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UNITED STATES
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): NOVEMBER 23, 1999
SEARS CREDIT ACCOUNT MASTER TRUST II
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(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
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ILLINOIS 0-24776 NOT APPLICABLE
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(STATE OF (COMMISSION (IRS EMPLOYER
ORGANIZATION) FILE NUMBER) IDENTIFICATION NO.)
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C/O SRFG, INC.
3711 KENNETT PIKE
GREENVILLE, DELAWARE 19807
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (302) 434-3176
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FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT: NOT APPLICABLE
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ITEM 5. OTHER EVENTS
SERIES 1999-3. ON NOVEMBER 23, 1999, $400,000,000 AGGREGATE
PRINCIPAL AMOUNT OF 6.45% CLASS A MASTER TRUST CERTIFICATES, SERIES 1999-3,
$28,250,000 AGGREGATE PRINCIPAL AMOUNT OF CLASS B MASTER TRUST CERTIFICATES,
SERIES 1999-3, AND $42,400,000 AGGREGATE PRINCIPAL AMOUNT OF CLASS C MASTER
TRUST CERTIFICATES, SERIES 1999-3, OF THE SEARS CREDIT ACCOUNT MASTER TRUST II
(THE "TRUST") WERE ISSUED PURSUANT TO THE POOLING AND SERVICING AGREEMENT, DATED
AS OF JULY 31, 1994, AS AMENDED, AMONG SRFG, INC. (FORMERLY SEARS RECEIVABLES
FINANCING GROUP, INC.) AS SELLER ("SRFG"), SEARS, ROEBUCK AND CO. AS SERVICER
("SEARS") AND BANK ONE, NATIONAL ASSOCIATION (FORMERLY THE FIRST NATIONAL BANK
OF CHICAGO) AS TRUSTEE (THE "TRUSTEE"), AND THE SERIES SUPPLEMENT DATED AS OF
NOVEMBER 23, 1999, AMONG SRFG AS SELLER, SEARS AS SERVICER AND THE TRUSTEE.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
EXHIBITS
EXHIBIT NO. DESCRIPTION
EXHIBIT 1.1 UNDERWRITING AGREEMENT AMONG SEARS, SRFG AND MORGAN
STANLEY & CO. INCORPORATED AS REPRESENTATIVE OF THE SEVERAL
UNDERWRITERS FOR THE CLASS A MASTER TRUST CERTIFICATES, DATED
NOVEMBER 15, 1999.
EXHIBIT 1.2 PRICING AGREEMENT AMONG SEARS, SRFG AND MORGAN STANLEY &
CO. INCORPORATED ON BEHALF OF THE UNDERWRITERS FOR THE CLASS A
MASTER TRUST CERTIFICATES, DATED NOVEMBER 15, 1999.
EXHIBIT 4.1 SERIES 1999-3 SUPPLEMENT AMONG SEARS AS SERVICER, SRFG AS
SELLER AND THE TRUSTEE, DATED AS OF NOVEMBER 23, 1999,
INCLUDING THE FORMS OF INVESTOR CERTIFICATES.
EXHIBIT 4.2 LETTER OF REPRESENTATIONS AMONG SRFG, THE TRUSTEE AND THE
DEPOSITORY TRUST COMPANY, DATED AS OF NOVEMBER 23, 1999.
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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: SRFG, INC.
(ORIGINATOR OF THE TRUST)
DATE: NOVEMBER 23, 1999 BY: /s/ GEORGE F. SLOOK
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GEORGE F. SLOOK
PRESIDENT AND CHIEF EXECUTIVE OFFICER
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INDEX TO EXHIBITS
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EXHIBIT
NO. DESCRIPTION
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1.1 UNDERWRITING AGREEMENT AMONG SEARS, SRFG AND MORGAN
STANLEY & CO. INCORPORATED AS REPRESENTATIVE OF THE SEVERAL
UNDERWRITERS FOR THE CLASS A MASTER TRUST CERTIFICATES, DATED
NOVEMBER 15, 1999.
1.2 PRICING AGREEMENT AMONG SEARS, SRFG AND MORGAN STANLEY &
CO. INCORPORATED ON BEHALF OF THE UNDERWRITERS FOR THE CLASS A
MASTER TRUST CERTIFICATES, DATED NOVEMBER 15, 1999.
4.1 SERIES 1999-3 SUPPLEMENT AMONG SEARS AS SERVICER, SRFG AS
SELLER AND THE TRUSTEE, DATED AS OF NOVEMBER 23, 1999,
INCLUDING THE FORMS OF INVESTOR CERTIFICATES.
