of any remaining Series Finance
Charge Collections and any remaining Series Additional Allocable
Amounts
shall be withdrawn from the Series Collections Account and
deposited into the Series Distribution Account.
(13) The Class A Early Termination Premium Shortfall.
If applicable, an amount equal to the lesser of
(A) the Class A Early Termination Premium
Shortfall and
(B) the sum of any remaining Series Finance
Charge Collections and any remaining Series Additional Allocable
Amounts
shall be withdrawn from the Series Collections Account and
deposited into the Series Distribution Account.
(14) The Class B Early Termination Premium Shortfall.
If applicable, an amount equal to the lesser of
(A) the Class B Early Termination Premium
Shortfall and
(B) the sum of any remaining Series Finance
Charge Collections and any remaining Series Additional Allocable
Amounts
shall be withdrawn from the Series Collections Account and
deposited into the Series Distribution Account.
(15) Series Excess Servicing. An amount equal to any
remaining Series Finance Charge Collections and any remaining
Series Additional Allocable Amounts (together, "Series Excess
Servicing") shall be withdrawn from the Series Collections
Account and deposited into the Group Finance Charge Collections
Reallocation Account.
(16) Third Party Credit Enhancement Drawing. If
applicable, an amount equal to the lesser of
(A) the Class C Modified Required Amount
Shortfall and
(B) the amount on deposit in the Third Party
Credit Enhancement Account
shall be withdrawn from the Third Party Credit Enhancement
Account and deposited into the Series Distribution Account. The
Class C Modified Required Amount Shortfall and the Third Party
Credit
Enhancement Amount both shall be reduced by the amount of such
deposit.
(17) Payment of the Class A Modified Required Amount
Shortfall from a Subordinate Series. If applicable, an amount
equal to the lesser of
(A) the Class A Modified Required Amount
Shortfall and
(B) funds, if any, available to pay such Class
A Modified Required Amount Shortfall from funds initially
allocated to any Subordinate Series
shall be deposited into the Series Distribution Account. The
Class A Modified Required Amount Shortfall shall be reduced by
the amount of such deposit.
(18) Payment of the Class B Modified Required Amount
Shortfall from a Subordinate Series. If applicable, an amount
equal to the lesser of
(A) the Class B Modified Required Amount
Shortfall and
(B) funds, if any, available to pay such Class
B Modified Required Amount Shortfall from funds initially
allocated to any Subordinate Series
shall be deposited into the Series Distribution Account. The
Class B Modified Required Amount Shortfall shall be reduced by
the amount of such deposit.
(19) Payment of the Class C Modified Required Amount
Shortfall from a Subordinate Series. If applicable, an amount
equal to the lesser of
(A) the Class C Modified Required Amount
Shortfall and
(B) funds, if any, available to pay such Class
C Modified Required Amount Shortfall from funds initially
allocated to any Subordinate Series
shall be deposited into the Series Distribution Account. The
Class C Modified Required Amount Shortfall shall be reduced by
the amount of such deposit.
(20) Reimbursement of the Class A Cumulative Investor
Charged-Off Amount from a Subordinate Series. If applicable, an
amount equal to the lesser of
(A) the Class A Cumulative Investor Charged-Off
Amount and
(B) funds, if any, available to pay such Class
A Cumulative Investor Charged-Off Amount from funds initially
allocated to any Subordinate Series
shall be deposited into the Series Principal Collections Account.
The Class A Cumulative Investor Charged-Off Amount shall be
reduced by the amount of such deposit.
(21) Reimbursement of the Class B Cumulative Investor
Charged-Off Amount from a Subordinate Series. If applicable, an
amount equal to the lesser of
(A) the Class B Cumulative Investor Charged-Off
Amount and
(B) funds, if any, available to pay such Class
B Cumulative Investor Charged-Off Amount from funds initially
allocated to any Subordinate Series
shall be deposited into the Series Principal Collections Account.
The Class B Cumulative Investor Charged-Off Amount shall be
reduced by the amount of such deposit.
(22) Reimbursement of the Class C Cumulative Investor
Charged-Off Amount from a Subordinate Series. If applicable, an
amount equal to the lesser of
(A) the Class C Cumulative Investor Charged-Off
Amount and
(B) funds, if any, available to pay such Class
C Cumulative Investor Charged-Off Amount from funds initially
allocated to any Subordinate Series shall be deposited into the
Series Principal Collections Account. The Class C Cumulative
Investor Charged-Off Amount shall be reduced by the amount of
such deposit.
(23) Reallocations for the Class A Modified Required
Amount Shortfall from the Group Finance Charge Collections
Reallocation Account. An amount equal to the lesser of
(A) the Class A Modified Required Amount
Shortfall and
(B) the product of
(x) a fraction the numerator of which
is the Class A Modified Required Amount Shortfall and the
denominator of which is the sum of the class modified required
amount shortfalls for all classes with the same alphabetical
designation for all series in the Group to which the Series
established hereby belongs (after giving effect to provisions in
the applicable Series Supplements substantially similar to the
clauses preceding this clause (23)) and
(y) the amount on deposit in the Group
Finance Charge Collections Reallocation Account before any
withdrawals therefrom with respect to any other series pursuant
to a comparable clause in the applicable Series Supplements
shall be withdrawn from the Group Finance Charge Collections
Reallocation Account and deposited into the Series Distribution
Account. The Class A Modified Required Amount Shortfall shall be
reduced by the amount of such deposit.
(24) Reallocations for the Class B Modified Required
Amount Shortfall from the Group Finance Charge Collections
Reallocation Account. An amount equal to the lesser of
(A) the Class B Modified Required Amount
Shortfall and
(B) the product of
(x) a fraction the numerator of which
is the Class B Modified Required Amount Shortfall and the
denominator of which is the sum of the class modified required
amount shortfalls for all classes with the same alphabetical
designation for all series in the Group to which the Series
established hereby belongs (after giving effect to provisions in
the applicable Series Supplements substantially similar to the
clauses preceding this clause (24)) and
(y) the amount on deposit in the Group
Finance Charge Collections Reallocation Account before any
withdrawals therefrom with respect to any other series pursuant
to a comparable clause for any class with the same alphabetical
designation and after any withdrawals therefrom for the benefit
of all classes designated by higher letters of the alphabet of
such other series in the applicable Series Supplements
shall be withdrawn from the Group Finance Charge Collections
Reallocation Account and deposited into the Series Distribution
Account. The Class B Modified Required Amount Shortfall shall be
reduced by the amount of such deposit.
(25) Reallocations for the Class C Modified Required
Amount Shortfall from the Group Finance Charge Collections
Reallocation Account. An amount equal to the lesser of
(A) the Class C Modified Required Amount
Shortfall and
(B) the product of
(x) a fraction the numerator of which
is the Class C Modified Required Amount Shortfall and the
denominator of which is the sum of the class modified required
amount shortfalls for all classes not initially rated by the
Rating Agencies for all series in the Group to which the Series
established hereby belongs (after giving effect to provisions in
the applicable Series Supplements substantially similar to the
clauses preceding this clause (25)); provided, however, that if
any other series (or multiple other series) shall have more than
one unrated class, the class modified required amount shortfall
to be used in the denominator for each such other series shall
be the class modified required amount shortfall for the most
senior unrated class for such series for which the class modified
required amount shortfall is greater than zero and
(y) the amount on deposit in the Group
Finance Charge Collections Reallocation Account before any
withdrawals therefrom with respect to any other series pursuant
to a comparable clause for any class with the same alphabetical
designation and after any withdrawals therefrom for the benefit
of all classes designated by higher letters of the alphabet of
such other series in the applicable Series Supplements
shall be withdrawn from the Group Finance Charge Collections
Reallocation Account and deposited into the Series Distribution
Account. The Class C Modified Required Amount Shortfall shall be
reduced by the amount of such deposit.
(26) Reallocations for the Class A Cumulative Investor
Charged-Off Amount from the Group Finance Charge Collections
Reallocation Account. An amount equal to the lesser of
(A) the Class A Cumulative Investor Charged-Off
Amount and
(B) the product of
(x) a fraction the numerator of which
is the Class A Cumulative Investor Charged-Off Amount and the
denominator of which is the sum of the class cumulative investor
charged-off amounts for all classes with the same alphabetical
designation for all series in the Group to which the Series
established hereby belongs (after giving effect to provisions in
the applicable Series Supplements substantially similar to the
clauses preceding this clause(26)) and
(y) the amount on deposit in the Group
Finance Charge Collections Reallocation Account before any
withdrawals therefrom with respect to any other series pursuant
to a comparable clause in the applicable Series Supplements
shall be withdrawn from the Group Finance Charge Collections
Reallocation Account and deposited into the Series Principal
Collections Account. The Class A Cumulative Investor Charged-Off
Amount shall be reduced by the amount of such deposit.
(27) Reallocations for the Class B Cumulative Investor
Charged-Off Amount from the Group Finance Charge Collections
Reallocation Account. An amount equal to the lesser of
(A) the Class B Cumulative Investor Charged-Off
Amount and
(B) the product of
(x) a fraction the numerator of which
is the Class B Cumulative Investor Charged-Off Amount and the
denominator of which is the sum of the class cumulative investor
charged-off amounts for all classes with the same alphabetical
designation for all series in the Group to which the Series
established hereby belongs (after giving effect to provisions in
the applicable Series Supplements substantially similar to the
clauses preceding this clause(27)) and
(y) the amount on deposit in the Group
Finance Charge Collections Reallocation Account before any
withdrawals therefrom with respect to any other series pursuant
to a comparable clause for any class with the same alphabetical
designation and after any withdrawals therefrom for the benefit
of all classes designated by higher letters of the alphabet of
such other series in the applicable Series Supplements
shall be withdrawn from the Group Finance Charge Collections
Reallocation Account and deposited into the Series Principal
Collections Account. The Class B Cumulative Investor Charged-Off
Amount shall be reduced by the amount of such deposit.
(28) Allocations from the Group Finance Charge
Collections Reallocation Account for the payment of accrued
Series Monthly Servicing Fees. An amount equal to the lesser of
(A) all accrued but unpaid Series Monthly
Servicing Fees and
(B) the product of
(x) a fraction the numerator of which
is all accrued but unpaid Series Monthly Servicing Fees and the
denominator of which is the sum of all accrued but unpaid monthly
servicing fees for all series in the Group to which the Series
established hereby belongs (after giving effect to provisions in
the applicable Series Supplements substantially similar to the
clauses preceding this clause (28)) and
(y) the amount on deposit in the Group
Finance Charge Collections Reallocation Account before any
withdrawals therefrom with respect to any other series pursuant
to a comparable clause in the applicable Series Supplements
shall be withdrawn from the Group Finance Charge Collections
Reallocation Account and deposited into the Series Distribution
Account.
(29) Reallocations for the Class C Cumulative Investor
Charged-Off Amount from the Group Finance Charge Collections
Reallocation Account. An amount equal to the lesser of
(A) the Class C Cumulative Investor Charged-Off
Amount and
(B) the product of
(x) a fraction the numerator of which
is the Class C Cumulative Investor Charged-Off Amount and the
denominator of which is the sum of the class cumulative investor
charged-off amounts for all classes unrated by the Rating
Agencies for all series in the Group to which the Series
established hereby belongs (after giving effect to provisions in
the applicable Series Supplements substantially similar to the
clauses preceding this clause (29)); provided, however, that if
any other series (or multiple other series) shall have more than
one unrated class, the class cumulative investor charged-off
amount to be used in the denominator for each such other series
shall be the class cumulative investor charged-off amount for the
most senior unrated class for such series for which the class
cumulative investor charged-off amount is greater than zero and
(y) the amount on deposit in the Group
Finance Charge Collections Reallocation Account before any
withdrawals therefrom with respect to any other series pursuant
to a comparable clause for any class with the same alphabetical
designation and after any withdrawals therefrom for the benefit
of all classes designated by higher letters of the alphabet of
such other series in the applicable Series Supplements
shall be withdrawn from the Group Finance Charge Collections
Reallocation Account and deposited into the Series Principal
Collections Account. The Class C Cumulative Investor Charged-Off
Amount shall be reduced by the amount of such deposit.
(30) Payment of the Class A Modified Required Amount
Shortfall from Class C Principal Collections. An amount equal to
the lesser of
(A) the Class A Modified Required Amount
Shortfall and
(B) the sum of the Series Excess Funding Amount
(SRC) and Class C Principal Collections less Series Yield
Collections allocable to the Class C Investor Interest
shall be withdrawn from the Series Collections Account and
deposited into the Series Distribution Account. The Class A
Modified Required Amount Shortfall shall be reduced by the amount
of such deposit, and the Class C Cumulative Investor Charged-Off
Amount shall be increased by the amount of such deposit.
(31) Payment of the Class A Modified Required Amount
Shortfall from Class B Principal Collections. An amount equal to
the lesser of
(A) the Class A Modified Required Amount
Shortfall and
(B) the Class B Principal Collections less
Series Yield Collections allocable to the Class B Investor
Interest shall be withdrawn from the Series Collections Account
and deposited into the Series Distribution Account. The Class A
Modified Required Amount Shortfall shall be reduced by the amount
of such deposit, and the Class B Cumulative Investor Charged-Off
Amount shall be increased by the amount of such deposit.
(32) Payment of the Class B Modified Required Amount
Shortfall from Class C Principal Collections. An amount equal to
the lesser of
(A) the Class B Modified Required Amount
Shortfall and
(B) the sum of any remaining Series Excess
Funding Amounts (SRC) and any remaining Class C Principal
Collections less Series Yield Collections allocable to the Class
C Investor Interest
shall be withdrawn from the Series Collections Account and
deposited into the Series Distribution Account. The Class B
Modified Required Amount Shortfall shall be reduced by the amount
of such deposit, and the Class C Cumulative Investor Charged-Off
Amount shall be increased by the amount of such deposit.
(33) Reimbursement of the Class A Cumulative Investor
Charged-Off Amount from Class C Principal Collections. An amount
equal to the lesser of
(A) the Class A Cumulative Investor Charged-Off
Amount and
(B) the sum of any remaining Series Excess
Funding Amounts (SRC)and any remaining Class C Principal
Collections less Series Yield Collections allocable to the Class
C Investor Interest
shall be withdrawn from the Series Collections Account and
deposited into the Series Principal Collections Account. The
Class A Cumulative Investor Charged-Off Amount shall be reduced
by the amount of such deposit, and the Class C Cumulative
Investor
Charged-Off Amount shall be increased by the amount of such
deposit.
(34) Reallocation of the Class C Investor Interest to
reimburse the Class A Cumulative Investor Charged-Off Amount.
The Class A Cumulative Investor Charged-Off Amount shall be
reduced by an amount equal to the lesser of
(A) the Class A Cumulative Investor Charged-Off
Amount and
(B) the Class C Investor Interest
and the Class C Cumulative Investor Charged-Off Amount shall be
increased by such amount; provided, however, that the Class C
Cumulative Investor Charged-Off Amount would not, as a result,
exceed the Class C Initial Investor Interest less principal
payments made in respect of such Class prior to such Distribution
Date.
(35) Reimbursement of the Class A Cumulative Investor
Charged-Off Amount from Class B Principal Collections. An amount
equal to the lesser of
(A) the Class A Cumulative Investor Charged-Off
Amount and
(B) any remaining Class B Principal Collections
less Series Yield Collections allocable to the Class B Investor
Interest
shall be withdrawn from the Series Collections Account and
deposited into the Series Principal Collections Account. The
Class A Cumulative Investor Charged-Off Amount shall be reduced
by the amount of such deposit, and the Class B Cumulative
Investor
Charged-Off Amount shall be increased by the amount of such
deposit.
(36) Reallocation of the Class B Investor Interest to
reimburse the Class A Cumulative Investor Charged-Off Amount.
The Class A Cumulative Investor Charged-Off Amount shall be
reduced by an amount equal to the lesser of
(A) the Class A Cumulative Investor Charged-Off
Amount and
(B) the Class B Investor Interest
and the Class B Cumulative Investor Charged-Off Amount shall be
increased by such amount; provided, however, that the Class B
Cumulative Investor Charged-Off Amount would not, as a result,
exceed the Class B Initial Investor Interest.
(37) Reimbursement of the Class B Cumulative Investor
Charged-Off Amount from Class C Principal Collections. An amount
equal to the lesser of
(A) the Class B Cumulative Investor Charged-Off
Amount and
(B) the sum of any remaining Series Excess
Funding Amounts (SRC) and any remaining Class C Principal
Collections less Series Yield Collections allocable to the Class
C Investor Interest
shall be withdrawn from the Series Collections Account and
deposited into the Series Principal Collections Account. The
Class B Cumulative Investor Charged-Off Amount shall be reduced
by the amount of such deposit, and the Class C Cumulative
Investor
Charged-Off Amount shall be increased by the amount of such
deposit.
(38) Reallocation of the Class C Investor Interest to
reimburse the Class B Cumulative Investor Charged-Off Amount.
The Class B Cumulative Investor Charged-Off Amount shall be
reduced by an amount equal to the lesser of
(A) the Class B Cumulative Investor Charged-Off
Amount and
(B) the Class C Investor Interest
and the Class C Cumulative Investor Charged-Off Amount shall be
increased by such amount; provided, however, that the Class C
Cumulative Investor Charged-Off Amount would not, as a result,
exceed the Class C Initial Investor Interest less principal
payments made in respect of such Class prior to such Distribution
Date.
(39) Reinstatement of Class C Investor Interest from
the Third Party Credit Enhancement Account. On the Distribution
Date in which the Class A Invested Amount and Class B Invested
Amounts have been reduced to zero, if applicable, an amount equal
to the lesser of
(A) the Class C Cumulative Investor Charged-Off
Amount and
(B) the amount on deposit in the Third Party
Credit Enhancement Account
shall be withdrawn from the Third Party Credit Enhancement
Account and deposited into the Series Principal Collections
Account by the Third Party Credit Enhancement Provider. The Class
C Cumulative
Investor Charged-Off Amount and the Third Party Credit
Enhancement Amount shall both be reduced by the amount of such
deposit.
(40) Special Third Party Credit Enhancement Drawing.
On the Distribution Date in which the Class A Invested Amount and
Class B Invested Amounts have been reduced to zero, if
applicable, an amount equal to the lesser of
(A) the Class C Modified Required Amount
Shortfall and
(B) the amount on deposit in the Third Party
Credit Enhancement Account
shall be withdrawn from the Third Party Credit Enhancement
Account and deposited into the Series Distribution Account. The
Class C Modified Required Amount Shortfall and the Third Party
Credit
Enhancement Amount shall be reduced by the amount of such
deposit.
(41) Reallocations for the Class A Early Termination
Premium Shortfall from the Group Finance Charge Collections
Reallocation Account. If applicable, an amount equal to the
lesser of
(A) the Class A Early Termination Premium
Shortfall and
(B) the product of
(x) a fraction the numerator of which
is the Class A Early Termination Premium Shortfall and the
denominator of which is the sum of all class early termination
premium shortfalls with the same alphabetical designation for all
series in the Group to which the Series established hereby
belongs (after giving effect to provisions in the applicable
Series Supplements substantially similar to the clauses preceding
this clause (41)) and
(y) the amount on deposit in the Group
Finance Charge Collections Reallocation Account before any
withdrawals therefrom with respect to any other series pursuant
to a comparable clause in the applicable Series Supplements
shall be withdrawn from the Group Finance Charge Collections
Reallocation Account and deposited into the Series Distribution
Account.
(42) Reallocations for the Class B Early Termination
Premium Shortfall from the Group Finance Charge Collections
Reallocation Account. If applicable, an amount equal to the
lesser of
(A) the Class B Early Termination Premium
Shortfall and
(B) the product of
(x) a fraction the numerator of which
is the Class B Early Termination Premium Shortfall and the
denominator of which is the sum of all class early termination
premium shortfalls with the same alphabetical designation for all
series in the Group to which the Series established hereby
belongs (after giving effect to provisions in the applicable
Series Supplements substantially similar to the clauses preceding
this clause (42)) and
(y) the amount on deposit in the Group
Finance Charge Collections Reallocation Account before any
withdrawals therefrom with respect to any other series pursuant
to a comparable clause for any class with the same alphabetical
designation and after any withdrawals therefrom for the benefit
of all classes designated by higher letters of the alphabet of
such other series in the applicable Series Supplements
shall be withdrawn from the Group Finance Charge Collections
Reallocation Account and deposited into the Series Distribution
Account.
(43) Allocations of remaining amounts from the Group
Finance Charge Collections Reallocation Account to the Seller.
An amount equal to all remaining amounts on deposit in the Group
Finance Charge Collections Reallocation Account, after all other
allocations from such Account pursuant to the Series Supplements
for any series in the Group to which the Series established
hereby belongs, shall be withdrawn from the Group Finance Charge
Collections Reallocation Account and paid to the Seller.
(44) Allocations from the Excess Funding Account
(General) to the Group Principal Collections Reallocation
Account. If no series is in its Rapid Amortization Period, or if
amounts
remain on deposit in the Excess Funding Account (General) after
all allocations to any other series that are in their Rapid
Amortization Period, an amount equal to the product of
(A) a fraction the numerator of which is the
sum of the series investor interests less the sum of class
investor
interests with respect to seller retained classes for all series
in the Group to which the Series established hereby belongs and
the denominator of which is the Aggregate Investor Interest less
the sum of all class investor interests with respect to seller
retained classes for all outstanding series (after giving effect
to
provisions in the applicable Series Supplements substantially
similar to the clauses preceding this clause (44)) and
(B) the amount on deposit in the Excess Funding
Account (General) before any withdrawals therefrom with respect
to any other series pursuant to a comparable clause in the
applicable Series Supplements shall be withdrawn from the Excess
Funding Account (General) and deposited into the Group Principal
Collections Reallocation Account.
(45) Allocations of Series Principal Collections. An
amount equal to the remaining Series Principal Collections minus
the (i) Series Yield Collections, if any and (ii) remaining
Seller Retained Class Principal Collections shall be withdrawn
from the Series Collections Account and deposited into the Series
Principal Collections Account.
(46) Class A Controlled Accumulation Amount or the
Class A Controlled Amortization Amount, as applicable. An amount
equal to the lesser of
(A) the Class A Controlled Accumulation Amount
or the Class A Controlled Amortization Amount, as applicable, and
(B) Amounts on deposit in the Series Principal
Collections Account
shall be withdrawn from the Series Principal Collections Account
and deposited into the Series Principal Funding Account or Series
Distribution Account, as applicable. The amount by which the
Class A Controlled Accumulation Amount or Class A Controlled
Amortization Amount exceeds such deposit shall be the "Class A
Controlled Accumulation Amount Shortfall" or the "Class A
Controlled Amortization Shortfall," respectively.
(47) Class C Permitted Controlled Amortization Amount.
An amount equal to the lesser of
(A) the Class C Permitted Controlled
Amortization Amount and
(B) remaining amounts on deposit in the Series
Collections Account
shall be withdrawn from the Series Collections Account and
deposited into the Series Distribution Account. The amount by
which the Class C Permitted Controlled Amortization Amount
exceeds such deposit shall be the "Class C Permitted Controlled
Amortization Amount Shortfall."
(48) Class B Controlled Accumulation Amount or the
Class B Controlled Amortization Amount, as applicable. On the
Distribution Date following the Class A Expected Final Payment
Date if the Class A Invested Amount has been paid in full, or on
and after the Distribution Date on which the Class A Invested
Amount has been paid in full if such Distribution Date is after
the Class A Expected Final Payment Date, an amount equal to the
lesser of
(A) the Class B Controlled Accumulation Amount
or the Class B Controlled Amortization Amount, as applicable, and
(B) remaining amounts on deposit in the Series
Principal Collections Account
shall be withdrawn from the Series Principal Collections Account
and deposited into the Series Principal Funding Account or Series
Distribution Account, as applicable. The amount by which the
Class B Controlled Accumulation Amount or Class B Controlled
Amortization Amount exceeds such deposit shall be the "Class B
Controlled Accumulation Amount Shortfall" or the "Class B
Controlled Amortization Amount Shortfall," respectively.
(49) Class C Controlled Accumulation Amount or the
Class C Controlled Amortization Amount, as applicable. On each
Distribution Date after the Distribution Date on which the Class
A and Class B Invested Amounts are paid in full, an amount equal
to the lesser of
(A) the Class C Controlled Accumulation Amount
or the Class C Controlled Amortization Amount, as applicable, and
(B) remaining amounts on deposit in the Series
Collections Account
shall be withdrawn from the Series Collections Account and
deposited into the Series Principal Funding Account or Series
Distribution Account, as applicable. The amount by which the
Class C Controlled Accumulation Amount or Class Controlled
Amortization Amount exceeds such deposit shall be the "Class C
Controlled Accumulation Amount Shortfall" or the "Class C
Controlled Amortization Amount Shortfall."
(50) Allocations from the Group Principal Collections
Reallocation Account for the payment of the Class A Controlled
Accumulation Amount Shortfall or the Class A Controlled
Amortization Amount Shortfall, as applicable. An amount equal to
the lesser of
(A) the Class A Controlled Accumulation Amount
Shortfall or the Class A Controlled Amortization Amount
Shortfall, as applicable and
(B) the product of
(x) a fraction the numerator of which
is the Class A Controlled Accumulation Amount Shortfall or the
Class A Controlled Amortization Amount Shortfall, as applicable,
and the denominator of which is the sum of the class controlled
accumulation amount shortfalls or class controlled amortization
amount shortfalls, as applicable, for all classes with the same
alphabetical designation for all series in the Group to which the
Series established hereby belongs (after giving effect to
provisions in the applicable Series Supplements substantially
similar to the clauses preceding this clause (50)) and
(y) the amount on deposit in the Group
Principal Collections Reallocation Account before any withdrawals
therefrom with respect to any other series pursuant to a
comparable clause in the applicable Series Supplements
shall be withdrawn from the Group Principal Collections
Reallocation Account and deposited in the Series Principal
Funding Account or Series Distribution Account, as applicable.
The Class A Controlled Accumulation Amount Shortfall or the Class
A Controlled Amortization Amount Shortfall, as applicable, shall
be reduced by the amount of such deposit.
(51) Allocations from the Group Principal Collections
Reallocation Account for the payment of the Class B Controlled
Accumulation Amount Shortfall or the Class B Controlled
Amortization Amount Shortfall, as applicable. An amount equal to
the lesser of
(A) the Class B Controlled Accumulation Amount
Shortfall or the Class B Controlled Amortization Amount
Shortfall, as applicable and
(B) the product of
(x) a fraction the numerator of which
is the Class B Controlled Accumulation Amount Shortfall or the
Class B Controlled Amortization Amount Shortfall, as applicable,
and the denominator of which is the sum of the class controlled
accumulation amount shortfalls or class controlled amortization
amount shortfalls, as applicable, for all classes with the same
alphabetical designation for all series in the Group to which the
Series established hereby belongs (after giving effect to
provisions in the applicable Series Supplements substantially
similar to the clauses preceding this clause (51)) and
(y) the amount on deposit in the Group
Principal Collections Reallocation Account before any withdrawals
therefrom with respect to any other series pursuant to a
comparable clause for any class with the same alphabetical
designation and after any withdrawals therefrom for the benefit
of all classes designated by higher letters of the alphabet of
such other series in the applicable Series Supplements
shall be withdrawn from the Group Principal Collections
Reallocation Account and deposited in the Series Principal
Funding Account or Series Distribution Account, as applicable.
The Class B Controlled Accumulation Amount Shortfall or the Class
B Controlled Amortization Amount Shortfall, as applicable, shall
be reduced by the amount of such deposit.
(52) Allocations from the Group Principal Collections
Reallocation Account for the payment of the Class C Controlled
Accumulation Amount Shortfall or the Class C Controlled
Amortization Amount Shortfall, as applicable. An amount equal to
the lesser of
(A) the Class C Controlled Accumulation Amount
Shortfall or the Class C Controlled Amortization Amount
Shortfall, as applicable and
(B) the product of
(x) a fraction the numerator of which
is the Class C Controlled Accumulation Amount Shortfall or the
Class C Controlled Amortization Amount Shortfall, as applicable,
and the denominator of which is the sum of the class controlled
accumulation amount shortfalls or class controlled amortization
amount shortfalls, as applicable, for all classes with the same
alphabetical designation for all series in the Group to which the
Series established hereby belongs (after giving effect to
provisions in the applicable Series Supplements substantially
similar to the clauses preceding this clause (52)); provided,
however, that if any other series (or multiple other series)
shall have more than one unrated class, the class controlled
accumulation amount shortfall or class controlled amortization
amount shortfall, as applicable, to be used in the denominator
for each such other series shall be the class controlled
accumulation amount shortfall or class controlled amortization
amount shortfall, as applicable, for the most senior unrated
class for such series for which the class controlled accumulation
amount shortfall or class controlled amortization amount
shortfall, as applicable, is greater than zero and
(y) the amount on deposit in the Group
Principal Collections Reallocation Account before any withdrawals
therefrom with respect to any other series pursuant to a
comparable clause for any class with the same alphabetical
designation and after any withdrawals therefrom for the benefit
of all classes designated by higher letters of the alphabet of
such other series in the applicable Series Supplements
shall be withdrawn from the Group Principal Collections
Reallocation Account and deposited in the Series Principal
Funding Account or Series Distribution Account, as applicable.
The Class C Controlled Accumulation Amount Shortfall or the Class
C Controlled Amortization Amount Shortfall, as applicable, shall
be reduced by the amount of such deposit.
(53) Allocations from the Group Pre-Funding
Reallocation Account for the payment of the Class A Controlled
Accumulation
Amount Shortfall or Class A Controlled Amortization Amount
Shortfall, as applicable. An amount equal to the lesser of
(A) the Class A Controlled Accumulation Amount
Shortfall or Class A Controlled Amortization Amount Shortfall, as
applicable, and
(B) the product of
(x) a fraction the numerator of which
is the Class A Controlled Accumulation Amount Shortfall or Class
A
Controlled Amortization Amount Shortfall, as applicable, and the
denominator of which is the sum of the class controlled
accumulation amount shortfalls or class controlled amortization
amount shortfalls, as applicable, for all classes with the same
alphabetical designation for all series not in their Rapid
Amortization Periods in the Group to which the Series established
hereby belongs (after giving effect to provisions in the
applicable Series Supplements substantially similar to the
clauses preceding this clause (53)) and
(y) the amount on deposit in the Group
Pre-Funding Reallocation Account before any withdrawals therefrom
with respect to any other series pursuant to a comparable clause
in the applicable Series Supplements
shall be withdrawn from the Group Pre-Funding Reallocation
Account and deposited in the Series Principal Funding Account or
Series
Distribution Account, as applicable. The Class A Controlled
Accumulation Amount Shortfall or the Class A Controlled
Amortization Amount Shortfall, as applicable, will be reduced by
the amount of such deposit.
(54) Allocations from the Group Pre-Funding
Reallocation Account for the payment of the Class B Controlled
Accumulation Amount Shortfall or Class B Controlled Amortization
Amount Shortfall, as applicable. An amount equal to the lesser
of
(A) the Class B Controlled Accumulation Amount
Shortfall or Class B Controlled Amortization Amount Shortfall, as
applicable, and
(B) the product of
(x) a fraction the numerator of which
is the Class B Controlled Accumulation Amount Shortfall or Class
B Controlled Amortization Amount Shortfall, as applicable, and
the denominator of which is the sum of the class controlled
accumulation amount shortfalls or class controlled amortization
amount shortfalls, as applicable, for all classes with the same
alphabetical designation for all series not in their Rapid
Amortization Periods in the Group to which the Series established
hereby belongs (after giving effect to provisions in the
applicable Series Supplements substantially similar to the
clauses preceding this clause (54)) and
(y) the amount on deposit in the Group
Pre-Funding Reallocation Account before any withdrawals therefrom
with respect to any other series pursuant to a comparable clause
for any class with the same alphabetical designation and after
any withdrawals therefrom for the benefit of all classes
designated by higher letters of the alphabet of such other series
in the applicable Series Supplements
shall be withdrawn from the Group Pre-Funding Reallocation
Account and deposited in the Series Principal Funding Account or
Series Distribution Account, as applicable. The Class B
Controlled Accumulation Amount Shortfall or the Class B
Controlled Amortization Amount Shortfall, as applicable, will be
reduced by the amount of such deposit.
(55) Allocations from the Group Pre-Funding
Reallocation Account for the payment of the Class C Controlled
Accumulation Amount Shortfall or Class C Controlled Amortization
Amount Shortfall, as applicable. An amount equal to the lesser
of
(A) the Class C Controlled Accumulation Amount
Shortfall or Class C Controlled Amortization Amount Shortfall, as
applicable, and
(B) the product of
(x) a fraction the numerator of which
is the Class C Controlled Accumulation Amount Shortfall or Class
C Controlled Amortization Amount Shortfall, as applicable, and
the denominator of which is the sum of the class controlled
accumulation amount shortfalls or class controlled amortization
amount shortfalls, as applicable, for all classes with the same
alphabetical designation for all series not in their Rapid
Amortization Periods in the Group to which the Series established
hereby belongs (after giving effect to provisions in the
applicable Series Supplements substantially similar to the
clauses preceding this clause (55)) and
(y) the amount on deposit in the Group
Pre-Funding Reallocation Account before any withdrawals therefrom
with respect to any other series pursuant to a comparable clause
for any class with the same alphabetical designation and after
any withdrawals therefrom for the benefit of all classes
designated by higher letters of the alphabet of such other series
in the applicable Series Supplements
shall be withdrawn from the Group Pre-Funding Reallocation
Account and deposited in the Series Principal Funding Account or
Series Distribution Account, as applicable. The Class C
Controlled Accumulation Amount Shortfall or the Class C
Controlled Amortization Amount Shortfall, as applicable, will be
reduced by the amount of such deposit.
(56) Allocations of remaining Series Principal
Collections. An amount equal to all remaining amounts on deposit
in the Series Principal Collections Account shall be withdrawn
from the Series Principal Collections Account and deposited into
the Group Principal Collections Reallocation Account.
(57) Payment to the Seller. An amount equal to the
lesser of
(A) the positive difference, if any, between
the amount of the Seller Interest and the Minimum Seller Interest
(after giving effect to all similar provisions in other Series
Supplements, beginning with the series (including the Series
established hereby) having the earliest series closing date and
continuing seriatim) and
(B) any remaining amounts on deposit in the
Series Collections Account
shall be withdrawn from the Series Collections Account and paid
to the Seller. If after such payment, amounts remain on deposit
in the Series Collections Account, such amounts shall be
deposited
into the Excess Funding Account (SRC).
(58) Additional payment to the Seller. An amount equal
to the lesser of
(A) the positive difference, if any, between
the amount of the Seller Interest and the Minimum Seller Interest
and
(B) the product of (i) any remaining amounts on
deposit in the Group Principal Collections Reallocation Account
and (ii) a fraction the numerator of which is the remaining
amounts on deposit in the Group Principal Collections
Reallocation Account and the denominator of which is the sum of
the remaining amounts on deposit in all group principal
collections reallocation accounts (including the Group Principal
Collections Reallocation Account for the Group to which the
Series established hereby belongs)
shall be withdrawn from the Group Principal Collections
Reallocation Account and paid to the Seller. If after such
payment, amounts remain on deposit in the Group Principal
Collections Reallocation Account, such amounts shall be deposited
into the Excess Funding Account (General).
(d) Deposits During the Rapid Amortization Period. On
or before each Distribution Date during the Rapid Amortization
Period, the Servicer shall direct the Trustee that funds be paid
or deposited, and the Trustee shall apply such funds in the
following amounts, to the extent such funds are available and in
the order of priority specified, to the account or Person
indicated, in each
case as set forth below.
(1) Deposits from the Series Principal Funding Account
into the Series Principal Collections Account. All amounts on
deposit in the Series Principal Funding Account shall be
deposited into the Series Principal Collections Account.
(2) Deposits from the Series Pre-Funding Account into
the Series Principal Collections Account. If applicable, all
amounts on deposit in the Series Pre-Funding Account shall be
deposited
into the Series Principal Collections Account.
(3) Deposits from the PFA Special Reserve Account into
the Series Collections Account. If applicable, all amounts on
deposit in the PFA Special Reserve Account shall be deemed to be
Series Finance Charge Collections and shall be deposited into the
Series Collections Account.
(4) Deposits from the Series Pre-Funding Special
Reserve Account into the Series Collections Account. If
applicable, all amounts on deposit in the Series Pre-Funding
Special Reserve Account shall be deemed to be Series Finance
Charge Collections and shall be deposited into the Series
Collections Account.
(5) Class A Monthly Interest. An amount equal to the
lesser of
(A) the Class A Modified Required Amount and
(B) the sum of Series Finance Charge
Collections and Series Additional Allocable Amounts shall be
withdrawn from the Series Collections Account and deposited into
the Series Distribution Account.
(6) Class B Monthly Interest. An amount equal to the
lesser of
(A) the Class B Modified Required Amount and
(B) the sum of any remaining Series Finance
Charge Collections and any remaining Series Additional Allocable
Amounts
shall be withdrawn from the Series Collections Account and
deposited into the Series Distribution Account.
(7) Class C Monthly Interest. An amount equal to the
lesser of
(A) the Class C Modified Required Amount, if
any, and
(B) the sum of any remaining Series Finance
Charge Collections and any remaining Series Additional Allocable
Amounts
shall be withdrawn from the Series Collections Account and
deposited into the Series Distribution Account.
(8) Series Monthly Servicing Fee Additional Funds
Portion. An amount equal to the lesser of
(A) the Series Monthly Servicing Fee Additional
Funds Portion and
(B) Series Additional Funds
shall be withdrawn from the Series Collections Account and
deposited into the Series Distribution Account. The positive
difference, if any, between the amount in (A) and the amount in
(B) shall be the "Series Monthly Servicing Fee Additional Funds
Portion Shortfall."
(9) Series Monthly Servicing Fee. An amount equal to
the lesser of
(A) the sum of the Series Monthly Servicing Fee
and all accrued but unpaid Series Monthly Servicing Fees as of
the prior Distribution Date less the Series Monthly Servicing Fee
Additional Funds Portion, if any, and
(B) the sum of any remaining Series Finance
Charge Collections and any remaining Series Additional Allocable
Amounts
shall be withdrawn from the Series Collections Account and
deposited into the Series Distribution Account.
(10) Reimbursement of Class A Cumulative Investor
Charged-Off Amounts. An amount equal to the lesser of
(A) the Class A Cumulative Investor Charged-Off
Amount and
(B) the sum of any remaining Series Finance
Charge Collections and any remaining Series Additional Allocable
Amounts
shall be withdrawn from the Series Collections Account and
deposited into the Series Principal Collections Account. The
Class A Cumulative Investor Charged-Off Amount shall be reduced
by the amount of such deposit.
(11) Reimbursement of Class B Cumulative Investor
Charged-Off Amounts. An amount equal to the lesser of
(A) the Class B Cumulative Investor Charged-Off
Amount and
(B) the sum of any remaining Series Finance
Charge Collections and any remaining Series Additional Allocable
Amounts
shall be withdrawn from the Series Collections Account and
deposited into the Series Principal Collections Account. The
Class B Cumulative Investor Charged-Off Amount shall be reduced
by the amount of such deposit.
(12) Series Monthly Servicing Fee Additional Funds
Portion Shortfall. An amount equal to the lesser of
(A) the Series Monthly Servicing Fee Additional
Funds Portion Shortfall and
(B) the sum of any remaining Series Finance
Charge Collections and any remaining Series Additional Allocable
Amounts
shall be withdrawn from the Series Collections Account and
deposited into the Series Distribution Account.
(13) Reimbursement of Class C Cumulative Investor
Charged-Off Amounts. An amount equal to the lesser of
(A) the Class C Cumulative Investor Charged-Off
Amount and
(B) the sum of any remaining Series Finance
Charge Collections and any remaining Series Additional Allocable
Amounts.
shall be withdrawn from the Series Collections Account and
deposited into the Series Principal Collections Account. The
Class C Cumulative Investor Charged-Off Amount shall be reduced
by the amount of such deposit.
(14) Reimbursement of prior Third Party Credit
Enhancement Drawings. On and after each Distribution Date after
the Class A Invested Amount and Class B Invested Amount have been
reduced to zero, if applicable, an amount equal to the lesser of
(A) the sum of all unreimbursed Third Party
Credit Enhancement Drawings and
(B) the sum of any remaining Series Finance
Charge Collections and any remaining Series Additional Allocable
Amounts
shall be withdrawn from the Series Collections Account and
deposited into the Third Party Credit Enhancement Account. The
amount of unreimbursed Third Party Credit Enhancement Drawings
shall be reduced by the amount of such deposit.
(15) Third Party Credit Enhancement Fee. If
applicable, an amount equal to the lesser of
(A) the Third Party Credit Enhancement Fee and
(B) the sum of any remaining Series Finance
Charge Collections and any remaining Series Additional Allocable
Amounts
shall be withdrawn from the Series Collections Account and
deposited into the Series Distribution Account.
(16) Series Excess Servicing. An amount equal to any
remaining Series Finance Charge Collections and any remaining
Series Additional Allocable Amounts (together, "Series Excess
Servicing") shall be withdrawn from the Series Collections
Account and deposited into the Group Finance Charge Collections
Reallocation Account.
(17) Third Party Credit Enhancement Drawing. If
applicable, an amount equal to the lesser of
(A) the Class C Modified Required Amount
Shortfall and
(B) the amount on deposit in the Third Party
Credit Enhancement Account
shall be withdrawn from the Third Party Credit Enhancement
Account and deposited into the Series Distribution Account. The
Class C Modified Required Amount Shortfall and the Third Party
Credit
Enhancement shall be reduced by the amount of such deposit.
(18) Payment of the Class A Modified Required Amount
Shortfall from a Subordinate Series. If applicable, an amount
equal to the lesser of
(A) the Class A Modified Required Amount
Shortfall and
(B) funds, if any, available to pay such Class
A Modified Required Amount Shortfall from funds initially
allocated to any Subordinate Series
shall be deposited into the Series Distribution Account. The
Class A Modified Required Amount Shortfall shall be reduced by
the amount of such deposit.
(19) Payment of the Class B Modified Required Amount
Shortfall from a Subordinate Series. If applicable, an amount
equal to the lesser of
(A) the Class B Modified Required Amount
Shortfall and
(B) funds, if any, available to pay such Class
B Modified Required Amount Shortfall from funds initially
allocated to any Subordinate Series
shall be deposited into the Series Distribution Account. The
Class B Modified Required Amount Shortfall shall be reduced by
the amount of such deposit.
(20) Payment of the Class C Modified Required Amount
Shortfall from a Subordinate Series. If applicable, an amount
equal to the lesser of
(A) the Class C Modified Required Amount
Shortfall and
(B) funds, if any, available to pay such Class
C Modified Required Amount Shortfall from funds initially
allocated to any Subordinate Series
shall be deposited into the Series Distribution Account. The
Class C Modified Required Amount Shortfall shall be reduced by
the amount of such deposit.
(21) Reimbursement of the Class A Cumulative Investor
Charged-Off Amount from a Subordinate Series. If applicable, an
amount equal to the lesser of
(A) the Class A Cumulative Investor Charged-Off
Amount and
(B) funds, if any, available to pay such Class
A Cumulative Investor Charged-Off Amount from funds initially
allocated to any Subordinate Series
shall be deposited into the Series Principal Collections Account.
The Class A Cumulative Investor Charged-Off Amount shall be
reduced by the amount of such deposit.
(22) Reimbursement of the Class B Cumulative Investor
Charged-Off Amount from a Subordinate Series. If applicable, an
amount equal to the lesser of
(A) the Class B Cumulative Investor Charged-Off
Amount and
(B) funds, if any, available to pay such Class
B Cumulative Investor Charged-Off Amount from funds initially
allocated to any Subordinate Series
shall be deposited into the Series Principal Collections Account.
The Class B Cumulative Investor Charged-Off Amount shall be
reduced by the amount of such deposit.
(23) Reimbursement of the Class C Cumulative Investor
Charged-Off Amount from a Subordinate Series. If applicable, an
amount equal to the lesser of
(A) the Class C Cumulative Investor Charged-Off
Amount and
(B) funds, if any, available to pay such Class
C Cumulative Investor Charged-Off Amount from funds initially
allocated to any Subordinate Series
shall be deposited into the Series Principal Collections Account.
The Class C Cumulative Investor Charged-Off Amount shall be
reduced by the amount of such deposit.
(24) Reallocations for the Class A Modified Required
Amount Shortfall from the Group Finance Charge Collections
Reallocation Account. An amount equal to the lesser of
(A) the Class A Modified Required Amount
Shortfall and
(B) the product of
(x) a fraction the numerator of which
is the Class A Modified Required Amount Shortfall and the
denominator of which is the sum of the class modified required
amount
shortfalls for all classes with the same alphabetical designation
for all series in the Group to which the Series established
hereby belongs (after giving effect to provisions in the
applicable Series Supplements substantially similar to the
clauses preceding this
clause (24)) and
(y) the amount on deposit in the Group
Finance Charge Collections Reallocation Account before any
withdrawals therefrom with respect to any other series pursuant
to a comparable clause in the applicable Series Supplements shall
be withdrawn from the Group Finance Charge Collections
Reallocation Account and deposited into the Series Distribution
Account. The Class A Modified Required Amount Shortfall shall be
reduced by the amount of such deposit.
(25) Reallocations for the Class B Modified Required
Amount Shortfall from the Group Finance Charge Collections
Reallocation Account. An amount equal to the lesser of
(A) the Class B Modified Required Amount
Shortfall and
(B) the product of
(x) a fraction the numerator of which
is the Class B Modified Required Amount Shortfall and the
denominator of which is the sum of the class modified required
amount
shortfalls for all classes with the same alphabetical designation
for all series in the Group to which the Series established
hereby belongs (after giving effect to provisions in the
applicable Series Supplements substantially similar to the
clauses preceding this
clause (25)) and
(y) the amount on deposit in the Group
Finance Charge Collections Reallocation Account before any
withdrawals therefrom with respect to any other series pursuant
to a comparable clause for any class with the same alphabetical
designation and after any withdrawals therefrom for the benefit
of all classes designated by higher letters of the alphabet of
such other series in the applicable Series Supplements
shall be withdrawn from the Group Finance Charge Collections
Reallocation Account and deposited into the Series Distribution
Account. The Class B Modified Required Amount Shortfall shall be
reduced by the amount of such deposit.
(26) Reallocations for the Class C Modified Required
Amount Shortfall from the Group Finance Charge Collections
Reallocation Account. An amount equal to the lesser of
(A) the Class C Modified Required Amount
Shortfall and
(B) the product of
(x) a fraction the numerator of which
is the Class C Modified Required Amount Shortfall and the
denominator of which is the sum of the class modified required
amount
shortfalls for all classes not initially rated by the Rating
Agencies for all series in the Group to which the Series
established hereby belongs (after giving effect to provisions in
the applicable Series Supplements substantially similar to the
clauses preceding this clause (26)); provided, however, that if
any other series (or multiple other series) shall have more than
one unrated class, the class modified required amount shortfall
to be used in the denominator for each such other series shall be
the
class modified required amount shortfall for themost senior
unrated class for such series for which the class modified
required amount shortfall is greater than zero and
(y) the amount on deposit in the Group
Finance Charge Collections Reallocation Account before any
withdrawals therefrom with respect to any other series pursuant
to a comparable clause for any class with the same alphabetical
designation and after any withdrawals therefrom for the benefit
of all classes designated by higher letters of the alphabet of
such other series in the applicable Series Supplements
shall be withdrawn from the Group Finance Charge Collections
Reallocation Account and deposited into the Series Distribution
Account. The Class C Modified Required Amount Shortfall shall be
reduced by the amount of such deposit.