4.2 LETTER OF REPRESENTATIONS AMONG SRFG, THE TRUSTEE AND THE
DEPOSITORY TRUST COMPANY, DATED AS OF NOVEMBER 23, 1999.
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EXHIBIT 1.1
SEARS CREDIT ACCOUNT MASTER TRUST II
Master Trust Certificates
Underwriting Agreement
November 15, 1999
Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036
As Representative of the several Underwriters
Ladies and Gentlemen:
SRFG, Inc. (formerly known as 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 1 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 Bank One, National Association
(formerly known as 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
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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
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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
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December 21, 1995 (the "Receivables Warehouse Agreement"), by and between the
Company and Sears, this Agreement, the Assignment of Additional Funds, dated as
of January 30, 1998, between the Company and the Trustee (the "Assignment of
Additional Funds") 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. or Sears National Bank
(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;
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(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 Bank One, National Association, One North State
Street, 9th Floor, Chicago, Illinois 60602.
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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
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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;
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(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 Assignment of Additional Funds, 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 Assignment of Additional Funds, 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, as amended, 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,
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of the transactions contemplated by the Bank Assignment Agreement,
the Purchase Agreement, the Contribution Agreement, the Assignment
of Additional Funds 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
9
<PAGE> 10
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) The Assignment of Additional Funds has been duly
authorized, executed and delivered by the Company and, as to the
Company, 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;
(ix) 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;
(x) 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;
(xi) 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
(xii) 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.
10
<PAGE> 11
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;
11
<PAGE> 12
(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;
12
<PAGE> 13
(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
13
<PAGE> 14
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
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<PAGE> 15
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.
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<PAGE> 16
(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
16
<PAGE> 17
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.
17
<PAGE> 18
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: President.
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.
18
<PAGE> 19
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,
SRFG, INC.
By: /s/ George F. Slook
---------------------------------
SEARS, ROEBUCK AND CO.
By: /s/ Larry R. Raymond
---------------------------------
Accepted as of the date hereof:
MORGAN STANLEY & CO. INCORPORATED
/s/ J. Douglas Van Ness
---------------------------------------------
Authorized Signatory
As Representative of the several Underwriters
19
<PAGE> 1
EXHIBIT 1.2
SEARS CREDIT ACCOUNT MASTER TRUST II
MASTER TRUST CERTIFICATES
PRICING AGREEMENT
Dated: November 15, 1999
To: SRFG, Inc., ("SRFG") as Seller under the Pooling and Servicing Agreement
dated as of July 31, 1994, as amended.
Re: Underwriting Agreement dated November 15, 1999 (the "Agreement") (a copy
of which is attached hereto).
Title: Sears Credit Account Master Trust II, $400,000,000 6.45% Class A Master
Trust Certificates, Series 1999-3.
Initial Principal Amount of Certificates:
$400,000,000 Class A Master Trust Certificates, Series 1999-3
Class A Expected Final Payment Date: November 2005
Series and Class Designation of Designated Securities:
6.45% Class A Master Trust Certificates, Series 1999-3 (the "Class A
Certificates")
<TABLE>
<S> <C> <C>
Certificate Rating: Class A Certificates: Aaa by Moody's Investors Service, Inc.
AAA by Standard & Poor's Ratings Services
</TABLE>
Aggregate Principal Receivables in the Accounts in the Trust as of the last day
of the Due Period ending in October 1999: $9,629,437,514
Date of Series Supplement: November 23, 1999
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 November 23, 1999.
Class A Certificates: 98.7221%
1
<PAGE> 2
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 November 23, 1999.
Class A Certificates: 99.0221%
Closing Location: Sears, Roebuck and Co.
3333 Beverly Road
Hoffman Estates, Illinois 60179
Time of Delivery: 10:00 A.M., New York Time, on November 23, 1999, or at such
other time as may be agreed upon in writing.
Address of Representative of the Underwriters for notices:
Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036
Attention: J. Douglas Van Ness
Facsimile: (212) 761-0782
Additional Agreements:
Notwithstanding any provision in the Agreement to the
contrary, each of the several Underwriters expressly waives the condition
provided in Section 7(g) of the Agreement; further, the occurrence of any event
described in Section 7(g) shall not be deemed a failure of any condition
described in Section 7(f) of the Agreement.
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.
2
<PAGE> 3
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,
MORGAN STANLEY & CO.INCORPORATED
By: /s/ J. Douglas Van Ness
-------------------------------------
On behalf of each of the Underwriters
Accepted:
SRFG, INC.