(27) Reallocations for the Class A Cumulative Investor
Charged-Off Amount from the Group Finance Charge Collections
Reallocation Account. An amount equal to the lesser of
(A) the Class A Cumulative Investor Charged-Off
Amount and
(B) the product of
(x) a fraction the numerator of which
is the Class A Cumulative Investor Charged-Off Amount and the
denominator of which is the sum of the class cumulative investor
charged-off amounts for all classes with the same alphabetical
designation for all series in the Group to which the Series
established hereby belongs (after giving effect to provisions in
the applicable Series Supplements substantially similar to the
clauses preceding this clause (27)) and
(y) the amount on deposit in the Group
Finance Charge Collections Reallocation Account before any
withdrawals therefrom with respect to any other series pursuant
to a comparable clause in the applicable Series Supplements
shall be withdrawn from the Group Finance Charge Collections
Reallocation Account and deposited into the Series Principal
Collections Account. The Class A Cumulative Investor Charged-Off
Amount shall be reduced by the amount of such deposit.
(28) Reallocations for the Class B Cumulative Investor
Charged-Off Amount from the Group Finance Charge Collections
Reallocation Account. An amount equal to the lesser of
(A) the Class B Cumulative Investor Charged-Off
Amount and
(B) the product of
(x) a fraction the numerator of which
is the Class B Cumulative Investor Charged-Off Amount and the
denominator of which is the sum of the class cumulative investor
charged-off amounts for all classes with the same alphabetical
designation for all series in the Group to which the Series
established hereby belongs (after giving effect to provisions in
the applicable Series Supplements substantially similar to the
clauses preceding this clause (28)) and
(y) the amount on deposit in the Group
Finance Charge Collections Reallocation Account before any
withdrawals therefrom with respect to any other series pursuant
to a comparable clause for any class with the same alphabetical
designation and after any withdrawals therefrom for the benefit
of all classes designated by higher letters of the alphabet of
such other series in the applicable Series Supplements
shall be withdrawn from the Group Finance Charge Collections
Reallocation Account and deposited into the Series Principal
Collections Account. The Class B Cumulative Investor Charged-Off
Amount shall be reduced by the amount of such deposit.
(29) Allocations from the Group Finance Charge
Collections Reallocation Account for the payment of accrued
Series Monthly Servicing Fees. An amount equal to the lesser of
(A) all accrued but unpaid Series Monthly
Servicing Fees and
(B) the product of
(x) a fraction the numerator of which
is all accrued but unpaid Series Monthly Servicing Fees and the
denominator of which is the sum of all accrued but unpaid monthly
servicing fees for all series in the Group to which the Series
established hereby belongs (after giving effect to provisions in
the applicable Series Supplements substantially similar to the
clauses preceding this clause (29)) and
(y) the amount on deposit in the Group
Finance Charge Collections Reallocation Account before any
withdrawals therefrom with respect to any other series pursuant
to a comparable clause in the applicable Series Supplements
shall be withdrawn from the Group Finance Charge Collections
Reallocation Account and deposited into the Series Distribution
Account.
(30) Reallocations for the Class C Cumulative Investor
Charged-Off Amount from the Group Finance Charge Collections
Reallocation Account. An amount equal to the lesser of
(A) the Class C Cumulative Investor Charged-Off
Amount and
(B) the product of
(x) a fraction the numerator of which
is the Class C Cumulative Investor Charged-Off Amount and the
denominator of which is the sum of the class cumulative investor
charged-off amounts for all classes unrated by the Rating
Agencies for all series in the Group to which the Series
established hereby belongs (after giving effect to provisions in
the applicable Series Supplements substantially similar to the
clauses preceding this clause (30)); provided, however, that if
any other series (or multiple other series) shall have more than
one unrated class, the class cumulative investor charged-off
amount to be used in the denominator for each such other series
shall be the class cumulative investor charged-off amount for the
most senior unrated class for such series for which the class
cumulative investor charged-off amount is greater than zero and
(y) the amount on deposit in the Group
Finance Charge Collections Reallocation Account before any
withdrawals therefrom with respect to any other series pursuant
to a comparable clause for any class with the same alphabetical
designation and after any withdrawals therefrom for the benefit
of all classes designated by higher letters of the alphabet of
such other series in the applicable Series Supplements
shall be withdrawn from the Group Finance Charge Collections
Reallocation Account and deposited into the Series Principal
Collections Account. The Class C Cumulative Investor Charged-Off
Amount shall be reduced by the amount of such deposit.
(31) Payment of the Class A Modified Required Amount
Shortfall from Class C Principal Collections. An amount equal to
the lesser of
(A) the Class A Modified Required Amount
Shortfall and
(B) the sum of the Series Excess Funding Amount
(SRC) and Class C Principal Collections less Series Yield
Collections allocable to the Class C Investor Interest
shall be withdrawn from the Series Collections Account and
deposited into the Series Distribution Account. The Class A
Modified Required Amount Shortfall shall be reduced by the amount
of such deposit, and the Class C Cumulative Investor Charged-Off
Amount shall be increased by the amount of such deposit.
(32) Payment of the Class A Modified Required Amount
Shortfall from Class B Principal Collections. An amount equal to
the lesser of
(A) the Class A Modified Required Amount
Shortfall and
(B) the Class B Principal Collections less
Series Yield Collections allocable to the Class B Investor
Interest
shall be withdrawn from the Series Collections Account and
deposited into the Series Distribution Account. The Class A
Modified Required Amount Shortfall shall be reduced by the amount
of such deposit, and the Class B Cumulative Investor Charged-Off
Amount shall be increased by the amount of such deposit.
(33) Payment of the Class B Modified Required Amount
Shortfall from Class C Principal Collections. An amount equal to
the lesser of
(A) the Class B Modified Required Amount
Shortfall and
(B) the sum of any remaining Series Excess
Funding Amounts (SRC) and any remaining Class C Principal
Collections less Series Yield Collections allocable to the Class
C Investor Interest
shall be withdrawn from the Series Collections Account and
deposited into the Series Distribution Account. The Class B
Modified Required Amount Shortfall shall be reduced by the amount
of such deposit, and the Class C Cumulative Investor Charged-Off
Amount shall be increased by the amount of such deposit.
(34) Reimbursement of the Class A Cumulative Investor
Charged-Off Amount from Class C Principal Collections. An amount
equal to the lesser of
(A) the Class A Cumulative Investor Charged-Off
Amount and
(B) the sum of any remaining Series Excess
Funding Amounts (SRC) and any remaining Class C Principal
Collections less Series Yield Collections allocable to the Class
C Investor Interest
shall be withdrawn from the Series Collections Account and
deposited into the Series Principal Collections Account. The
Class A Cumulative Investor Charged-Off Amount shall be reduced
by the amount of such deposit, and the Class C Cumulative
Investor
Charged-Off Amount shall be increased by the amount of such
deposit.
(35) Reallocation of the Class C Investor Interest to
reimburse the Class A Cumulative Investor Charged-Off Amount.
The Class A Cumulative Investor Charged-Off Amount shall be
reduced by an amount equal to the lesser of
(A) the Class A Cumulative Investor Charged-Off
Amount and
(B) the Class C Investor Interest
and the Class C Cumulative Investor Charged-Off Amount shall be
increased by such amount; provided, however, that the Class C
Cumulative Investor Charged Off Amount would not, as a result
exceed the Class C Initial Investor Interest less principal
payments made in respect of such Class prior to such Distribution
Date.
(36) Reimbursement of the Class A Cumulative Investor
Charged-Off Amount from Class B Principal Collections. An amount
equal to the lesser of
(A) the Class A Cumulative Investor Charged-Off
Amount and
(B) any remaining Class B Principal Collections
less Series Yield Collections allocable to the Class B Investor
Interest
shall be withdrawn from the Series Collections Account and
deposited into the Series Principal Collections Account. The
Class A Cumulative Investor Charged-Off Amount shall be reduced
by the amount of such deposit, and the Class B Cumulative
Investor
Charged-Off Amount shall be increased by the amount of such
deposit.
(37) Reallocation of the Class B Investor Interest to
reimburse the Class A Cumulative Investor Charged-Off Amount.
The Class A Cumulative Investor Charged-Off Amount shall be
reduced by an amount equal to the lesser of
(A) the Class A Cumulative Investor Charged-Off
Amount and
(B) the Class B Investor Interest
and the Class B Cumulative Investor Charged-Off Amount shall be
increased by such amount; provided, however, that the Class B
Cumulative Investor Charged-Off Amount would not, as a result,
exceed the Class B Initial Investor Interest less principal
payments made in respect of such Class prior to such Distribution
Date.
(38) Reimbursement of the Class B Cumulative Investor
Charged-Off Amount from Class C Principal Collections. An amount
equal to the lesser of
(A) the Class B Cumulative Investor Charged-Off
Amount and
(B) the sum of any remaining Series Excess
Funding Amounts (SRC) and any remaining Class C Principal
Collections less Series Yield Collections allocable to the Class
C Investor Interest
shall be withdrawn from the Series Collections Account and
deposited into the Series Principal Collections Account. The
Class B Cumulative Investor Charged-Off Amount shall be reduced
by the amount of such deposit, and the Class C Cumulative
Investor
Charged-Off Amount shall be increased by the amount of such
deposit.
(39) Reallocation of the Class C Investor Interest to
reimburse the Class B Cumulative Investor Charged-Off Amount.
The Class B Cumulative Investor Charged-Off Amount shall be
reduced by an amount equal to the lesser of
(A) the Class B Cumulative Investor Charged-Off
Amount and
(B) the Class C Investor Interest
and the Class C Cumulative Investor Charged-Off Amount shall be
increased by such amount; provided, however, that the Class C
Cumulative Investor Charged Off Amount would not, as a result
exceed the Class C Initial Investor Interest less principal
payments made in respect of such Class prior to such Distribution
Date.
(40) Reinstatement of Class C Investor Interest from
the Third Party Credit Enhancement Account. On the Distribution
Date in which the Class A Invested Amount and Class B Invested
Amounts have been reduced to zero, if applicable, an amount equal
to the lesser of
(A) the Class C Cumulative Investor Charged-Off
Amount and
(B) the Third Party Credit Enhancement Amount
shall be withdrawn from the Third Party Credit Enhancement
Account and deposited into the Series Principal Collections
Account by the Third Party Credit Enhancement Provider. The
Class C Cumulative Investor Charged-Off Amount and the Third
Party Credit Enhancement Amount shall both be reduced by the
amount of such deposit.
(41) Special Third Party Credit Enhancement Drawing.
On the Distribution Date in which the Class A Invested Amount and
Class B Invested Amounts have been reduced to zero, if
applicable, an amount equal to the lesser of
(A) the Class C Modified Required Amount
Shortfall and
(B) the amount on deposit in the Third Party
Credit Enhancement Account
shall be withdrawn from the Third Party Credit Enhancement
Account and deposited into the Series Distribution Account. The
Class C Modified Required Amount Shortfall and the Third Party
Credit
Enhancement Amount shall be reduced by the amount of such
deposit.
(42) Allocations of remaining amounts from the Group
Finance Charge Collections Reallocation Account to the Seller.
An amount equal to all remaining amounts on deposit in the Group
Finance Charge Collections Reallocation Account, after all other
allocations from such Account pursuant to the Series Supplements
for any series in the Group to which the Series established
hereby belongs, shall be withdrawn from the Group Finance Charge
Collections Reallocation Account and paid to the Seller.
(43) Allocations from the Excess Funding Account
(General) to the Series Principal Collections Account. An amount
equal to the product of
(A) a fraction the numerator of which is the
Series Investor Interest less the Class Investor Interest with
respect to a Seller Retained Class and the denominator of which
is the sum of the series investor interests less class investor
interests with respect to seller retained classes for all
outstanding series in rapid amortization (after giving effect to
provisions in the applicable Series Supplements substantially
similar to the clauses preceding this clause (43)) and
(B) the amount on deposit in the Excess Funding
Account (General) before any withdrawals therefrom with respect
to any other series pursuant to a comparable clause in the
applicable Series Supplements
shall be withdrawn from the Excess Funding Account (General) and
deposited into the Series Principal Collections Account.
(44) Allocations of Series Principal Collections. An
amount equal to the remaining Series Principal Collections minus
the (i) Series Yield Collections, if any and (ii) remaining
Seller Retained Class Principal Collections shall be withdrawn
from the Series Collections Account and deposited into the Series
Principal Collections Account.
(45) Class A Rapid Amortization Amount. An amount
equal to the lesser of
(A) the Class A Rapid Amortization Amount and
(B) amounts on deposit in the Series Principal
Collections Account
shall be withdrawn from the Series Principal Collections Account
and deposited into the Series Distribution Account. The amount
by which the Class A Rapid Amortization Amount exceeds such
deposit shall be the "Class A Rapid Amortization Amount
Shortfall."
(46) Class B Rapid Amortization Amount. On each
Distribution Date after the Distribution Date on which the Class
A Invested Amount is paid in full, an amount equal to the lesser
of
(A) the Class B Rapid Amortization Amount and
(B) amounts on deposit in the Series Principal
Collections Account
shall be withdrawn from the Series Principal Collections Account
and deposited into the Series Distribution Account. The amount
by which the Class B Rapid Amortization Amount exceeds such
deposit shall be the "Class B Rapid Amortization Amount
Shortfall."
(47) Class C Rapid Amortization Amount. On each
Distribution Date after the Distribution Date on which the Class
A and Class B Invested Amounts are paid in full, an amount equal
to the lesser of
(A) the Class C Rapid Amortization Amount and
(B) amounts on deposit in the Series
Collections Account
shall be withdrawn from the Series Collections Account and
deposited into the Series Distribution Account. The amount by
which the Class C Rapid Amortization Amount exceeds such deposit
shall be the "Class C Rapid Amortization Amount Shortfall."
(48) Allocations from the Group Principal Collections
Reallocation Account for the payment of the Class A Rapid
Amortization Amount Shortfall. An amount equal to the lesser of
(A) the Class A Rapid Amortization Amount
Shortfall and
(B) the product of
(x) a fraction the numerator of which
is the Class A Rapid Amortization Amount Shortfall and the
denominator of which is the sum of the class rapid amortization
amount
shortfalls for all classes with the same alphabetical designation
for all series in rapid amortization in the Group to which the
Series established hereby belongs (after giving effect to
provisions in the applicable Series Supplements substantially
similar to the clauses preceding this clause (48)) and
(y) the amount on deposit in the Group
Principal Collections Reallocation Account before any withdrawals
therefrom with respect to any other series pursuant to a
comparable clause in the applicable Series Supplements
shall be withdrawn from the Group Principal Collections
Reallocation Account and deposited in the Series Distribution
Account. The Class A Rapid Amortization Amount Shortfall will be
reduced by the amount of such deposit.
(49) Allocations from the Group Principal Collections
Reallocation Account for the payment of the Class B Rapid
Amortization Amount Shortfall. An amount equal to the lesser of
(A) the Class B Rapid Amortization Amount
Shortfall and
(B) the product of
(x) a fraction the numerator of which
is the Class B Rapid Amortization Amount Shortfall and the
denominator of which is the sum of the class rapid amortization
amount
shortfalls for all classes with the same alphabetical designation
for all series in rapid amortization in the Group to which the
Series established hereby belongs (after giving effect to
provisions in the applicable Series Supplements substantially
similar to the clauses preceding this clause (49)) and
(y) the amount on deposit in the Group
Principal Collections Reallocation Account before any withdrawals
therefrom with respect to any other series pursuant to a
comparable clause for any class with the same alphabetical
designation and
after any withdrawals therefrom for the benefit of all classes
designated by higher letters of the alphabet of such other series
in the applicable Series Supplements
shall be withdrawn from the Group Principal Collections
Reallocation Account and deposited in the Series Distribution
Account. The Class B Rapid Amortization Amount Shortfall will be
reduced by the amount of such deposit.
(50) Allocations from the Group Principal Collections
Reallocation Account for the payment of the Class C Rapid
Amortization Amount Shortfall. An amount equal to the lesser of
(A) the Class C Rapid Amortization Amount
Shortfall and
(B) the product of
(x) a fraction the numerator of which
is the Class C Rapid Amortization Amount Shortfall and the
denominator of which is the sum of the class rapid amortization
amount
shortfalls for all classes with the same alphabetical designation
for all series in rapid amortization in the Group to which the
Series established hereby belongs (after giving effect to
provisions in the applicable Series Supplements substantially
similar to the clauses preceding this clause (50)); provided,
however, that if any other series (or multiple other series)
shall have more than one unrated class, the class rapid
amortization
amount shortfall to be used in the denominator for each such
other series shall be the class rapid amortization amount
shortfall for the most senior unrated class for such series for
which the class rapid amortization shortfall is greater than zero
and
(y) the amount on deposit in the Group
Principal Collections Reallocation Account before any withdrawals
therefrom with respect to any other series pursuant to a
comparable clause for any class with the same alphabetical
designation and
after any withdrawals therefrom for the benefit of all classes
designated by higher letters of the alphabet of such other series
in the applicable Series Supplements
shall be withdrawn from the Group Principal Collections
Reallocation Account and deposited in the Series Distribution
Account. The Class C Rapid Amortization Amount Shortfall will be
reduced by the amount of such deposit.
(51) Allocations of remaining Series Principal
Collections. An amount equal to all remaining amounts on deposit
in the Series Principal Collections Account shall be withdrawn
from the Series Principal Collections Account and deposited into
the
Group Principal Collections Reallocation Account.
(52) Payment to the Seller. An amount equal to the
lesser of
(A) the positive difference, if any, between
the amount of the Seller Interest and the Minimum Seller Interest
(after giving effect to all similar provisions in other Series
Supplements, beginning with the series (including the Series
established hereby) having the earliest series closing date and
continuing seriatim) and
(B) any remaining amounts on deposit in the
Series Collections Account
shall be withdrawn from the Series Collections Account and paid
to the Seller. If after such payment, amounts remain on deposit
in the Series Collections Account, such amounts shall be
deposited into the Excess Funding Account (SRC).
(53) Additional payment to the Seller. An amount equal
to the lesser of
(A) the positive difference, if any, between
the amount of the Seller Interest and the Minimum Seller Interest
and
(B) the product of (i) any remaining amounts on
deposit in the Group Principal Collections Reallocation Account
and (ii) a fraction the numerator of which is the remaining
amounts on deposit in the Group Principal Collections
Reallocation Account and the denominator of which is the sum of
the remaining amounts on deposit in all group principal
collections reallocation accounts (including the Group Principal
Collections Reallocation Account for the Group to which the
Series established hereby belongs)
shall be withdrawn from the Group Principal Collections
Reallocation Account and paid to the Seller. If after such
payment, amounts remain on deposit in the Group Principal
Collections Reallocation Account, such amounts shall be deposited
into the Excess Funding Account (General).
SECTION 9. Payments.
(a) Payments to the Investor Certificateholders. On
each Distribution Date, after giving effect to deposits and
allocations made pursuant to Section 8, the Servicer shall direct
the Trustee to make the following additional deposits and
withdrawals and to cause the Paying Agent to pay funds from the
applicable Investor Account to or for the benefit of each Class
of Investor Certificateholders as set forth below
(1) Deposits of the Class A Modified Required Amount
into the Series Interest Funding Account. An amount equal to the
lesser of
(A) the Class A Modified Required Amount and
(B) the amount deposited in respect of the
Class A Modified Required Amount into the Series Distribution
Account on such Distribution Date pursuant to Section 8
shall be withdrawn from the Series Distribution Account and
deposited into the Series Interest Funding Account. The positive
difference, if any, between the Class A Modified Required Amount
and the amount of such deposit shall be the "Class A Monthly
Deficiency Amount."
(2) Deposits of the Class B Modified Required Amount
into the Series Interest Funding Account. An amount equal to the
lesser of
(A) the Class B Modified Required Amount and
(B) the amount deposited in respect of the
Class B Modified Required Amount into the Series Distribution
Account on such Distribution Date pursuant to Section 8
shall be withdrawn from the Series Distribution Account and
deposited into the Series Interest Funding Account. The positive
difference, if any, between the Class B Modified Required Amount
and the amount of such deposit shall be the "Class B Monthly
Deficiency Amount."
(3) Deposits of the Class C Modified Required Amount
into the Series Interest Funding Account. An amount equal to the
lesser of
(A) the Class C Modified Required Amount and
(B) the amount deposited in respect of the
Class C Modified Required Amount into the Series Distribution
Account on such Distribution Date pursuant to Section 8
shall be withdrawn from the Series Distribution Account and
deposited into the Series Interest Funding Account. The positive
difference, if any, between the Class C Modified Required Amount
and the amount of such deposit shall be the "Class C Monthly
Deficiency Amount."
(4) Payment of Series Interest. On each Interest
Payment Date and Special Payment Date, the Servicer shall direct
the
Trustee to withdraw and cause the Paying Agent to pay the amount
deposited into the Series Interest Funding Account with respect
to each Class or Subclass since the preceding Interest Payment
Date to the Investor Certificateholders of such Class or Subclass
in
accordance with Section 5.01 of the Pooling and Servicing
Agreement.
(5) Payment of the Class A Early Termination Premium or
Class A Early Termination Premium Shortfall, as applicable. If
applicable, an amount equal to the lesser of
(A) the Class A Early Termination Premium or
the Class A Early Termination Premium Shortfall, as applicable,
and
(B) the amount on deposit in respect of the
Class A Early Termination Premium or the Class A Early
Termination
Premium Shortfall, as applicable, on such Distribution Date
pursuant to Section 8
shall be withdrawn from the Series Distribution Account and paid
to the Class A Investor Certificateholders.
(6) Payment of the Class B Early Termination Premium or
Class B Early Termination Premium Shortfall, as applicable. If
applicable, an amount equal to the lesser of
(A) the Class B Early Termination Premium or
the Class B Early Termination Premium Shortfall, as applicable,
and
(B) the amount on deposit in respect of the
Class B Early Termination Premium or the Class B Early
Termination
Premium Shortfall, as applicable, on such Distribution Date
pursuant to Section 8
shall be withdrawn from the Series Distribution Account and paid
to the Class B Investor Certificateholders.
(7) Payment of Series Monthly Servicing Fee. An amount
equal to the lesser of
(A) the sum of the Series Monthly Servicing Fee
and all accrued but unpaid Series Monthly Servicing Fees as of
the prior Distribution Date and
(B) the amount on deposit in respect of the
Series Monthly Servicing Fee in the Series Distribution Account
on such Distribution Date pursuant to Section 8
shall be withdrawn from the Series Distribution Account and paid
to the Servicer.
(8) Payment of the Series Monthly Servicing Fee
Additional Funds Portion and the Series Monthly Servicing Fee
Additional Funds Portion Shortfall, if applicable. If
applicable, an amount equal to the lesser of
(A) the sum of the Series Monthly Servicing Fee
Additional Funds Portion and the Series Monthly Servicing Fee
Additional Funds Portion Shortfall, if applicable, and
(B) the amount on deposit in respect of the
Series Monthly Servicing Fee Additional Funds Portion and the
Series Monthly Servicing Fee Additional Funds Portion Shortfall,
if applicable, in the Series Distribution Account on such
Distribution Date pursuant to Section 8
shall be withdrawn from the Series Distribution Account and paid
to the Servicer.
(9) Payment of the Third Party Credit Enhancement Fee.
An amount equal to the lesser of
(A) the Third Party Credit Enhancement Fee and
(B) the amount on deposit in respect of the
Third Party Enhancement Fee in the Series Distribution Account on
such Distribution Date pursuant to Section 8
shall be withdrawn from the Series Distribution Account and paid
to the Trustee as administrator of the Third Party Credit
Enhancement for application in accordance with the provisions of
the Third
Party Credit Enhancement Agreement.
(10) Payment of the Series Pre-Funding Amount, if
applicable. An amount equal to the amount on deposit in respect
of the Series Pre-Funding Amount in the Series Distribution
Account pursuant to Section 8 shall be withdrawn from the Series
Distribution Account and paid to each Class, seriatim, in
accordance with the following calculation: an amount equal to
the product of (i) a fraction the numerator of which is the Class
Investor Interest and the denominator of which is the Series
Investor Interest and (ii) such amount on deposit.
(11) Payment of Series Principal.
(A) On each Principal Payment Date, an amount
equal to the lesser of
(x) the Class Controlled Amortization
Amount and the Class C Permitted Controlled Amortization Amount,
if any, and
(y) the remaining amount on deposit in
the Series Distribution Account on such Distribution Date
pursuant to Section 8
shall be withdrawn from the Series Distribution Account and shall
be paid to (i) prior to the Class C Fixing Deadline, the Class A
Certificateholders and Class C Certificateholders, as applicable,
and (ii) after the Class C Fixing Deadline, to each outstanding
Class of Investor Certificateholders, seriatim, beginning with
the most senior Class, pursuant to Section 5.01 of the Pooling
and Servicing Agreement.
(B) On each Special Payment Date, an amount
equal to the remaining amount on deposit in the Series
Distribution Account or the Series Principal Funding Account, as
applicable, as of such Date pursuant to Section 8 shall be
withdrawn from the Series Distribution Account or the Series
Principal Funding Account, as applicable, and shall be paid to
the Investor Certificateholders pursuant to Section 5.01 of the
Pooling and Servicing Agreement.
(C) On each Class Expected Final Payment Date,
an amount equal to the lesser of
(x) the Class Invested Amount and
(y) the amount deposited into the
Series Principal Funding Account on such Distribution Date
pursuant to
Section 8
shall be withdrawn from the Series Principal Funding Account and
shall be paid to the Investor Certificateholders pursuant to
Section 5.01 of the Pooling and Servicing Agreement.
All amounts set forth in subsections (A)-(C) above shall be paid
to the Class A Investor Certificateholders until the Class A
Invested Amount is reduced to zero; thereafter, such amounts
shall be paid to the Class B Investor Certificateholders until
the Class B Invested Amount is reduced to zero; thereafter, such
amounts shall be paid to the Class C Investor Certificateholders
until the Class C Invested Amount is reduced to zero, unless the
Series Termination Date occurs prior to such date; provided,
however, that nothing contained in this section shall prohibit
the payment of the Class C Permitted Controlled Amortization
Amount. In no event shall any amounts be paid with respect to
any Class of Investor Certificates pursuant to this clause (11)
in excess of the Class Invested Amount for such Class. Any
amounts remaining on deposit in any of the Investor Accounts
established for this Series after the Class Invested Amount for
each Class has been reduced to zero shall be paid to the Seller.
(b) Payments to the Seller and/or the Servicer.
Notwithstanding the other provisions in Section 8 and this
Section 9, any amounts payable to the Seller or to the Servicer
on any
Distribution Date pursuant to Section 8 and this Section 9 may be
paid prior to such Distribution Date pursuant to Section 4.03(d)
of the Pooling and Servicing Agreement.
SECTION 10. Third Party Credit Enhancement.
(a) Initial Third Party Credit Enhancement. If
applicable, the Servicer hereby represents with respect to the
Initial Third Party Credit Enhancement and shall be deemed to
represent with respect to any successor Third Party Credit
Enhancement that (i) the Servicer has provided for the Third
Party Credit Enhancement for the account of the Trustee and for
the benefit of the Certificateholders, (ii) the Servicer has
entered into a Third Party Credit Enhancement Agreement, (iii)
the Third Party Credit Enhancement permits the Trustee or the
Servicer, acting as the Trustee's attorney-in-fact or otherwise,
to make Third Party Credit Enhancement Drawings from time to time
in an amount up to the Total Available Third Party Credit
Enhancement Amount at such time, for the purposes set forth in
this Agreement and (iv) the Third Party Credit Enhancement and
the respective Third Party Credit Enhancement Agreement may be
terminated by the Trustee without penalty if the Servicer elects
to obtain a successor Third Party Credit Enhancement and such
election does not cause a Ratings Event.
(b) Successor Third Party Credit Enhancement.
(i) If the provider of the Third Party
Credit Enhancement ceases to be a Qualified Third Party Credit
Enhancement Provider, the Servicer shall exercise its best
efforts to obtain a successor Third Party Credit Enhancement (a)
which will be issued by a Qualified Third Party Credit
Enhancement Provider and (b) with respect to which the
representations set forth in Section 10(a) will be satisfied;
provided, however, that the Servicer shall not be required to
continue efforts to obtain a successor Third Party Credit
Enhancement if the then existing Third Credit Enhancement
Provider again becomes a Qualified Third Party Credit Enhancement
Provider and remains such; and provided, further,that unless
otherwise agreed to by the Rating Agencies, the Third Party
Credit Enhancement and Third Party Credit Enhancement Agreement
will not be terminated and no successor Third Party
Credit Enhancement Provider shall be selected if the successor
Third Party Credit Enhancement, the successor Third Party Credit
Enhancement Agreement, or the selection of such successor Third
Party Credit Enhancement Provider would cause a Ratings Event.
The Servicer, the Trustee and the Seller shall promptly enter
into any such successor Third Party Credit Enhancement Agreement,
and the Servicer shall use its best efforts to secure the
signature of any other required party to such agreement.
(ii) The Servicer may elect, at any time, to
obtain a successor Third Party Credit Enhancement, provided that
such successor Third Party Credit Enhancement does not cause a
Ratings Event.
(iii) In any case, subject to the foregoing,
any successor Third Party Credit Enhancement obtained by the
Servicer need not consist of the same type of Third Party Credit
Enhancement as the Initial Third Party Credit Enhancement, but
may consist of a different type of facility, including, but not
limited to, a
reserve account, a cash collateral account, an
irrevocable standby letter of credit, a surety bond or a
combination of any of the above. Upon issuance of, or other
provision for, any such
successor Third Party Credit Enhancement, the Trustee may
terminate the prior Third Party Credit Enhancement and the Third
Party Credit Enhancement Agreement.
SECTION 11. Calculation of Investor Losses.
(a) For each Distribution Date, the Servicer shall
calculate the Class Investor Charged-Off Amount with respect to
each Class, as of the end of the related Due Period.
(b) On each Distribution Date, after giving effect to
all allocations and deposits pursuant to Section 8, the Investor
Loss shall equal the Class Cumulative Investor Charged-Off Amount
with respect to any Class as of such Distribution Date.
SECTION 12. Servicing Compensation. As compensation
for its servicing activities hereunder and under the Pooling and
Servicing Agreement and reimbursement of its expenses as set
forth in Section 3.02 of the Pooling and Servicing Agreement, the
Servicer shall be entitled to receive a monthly servicing fee
with respect to the Series established hereby in respect of any
Due Period (or portion thereof) prior to the earlier of (i) the
date on which the Series Investor Interest is reduced to zero or
(ii) the Series Termination Date. The Series Monthly Servicing
Fee and the Series Monthly Servicing Fee Additional Funds
Portion, if any, shall be paid to the Servicer on or before each
Distribution Date pursuant to Section 8.
SECTION 13. Class Coupon Cap Agreement.
(a) The Servicer may obtain Class Coupon Cap Agreements
in favor of the Trustee for the benefit of each Class or Subclass
that does not have a fixed Certificate Rate or Embedded Coupon
Cap. If applicable, each such Class Coupon Cap Agreement shall
provide that (i) the Trust shall not be required to make any
payments thereunder and (ii) the Trust shall be entitled to
receive payments (determined in accordance with such Class Coupon
Cap Agreement) from the Coupon Cap Provider on an Interest
Payment Date if LIBOR or the Commercial Paper Rate (or such other
index as determined by the Servicer, a "Substitute Index"), as
applicable, for the related Calculation Period exceeds the Class
Coupon Cap for the applicable Class or Subclass. Any Class
Coupon Payment shall be made in accordance with Sections 8 and 9.
(b) In the event that the commercial paper or
certificate of deposit rating of the Coupon Cap Provider is
withdrawn or reduced below the ratings specified in the Class
Coupon Cap Agreement (or, in either case, such lower rating as
will not cause a Ratings Event), then within 30 days after
receiving notice of such decline in the creditworthiness of the
Coupon Cap Provider as determined by either Rating Agency, either
(x) the Coupon Cap Provider, with the prior confirmation of the
Rating Agencies that such arrangement will not result in a
Ratings Event, will enter into an arrangement the purpose of
which shall be to assure performance by the Coupon Cap Provider
of its obligations under the Class Coupon Cap Agreement; or (y)
the Servicer shall at its option either (i) with the prior
confirmation of the Rating Agencies that such action will not
result in a Ratings Event, (A) cause the Coupon Cap Provider to
pledge securities in the manner provided by applicable law or (B)
itself pledge or cause to be pledged securities, which shall be
held by the Trustee or its agent free and clear of the Lien of
any third party, in a manner conferring on the Trustee a
perfected first Lien in such securities securing the Coupon Cap
Provider's performance of its obligations under
the Class Coupon Cap Agreement, or (ii) establish any other
arrangement (including an arrangement or arrangements in addition
to or in substitution for any prior arrangement made in
accordance with the provisions of this Section 13(b))
satisfactory to the Rating Agencies such that such other
arrangement will not cause a Ratings Event (a "Qualified
Substitute Cap Arrangement");
provided, however, that in the event at any time any alternative
arrangement established pursuant to clause (x) or (y)(i) or
(y)(ii) above shall cease to be satisfactory to the Rating
Agencies then the provisions of this Section 13(b) shall again be
applied and in connection therewith the 30-day period referred to
above shall commence on the date the Servicer receives notice of
such cessation.
(c) Unless an alternative arrangement pursuant to
clause (x), (y)(i) or (y)(ii) of Section 13(b) is being
established, the Servicer shall use its best efforts to obtain a
Replacement Class Coupon Cap Agreement or Qualified Substitute
Cap Arrangements meeting the requirements of this Section 13(c)
during the 30-day period referred to in Section 13(b). The
Trustee shall not terminate the Class Coupon Cap Agreement
unless, prior to the expiration of the 30-day period referred to
in Section 13(b), the Servicer delivers to the Trustee (i) a
Replacement Class Coupon Cap Agreement or Qualified Substitute
Cap Arrangements, (ii) to the extent applicable, an Opinion of
Counsel as to the due authorization, execution and delivery and
validity and enforceability of each such Replacement Class Coupon
Cap Agreement or Qualified Substitute Cap Arrangement, as the
case may be, and (iii) confirmation from each Rating Agency that
the termination of the Class Coupon Cap Agreement and their
replacement with such Replacement Class Coupon Cap Agreement or
Qualified Substitute Cap Arrangements will not cause a Ratings
Event.
(d) The Servicer shall notify the Trustee, the Rating
Agencies and the Third Party Credit Enhancement Provider within
five Business Days after obtaining knowledge that the commercial
paper or certificate of deposit rating of the Coupon Cap Provider
has been withdrawn or reduced by either Rating Agency.
(e) Notwithstanding the foregoing, the Servicer may at
any time obtain a Replacement Class Coupon Cap Agreement,
provided that the Servicer delivers to the Trustee (i) an Opinion
of Counsel as to the due authorization, execution and delivery
and validity and enforceability of such Replacement Class Coupon
Cap Agreement and (ii) confirmation from the Rating Agencies that
the termination of the then current Class Coupon Cap Agreement
and its replacement with such Replacement Class Coupon Cap
Agreement will not cause a Ratings Event. After a Replacement
Class Coupon Cap Agreement or Qualified Substitute Cap
Arrangement has been obtained, the Seller may direct the Trustee
to terminate or otherwise transfer or assign the replaced Class
Coupon Cap Agreement, and direct the Trustee to pay any proceeds
from such termination or transfer to the Servicer. In addition,
notwithstanding the foregoing, the Seller may at any time direct
the Trustee to terminate or otherwise transfer or
assign its rights relating to any portion of the Class Coupon Cap
Agreement. The Seller may direct the Trustee to pay any proceeds
from such partial termination to the Servicer.
(f) The Trustee hereby appoints the Servicer to perform
the duties of the calculation agent under the Class Coupon Cap
Agreement and the Servicer accepts such appointment.
SECTION 14. Investor Certificateholders' Monthly
Statement. On each Distribution Date, the Paying Agent shall
forward to each Certificateholder of the Series established
hereby a statement substantially in the form of Exhibit B
prepared by the Trustee (based on information provided by the
Servicer) setting
forth the information listed thereon.
SECTION 15. Monthly Servicer Certificate. On or
before the second Business Day preceding each Distribution Date,
the Servicer shall forward to the Seller, the Trustee and the
Paying Agent a certificate of a Servicing Officer substantially
in the form of Exhibit C setting forth the information listed
thereon.
SECTION 16. Additional Rapid Amortization Events.
If any one of the following events shall occur:
(a) failure on the part of the Seller (i) to make
any payment or deposit required by the terms of this Agreement or
the Pooling and Servicing Agreement on or before the date
occurring five Business Days after the date such payment or
deposit is required to be made or (ii) duly to observe or perform
in any material respect any other material covenants or
agreements of the Seller set forth in this Agreement or the
Pooling and Servicing Agreement, which continues unremedied for a
period of 60 days after the date on which written notice of such
failure, requiring the same to be remedied, shall have been given
to the Seller by the Trustee, or to the Seller and the Trustee by
the Investor Certificateholders evidencing Fractional Undivided
Interests aggregating not less than 25% of the Class Invested
Amount of any Class of any Series materially adversely affected
thereby;
(b) any representation or warranty made by the
Seller in this Agreement or the Pooling and Servicing Agreement
or any information contained in Schedule 1 of the Pooling and
Servicing Agreement shall prove to have been incorrect in any
material respect when made or when delivered, which
representation, warranty or Schedule 1 continues to be incorrect
in any material respect for a period of 60 days after the date on
which written notice of such failure, requiring the same to be
remedied, shall have been given to the Seller by the Trustee, or
to the Seller and the Trustee by the Holders of Investor
Certificates evidencing Fractional Undivided Interests
aggregating not less than 25% of the Class
Invested Amount of any Class of any Series materially adversely
affected thereby;
(c) the Seller shall become unable for any reason to
transfer Receivables to the Trust in accordance with the
provisions of the Pooling and Servicing Agreement and such
inability shall continue for five Business Days;
(d) any Servicer Termination Event shall occur that
would have a material adverse effect on the Investor
Certificateholders;
(e) the Trust shall become an "investment company"
within the meaning of the Investment Company Act of 1940, as
amended;
(f) the amount of Principal Receivables in the Trust
at the end of any Due Period shall be less than the Minimum
Principal Receivables Balance and the Seller shall have failed to
assign Principal Receivables in Additional Accounts or
Participation Interests to the Trust on behalf of the Seller in
at least the amount of such deficiency by the Distribution Date
related to the second subsequent Due Period (for purposes of this
clause (f) the amount of Principal Receivables in Additional
Accounts shall be determined as of the last day of the Due Period
preceding the assignment of such Principal Receivables to the
Trust);
(g) if applicable, following the withdrawal or
reduction of the commercial paper or certificate of deposit
rating of any
Coupon Cap Provider to below the ratings specified in the Series
Term Sheet (or, in either case, such lower rating as the
applicable Rating Agency has permitted), the Servicer shall fail,
within the applicable time period specified in Section 13, to (x)
obtain Replacement Class Coupon Cap Agreement or Qualified
Substitute Cap Arrangements or (y) cause the Coupon Cap Provider
to pledge securities as collateral securing the obligations of
the Coupon Cap Provider as provided in Section 13, in each case
in a manner satisfactory to the Trustee and the Rating Agencies
(such that neither Rating Agency will reduce or withdraw the
ratings of the Investor Certificates of the Series established
hereby); or
(h) there shall have been three Distribution Dates on
which the Net Yield is less than the Base Rate since the later of
the Series Closing Date or the last Distribution Date on which
the Investor Loss for each Class of the Series equalled zero;
then
(x) in the case of any event described in
subparagraphs (a), (b) or (d) after any applicable grace period
set forth in such subparagraphs, either the Trustee or the
Holders of Investors Certificates evidencing Fractional Undivided
Interests aggregating not less than 51% of the Series Investor
Interest by notice then given in writing to the Seller and the
Servicer (and to the Trustee if given by the Investor
Certificateholders) may declare that an amortization event (a
"Rapid Amortization Event") has occurred with respect to the
Series established hereby as of the date of such notice;
(y) in the case of any event described in
subparagraph (c), (e) or (f), a Rapid Amortization Event shall
occur with respect to all Series of Investor Certificates,
immediately upon the occurrence of such event; and
(z) in the case of any event described in
subparagraphs (g) and (h), a Rapid Amortization Event shall occur
with respect to the Investor Certificates of the Series
established hereby, immediately upon the occurrence of such
event.
SECTION 17. Purchase of Investor Certificates and
Series Termination. If the Servicer determines that, as of any
Distribution Date during the Rapid Amortization Period, or after
the Class B Expected Final Payment Date (after giving effect to
any allocations or deposits calculated pursuant to Section 8 made
on such Distribution Date) the Series Investor Interest less (i)
the Class Investor Interest with respect to any Seller Retained
Class and (ii) the Supplemental Cash allocable to the Class A
Investor Interest or Class B Investor Interest of the Series
established hereby, will be less than or equal to 10% of the
Series Initial Investor Interest minus the Class Initial Investor
Interest with respect to any Seller Retained Class, the Seller
may purchase and cancel the Investor Certificates of the Series
established hereby by depositing into the Series Distribution
Account, on such Distribution Date, an amount equal to the Series
Investor Interest (plus all accrued but unpaid Certificate
Interest and all funds on deposit in the Series Principal Funding
Account) as of the last day of the Due Period related to such
immediately succeeding Distribution Date; provided, however, that
the Seller may not purchase and cancel any Investor Certificates
representing a Seller Retained Class (except as otherwise
provided in Section 8) until all Classes of Investor Certificates
senior to such Seller Retained Class have been purchased and
cancelled. The amount deposited pursuant to this Section 17 that
is allocable to the Investor Certificateholders shall be paid to
the Investor Certificateholders pursuant to Section 12.02 of the
Pooling and Servicing Agreement on the Distribution Date related
to such deposit. All Investor Certificates of the Series
established hereby that are purchased by the Seller pursuant to
this Section 17 shall be delivered upon such purchase by the
Seller to, and shall be cancelled by, the Transfer Agent and
shall be disposed of in a manner satisfactory to the
Trustee and the Seller.
SECTION 18. Variable Accumulation Period. The
Controlled Accumulation Period is scheduled to commence on the
Stated Controlled Accumulation Period Commencement Date;
provided, however, that if the Controlled Accumulation Period
Length
(determined as described below) on any Determination Date is
different from the Initial Scheduled Controlled Accumulation
Period Length, the Servicer, at its option on any Determination
Date prior to the commencement of the Controlled Accumulation
Period, may elect to modify the date on which the Controlled
Accumulation Period actually commences to the last Business Day
of any Due Period that precedes the Due Period that is the number
of Due Periods prior to the Expected Final Payment Date equal to
the Controlled Accumulation Period Length. Such election will be
set forth in the Monthly Servicer Certificate. If the Servicer
elects to modify the date on which the Controlled Accumulation
Period commences pursuant to this Section 18, then on each
Determination Date thereafter until the date on which the
Controlled Accumulation Period commences the Servicer will
recalculate the Controlled Accumulation Period Length; provided,
however, that (i) the length of the Controlled Accumulation
Period will not be less than the Minimum Controlled Accumulation
Period Length and (ii) notwithstanding any other provision of
this Series Supplement to the contrary, no election to postpone
the commencement of the Controlled Accumulation Period shall be
made after a Rapid Amortization Event (as described herein or in
the applicable Series Supplement) shall have occurred for so long
as it is continuing with respect to any Series in the Group to
which the Series established hereby belongs. On each
Determination Date, the Servicer will determine the "Controlled
Accumulation Period Length" that will equal the number of Due
Periods such that the Class Controlled Accumulation Amount for
the Due Period related to the Class Expected Final Payment Date,
when aggregated with the Class Controlled Accumulation Amounts
for each preceding Due Period, will equal or exceed the Series
Initial Investor Interest. Any notice by the Servicer electing
to modify the commencement of the Controlled Accumulation Period
pursuant to this Section 18 shall specify the following as
determined on such Determination Date: (i) the Controlled
Accumulation Period Length; (ii) the commencement date of the
Controlled Accumulation Period; and (iii) the Class Controlled
Accumulation Amount with respect to each class of such Series
with respect to each Due Period. If the Controlled Accumulation
Period Length as recalculated on any such Determination Date
exceeds the number of full Due Periods following such
Determination Date and preceding the Class A Expected Final
Payment Date, the commencement date of the Controlled
Accumulation Period will be such Determination Date.
SECTION 19. Series Yield Factor. The Series Yield
Factor for the Series established hereby initially shall be the
Series Yield Factor set forth in the Series Term Sheet. The
Servicer may change the Series Yield Factor upon 20 days prior
written notice to the Trustee, the Seller, the Third Party Credit
Enhancement Provider and the Rating Agencies, provided that the
following conditions are satisfied: (i) the Series Yield Factor
may not be reduced below the initial Series Yield Factor; (ii)
the Servicer shall have delivered to the Trustee a certificate to
the effect that the Servicer reasonably believes that the change
in the Series Yield Factor would not (x) result in any delay in
the payment of principal to the Investor Certificateholders of
any Series then outstanding, or (y) cause a Rapid Amortization
Event to occur with respect to any Series then outstanding; and
(iii) the Rating Agencies shall have advised the Servicer and the
Seller that such change in the Series Yield Factor would not
cause a Ratings Event. Any such change shall be effective as of
the first day of the Due Period specified in the notice of the
Servicer. Series Yield Collections, if any, shall be treated as
a "Series Additional Allocable Amount."
SECTION 20. Issuance of Additional Investor
Certificates.
(a) During the Revolving Period, the Seller may, in
its discretion and subject to the terms of subsection (b) below,
request the Trustee to issue additional investor certificates of
each Class (each such additional certificates, the "Additional
Certificates") for the Series established hereby in an amount and
on the date (the "Additional Certificate Date") determined by the
Seller. Upon issuance, the Additional Certificates will be
identical in all respects (except that the principal amount of
such Additional Certificates may be different) to the Investor
Certificates currently outstanding and will be equally and
ratably entitled to the benefits of this Series Supplement and
the Pooling and Servicing Agreement. The outstanding principal
amounts of all Classes of the outstanding Series and the size of
the Series Third Party Credit Enhancement, if any, shall be
increased pro rata. The percentage of the Series Third Party
Credit Enhancement for each outstanding Class of such Series
shall not change upon the issuance of the Additional
Certificates. The Class Controlled Accumulation Amount or Class
Controlled Amortization Amount, as applicable, for each Class of
such Series shall be increased proportionally to
reflect the additional amount of Class A, Class B and Class C
Certificates for such Series represented by the Additional
Certificates.