By: /s/ George F. Slook
------------------------------
SEARS, ROEBUCK AND CO.
By: /s/ Larry R. Raymond
------------------------------
3
<PAGE> 4
SCHEDULE 1
Principal
Amount of
Class A
Certificates
to be
Underwriter Purchased
----------- ---------
Morgan Stanley & Co. Incorporated ............................ $ 80,000,000
Bear Stearns & Co. Inc. ...................................... $ 80,000,000
Credit Suisse First Boston Corporation ....................... $ 80,000,000
Goldman, Sachs & Co. ......................................... $ 80,000,000
Merrill Lynch, Pierce, Fenner & Smith Incorporated............ $ 80,000,000
------------
Total $400,000,000
4
<PAGE> 1
EXHIBIT 4.1
SEARS, ROEBUCK AND CO.
SERVICER
SRFG, INC.
SELLER
AND
BANK ONE, NATIONAL ASSOCIATION
TRUSTEE
ON BEHALF OF THE CERTIFICATEHOLDERS
-----------------------
SERIES 1999-3 SUPPLEMENT
DATED AS OF NOVEMBER 23, 1999
TO THE
POOLING AND SERVICING AGREEMENT
DATED AS OF JULY 31, 1994
-----------------------
$470,650,000
SEARS CREDIT ACCOUNT MASTER TRUST II
MASTER TRUST CERTIFICATES, SERIES 1999-3
<PAGE> 2
SEARS CREDIT ACCOUNT MASTER TRUST II
MASTER TRUST CERTIFICATES, SERIES 1999-3
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 SRFG,
INC. (formerly Sears Receivables Financing Group, Inc.), a Delaware corporation
("SRFG") as Seller, SEARS, ROEBUCK AND CO., a New York corporation ("Sears") as
Servicer, and BANK ONE, NATIONAL ASSOCIATION (formerly 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
1999-3.
SERIES TERM SHEET
Date of Series Term Sheet November 23, 1999.
Group One.
Series Initial Investor Interest $470,650,000.
Class Initial Investor Interest Class A - $400,000,000.
of each Class of Investor Certificates Class B - $28,250,000.
Class C - $42,400,000.
Seller Retained Class Initially, Class B and Class C.
Type of Structure Controlled Amortizing Structure.
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 - Initially, 0%; provided,
however, that the Seller may
increase the Certificate Rate
pursuant to Section 22.
i
<PAGE> 3
Class C - Initially, 0%; provided,
however, that the Seller may
increase the Certificate Rate
pursuant to Section 22.
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.
Eligible for Interest Rate Swaps No
Swap Counterparty Payment Not applicable.
Swap Rate Not applicable.
Swap Trust Payment Not applicable.
Series Yield Factor Initially zero, but may be
increased pursuant to Section 20.
Date from which Interest for First Series Closing Date.
Interest Payment Date Shall Accrue
Distribution Dates December 15, 1999 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 December 1999.
ii
<PAGE> 4
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 December 2003, and each
Special Payment Date.
Class A Expected Final Payment Date November 15, 2005.
Class B Expected Final Payment Date The Distribution Date in January 2006.
Class C Expected Final Payment Date The Distribution Date in February 2006.
Series Cut-Off Date October 1999.
Series Closing Date November 23, 1999.
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 December 2003
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 December 2003 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 $16,666,666.67.
Class B Controlled Amortization Amount $14,125,000.00
Class C Controlled Amortization Amount Unless a Rapid Amortization Event
shall have occurred, $14,119,500.00
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.
iii
<PAGE> 5
Series Monthly Servicing Fee Additional Funds Not applicable.
Portion Percentage
Amount of Additional Funds Amount specified in the
Assignment of Additional Funds
dated as of January 30, 1998
between the Seller and the
Trustee, but subject to being
increased pursuant to Section
4.03(e) of the Pooling and
Servicing Agreement.
Eligible for Finance Charge Collections Yes.
Reallocations to and from
other Series in the Group
Eligible for Principal Collections Yes.
Reallocations to and from other
Series in the Group
Paired Series No.
Subject to being part of a Paired Series Yes.
Series Termination Date The business day following the
November 2009 Distribution
Date.
Variable Funded Series No.
Classes, if any, subject to ERISA Class B and Class C.
restrictions (as set forth in
Section 6.06(a)(ii) of the Pooling
and Servicing Agreement)
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.
iv
<PAGE> 6
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.
v
<PAGE> 7
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.