(b) Additional Certificates shall only be issued
upon satisfaction of all of the following conditions:
(i) On or before the fifth Business Day
immediately preceding the date on which the Additional
Certificates are to be issued, the Seller shall give notice to
the Trustee, the Servicer and the Rating Agencies of such
issuance and the date upon which it is to occur;
(ii) After giving effect to the addition of
the Additional Certificates to the Series, the total amount of
Principal Receivables in the Trust shall be greater than or equal
to the Minimum Principal Receivables Balance;
(iii) The Seller shall have delivered evidence
of the proportional increase in the Series Third Party Credit
Enhancement to the Trustee and the Rating Agencies;
(iv) On or before the Additional Certificate
Date, the Trustee shall have been advised in writing by the
Rating Agencies that the issuance of the Additional Certificates
will not cause a Ratings Event;
(v) The Seller shall have delivered to the
Trustee an Officer's Certificate dated as of the Additional
Certificate Date, stating that the Seller reasonably believes
that the issuance of such Additional Certificates will not have a
material adverse effect on any outstanding Class of the Series
affected by such issuance;
(vi) As of the Additional Certificate Date,
the amount of Investor Loss for all Classes of such Series shall
be
zero; and
(vii) The Seller shall have delivered to the
Trustee a Tax Opinion with respect to such issuance.
SECTION 21. Sale or Transfer of Seller Retained
Classes. On any date that is at least two months prior to the
start of the Controlled Accumulation or Controlled Amortization
Period, as applicable, the Seller may, in its discretion and
subject to the terms of this Section 21, sell or transfer any
Seller Retained Class of Investor Certificates (the "Purchased
Class") of the Series established hereby (the "Seller Retained
Class Purchase Date") upon satisfaction of the following
conditions:
(i) On or before the fifth Business Day
immediately preceding the Seller Retained Class Purchase
Date, the Seller shall give notice to the Trustee, the
Servicer and the Rating Agencies of such sale or transfer
and of the Seller Retained Class Purchase Date;
(ii) On or before the Seller Retained Class
Purchase Date, the Trustee shall have been advised in writing by
the Rating Agencies that the sale or transfer of the Purchased
Class will not cause a Ratings Event;
(iii) On or before the Seller Retained Class
Purchase Date, the Seller shall have delivered to the Trustee an
Officer's Certificate dated as of the Seller Retained Class
Purchase Date, stating that the Seller reasonably believes that
the sale of such Seller Retained Class will not have a material
adverse effect on any other
outstanding Class of the Series;
(iv) As of the Seller Retained Class Transfer
Date, the amount of Class Investor Loss for all Classes
of this Series shall be zero;
(v) The Holders of the Purchased Class shall
have agreed that they shall not be entitled to principal payments
with respect to such Purchased Class until the Class Investor
Interest for all Classes senior to such Purchased Class have been
reduced to zero;
(vi) No Rapid Amortization Event with respect
to this Series shall have occurred; and
(vii) The Seller shall have delivered to the
Trustee a Tax Opinion with respect to the Purchased Class.
Any such Seller Retained Class sold pursuant to this Section 21
shall no longer be considered a Seller Retained Class.
SECTION 22. Paired Series. If the Series Term Sheet
for the Series established hereby so provides, the Seller may
issue a subsequent series of investor certificates (the "Paired
Series") that is linked with the Series established hereby.
Under certain circumstances, a Paired Series may affect the
timing and amount of principal collections available for the
Series established hereby.
SECTION 23. Fixed Principal Allocation Adjustment.
Upon the issuance of each new series of Investor Certificates in
the Group to which the Series established hereby belongs,
provided that (i) a Rapid Amortization Event has not occurred and
(ii) a Fixed Principal Allocation Event has occurred, the
Servicer may, at its option on or before any Determination Date,
elect to cause a readjustment of the Class Percentage with
respect to Principal Collections by taking into account principal
collections available to the Series established hereby from the
newly issued series (a "Fixed Principal Allocation Adjustment").
Notice of such election will be set forth in the Monthly Servicer
Certificate.
SECTION 24. Ratification of Pooling and Servicing
Agreement. As supplemented and amended by this Series
Supplement, the Pooling and Servicing Agreement is in all
respects ratified and confirmed and the Pooling and Servicing
Agreement as so
supplemented by this Series Supplement shall be read, taken, and
construed as one and the same instrument.
SECTION 25. Counterparts. This Series Supplement
may be executed in any number of counterparts, each of which so
executed shall be deemed to be an original, but all of such
counterparts shall together constitute but one and the same
instrument.
SECTION 26. Book-Entry Certificates. The Class C
Investor Certificate shall not be issued as book-entry
certificates pursuant to Section 6.02 of the Pooling and
Servicing Agreement
unless (i) the Class C Certificate shall be sold or transferred
pursuant to Section 21 and (ii) the Seller shall so elect.
SECTION 27. Governing Law. This Series Supplement
shall be construed in accordance with the internal laws of the
State of New York, without reference to its conflict of law
provisions, and the obligations, rights and remedies of the
parties hereunder shall be determined in accordance with such
laws.<PAGE>
EXHIBIT A-1
FORM OF CLASS A CERTIFICATE
[FORM OF THE FACE OF THE CLASS A CERTIFICATES]
UNLESS THIS CLASS A CERTIFICATE IS PRESENTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO THE
ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY CLASS A CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND
ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
NO. $
CUSIP NO. _81234C__
6.45% CLASS A MASTER TRUST CERTIFICATE, SERIES 1996-4
SEARS CREDIT ACCOUNT MASTER TRUST II
SEARS RECEIVABLES FINANCING GROUP, INC.
SELLER
SEARS, ROEBUCK AND CO.
SERVICER
(NOT AN INTEREST IN OR OBLIGATION OF SEARS RECEIVABLES FINANCING
GROUP, INC., SEARS NATIONAL BANK OR SEARS, ROEBUCK AND CO.)
This certifies that CEDE & CO. (the "Class A
Certificateholder") is the registered owner of a Fractional
Undivided Interest in Sears Credit Account Master Trust II (the
"Trust"), the corpus of which consists of a portfolio of
receivables (the "Receivables") existing as of the Cut-Off Date
(or, with respect to Receivables in Additional Accounts, as of
the applicable Additional Account Cut-Off Date) or thereafter
created under certain open-end retail charge plans for specified
Persons (the "Accounts") originated by Sears, Roebuck and Co., a
New York corporation ("Sears") or its affiliates, and transferred
to Sears Receivables Financing Group, Inc., a Delaware
corporation ("SRFG"), all monies due or to become due with
respect thereto, all Participation Interests, if any, all
benefits under any Credit Enhancement with respect to any series
of investor certificates issued from time to time, to the extent
applicable, all proceeds (as defined in Article 9 of the Uniform
Commercial Code as in effect in the State of New York) of such
Receivables, and Insurance Proceeds, if any, relating thereto,
pursuant to a Pooling and Servicing Agreement, dated as of July
31, 1994, as amended (the "Pooling and Servicing Agreement"), by
and among Sears as Servicer, SRFG as Seller and The First
National Bank of Chicago, as trustee (the "Trustee"), a summary
of certain of the pertinent provisions of which is set forth
below. Reference is hereby made to the
further provisions of this Class A Certificate set forth on the
reverse hereof, and such further provisions shall for all
purposes have the same effect as if set forth at this place.
This Class A Certificate shall not be entitled to any
benefit under the Pooling and Servicing Agreement or any
amendment thereto, or the Series Supplement, dated as of October
29, 1996 (the "Series Supplement"), by and among the Trustee,
Sears and SRFG or any amendment thereto, or become vested or
obligatory for any
purpose until the certificate of authentication hereon shall have
been signed by or on behalf of the Trustee under the Pooling and
Servicing Agreement.
IN WITNESS WHEREOF, SRFG has caused this Class A
Certificate to be duly executed and authenticated.
SEARS RECEIVABLES FINANCING GROUP, INC.
By:______________________________________
Name:
Title:
<PAGE>
[FORM OF THE REVERSE OF THE CLASS A
CERTIFICATES] [For an Amortizing
Structure]
It is the intent of SRFG and the Investor
Certificateholders that, for federal, state and local income and
franchise tax purposes only, the Investor Certificates will be
evidence of indebtedness. SRFG and the Class A
Certificateholder, by the acceptance of this Class A Certificate,
agree to treat this Class A Certificate for federal, state and
local income and franchise tax purposes as indebtedness secured
by the Receivables and other assets held in the Trust.
To the extent not defined herein, the capitalized terms
used herein have the meanings assigned in the Pooling and
Servicing Agreement or the Series Supplement. This Class A
Certificate is issued under and is subject to the terms,
provisions and conditions of the Pooling and Servicing Agreement
and the Series Supplement, to which Pooling and Servicing
Agreement and Series Supplement, as each may be amended from time
to time, the Class A Certificateholder by virtue of the
acceptance hereof assents and by which the Class A
Certificateholder is bound.
This Class A Certificate is one of a series of
Certificates entitled "6.45% Class A Master Trust Certificates,
Series 1996-4" (the "Class A Certificates"), each of which
represents a Fractional Undivided Interest in the Trust,
including the right to receive the Collections and other amounts
at the times and in the amounts specified in the Pooling and
Servicing Agreement and the Series Supplement to be deposited in
the Investor Accounts with respect to Sears Credit Account Master
Trust II, Series 1996-4 or paid to the Class A
Certificateholders. Also issued under the Pooling and Servicing
Agreement and the Series Supplement are Investor Certificates
designated as "6.65% Class B Master Trust Certificates, Series
1996-4" (the "Class B Certificates") and "Class C Master Trust
Certificates, Series 1996-4" (the "Class C Certificates"). The
Class A Certificates, the Class B Certificates and the Class C
Certificates are collectively referred to herein as the Investor
Certificates.
The aggregate interest represented by the Class A
Certificates at any time in the assets of the Trust shall not
exceed an amount equal to the Class A Investor Interest at such
time, plus accrued but unpaid Certificate Interest for the Class
A Certificates and any interest thereon. The Class Initial
Investor Interest of the Class A Certificates is $500,000,000.
The Class A Invested Amount on any Distribution Date will be an
amount equal to the Class A Initial Investor Interest minus the
sum of (a) the
aggregate amount of payments of Certificate Principal paid to the
Class A Certificateholders prior to such Distribution Date and
(b) the Investor Loss for such Class, if any, at the beginning of
such Distribution Date. In addition to the Investor
Certificates, a Seller Certificate has been issued pursuant to
the Pooling and Servicing Agreement which represents, at any
time, the undivided interest in the Trust not represented by the
Investor Certificates or the investor certificates of any other
series of investor certificates then outstanding. Subject to the
terms and conditions of the Pooling and Servicing Agreement, the
Seller may from time to time direct the Trustee, on behalf of the
Trust, to issue one or more new series of investor certificates,
which will represent Fractional Undivided Interests in the Trust.
During the Revolving Period, which begins on the day
following the Series Cut-Off Date, Certificate Interest will be
distributed on the 15th day of each calendar month with respect
to interest accrued during the preceding Interest Accrual Period,
commencing in November 1996, or if such 15th day is not a
Business Day, on the next succeeding Business Day (each, a
"Distribution Date"), to the Class A Certificateholders of record
as of the last day of the month preceding the related
Distribution Date. During the Controlled Amortization Period,
which will begin on the first day of the Due Period related to
the Distribution Date in November 2000 unless a Rapid
Amortization Event occurs prior to such date, and during the
Rapid Amortization Period, if any, Certificate
Interest and Certificate Principal collected by the Servicer will
be distributed to the Class A Certificateholders on the
Distribution Date of each calendar month, commencing in the month
following the commencement of the earlier of the Controlled
Amortization Period or the Rapid Amortization Period. In any
event, the final payment of principal will be made no later than
the day following the Distribution Date in October 2006 (the
"Series Termination Date").
The amount to be distributed on each Distribution Date
to the holder of this Class A Certificate will be equal to the
product of (a) the percentage equivalent of a fraction, the
numerator of which is the portion of the Class A Initial Investor
Interest
evidenced by this Class A Certificate and the denominator of
which is the Class A Initial Investor Interest and (b) the
aggregate of all payments to be made to the Class A
Certificateholders on such Distribution Date. Distributions with
respect to this Class A
Certificate will be made by the Paying Agent by check mailed to
the address of the Class A Certificateholder of record appearing
in the Certificate Register (except for the final distribution in
respect of this Class A Certificate) without the presentation or
surrender of this Class A Certificate or the making of any
notation thereon, except that with respect to Class A
Certificates registered in the name of CEDE & CO., the nominee
registrant for The Depository Trust Company, distributions will
be made in the form of immediately
available funds.
This Class A Certificate does not represent an
obligation of, or an interest in, SRFG or the Servicer. This
Class A Certificate is limited in right of payment to certain
Collections respecting the Receivables, all as more specifically
set forth hereinabove and in the Pooling and Servicing Agreement
and the Series Supplement.
The Pooling and Servicing Agreement permits, with
certain exceptions, the amendment and modification of the rights
and obligations of the Servicer, and the rights of Investor
Certificateholders under the Pooling and Servicing Agreement and
Series Supplement, at any time by the Servicer, the Seller and
the Trustee in certain cases (some of which require written
confirmation from the Rating Agencies that such amendment will
not cause a Ratings Event) without the consent of the Investor
Certificateholders, and in all other cases with the consent of
the Investor Certificateholders owning Fractional Undivided
Interests aggregating not less than 66-2/3% of the Class Invested
Amount of each such affected Class (and with written confirmation
from the Rating Agencies that such amendment will not cause a
Ratings Event); provided, however, that no such amendment shall
(a) increase or reduce in any manner the amount of, or delay the
timing of, distributions which are required to be made on any
Investor Certificate without the consent of the affected Investor
Certificateholders or (b) reduce the aforesaid percentage
required to consent to any such amendment, without the consent of
each Investor Certificateholder of each affected Class then of
record. Any such amendment and any such consent by the Class A
Certificateholder shall be conclusive and binding on such Class A
Certificateholder and upon all future Holders of this Class A
Certificate and of any Class A Certificate issued in exchange
hereof or in lieu hereof whether or not notation thereof is made
upon this Class A Certificate.
The transfer of this Class A Certificate shall be
registered in the Certificate Register upon surrender of this
Investor Certificate for registration of transfer at any office
or agency maintained by the Transfer Agent and Registrar
accompanied by a written instrument of transfer in a form
satisfactory to the Trustee and the Transfer Agent and Registrar
duly executed by the Class A Certificateholder or such Class A
Certificateholder's attorney duly authorized in writing, and
thereupon one or more new Class A Certificates of authorized
denominations and for the same aggregate Fractional Undivided
Interest will be issued to the designated transferee or
transferees.
As provided in the Pooling and Servicing Agreement and
subject to certain limitations therein set forth, Class A
Certificates are exchangeable for new Class A Certificates
evidencing like aggregate Fractional Undivided Interests, as
requested by the Class A Certificateholder surrendering such
Class A Certificates. No service charge may be imposed for any
such exchange but the Servicer or Transfer Agent and Registrar
may require payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection therewith.
The Servicer, the Trustee, the Paying Agent and the
Transfer Agent, and any agent of any of them, may treat the
person in whose name this Class A Certificate is registered as
the owner hereof for all purposes, and neither the Servicer, the
Trust nor the Trustee, the Paying Agent, the Transfer Agent, nor
any agent of any of them or any such agent shall be affected by
notice to the contrary except in certain circumstances described
in the Pooling and Servicing Agreement.
Subject to certain conditions in the Pooling and
Servicing Agreement and the Series Supplement, if the principal
of the Investor Certificates has not been paid in full prior to
the Series Termination Date, the obligations created by the
Pooling and Servicing Agreement and the Series Supplement with
respect to the Investor Certificates shall terminate on the
Series Termination Date.
This is one of the Class A Certificates referred to in
the within mentioned Pooling and Servicing Agreement and Series
Supplement.
THE FIRST NATIONAL BANK OF CHICAGO
as Trustee
By:______________________________
Authorized Officer
<PAGE>
EXHIBIT A-2
FORM OF CLASS B CERTIFICATE
[FORM OF THE FACE OF THE CLASS B CERTIFICATES]
THIS CLASS B CERTIFICATE MAY NOT BE TRANSFERRED TO AN
EMPLOYEE BENEFIT PLAN, TRUST OR ACCOUNT SUBJECT TO THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED, OR DESCRIBED
IN SECTION 4975(e)(1) OF THE INTERNAL REVENUE CODE OF 1986, AS
AMENDED.
UNLESS THIS CLASS B CERTIFICATE IS PRESENTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO THE
ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY CLASS B CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND
ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THIS CLASS B CERTIFICATE IS SUBORDINATED IN RIGHT OF
PAYMENT TO THE CLASS A CERTIFICATES AND TO THE RIGHTS OF THE
SERVICER AS DESCRIBED IN THE POOLING AND SERVICING AGREEMENT AND
SERIES SUPPLEMENT REFERRED TO HEREIN.
NO. $
CUSIP NO. __81234C_
6.65% CLASS B MASTER TRUST CERTIFICATE, SERIES 1996-4
SEARS CREDIT ACCOUNT MASTER TRUST II
SEARS RECEIVABLES FINANCING GROUP, INC.
SELLER
SEARS, ROEBUCK AND CO.
SERVICER
(NOT AN INTEREST IN OR OBLIGATION OF SEARS RECEIVABLES FINANCING
GROUP, INC., SEARS NATIONAL BANK OR SEARS, ROEBUCK AND CO.)
This certifies that CEDE & CO. (the "Class B Certificateholder")
is the registered owner of a Fractional Undivided Interest in
Sears Credit Account Master Trust II (the "Trust"), the corpus of
which consists of a portfolio of receivables (the "Receivables")
existing as of the Cut-Off Date (or, with respect to Receivables
in
Additional Accounts, as of the applicable Additional Account Cut-
Off Date) or thereafter created under certain open-end retail
charge plans for specified Persons (the "Accounts") originated by
Sears, Roebuck and Co., a New York corporation ("Sears") or its
affiliates, and transferred to Sears Receivables Financing Group,
Inc., a Delaware corporation ("SRFG"), all monies due or to
become due with respect thereto, all Participation Interests, if
any, all benefits under any Credit Enhancement with respect to
any series of investor certificates issued from time to time, to
the extent applicable, all proceeds (as defined in Article 9 of
the Uniform Commercial Code as in effect in the State of New
York) of such Receivables, and Insurance Proceeds, if any,
relating thereto, pursuant to a Pooling and Servicing Agreement,
dated as of July 31, 1994, as amended (the "Pooling and Servicing
Agreement"), by and among Sears as Servicer, SRFG as Seller and
The First National Bank of Chicago, as trustee (the "Trustee"), a
summary of certain of the pertinent provisions of which is set
forth below. Reference is hereby made to the further provisions
of this Class B Certificate set forth on the reverse hereof, and
such further provisions shall for all purposes have the same
effect as if set forth at this place.
This Class B Certificate shall not be entitled to any
benefit under the Pooling and Servicing Agreement or any
amendment thereto, or the Series Supplement, dated as of October
29, 1996 (the "Series Supplement"), by and among the Trustee,
Sears and SRFG or any amendment thereto, or become vested or
obligatory for any purpose until the certificate of
authentication hereon shall have been signed by or on behalf of
the Trustee under the Pooling and Servicing Agreement.
IN WITNESS WHEREOF, SRFG has caused this Class B
Certificate to be duly executed and authenticated.
SEARS RECEIVABLES FINANCING GROUP, INC.
By:______________________________________
Name:
Title:
<PAGE>
[FORM OF THE REVERSE OF THE CLASS B CERTIFICATES]
[For an Amortizing Structure]
It is the intent of SRFG and the Investor
Certificateholders that, for federal, state and local income and
franchise tax purposes only, the Investor Certificates will be
evidence of indebtedness. SRFG and the Class B
Certificateholder, by the acceptance of this Class B Certificate,
agree to treat this Class B Certificate for federal, state and
local income and franchise tax purposes as indebtedness secured
by the Receivables and other assets held in the Trust.
To the extent not defined herein, the capitalized terms
used herein have the meanings assigned in the Pooling and
Servicing Agreement or the Series Supplement. This Class B
Certificate is issued under and is subject to the terms,
provisions and conditions of the Pooling and Servicing Agreement
and the Series Supplement, to which Pooling and Servicing
Agreement and Series Supplement, as each may be amended from time
to time, the Class B Certificateholder by virtue of the
acceptance hereof assents and by which the Class B
Certificateholder is bound.
This Class B Certificate is one of a series of
Certificates entitled "6.65% Class B Master Trust Certificates,
Series 1996-4" (the "Class B Certificates"), each of which
represents a Fractional Undivided Interest in the Trust,
including the right to receive the Collections and other amounts
at the times and in the amounts specified in the Pooling and
Servicing Agreement and the Series Supplement to be deposited in
the Investor Accounts with respect to Sears Credit Account Master
Trust II, Series 1996-4 or paid to the Class B
Certificateholders. Also issued under the Pooling and Servicing
Agreement and the Series Supplement are Investor Certificates
designated as "6.45% Class A Master Trust Certificates, Series
1996-4" (the "Class A Certificates") and "Class C Master Trust
Certificates, Series 1996-4" (the "Class C Certificates"). The
Class A Certificates, the Class B Certificates and the Class C
Certificates are collectively referred to herein as the Investor
Certificates.
The aggregate interest represented by the Class B
Certificates at any time in the assets of the Trust shall not
exceed an amount equal to the Class B Investor Interest at such
time, plus accrued but unpaid Certificate Interest for the Class
B Certificates and any interest thereon. The Class Initial
Investor Interest of the Class B Certificates is $22,500,000.
The Class B Invested Amount on any Distribution Date will be an
amount equal to the Class B Initial Investor Interest minus the
sum of (a) the aggregate amount of payments of Certificate
Principal paid to the Class B Certificateholders prior to such
Distribution Date and (b) the Investor Loss for such Class, if
any, at the beginning of such Distribution Date. In addition to
the Investor Certificates, a
Seller Certificate has been issued pursuant to the Pooling and
Servicing Agreement which represents, at any time, the undivided
interest in the Trust not represented by the Investor
Certificates or the investor certificates of any other series of
investor certificates then outstanding. Subject to the terms and
conditions of the Pooling and Servicing Agreement, the Seller may
from time to time direct the Trustee, on behalf of the Trust, to
issue one or more new series of investor certificates, which will
represent Fractional Undivided Interests in the Trust.
During the Revolving Period, which begins on the day
following the Series Cut-Off Date, Certificate Interest will be
distributed on the 15th day of each calendar month with respect
to interest accrued during the preceding Interest Accrual Period,
commencing in November 1996, or if such 15th day is not a
Business Day, on the next succeeding Business Day (each, a
"Distribution Date"), to the Class B Certificateholders of record
as of the last day of the month preceding the related
Distribution Date. During the Controlled Amortization Period,
which will begin on the first day of the Due Period related to
the Distribution Date in November 2000 unless a Rapid
Amortization Event occurs prior to such date, and during the
Rapid Amortization Period, if any, Certificate Interest and
Certificate Principal collected by the Servicer will be
distributed to the Class B Certificateholders on the Distribution
Date of each calendar month, commencing in the month following
the commencement of the earlier of the Controlled Amortization
Period or the Rapid Amortization Period; provided, however, that,
except as otherwise set forth in the Series Supplement, no
Certificate Principal will be distributed to the Class B
Certificateholders until the Class A Investor Interest has been
reduced to zero. The rights of the Class B Certificateholders to
receive distributions to which they would otherwise be entitled
on the Receivables will be subordinated to the rights of the
Class A Certificateholders and the Servicer to the extent
described in the Pooling and Servicing Agreement and Series
Supplement. In any event, the final payment of principal will be
made no later than the day following the Distribution Date in
October 2006 (the "Series Termination Date").
The amount to be distributed on each Distribution Date
to the holder of this Class B Certificate will be equal to the
product of (a) the percentage equivalent of a fraction, the
numerator of which is the portion of the Class B Initial Investor
Interest evidenced by this Class B Certificate and the
denominator of which is the Class B Initial Investor Interest and
(b) the aggregate of all payments to be made to the Class B
Certificateholders on such Distribution Date. Distributions with
respect to this Class B Certificate will be made by the Paying
Agent by check mailed to the address of the Class B
Certificateholder of record appearing in the Certificate Register
(except for the final distribution in respect of this Class B
Certificate) without the presentation or surrender of this Class
B Certificate or the making of any notation thereon, except that
with respect to Class B Certificates registered in the name of
CEDE & CO., the nominee registrant for The Depository Trust
Company, distributions will be made in the form of immediately
available funds.
This Class B Certificate does not represent an
obligation of, or an interest in, SRFG or the Servicer. This
Class B Certificate is limited in right of payment to certain
Collections respecting the Receivables, all as more specifically
set forth hereinabove and in the Pooling and Servicing Agreement
and the Series Supplement.
The Pooling and Servicing Agreement permits, with
certain exceptions, the amendment and modification of the rights
and obligations of the Servicer, and the rights of Investor
Certificateholders under the Pooling and Servicing Agreement and
Series Supplement, at any time by the Servicer, the Seller and
the Trustee in certain cases (some of which require written
confirmation from the Rating Agencies that such amendment will
not cause a Ratings Event) without the consent of the Investor
Certificateholders, and in all other cases with the consent of
the Investor Certificateholders owning Fractional Undivided
Interests aggregating not less than 66-2/3% of the Class Invested
Amount of each such affected Class (and with written confirmation
from the Rating Agencies that such amendment will not cause a
Ratings Event); provided, however, that no such amendment shall
(a) increase or reduce in any manner the amount of, or delay the
timing of, distributions which are required to be made on any
Investor Certificate without the consent of the affected Investor
Certificateholders or (b) reduce the aforesaid percentage
required to consent to any such amendment, without the consent of
each Investor Certificateholder of each affected Class then of
record. Any such amendment and any such consent by the Class B
Certificateholder shall be conclusive and binding on such Class B
Certificateholder and upon all future Holders of this Class B
Certificate and of any Class B Certificate issued in exchange
hereof or in lieu hereof whether or not notation thereof is made
upon this Class B Certificate.
The transfer of this Class B Certificate shall be
registered in the Certificate Register upon surrender of this
Investor Certificate for registration of transfer at any office
or agency maintained by the Transfer Agent and Registrar
accompanied by a written instrument of transfer in a form
satisfactory to the Trustee and the Transfer Agent and Registrar
duly executed by the Class B Certificateholder or such Class B
Certificateholder's attorney duly authorized in writing, and
thereupon one or more new Class B Certificates of authorized
denominations and for the same aggregate Fractional Undivided
Interest will be issued to the designated transferee or
transferees.
The transfer of this Class B Certificate is subject to
certain restrictions set forth in the Pooling and Servicing
Agreement. In no event shall this Class B Certificate, or any
interest herein, be transferred to an employee benefit plan,
trust or account subject to the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), or described in
Section 4975(e)(1) of the Internal Revenue Code. Any Holder of
this Class B Certificate, by its acceptance hereof, shall be
deemed to represent and warrant that it is not (i) an employee
benefit plan (as defined in Section 3(3) of ERISA), that is
subject to Title I of ERISA, (ii) a plan described in Section
4975(e)(1) of the Internal Revenue Code, and not excepted under
Section 4975(g), or (iii) an entity using assets to purchase such
Certificate which constitute plan assets by reason of a plan's
investment in such Holder.
As provided in the Pooling and Servicing Agreement and
subject to certain limitations therein set forth, Class B
Certificates are exchangeable for new Class B Certificates
evidencing like aggregate Fractional Undivided Interests, as
requested by the Class B Certificateholder surrendering such
Class B Certificates. No service charge may be imposed for any
such exchange but the Servicer or Transfer Agent and Registrar
may require payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection therewith.
The Servicer, the Trustee, the Paying Agent and the
Transfer Agent, and any agent of any of them, may treat the
person in whose name this Class B Certificate is registered as
the owner hereof for all purposes, and neither the Servicer, the
Trust nor the Trustee, the Paying Agent, the Transfer Agent, nor
any agent of any of them or any such agent shall be affected by
notice to the contrary except in certain circumstances described
in the Pooling and Servicing Agreement.
Subject to certain conditions in the Pooling and
Servicing Agreement and the Series Supplement, if the principal
of the Investor Certificates has not been paid in full prior to
the Series Termination Date, the obligations created by the
Pooling and Servicing Agreement and the Series Supplement with
respect to the Investor Certificates shall terminate on the
Series Termination Date.
[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the Class B Certificates referred to in
the within mentioned Pooling and Servicing Agreement and Series
Supplement.
THE FIRST NATIONAL BANK OF CHICAGO
as Trustee
By:______________________________
Authorized Officer
<PAGE>
EXHIBIT A-3
FORM OF CLASS C CERTIFICATE
[FORM OF THE FACE OF THE CLASS C CERTIFICATE]
THIS CLASS C CERTIFICATE MAY NOT BE TRANSFERRED TO AN
EMPLOYEE BENEFIT PLAN, TRUST OR ACCOUNT SUBJECT TO THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED, OR DESCRIBED
IN SECTION 4975(e)(1) OF THE INTERNAL REVENUE CODE OF 1986, AS
AMENDED.
THIS CLASS C CERTIFICATE IS SUBORDINATED IN RIGHT OF
PAYMENT TO THE CLASS A CERTIFICATES, THE CLASS B CERTIFICATES AND
TO THE RIGHTS OF THE SERVICER AS DESCRIBED IN THE POOLING AND
SERVICING AGREEMENT AND SERIES SUPPLEMENT REFERRED TO HEREIN.
THIS CLASS C CERTIFICATE MAY NOT BE TRANSFERRED,
ASSIGNED, EXCHANGED OR OTHERWISE CONVEYED WITHOUT SATISFACTION OF
CERTAIN CONDITIONS SET FORTH IN THE SERIES SUPPLEMENT REFERRED TO
HEREIN.
THE SECURITIES REPRESENTED BY THIS CLASS C CERTIFICATE
HAVE NOT BEEN REGISTERED PURSUANT TO THE SECURITIES ACT OF 1933
AND MAY NOT BE TRANSFERRED OR SOLD UNLESS PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT OR AN OPINION OF COUNSEL THAT
SUCH REGISTRATION IS NOT REQUIRED AND THE SATISFACTION OF CERTAIN
OTHER REQUIREMENTS SPECIFIED IN THE POOLING AND SERVICING
AGREEMENT AND SERIES SUPPLEMENT REFERRED TO HEREIN.
NO. $
CLASS C MASTER TRUST CERTIFICATE, SERIES 1996-4
SEARS CREDIT ACCOUNT MASTER TRUST II
SEARS RECEIVABLES FINANCING GROUP, INC.
SELLER
SEARS, ROEBUCK AND CO.
SERVICER
(NOT AN INTEREST IN OR OBLIGATION OF SEARS RECEIVABLES FINANCING
GROUP, INC., SEARS NATIONAL BANK OR SEARS, ROEBUCK AND CO.)
This certifies that Sears Receivables Financing Group,
Inc., a Delaware corporation ("SRFG"), is the registered owner of
a Fractional Undivided Interest in Sears Credit Account Master
Trust II (the "Trust"), the corpus of which consists of a
portfolio of receivables (the "Receivables") existing as of the
Cut-Off Date (or, with respect to Receivables in Additional
Accounts, as of the applicable Additional Account Cut-Off Date)
or thereafter created under certain open-end retail charge plans
for specified Persons (the "Accounts") originated by Sears,
Roebuck and Co., a New York corporation ("Sears") or its
affiliates, and transferred to SRFG, all monies due or to become
due with respect thereto, all Participation Interests, if any,
all benefits under any Credit Enhancement with respect to any
series of investor certificates issued from time to time, to the
extent applicable, all proceeds (as defined in Article 9 of the
Uniform Commercial Code as in effect in the State of New York) of
such Receivables, and Insurance Proceeds, if any, relating
thereto, pursuant to a Pooling and Servicing Agreement, dated as
of July 31, 1994, as amended (the "Pooling and Servicing
Agreement"), by and among Sears as Servicer, SRFG as Seller and
The First National Bank of Chicago, as trustee (the "Trustee"), a
summary of certain of the pertinent provisions of which is set
forth below. Reference is hereby made to the
further provisions of this Class C Certificate set forth on the
reverse hereof, and such further provisions shall for all
purposes have the same effect as if set forth at this place.
This Class C Certificate shall not be entitled to any
benefit under the Pooling and Servicing Agreement or any
amendment thereto, or the Series Supplement, dated as of October
29, 1996 (the "Series Supplement"), by and among the Trustee,
Sears and SRFG or any amendment thereto, or become vested or
obligatory for any purpose until the certificate of
authentication hereon shall have been signed by or on behalf of
the Trustee under the Pooling and Servicing Agreement.
IN WITNESS WHEREOF, SRFG has caused this Class C
Certificate to be duly executed and authenticated.
SEARS RECEIVABLES FINANCING GROUP, INC.
By:______________________________________
Name:
Title:
[FORM OF THE REVERSE OF THE CLASS C CERTIFICATES]
[For an Amortizing Structure]
It is the intent of SRFG and the Investor
Certificateholders that, for federal, state and local income and
franchise tax purposes only, the Investor Certificates will be
evidence of indebtedness. SRFG, by the acceptance of this Class
C Certificate, agrees to treat this Class C Certificate for
federal, state and local income and franchise tax purposes as
indebtedness secured by the Receivables and other assets held in
the Trust.
To the extent not defined herein, the capitalized terms
used herein have the meanings assigned in the Pooling and
Servicing Agreement or the Series Supplement. This Class C
Certificate is issued under and is subject to the terms,
provisions and conditions of the Pooling and Servicing Agreement
and the Series Supplement, to which Pooling and Servicing
Agreement and Series Supplement, as each may be amended from time
to time, SRFG by virtue of the acceptance hereof assents and by
which SRFG is bound.
This Class C Certificate is one of a series of
Certificates entitled "Class C Master Trust Certificates, Series
1996-4" (the "Class C Certificates"), each of which represents a
Fractional Undivided Interest in the Trust, including the right
to receive the Collections and other amounts at the times and in
the amounts specified in the Pooling and Servicing Agreement and
the Series Supplement to be deposited in the Investor Accounts
with respect to Sears Credit Account Master Trust II, Series
1996-4 or paid to SRFG. Also issued under the Pooling and
Servicing Agreement and the Series Supplement are Investor
Certificates designated as "6.45% Class A Master Trust
Certificates, Series 1996-4" (the "Class A Certificates") and
"6.65% Class B Master Trust Certificates, Series 1996-4" (the
"Class B Certificates"). The Class A Certificates, the Class B
Certificates and the Class C Certificates are collectively
referred to herein as the Investor Certificates.
The aggregate interest represented by the Class C
Certificates at any time in the assets of the Trust shall not
exceed an amount equal to the Class C Investor Interest at such
time, plus accrued but unpaid Certificate Interest for the Class
C Certificates and any interest thereon. The Class Initial
Investor Interest of the Class C Certificates is $39,330,000.
The Class C Invested Amount on any Distribution Date will be an
amount equal to the Class C Initial Investor Interest minus the
sum of (a) the aggregate amount of payments of Certificate
Principal paid to SRFG prior to such Distribution Date and (b)
the Investor Loss for such Class, if any, at the beginning of
such Distribution Date. In addition to the Investor
Certificates, a Seller Certificate has been issued pursuant to
the Pooling and Servicing Agreement which represents, at any
time, the undivided interest in the Trust not represented by the
Investor Certificates or the investor certificates of any other
series of investor certificates then outstanding. Subject to the
terms and conditions of the Pooling and Servicing Agreement, the
Seller may from time to time direct the Trustee, on behalf of the
Trust, to issue one or more new series of investor certificates,
which will represent Fractional Undivided Interests in the Trust.
During the Revolving Period, which begins on the day
following the Series Cut-Off Date, Certificate Interest will be
distributed on the 15th day of each calendar month with respect
to interest accrued during the preceding Interest Accrual Period,
commencing in November 1996, or if such 15th day is not a
Business Day, on the next succeeding Business Day (each, a
"Distribution Date"), to SRFG. During the Controlled
Amortization Period, which will begin on the first day of the Due
Period related to the Distribution Date in November 2000 unless a
Rapid Amortization Event occurs prior to such date, and during
the Rapid Amortization Period, if any, Certificate Interest and
Certificate Principal collected by the Servicer will be
distributed to SRFG on the Distribution Date of each calendar
month, commencing in the month following the commencement of the
earlier of the Controlled Amortization Period or the Rapid
Amortization Period; provided, however, that, except as otherwise
set forth in the Series Supplement, no Certificate Principal will
be distributed to SRFG in respect of this Class C Certificate
(except Certificate Principal distributed to SRFG in respect of
the Class C Permitted Controlled Amortization Amount, if any)
until the Class A Investor Interest and the Class B Investor
Interest have been reduced to zero. The rights of SRFG to
receive distributions to which it would otherwise be entitled on
the Receivables will be subordinated to the rights of the Class A
Certificateholders, the Class B Certificateholders and the
Servicer to the extent described in the Pooling and
Servicing Agreement and Series Supplement. In any event, the
final payment of principal will be made no later than the day
following the Distribution Date in October 2006 (the "Series
Termination Date").
The amount to be distributed on each Distribution Date
to the holder of this Class C Certificate will be equal to the
product of (a) the percentage equivalent of a fraction, the
numerator of which is the portion of the Class C Initial Investor
Interest evidenced by this Class C Certificate and the
denominator of which is the Class C Initial Investor Interest and
(b) the aggregate of all payments to be made to SRFG on such
Distribution Date. Distributions with respect to this Class C
Certificate will be made by the Paying Agent by check mailed to
the address of SRFG (except for the final distribution in respect
of this Class C Certificate) without the presentation or
surrender of this Class C Certificate or the making of any
notation thereon.
This Class C Certificate does not represent an
obligation of, or an interest in, SRFG or the Servicer. This
Class C Certificate is limited in right of payment to certain
Collections respecting the Receivables, all as more specifically
set forth hereinabove and in the Pooling and Servicing Agreement
and the Series Supplement.
The Pooling and Servicing Agreement permits, with
certain exceptions, the amendment and modification of the rights
and obligations of the Servicer, and the rights of Investor
Certificateholders under the Pooling and Servicing Agreement and
Series Supplement, at any time by the Servicer, the Seller and
the Trustee in certain cases (some of which require written
confirmation from the Rating Agencies that such amendment will
not cause a Ratings Event) without the consent of the Investor
Certificateholders, and in all other cases with the consent of
the Investor Certificateholders owning Fractional Undivided
Interests aggregating not less than 66-2/3% of the Class Invested
Amount of each such affected Class (and with written confirmation
from the Rating Agencies that such amendment will not cause a
Ratings Event); provided, however, that no such amendment shall
(a) increase or reduce in any manner the amount of, or delay the
timing of, distributions which are required to be made on any
Investor Certificate without the consent of the affected Investor
Certificateholders or (b) reduce the aforesaid percentage
required to consent to any such amendment, without the consent of
each Investor Certificateholder of each affected Class then of
record. Any such amendment and any such consent by SRFG shall be
conclusive and binding on such Class C Certificateholder and upon
all future Holders of this Class C Certificate and of any Class C
Certificate issued in exchange hereof or in lieu hereof whether
or not notation thereof is made upon this Class C Certificate.
The transfer of this Class C Certificate shall be
registered in the Certificate Register upon surrender of this
Investor Certificate for registration of transfer at any office
or agency maintained by the Transfer Agent and Registrar
accompanied by a written instrument of transfer in a form
satisfactory to the Trustee and the Transfer Agent and Registrar
duly executed by SRFG or such Class C Certificateholder's
attorney duly authorized in writing, and thereupon one or more
new Class C Certificates of authorized denominations and for the
same aggregate Fractional Undivided Interest will be issued to
the designated transferee or transferees.
The transfer of this Class C Certificate is subject to
certain restrictions set forth in the Pooling and Servicing
Agreement. In no event shall this Class C Certificate, or any
interest therein, be transferred to an employee benefit plan,
trust or account subject to the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), or described in
Section 4975(e)(1) of the Internal Revenue Code. Any Holder of
this Class C Certificate, by its acceptance hereof, shall be
deemed to represent and warrant that it is not (i) an employee
benefit plan (as defined in Section 3(3) of ERISA), that is
subject to Title I of ERISA, (ii) a plan described in Section
4975(e)(1) of the Internal Revenue Code, and not excepted under
Section 4975(g), or (iii) an entity using assets to purchase such
Certificate which constitute plan assets by reason of a plan's
investment in such Holder.
The transfer of this Class C Certificate is subject to
certain further restrictions and the fulfillment of certain
conditions as set forth in the Series Supplement.
As provided in the Pooling and Servicing Agreement and
subject to certain limitations therein set forth, Class C
Certificates are exchangeable for new Class C Certificates
evidencing like aggregate Fractional Undivided Interests, as
requested by SRFG. No service charge may be imposed for any such
exchange but the Servicer or Transfer Agent and Registrar may
require payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection therewith.
The Servicer, the Trustee, the Paying Agent and the
Transfer Agent, and any agent of any of them, may treat the
person in whose name this Class C Certificate is registered as
the owner hereof for all purposes, and neither the Servicer, the
Trust nor the Trustee, the Paying Agent, the Transfer Agent, nor
any agent of any of them or any such agent shall be affected by
notice to the contrary except in certain circumstances described
in the Pooling and Servicing Agreement.
Subject to certain conditions in the Pooling and
Servicing Agreement and the Series Supplement, if the principal
of the Investor Certificates has not been paid in full prior to
the Series Termination Date, the obligations created by the
Pooling and Servicing Agreement and the Series Supplement with
respect to the Investor Certificates shall terminate on the
Series Termination Date.
[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the Class C Certificates referred to in
the within mentioned Pooling and Servicing Agreement and Series
Supplement.
THE FIRST NATIONAL BANK OF CHICAGO
as Trustee
By:______________________________
Authorized Officer
EXHIBIT B
Form of Investor Certificateholders' Monthly Statement
Sears Credit Account Master Trust II
Series 1996-4 Monthly Statement
Distribution Date: __________ __, ____
Due Period Ending: __________ __, ____
Under the Series Supplements relating to the Pooling and
Servicing Agreement dated as of July 31, 1994, as amended, by and
among Sears, Roebuck and Co., Sears Receivables Financing Group,
Inc. and The First National Bank of Chicago as Trustee, the
Trustee is required to prepare certain information each month
regarding current distributions to Certificateholders and the
performance of the Trust. The information for the Due Period and
the Distribution Date listed above is set forth below.
1. Payments or Allocations to Series 1996-4 Investors this
Due Period
Total Interest Principal
Series 1996-4
Class A
$____________ $____________ $__________
Class B
$____________ $____________ $__________
Class C
$____________ $____________ $_________
2. Principal Receivables at the end of the Due Period
(a) TOTAL PRINCIPAL RECEIVABLES IN TRUST $____________
Aggregate Investor Interest $____________
Seller Interest $____________
(b) INVESTOR INTEREST BY GROUPS
Group One Investor Interest $____________
(c) INVESTOR INTEREST BY SERIES
Series 1994-1 Investor Interest $____________
Series 1994-2 Investor Interest $____________
Series 1995-1 Investor Interest $____________
Series 1995-2 Investor Interest $____________
Series 1995-3 Investor Interest $____________
Series 1995-4 Investor Interest $____________
Series 1995-5 Investor Interest $____________
Series 1996-1 Investor Interest $____________
Series 1996-2 Investor Interest $____________
Series 1996-3 Investor Interest $____________
Series 1996-4 Investor Interest $____________
(d) INVESTOR INTEREST BY CLASS (SERIES 1996-4)
Class A Investor Interest $____________
Class B Investor Interest $____________
Class C Investor Interest $____________
TOTAL CLASS INVESTOR INTEREST $____________
3. Allocation of Collections During the Due Period
(a) TOTAL COLLECTIONS $____________
Principal Receivables Collected $____________
Finance Charge Receivables Collected $____________
Finance Charge Principal Yield
Collections Collections Collections
(b) ALLOCATION OF COLLECTIONS WITH
RESPECT TO THE INVESTOR INTEREST
AND THE SELLER INTEREST
Aggregate Investor Allocation
(Aggregate Investor Percentage
multiplied by total Collections
received during the Due Period) $_________ $_________ N/A
Seller Allocation (Seller
Percentage multiplied by total
Collections received during
the Due Period) $________ $________ N/A
(c) Group One Allocation $_______ $________ N/A
(d) Series 1996-4 Allocation $________ $_______ N/A
(e) Reallocations of Collections
to Series 1996-4 from other
series in Group One $________ $_______ N/A
4. Information Concerning Controlled Amortization Amount
Amount Distributed Total Distributions
this Due Period through this Due Period
SERIES 1996-4 BY CLASS
(a) Class A
$____________ $___________
(b) Class B
$____________ $___________
(c) Class C
$____________ $___________
5. Investor Charged-Off Amounts
This Due Period
(a) Group One (the sum of Series Investor
Charged-Off Amounts for all Series in Group One) $___________
(b) Series 1996-4 (the sum of the Class Investor
Charged-Off Amounts for all Classes in Series 1996-4)$___________
(c) Series 1996-4 by Class:
Class A (Class A Percentage multiplied by the
Charged-Off Amount) $___________
Class B (Class B Percentage multiplied by the
Charged-Off Amount) $___________
Class C (Class C Percentage multiplied by the
Charged-Off Amount) $___________
6. Investor Losses
Total
(a) Group One $___________
(b) Series 1996-4 $___________
(c) Series 1996-4 by Class
Class A $___________
Class B $___________
Class C $___________
7. Monthly Servicing Fee Payable This Due Period
SELLER SERVICING FEE
$___________
INVESTOR SERVICING FEE
(a) Group One $___________
(b) Series 1996-4 $___________
8. Performance Analysis
(a) Portfolio Yield (Finance Charge Collections
during the Due Period divided by Principal Receivables in
the Trust as of the first day of the Due Period)
___________%
(b) Charge-Offs (Charged-Off Amounts during the Due
Period divided by Principal Receivables in the Trust as of the
first day of the Due Period) ___________%
(c) Investor Servicing Fee Percentage (weighted
average of Investor Servicing Fees for Series 1996-4)
___________%
(d) Weighted Average Certificate Rate (weighted
average certificate rates for all classes ofSeries 1996-4)
___________%
(e) Series Excess Servicing Percentage (Portfolio
Yield minus the sum of Charge-Offs, the Investor Servicing Fee
Percentage and the Weighted Average Certificate Rate)
___________%
(f) Total Payment Rate (Aggregate Collections during
the Due Period divided by the aggregate amount of Receivables in
the Trust as of the first day of the Due Period)
___________%
9. Summary Delinquency Aging Information
The aging of delinquent receivables with respect
to the Sears Portfolio is summarized as follows
(1):
[month/year]
Delinquencies as a % of balances
80-89 days past due.................... ____%
90-119 days past due................... ____%
120 days or more past due............ ____%
Total Delinquencies _____%
(1) An account is considered delinquent when it is
past due a total of three or more scheduled monthly payments.
Delinquencies as of the end of each month are divided by balances
at the beginning of each such month. Excludes accounts
from Puerto Rico, which were not included in the Account.
THE FIRST NATIONAL BANK OF CHICAGO
as Trustee
By:__________________________________________________
EXHIBIT C
Sears Credit Account Master Trust II
Monthly Servicer Certificate
CREDIT ACCOUNT
MASTER TRUST CERTIFICATES
The undersigned, a duly authorized representative of
Sears, Roebuck and Co. ("Sears"), as Servicer pursuant to the
Pooling and Servicing Agreement dated as of July 31, 1994, as
amended (the "Pooling and Servicing Agreement") by and among
Sears, Sears Receivables Financing Group, Inc. and The First
National Bank of Chicago, as Trustee, does hereby certify as
follows with respect to the Series outstanding for the
Distribution Date occurring on_______________:
1. Sears is Servicer under the Pooling and Servicing Agreement.
2. The undersigned is a Servicing Officer of Sears as Servicer.
Section I: Total Trust Information
3. The aggregate amount of Principal Collections processed
during the related Due period is equal to. . . . . . $______
4. The aggregate amount of Finance Charge Collections processed
during the related Due Period is equal to. . . . . . . $______
5. The aggregate amount of Total Collections processed during
the related Due Period is equal to. . . . . . . . $______
6. The aggregate amount of Principal Receivables in the Trust as
of the last day of the related Due Period is equal
to...... . ... . . . . . . . . . . . . . . . . . .$______
7. The aggregate amount of Finance Charge Receivables in the
Trust as of the last day of the related Due Period
is equal to. . . . . . . . . . . . . . . . . . . . . $______
8. The aggregate amount of Total Receivables in the Trust as of
the last day of the related Due Period is equal to. . . .$______
Section II: Series 1994-1
9. The aggregate amount of Series Additional Allocable Amounts
during the related Due Period is equal to. . . .. . . . .$______
10. The amount of interest payable to the Class A
Certificateholders on thecurrent Distribution Date is
equal to. ... . . . . . . . . . .$______
11. The amount of principal payable to the Class A
Certificateholders on the current Distribution Date is
equal to . . .$______
12. The amount of interest payable to the Class B
Certificateholders on the current Distribution Date is
equal to . . .$______
13. The amount of principal payable to the Class B
Certificateholders on the current Distribution Date is
equal to . . .$______
14. The amount of interest payable to the Class C
Certificateholders on the current Distribution Date is
equal to . . $______
15. The amount of principal payable to the Class C
Certificateholders on the current Distribution Date is
equal to . . .$______
16. The aggregate amount of Reallocated Class B Principal
Collections during the related Due Period is equal to. . .
$______
17. The aggregate amount of Reallocated Class C Principal
Collections during the related Due Period is
equal to . . .$______
Section III: Series 1994-2
18. The aggregate amount of Series Additional Allocable Amounts
during the related Due Period is equal to. . . . . $______
19. The amount of interest payable to the Class A
Certificateholders on the current Distribution Date is
equal to. .. $______
20. The amount of principal payable to the Class A
Certificateholders on the current Distribution Date is
equal to . . $______
21. The amount of interest payable to the Class B
Certificateholders on the current Distribution Date is
equal to . . $______
22. The amount of principal payable to the Class B
Certificateholders on the current Distribution Date is
equal to . . $______
23. The amount of interest payable to the Class C
Certificateholders on the current Distribution Date is
equal to . . $______
24. The amount of principal payable to the Class C
Certificateholders on the current Distribution Date is
equal to . . $______
25. The aggregate amount of Reallocated Class B Principal
Collections during the related Due Period is
equal to. . . $______
26. The aggregate amount of Reallocated Class C Principal
Collections during the related Due Period is
equal to. . . $______
Section IV: Series 1995-1
27. The aggregate amount of Series Additional Allocable Amounts
during the related Due Period is equal to. . . . . $______
28. The amount of interest payable to the Class A
Certificateholders on the current Distribution Date is
equal to. . . $______
29. The amount of principal payable to the Class A
Certificateholders on the current Distribution Date is
equal to . . .$______
30. The amount of interest payable to the Class B
Certificateholders on the current Distribution Date is
equal to . . .$______
31. The amount of principal payable to the Class B
Certificateholders on the current Distribution Date is
equal to . . .$______
32. The amount of interest payable to the Class C
Certificateholders on the current Distribution Date is
equal to . . .$______
33. The amount of principal payable to the Class
C Certificateholders on the current Distribution Date is
equal to . . .$______
34. The aggregate amount of Reallocated Class B Principal
Collections during the related Due Period is
equal to. . . $______
35. The aggregate amount of Reallocated Class C Principal
Collections during the related Due Period is
equal to. . . $______
Section V: Series 1995-2
36. The aggregate amount of Series Additional Allocable Amounts
during the related Due Period is equal to. . . . . $______
37. The amount of interest payable to the Class A
Certificateholders on the current Distribution Date is
equal to . . .$______
38. The amount of principal payable to the Class A
Certificateholders on the current Distribution Date is
equal to. . . $______
39. The amount of interest payable to the Class B
Certificateholders on the current Distribution Date is
equal to . . $______
40. The amount of principal payable to the Class B
Certificateholders on the current Distribution Date is
equal to . . .$______
41. The amount of interest payable to the Class C
Certificateholders on the current Distribution Date is equal to .
. .$______
42. The amount of principal payable to the Class C
Certificateholders on the current Distribution Date is equal to .
. $______
43. The aggregate amount of Reallocated Class B
Principal Collections during the related Due Period is equal to.
. . $______
44. The aggregate amount of Reallocated Class C
Principal Collections during the related Due Period is equal to.
. . $______
Section VI: Series 1995-3
45. The aggregate amount of Series Additional
Allocable Amounts during the related Due Period is equal to. . .
. . $______
46. The amount of interest payable to the Class A
Certificateholders on the current Distribution Date is equal to .
. .$______
47. The amount of principal payable to the Class A
Certificateholders on the current Distribution Date is equal to .
. .$______
48. The amount of interest payable to the Class B
Certificateholders on the current Distribution Date is equal to .
. .$______
49. The amount of principal payable to the Class B
Certificateholders on the current Distribution Date is equal to .
. .$______
50. The amount of interest payable to the Class C
Certificateholders on the current Distribution Date is equal to .
. $______
51. The amount of principal payable to the Class C
Certificateholders on the current Distribution Date is equal to .
. .$______
52. The aggregate amount of Reallocated Class B
Principal Collections during the related Due Period is equal to.
. . $______
53. The aggregate amount of Reallocated Class C
Principal Collections during the related Due Period is equal to.
. . $______
Section VII: Series 1995-4
54. The aggregate amount of Series Additional
Allocable Amounts during the related Due Period is equal to. . .
. . $______
55. The amount of interest payable to the Class A
Certificateholders on the current Distribution Date is equal to .
. $______
56. The amount of principal payable to the Class A
Certificateholders on the current Distribution Date is equal to .
. $______
57. The amount of interest payable to the Class B
Certificateholders on the current Distribution Date is equal to .
. $______
58. The amount of principal payable to the Class B
Certificateholders on the current Distribution Date is equal to .
. $______
59. The amount of interest payable to the Class C
Certificateholders on the current Distribution Date is equal to .
. $______
60. The amount of principal payable to the Class C
Certificateholders on the current Distribution Date is equal to .
. .$______
61. The aggregate amount of Reallocated Class B
Principal Collections during the related Due Period is equal to.
. . $______
62. The aggregate amount of Reallocated Class C
Principal Collections during the related Due Period is equal to.
. . $______
Section VIII: Series 1995-5
63. The aggregate amount of Series Additional
Allocable Amounts during the related Due Period is equal to. . .
. . $______
64. The amount of interest payable to the Class A
Certificateholders on the current Distribution Date is equal to .
. $______
65. The amount of principal payable to the Class A
Certificateholders on the current Distribution Date is equal to .
. $______
66. The amount of interest payable to the Class B
Certificateholders on the current Distribution Date is equal to .
. $______
67. The amount of principal payable to the Class B
Certificateholders on the current Distribution Date is equal to .
. .$______
68. The amount of interest payable to the Class C
Certificateholders on the current Distribution Date is equal to .
. .$______
69. The amount of principal payable to the Class C
Certificateholders on the current Distribution Date is equal to .
. .$______
70. The aggregate amount of Reallocated Class B
Principal Collections during the related Due Period is equal to.
. . $______
71. The aggregate amount of Reallocated Class C
Principal Collections during the related Due Period is equal to.
. . $______
Section IX: Series 1996-1
72. The aggregate amount of Series Additional
Allocable Amounts during the related Due Period is equal to. . .
. . $______
73. The amount of interest payable to the Class A
Certificateholders on the current Distribution Date is equal to .
. .$______
74. The amount of principal payable to the Class A
Certificateholders on the current Distribution Date is equal to .
. .$______
75. The amount of interest payable to the Class B
Certificateholders on the current Distribution Date is equal to .
. .$______
76. The amount of principal payable to the Class B
Certificateholders on the current Distribution Date is equal to .
. .$______
77. The amount of interest payable to the Class C
Certificateholders on the current Distribution Date is equal to .
. .$______
78. The amount of principal payable to the Class C
Certificateholders on the current Distribution Date is equal to .
. .$______
79. The aggregate amount of Reallocated Class B
Principal Collections during the related Due Period is equal to.
. . $______
80. The aggregate amount of Reallocated Class C
Principal Collections during the related Due Period is equal to.
. . $______
Section X: Series 1996-2
81. The aggregate amount of Series Additional
Allocable Amounts during the related Due Period is equal to. . .
. . $______
82. The amount of interest payable to the Class A
Certificateholders on the current Distribution Date is equal to .
. .$______
83. The amount of principal payable to the Class A
Certificateholders on the current Distribution Date is equal to .
. .$______
84. The amount of interest payable to the Class B
Certificateholders on the current Distribution Date is equal to .
. .$______
85. The amount of principal payable to the Class B
Certificateholders on the current Distribution Date is equal to .
. .$______
86. The amount of interest payable to the Class C
Certificateholders on the current Distribution Date is equal to .
. .$______
87. The amount of principal payable to the Class C
Certificateholders on the current Distribution Date is equal to .
. .$______
88. The aggregate amount of Reallocated Class B
Principal Collections during the related Due Period is equal to.
. . $______
89. The aggregate amount of Reallocated Class C
Principal Collections during the related Due Period is equal to.
. . $______
Section XI: Series 1996-3
90. The aggregate amount of Series Additional
Allocable Amounts during the related Due Period is equal to. .
. . . . . . .$______
91. The amount of interest payable to the Class A
Certificateholders on the current Distribution Date is equal to .
. $_______
92. The amount of principal payable to the class A
Certificateholders on the current Distribution Date is equal to .
. $_______
93. The amount of interest payable to the Class B
Certificateholders on the current Distribution Date is equal to
. . $_______
94. The amount of principal payable to the Class B
Certificateholders on the current Distribution Date is equal to .
. . $_______
95. The amount of interest payable to the Class C
Certificateholders on the current Distribution Date is equal to
. . $_______
96. The amount of principal payable to the Class C
Certificateholders on the current Distribution Date is equal to .
. $_______
97. The aggregate amount of Reallocated Class B
Principal Collections during the related Due Period is equal to .
.$_______
98. The aggregate amount of Reallocated Class C
Principal Collections during the related Due Period is equal to .
. .$______
Section XII: Series 1996-4
99. The aggregate amount of Series Additional
Allocable Amounts during the related Due Period is equal to . . .
. . .$______
100. The amount of interest payable to the Class A
Certificateholders on the current Distribution Date is equal to .
. . $_____.
101. The amount of principal payable to the Class A
Certificateholders on the current Distribution Date is equal to
...$_____.
102. The amount of interest payable to the Class B
Cerfiticateholders on the current Distribution Date is equal to .
. . $_____.
103. The amount of principal payable to the Class B
Certificateholders on the current Distribution Date is equal to .
. . $_____.
104. The amount of interest payable to the Class C
Certificateholders on the current Distribution Date is equal to .
. . $_____.
105. The amount of principal payable to the Class C
Certificateholders on the current Distribution Date is equal to .
. . $_____.
106. The aggregate amount of Reallocated Class B Principal
Collections during the related Due Period is equal to . . . .
$_____.
107. The aggregate amount of Reallocated Class C
Principal Collections during the related Due Period is equal to .
. . $_____.
108. Attached hereto is a true copy of the statement
required to be delivered by the Servicer on the date of this
Certificate to the Trustee pursuant to the Series Supplements.
IN WITNESS WHEREOF, the undersigned has duly executed
and delivered this certificate this ____day of ____________,
19__.
SEARS, ROEBUCK AND CO.
as Servicer
By:__________________________________________
Name:
Title:
SEARS, ROEBUCK AND CO.
Servicer
SEARS RECEIVABLES FINANCING GROUP, INC.
Seller
and
THE FIRST NATIONAL BANK OF CHICAGO
Trustee
on behalf of the Certificateholders
SERIES 1996-4 SUPPLEMENT
Dated as of Octoner 29, 1996
to the
POOLING AND SERVICING AGREEMENT
Dated as of July 31, 1994
$561,830,000
SEARS CREDIT ACCOUNT MASTER TRUST II
MASTER TRUST CERTIFICATES, SERIES 1996-4
<PAGE>
Exhibit 4.2
BOOK-ENTRY-ONLY COLLATERALIZED MORTGAGE OBLIGATIONS (CMOS)
(WITHOUT OWNER OPTION TO REDEEM)/
OTHER ASSET-BACKED SECURITIES/AND PASS-THROUGH CERTIFICATES
LETTER OF REPRESENTATIONS*
[To be completed by Issuer and Trustee]
Sears Receivables Financing Group, Inc. on behalf of
Sears Credit Account Master Trust II
[Name of Issuer]
The First National Bank of Chicago
[Name of Trustee]
October 29, 1996
[Date]
Attention: General Counsel's Office
The Depository Trust Company
55 Water Street; 49th Floor
New York, NY 10041-0099
Re: 6.45% Class A Master Trust Certificates, Series 1996-4;
and
6.65% Class B Master Trust Certificates, Series 1996-4 of
Sears Credit Account Master Trust II
[Issue Description]
Ladies and Gentlemen:
This letter sets forth our understanding with respect to certain
matters relating to the above-referenced issue (the"Securities").
Trustee will act as trustee with respect to the Securities
pursuant to a trust indenture dated as of July 31, 1994 (the
"Document"). See below** ("Underwriter") is distributing the
Securities through The Depository Trust Company ("DTC").
To induce DTC to accept the Securities as eligible for deposit at
DTC, and to act in accordance with its Rules with respect to the
Securities, Issuer and Trustee make the following representations
to DTC:
1. Prior to closing on the Securities on August 6, 1996, there
shall be deposited with DTC one Security certificate registered
in the name of DTC's nominee, Cede & Co., for each stated
maturity of the Securities in the face amounts set forth on
Schedule A hereto, the total of which represents 100% of the
principal amount of such Securities. If, however, the aggregate
principal amount of any maturity exceeds $200 million,one
certificate will be issued with respect to each $200 million of
principal amount and an additional certificate will be issued
with respect to any remaining principal amount. Each Security
certificate shall bear the following legend:
Unless this certificate is presented by an authorized
representative of The Depository Trust Company, a New York
corporation ("DTC"), to Issuer or its agent for registration of
transfer, exchange, or payment, and any certificate is registered
in the name of Cede & Co. or in such other name as is requested
by an authorized representative of DTC (and any payment is made
to Cede & Co. or to such other entity as is requested by an
authorized representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
inasmuch as the registered owner hereof, Cede & Co., has an
interest herein.
*This Letter of Representations includes the Addendum attached
hereto, which modifies and supersedes this Letter of
Representations to the extent set forth therein.
**CS First Boston Corporation, Bear, Stearns & Co. Inc., Goldman,
Sachs & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated,
and Salomon Brothers Inc
PAGE
<PAGE>
2. In the event of any solicitation of consents from or voting
by holders of the Securities, Issuer or Trustee shall establish a
record date for such purposes (with no provision for revocation
of consents or votes by subsequent holders) and shall, to the
extent possible, send notice of such record date to DTC not less
than 15 calendar days in advance of such record date. Notices to
DTC pursuant to this Paragraph by telecopy shall be sent to DTC's
Reorganization Department at (212) 709-6896 or (212) 709-6897,and
receipt of such notices shall be confirmed by telephoning(212)
709-6870. Notices to DTC pursuant to this Paragraph by mail or
by any other means shall be sent to DTC's Reorganization
Department as indicated in Paragraph 4.
3. In the event of a full or partial redemption, Issuer or
Trustee shall send a notice to DTC specifying: (a) the amount of
the redemption or refunding; (b) in the case of a refunding,the
maturity date(s) established under the refunding; and (c) the
date such notice is to be mailed to Security holders or
published(the "Publication Date"). Such notice shall be sent to
DTC by a secure means (e.g., legible telecopy, registered or
certified mail,overnight delivery) in a timely manner designed to
assure that such notice is in DTC's possession no later than the
close of business on the business day before or, if possible, two
business days before the Publication Date. Issuer or Trustee
shall forward such notice either in a separate secure
transmission for each CUSIP number or in a secure transmission
for multiple CUSIP numbers (if applicable) which includes a
manifest or list of each CUSIP number submitted in that
transmission. (The party sending such notice shall have a method
to verify subsequently the use of such means and the timeliness
of such notice.) The Publication Date shall be not less than 10
days nor more than 60 days prior to the redemption date or, in
the case of an advance refunding, the date that the proceeds are
deposited in escrow. Notices to DTC pursuant to this
Paragraph by telecopy shall be sent to DTC's Call Notification
Department at (516) 227-4039 or (516) 227-4190. If the party
sending the notice does not receive a telecopy receipt from DTC
confirming that the notice has been received, such party shall
telephone (516) 227-4070. Notices to DTC pursuant to this
Paragraph by mail or by any other means shall be sent to:
Manager; Call Notification Department
The Depository Trust Company
711 Stewart Avenue
Garden City, NY 11530-4719
4. In the event of an invitation to tender the Securities
(including mandatory tenders, exchanges, and capital changes),
notice by Issuer or Trustee to Security holders specifying the
terms of the tender and the Publication Date of such notice*
shall be sent to DTC by a secure means in the manner set forth in
the preceding Paragraph. Notices to DTC pursuant to this
Paragraph and notices of other corporate actions by telecopy
shall be sent to DTC's Reorganization Department at (212)
709-1093 or (212) 709-1094, and receipt of such notices shall be
confirmed by telephoning(212) 709-6884. Notices to DTC pursuant
to the above by mail or by any other means shall be sent to:
Manager; Reorganization Department
Reorganization Window
The Depository Trust Company
7 Hanover Square, 23rd Floor
New York, NY 10004-2695
5. All notices and payment advices sent to DTC shall contain the
CUSIP number of the Securities.
6. Trustee shall send DTC written notice with respect to the
dollar amount per $1,000 original face value (or other minimum
authorized denomination if less than $1,000 face value) payable
on each payment date allocated as to the interest and principal
portions thereof preferably 5, but not less than 2, business days
prior to such payment date. Such notices, which shall also
contain the current pool factor, any special adjustments to
principal/interest rates (e.g., adjustments due to deferred
interest or shortfall), and Trustee contact's name and telephone
number, shall be sent by telecopy to DTC's Dividend Department at
(212) 709-1723, or if by mail or by any other means to:
*Such notice shall be sent to DTC no later than 8:00 a.m. on the
Publication Date. <PAGE>
Manager; Announcements
Dividend Department
The Depository Trust Company
7 Hanover Square, 22nd Floor
New York, NY 10004-2695
7. [Note: Issuer must represent one of the following, and cross
out the other:] [The interest accrual period is payment date to
payment date.]
8. Trustee must provide DTC, no later than noon (Eastern Time)
on the payment date, CUSIP numbers for each issue for which
payment is being sent, as well as the dollar amount of the
payment for each issue. Notification of payment details should
be sent using automated communications.
9. Interest payments and principal payments that are part of
periodic principal-and-interest payments shall be received by
Cede & Co., as nominee of DTC, or its registered assigns in same-
day funds, no later than 2:30 p.m. (Eastern Time) on each payment
date (in accordance with existing arrangements between Issuer or
Trustee and DTC). Absent any other arrangements between Issuer
or Trustee and DTC, such funds shall be wired as follows:
The Chase Manhattan Bank
ABA 021000021
For credit to A/C The Depository Trust Company
Dividend Deposit Account
Issuer or Trustee shall provide interest payment information to a
standard announcement service subscribed to by DTC. In the
unlikely event that no such service exists, Issuer or Trustee
shall provide interest payment information directly to DTC in
advance of the interest payment date as soon as the information
is available. This information should be conveyed directly to
DTC electronically. If electronic transmission is not available,
absent any other arrangements between Trustee and DTC,such
information should be sent by telecopy to DTC's Dividend
Department at (212) 709-1723 or (212) 709-1686, and receipt of
such notices shall be confirmed by telephoning(212) 709-1270.
Notices to DTC pursuant to the above by mail or by any other
means shall be sent to:
Manager, Announcements
Dividend Department
The Depository Trust Company
7 Hanover Square; 22nd Floor
New York, NY 10004-2695
10. DTC shall receive maturity and redemption payments allocated
with respect to each CUSIP number on the payable date in same-day
funds by 2:30 p.m. (Eastern Time). Absent any other arrangements
between Trustee and DTC, such payments shall be wired as follows:
The Chase Manhattan Bank
ABA 021000021
For credit to A/C The Depository Trust Company
Redemption Deposit Account 066-027306
in accordance with existing SDFS payment procedures in the manner
set for in DTC's SDFS Paying Agent Operating Procedures, a copy
of which has previously been furnished to Trustee.
11. DTC shall receive all reorganization payments and
CUSIP-level detail resulting from corporate actions (such as
tender offers, remarketings, or mergers) on the first payable
date in same-day funds by 2:30 p.m. (Eastern Time). Absent any
other arrangements between Trustee and DTC, such payments shall
be wired as follows:
The Chase Manhattan Bank
ABA 021000021
For credit to A/C The Depository Trust Company
Reorganization Deposit Account 066-027608
12. DTC may direct Issuer or Trustee to use any other number or
address as the number or address to which notices or payments of
interest or principal may be sent.
13. There will be no partial redemption of the Securities.
14. In the event that Issuer determines that beneficial owners
of Securities shall be able to obtain certificated Securities,
Issuer or Trustee shall notify DTC of the availability of
certificates. In such event, Issuer or Trustee shall issue,
transfer, and exchange certificates in appropriate amounts, as
required by DTC and others.
15. DTC may discontinue providing its services as securities
depository with respect to the Securities at any time by giving
reasonable notice to Trustee (at which time DTC will confirm with
Trustee the aggregate principal amount of Securities
outstanding). Under such circumstances, at DTC's request Trustee
shall cooperate fully with DTC by taking appropriate action to
make available one or more separate certificates evidencing
Securities to any DTC Participant having Securities credited to
its DTC accounts.
16. Issuer: (a) understands that DTC has no obligation to,and
will not, communicate to its Participants or to any person having
an interest in the Securities any information contained in the
Security certificate(s); and (b) acknowledges that neither DTC's
Participants nor any person having an interest in the Securities
shall be deemed to have notice of the provisions of the Security
certificates by virtue of submission of such certificate(s) to
DTC.
17. Nothing herein shall be deemed to require Trustee to advance
funds on behalf of Issuer.
Notes:
A. If there is a Trustee (as defined in this Letter of
Representations). Trustee as well as Issuer must sign this
Letter. If there is no Trustee, in signing this Letter Issuer
itself undertakes to perform all of the obligations set forth
herein.
B. Schedule B contains statements that DTC believes accurately
describe DTC, the method of effecting book-entry transfers of
securities distributed through DTC, and certain related matters.
Very truly yours,
Sears Receivables Financing Group, Inc.
(Issuer)
By: /S/ Stephen D. Carp
(Authorized Officer's Signature)
The First National Bank of Chicago
(Trustee)
By: /S/ Steven M. Wagner
(Authorized Officer's Signature)
Received and Accepted:
THE DEPOSITORY TRUST COMPANY
By: /S/ Richard B. Nesson
cc: Underwriter
Underwriter's Counsel
<PAGE>
SCHEDULE A
6.45% Class A Master Trust Certificates, Series 1996-4; and
6.65%
Class B Master Trust Certificates, Series 1996-4 of
Sears Credit Account Master Trust II
(Describe Issue)
CUSIP Number Principal Amount Maturity Date
Interest Rate
Class A 81234CAW1 $500,000,000 October 16, 2006*
6.45%
Class B 81234CAX9 $22,500,000 October 16, 2006*
6.65%
* Last possible distribution date.
<PAGE>
SCHEDULE B
SAMPLE OFFICIAL STATEMENT LANGUAGE
DESCRIBING BOOK-ENTRY-ONLY ISSUANCE
(Prepared by DTC--bracketed material may be applicable only to
certain issues)
1. The Depository Trust Company ("DTC"), New York, NY, will act
as securities depository for the securities (the "Securities").
The Securities will be issued as fully-registered securities
registered in the name of Cede & Co. (DTC's partnership nominee).
One fully-registered Security certificate will be issued for
[each issue of] the Securities, [each] in the aggregate principal
amount of such issue, and will be deposited with DTC. [If,
however, the aggregate principal amount of [any] issue exceeds
$200 million,one certificate will be issued with respect to each
$200 million of principal amount and an additional certificate
will be issued with respect to any remaining principal amount of
such issue.]
2. DTC is a limited-purpose trust company organized under the
NewYork Banking Law, a "banking organization" within the meaning
of the New York Banking Law, a member of the Federal Reserve
System, a "clearing corporation"within the meaning of the New
York Uniform Commercial Code, and a "clearing agency"registered
pursuant to the provisions of Section 17A of the Securities
Exchange Act of 1934. DTC holds securities that its participants
("Participants") deposit with DTC. DTC also facilitates the
settlement among Participants of securities transactions, such as
transfers and pledges, in deposited securities through electronic
computerized book-entry changes in Participants' accounts,
thereby eliminating the need for physical movement of securities
certificates. Direct Participants include securities brokers and
dealers, banks, trust companies, clearing corporations, and
certain other organizations. DTC is owned by a number of its
Direct Participants and by the New York Stock Exchange, Inc., the
American Stock Exchange, Inc., and the National Association of
Securities Dealers, Inc. Access to the DTC system is also
available to others such as securities brokers and dealers,banks,
and trust companies that clear through or maintain a custodial
relationship with a Direct Participant, either directly
or indirectly ("Indirect Participants"). The Rules applicable to
DTC and its Participants are on file with the Securities and
Exchange Commission.
3. Purchases of Securities under the DTC system must be made by
or through Direct Participants, which will receive a credit for
the Securities on DTC's records. The ownership interest of each
actual purchaser of each Security ("Beneficial Owner") is in turn
to be recorded on the Direct and Indirect Participants' records.
Beneficial Owners will not receive written confirmation from DTC
of their purchase, but Beneficial Owners are expected to receive
written confirmations providing details of the transaction, as
well as periodic statements of their holdings, from the Direct or
Indirect Participant through which the Beneficial Owner entered
into the transaction. Transfers of ownership interests in the
Securities are to be accomplished by entries made on the books of
Participants acting on behalf of Beneficial Owners. Beneficial
Owners will not receive certificates representing their ownership
interests in Securities, except in the event that use of the
book-entry system for the Securities is discontinued.
4. To facilitate subsequent transfers, all Securities deposited
by Participants with DTC are registered in the name of DTC's
partnership nominee, Cede & Co. The deposit of Securities with
DTC and their registration in the name of Cede & Co. effect no
change in beneficial ownership. DTC has no knowledge of the
actual Beneficial Owners of the Securities; DTC's records reflect
only the identity of the Direct Participants to whose accounts
such Securities are credited, which may or may not be the
Beneficial Owners. The Participants will remain responsible for
keeping account of their holdings on behalf of their customers.
5. Conveyance of notices and other communications by DTC to
Direct Participants, by Direct Participants to Indirect
Participants, and by Direct Participants and Indirect
Participants to Beneficial Owners will be governed by
arrangements among them, subject to any statutory or regulatory
requirements as may be in effect from time to time.
[6. Redemption notices shall be sent to Cede & Co. If less than
all of the Securities within an issue are being redeemed, DTC's
practice is to determine by lot the amount of the interest of
each Direct Participant in such issue to be redeemed.]
<PAGE>
7. Neither DTC nor Cede & Co. will consent or vote with respect
to Securities. Under its usual procedures, DTC mails an Omnibus
Proxy to the Issuer as soon as possible after the record date.
The Omnibus Proxy assigns Cede & Co.'s consenting or voting
rights to those Direct Participants to whose accounts the
Securities are credited on the record date (identified in a
listing attached to the Omnibus Proxy).
8. Principal and interest payments on the Securities will be
made to DTC. DTC's practice is to credit Direct Participants'
accounts on payable date in accordance with their respective
holdings shown on DTC's records unless DTC has reason to believe
that it will not receive payment on payable date. Payments by
Participants to Beneficial Owners will be governed by standing
instructions and customary practices, as is the case with
securities held for the accounts of customers in bearer form or
registered in "street name," and will be the responsibility of
such Participant and not of DTC, the Trustee, or the Issuer,
subject to any statutory or regulatory requirements as may be in
effect from time to time. Payment of principal and interest to
DTC is the responsibility of the Issuer or the Trustee,
disbursement of such payments to Direct Participants shall be the
responsibility of DTC, and disbursement of such payments to the
Beneficial Owners shall be the responsibility of Direct and
Indirect Participants.
[9. A Beneficial Owner shall give notice to elect to have its
Securities purchase or tendered, through its Participant, to
Trustee[or Tender/Remarketing Agent], and shall effect delivery
of such Securities by causing the Direct Participant to transfer
the Participant's interest in the Securities, on DTC's records,
to Trustee[or Tender/Remarketing] Agent. The requirement for
physical delivery of Securities in connection with an optional
tender or a mandatory purchase will be deemed satisfied when the
ownership rights in the Securities are transferred by Direct
Participants on DTC's records and followed by a book-entry credit
of tendered Securities to Trustee[or Tender/Remarketing Agent's]
DTC account.]
10. DTC may discontinue providing its services as securities
depository with respect to the Securities at any time by giving
reasonable notice to Issuer or Agent. Under such circumstances,
in the event that a successor securities depository is not
obtained, Security certificates are required to be printed and
delivered.
11. Issuer may decide to discontinue use of the system of book-
entry transfers through DTC (or a successor securities
depository). In that event, Security certificates will be printed
and delivered.
12. The information in this section concerning DTC and DTC's
book-entry system has been obtained from sources that Issuer
believes to be reliable, but Issuer takes no responsibility for
the accuracy thereof.
<PAGE>
REPRESENTATIONS FOR ERISA-RESTRICTED SECURITIES --
to be included in DTC Letter of Representations
Issuer and Agent recognize that DTC does not in any way
undertake to, and shall not have any responsibility to, monitor
or ascertain whether a transfer of Securities could give rise to
a transaction prohibited or not otherwise permissible under the
Employee Retirement Income Security Act of 1974 or under
Section 4875 of the Internal Revenue Code of 1986. Issuer and
Agent acknowledge that: a) so long as Cede & Co. is the sole
record owner of the Securities, it shall be entitled to all
voting rights in respect thereof and to receive the full
amount of all principal, premium, if any, and interest payable
with respect thereto; and b) DTC shall treat any DTC Participant
having Securities credited to its DTC accounts as entitled to the
full benefits of ownership of such Securities even if the
crediting of such Securities to the DTC accounts of such
Participant results from transfers or failures to transfer in
violation of such laws. (The treatment by DTC of the effects of
the crediting by it of Securities to the accounts of DTC
Participants shall not affect the rights of Issuer or
purchasers, sellers, or holders of Securities against any DTC
Participant.)
Only the Class B Certificates are subject to the ERISA
restriction.
[5/94]
<PAGE>
A D D E N D U M
to
Letter of Representations dated October 29, 1996
Sears Credit Account Master Trust II
General: For purposes of this Letter of Representations:
"Document" shall mean the Pooling and Servicing Agreement
dated as of July 31, 1994, as amended and as supplemented by the
Series Supplement dated as of October 29, 1996, each by and among
Sears, Roebuck and Co. as Servicer, SRFG as Seller and the
Trustee.
Paragraph 1: The second sentence of Paragraph 1 is hereby
deleted in its entirety and replaced with the following:
"The [$500,000,000] aggregate principal amount of the
Class A Certificates shall be represented by one certificate.
The [$22,500,000] aggregate principal amount of the Class B
Certificates shall be represented by one certificate."
The following is hereby added after the third sentence of
Paragraph 1:
"Each certificate shall remain in the Trustee's custody
subject to the provisions of the Fast Balance Certificate
Agreement currently in effect between the Trustee and DTC."
Paragraph 3: The following sentence is added at the end of
Paragraph 3:
"Failure to provide timely notice shall not be a breach
under this Letter if Issuer shall become obligated less than 10
days prior to such redemption date under the Document to redeem
the Securities."
Paragraph 5: The following is hereby added after the first
sentence of Paragraph 5:
"Issuer or Trustee will forward such notice either in a
separate secure transmission for each CUSIP number or in a secure
transmission for multiple CUSIP numbers (if applicable) which
includes a manifest or list of each CUSIP submitted in that
transmission."
Paragraph 12: The following is hereby inserted after the work
"Trustee" in line 1 of Paragraph 12:
", and if requested, shall confirm such direction in
writing,"
Exhibit 5.1
[Letterhead]
October 29, 1996
CS First Boston Corporation
55 East 52nd Street
New York, New York 10055-0186
As Representative of the several Underwriters
named in Schedule 1 to the Pricing
Agreement dated October 17, 1996 among
Sears Receivables Financing Group, Inc.,
Sears, Roebuck and Co. and such Underwriters
with respect to the Class A Certificates and
as Underwriter of the Class B Certificates
c/o CS First Boston Corporation
55 East 52nd Street
New York, New York 10055-0186
Ladies and Gentlemen:
I am a Vice President, Law of Sears, Roebuck and Co.
("Sears"). The Corporate and Securities Section of the Sears Law
Department, under my supervision, has acted as counsel to Sears
Receivables Financing Group, Inc. (the "Company") and Sears in
connection with the registration under the Securities Act of
1933, as amended (the "Act"), and the public offering of
$500,000,000 aggregate principal amount of 6.45% Class A Master
Trust Certificates, Series 1996-4 and $22,500,000 aggregate
principal amount of 6.65% Class B Master Trust Certificates,
Series 1996-4 (together, the "Offered Certificates") of the
Sears Credit Account Master Trust II (the "Trust") issued
pursuant to the Pooling and Servicing Agreement among Sears as
Servicer, the Company as Seller and The First National Bank of
Chicago as Trustee (the "Trustee"), dated as of July 31, 1994,
as amended (the "Pooling and Servicing Agreement") and the
Series Supplement among Sears as Servicer, the Company as Seller
and The First National Bank of Chicago as Trustee, dated as of
October 29, 1996 (the "Series Supplement"), and to be sold to
the public in accordance with the terms of, with respect to the
Class A Master Trust Certificates, (i) the Pricing Agreement,
dated October 17, 1996, among Sears, the Company and CS First
Boston Corporation, on behalf of each of the Underwriters named
in Schedule 1 thereto (the "Class A Pricing Agreement"), and
(ii) the related Underwriting Agreement, dated October 17, 1996
among the Company, Sears and CS First Boston Corporation as
Representative of the several Underwriters (the "Class A
Underwriting Agreement") and with respect to the Class B Master
Trust Certificates, (i) the Pricing Agreement, dated October 17,
1996, among Sears, the Company and CS First Boston Corporation
(the "Class B Pricing Agreement" and, collectively with the
Class A Pricing Agreement, the "Pricing Agreement") and (ii) the
related Underwriting Agreement, dated October 17, 1996, among
Sears, the Company and CS First Boston Corporation as
Representative of the several Underwriters (the "Class B
Underwriting Agreement" and, collectively with the Class A
Underwriting Agreement, the "Underwriting Agreement"). The
Trust also will issue $39,330,000 aggregate principal amount of
Class C Master Trust Certificates, Series 1996-4 (the "Class C
Certificates," and together with the Offered Certificates, the
"Investor Certificates"). This opinion is furnished to you
pursuant to Section 7(c) to the Underwriting Agreement. All
terms not otherwise defined herein have the meanings given to
them in the Underwriting Agreement.
I have made such legal and factual examinations and
inquiries, including an examination of originals or copies
certified or otherwise identified to my satisfaction, of such
documents, corporate records and other instruments as I have
deemed necessary or appropriate for the purposes of this opinion.
I have obtained and relied upon, to the extent I deem
appropriate, certificates of officers and executives of the
Company, Sears and its subsidiaries, and of public officials as
to factual matters and opinions of other counsel. I call to
your attention the fact that, in rendering my opinion, I am
expressing my views only as to the laws of the State of Illinois
and the federal laws of the United States of America (except as
to the matters below which are governed in part by the laws of
the State of Delaware and the State of New York, relating to the
due incorporation and valid existence in good standing of the
Company and Sears, respectively, the due authorization,
execution and delivery by the Company and Sears, respectively,
of certain documents, and the absence of any violation of the
provisions of the Certificate of Incorporation or By-Laws of the
Company and Sears, and except to the extent that the opinions
expressed herein are given in reliance upon the opinion of
Latham & Watkins of even date herewith, a copy of which is being
delivered to you contemporaneously herewith).
On the basis of the foregoing and in reliance thereon, I am
of the opinion that, as of the date hereof:
(i) The Company and Sears have been duly incorporated and
are validly existing as corporations in good standing under the
laws of their respective states of incorporation;
(ii) Each of the Underwriting Agreement and the Pricing
Agreement has been duly authorized, executed and delivered on
the part of the Company and Sears;
(iii) The issue and sale of the Investor Certificates
and the compliance by the Company with all of the provisions of
the Investor Certificates, the Underwriting Agreement, the
Pricing Agreement, the Purchase Agreement, the Contribution
Agreement, the Receivables Warehouse Agreement, the Pooling and
Servicing Agreement and the Series Supplement will not (a)
conflict with or result in any breach which would constitute a
material default under, or, except as contemplated by the Pooling
and Servicing Agreement or the Series Supplement, result in the
creation or imposition of any lien, charge or encumbrance upon
any of the property or assets of the Company, material to the
Company, pursuant to the terms of, any indenture, loan agreement
or other agreement or instrument for borrowed money known to me
to which the Company is a party or by which the Company may be
bound or to which any of the property or assets of the Company,
material to the Company, is subject, (b) result in any violation
of the provisions of the Certificate of Incorporation or the
By-Laws of the Company, or (c) to the best of my knowledge,
result in any material violation of any statute or any order,
rule or regulation applicable to the Company of any court or any
federal, state or other regulatory authority or other
governmental body having jurisdiction over the Company,
provided, however, that except to the extent discussed in
paragraphs (vi)(c), (viii), (ix), (x), (xi) and the paragraph
immediately following paragraph (xi), I express no opinion as to
the Act, the Exchange Act, the Trust Indenture Act and the
Investment Company Act and provided, further, that I express no
opinion as to the securities laws of the various states or other
jurisdictions which are applicable to the issue and sale of the
Investor Certificates and I express no opinion as to state laws
pertaining to the perfection of security interests;
(iv) To the best of my knowledge, no consent, approval,
authorization or other order of, or filing with, any court or
any federal, state or other regulatory authority or other
governmental body having jurisdiction over Sears or the Company
is required for the consummation by Sears and the Company, as
applicable, of the transactions contemplated by the Bank
Assignment Agreement, the Purchase Agreement, the Contribution
Agreement and the Receivables Warehouse Agreement or for the
issue and sale of the Investor Certificates except as may be
required under the Act, the Exchange Act, the Trust Indenture
Act and the Investment Company Act and the securities laws of
the various states or other jurisdictions which are applicable
to the issue and sale of the Investor Certificates and except
for the filing of any financing or continuation statements
required to perfect the Trust's, the Company's and Sears
respective interests in the Receivables;
(v) The compliance by Sears with all of the provisions of
the Underwriting Agreement, the Bank Assignment Agreement, the
Pricing Agreement, the Purchase Agreement, the Contribution
Agreement, the Receivables Warehouse Agreement, the Pooling and
Servicing Agreement and the Series Supplement will not (a)
conflict with or result in any breach which would constitute a
material default under, or, except as contemplated by the Bank
Assignment Agreement, the Pooling and Servicing Agreement, the
Series Supplement, the Purchase Agreement, the Contribution
Agreement or the Receivables Warehouse Agreement, result in the
creation or imposition of any lien, charge or encumbrance upon
any of the property or assets of Sears or any subsidiary
thereof, material to Sears and its subsidiaries (whether or not
consolidated) considered as a whole, pursuant to the terms of,
any indenture, loan agreement or other agreement or instrument
for borrowed money known to me to which Sears, the Company,
Sears Roebuck Acceptance Corp., Sears DC Corp., Sears National
Bank or Sears Overseas Finance N.V. is a party or by which Sears
or any of the foregoing subsidiaries may be bound or to which
any of the property or assets of Sears or of the foregoing
subsidiaries, material to Sears and its subsidiaries (whether or
not consolidated) considered as a whole, is subject, (b) result
in any violation of the provisions of the Restated Certificate
of Incorporation or the By-Laws of Sears or (c) to the best of
my knowledge, result in any material violation of any statute or
any order, rule or regulation applicable to Sears of any court
or any federal, state or other regulatory authority or other
governmental body having jurisdiction over Sears, provided,
however, that except to the extent discussed in paragraphs
(vi)(c), (viii), (ix), (x), (xi) and the paragraph immediately
following paragraph (xi), I express no opinion as to the Act,
the Exchange Act, the Trust Indenture Act and the Investment
Company Act and the rules and regulations under each such act;
and provided, further, that I express no opinion as to the
securities laws of the various states or other jurisdictions
which are applicable to the issue and sale of the Investor
Certificates and I express no opinion as to the state laws
pertaining to the perfection of security interests;
(vi) (a) Each of the Pooling and Servicing Agreement, the
Series Supplement, the Purchase Agreement, the Contribution
Agreement and the Receivables Warehouse Agreement has been duly
authorized, executed and delivered on the part of the Company
and Sears and, as to each of the Company and Sears, is a valid
and binding instrument enforceable in accordance with its terms,
except as the foregoing may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws now or
hereafter in effect relating to creditors' rights generally,
general principles of equity (whether considered in a proceeding
at law or in equity) or the discretion of the court before which
any proceeding therefor may be brought;
(b) The Investor Certificates have been duly
authorized and (assuming their due authentication by the Trustee)
have been duly executed, issued and delivered and constitute
valid and binding obligations of the Trust in accordance with
their terms, entitled to the benefits of the Pooling and
Servicing Agreement and the Series Supplement, except as the
foregoing may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws now or hereafter in
effect relating to creditors' rights generally, general
principles of equity (whether considered in a proceeding at law
or in equity) or the discretion of the court before which any
proceeding therefor may be brought;
(c) The Pooling and Servicing Agreement is not
required to be qualified under the Trust Indenture Act; and the
Trust is not required to be registered under the Investment
Company Act;
(vii) The Bank Assignment Agreement has been duly
authorized, executed and delivered by Sears and, as to Sears, is
a valid and binding instrument enforceable in accordance with its
terms, except as the foregoing may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws now or
hereafter in effect relating to creditors' rights generally,
general principles of equity (whether considered in a proceeding
at law or in equity) or the discretion of the court before which
any proceeding therefor may be brought;
(viii) I do not know of any pending legal or governmental
proceedings required to be described in the Prospectus which are
not described as required;
(ix) The documents incorporated by reference in the
Prospectus as amended or supplemented (other than financial,
statistical and accounting data therein, as to which I express no
opinion), when they became effective or were filed with the
Commission, as the case may be, complied as to form in all
material respects with the requirements of the Act or the
Exchange Act, as applicable, and the rules and regulations
thereunder;
(x) The Registration Statement and the Prospectus as
amended or supplemented (excluding the documents incorporated
therein) (other than financial, statistical and accounting data
therein as to which I express no opinion) comply as to form in
all material respects with the requirements of the Act and the
rules and regulations of the Commission thereunder; and
(xi) I do not know of any contract or other document to
which the Company or Sears is a party required to be filed as an
exhibit to the Registration Statement or required to be
incorporated in the Prospectus as amended or supplemented, or
required to be described in the Prospectus as amended or
supplemented, which has not been so filed or described.
With respect to the statements of belief set forth below, I
have not independently verified the accuracy, completeness or
fairness of the statements contained in the Registration
Statement or the Prospectus and the limitations inherent in the
examination made by me and the knowledge available to me are
such that I am unable to assume, and I do not assume, any
responsibility for the accuracy, completeness or fairness of any
of the statements contained therein. I confirm, however, that
as a result of (1) the examinations made by me, as described
above, and (2) my participation in conferences with
representatives of Sears, the Company and you and your counsel,
at which conferences the contents of the Registration Statement,
the Underwriting Agreement and related matters were discussed,
nothing has come to my attention which has caused me to believe
that (a) any of the documents referred to in subdivision (ix)
above (other than financial, statistical and accounting data
therein, as to which I express no belief), in each case after
excluding any statement in any such document which does not
constitute part of the Registration Statement or the Prospectus
as amended or supplemented pursuant to Rule 412 of Regulation C
under the Act and after substituting therefor any statement
modifying or superseding such excluded statement, when they
became effective or were filed, as the case may be, contained,
in the case of documents which became effective under the Act,
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, and, in the case of
documents which were filed under the Exchange Act with the
Commission, an untrue statement of a material fact or omitted 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 or (b) the Registration Statement or the
Prospectus, as amended or supplemented, (other than financial,
statistical and accounting data therein, as to which I express
no belief) contains an untrue statement of a material fact or
omits to state a material fact required to be stated therein or
necessary to make the statements therein not misleading.
In rendering my opinion, I have assumed that the Bank
Assignment Agreement, the Pooling and Servicing Agreement and
the Series Supplement have been duly authorized, executed and
delivered by the parties thereto other than the Company and
Sears and that the signatures (other than those on behalf of the
Company and Sears) on all documents examined by me are genuine,
assumptions which I have not independently verified.
This opinion is furnished by me as counsel for the
Company and Sears to CS First Boston Corporation as
Representative of the Underwriters of the Class A Certificates
and CS First Boston Corporation as Representative of the
Underwriter of the Class B Certificates, and is solely for the
benefit of the Underwriters, and is not to be otherwise used,
circulated or relied upon without my express written consent,
except that Standard & Poor's Ratings Services, Moody's Investors
Service, Inc., Fitch Investors Service, L.P., Duff & Phelps
Credit Rating Company and The First National Bank of Chicago may
rely upon each of the foregoing opinions as if such opinions were
addressed to them.
Very truly yours,
Robert J. Pence