SRFG, INC.
as Seller
By: /s/ George F. Slook
---------------------------------------
George F. Slook
President and Chief Executive Officer
SEARS, ROEBUCK AND CO.
as Servicer
By: /s/ Larry R. Raymond
---------------------------------------
Larry R. Raymond
Vice President and Treasurer
BANK ONE, NATIONAL ASSOCIATION
as Trustee
By: /s/ Diane Swanson
---------------------------------------
vi
<PAGE> 8
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ANNEX..........................................................................................................1
SECTION 1. Definitions.....................................................................................1
SECTION 2. Subordination..................................................................................24
SECTION 3. Representations and Warranties of the Seller...................................................24
SECTION 4. Representations and Warranties of the Servicer.................................................25
SECTION 5. Representations and Warranties of the Trustee..................................................25
SECTION 6. Authentication of Certificates.................................................................25
SECTION 7. Establishment and Administration of Investor Accounts and the Third Party
Credit Enhancement Account.....................................................................25
SECTION 8. Allocations of Collections.....................................................................31
SECTION 9. Payments.......................................................................................84
SECTION 10. Third Party Credit Enhancement.................................................................88
SECTION 11. Calculation of Investor Losses.................................................................89
SECTION 12. Servicing Compensation.........................................................................90
SECTION 13. Class Coupon Cap Agreement.....................................................................90
SECTION 14. Interest Rate Swaps............................................................................91
SECTION 15. Investor Certificateholders' Monthly Statement.................................................92
SECTION 16. Monthly Servicer Certificate...................................................................92
SECTION 17. Additional Rapid Amortization Events...........................................................92
SECTION 18. Purchase of Investor Certificates and Series Termination.......................................93
SECTION 19. Variable Accumulation Period...................................................................94
SECTION 20. Series Yield Factor............................................................................95
SECTION 21. Issuance of Additional Investor Certificates...................................................95
SECTION 22. Sale or Transfer of Seller Retained Classes....................................................96
SECTION 23. Paired Series..................................................................................97
SECTION 24. Fixed Principal Allocation Adjustment..........................................................97
SECTION 25. Ratification of Pooling and Servicing Agreement................................................97
SECTION 26. Counterparts...................................................................................97
SECTION 27. Book-Entry Certificates........................................................................97
SECTION 28. Issuance of New Series.........................................................................97
SECTION 29. Governing Law..................................................................................97
EXHIBITS
EXHIBIT A-1 Form of Class A Certificate
EXHIBIT A-2 Form of Class B Certificate
EXHIBIT A-3 Form of Class C Certificate
EXHIBIT B Form of Investor Certificateholders' Monthly Statement
EXHIBIT C Form of Monthly Servicer Certificate
</TABLE>
<PAGE> 9
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
21(a).
"Additional Certificate Date" shall have the meaning specified in
Section 21(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, (B) the
Investor Servicing Fee Percentage and (C) the annualized percentage equivalent
of a fraction the numerator of which is the sum of the Swap Trust Payments and
the denominator of which is the Series Invested Amount.
"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
<PAGE> 10
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)(17) less amounts
previously deposited with respect to the Class A Early Termination Premium
Shortfall pursuant to Section 8(b)(44), 8(c)(14) or 8(c)(43). 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)(18) less amounts previously deposited with respect to the Class B
Early Termination Premium Shortfall pursuant to Section 8(b)(45), 8(c)(15) or
8(c)(44). 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.
2
<PAGE> 11
"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)(48) and 8(c)(49). 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)(12)) 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 19, 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 19 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 19 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)(48), 8(c)(50) or 8(c)(51).
"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
3
<PAGE> 12
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)(12)) 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)(48), 8(c)(50) or 8(c)(51).
"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
4
<PAGE> 13
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 21, minus (i) prior
amounts paid to such Class pursuant to Section 9(a)(12) 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)(12)), (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.
5
<PAGE> 14
"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
6
<PAGE> 15
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
7
<PAGE> 16
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)(47), 8(d)(48) or
8(d)(49).
"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.
8
<PAGE> 17
"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:
D x 360 x 100
Money Market Yield = -------------
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.
"Counterparty," if any, shall mean the counterparty under each Interest
Rate Swap.
"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.
9
<PAGE> 18
"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 25.
"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
25) 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
10
<PAGE> 19
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)(51),
8(c)(60) or 8(d)(55) minus (ii) (x) the amount deposited in the Group Principal
Collections Reallocation Account pursuant to any provisions similar to Section
8(b)(49) 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)(58) 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)(53).
"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).
11
<PAGE> 20
"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.
"Interest Rate Swap," if applicable, shall mean each interest rate swap
agreement between the Trustee and the Counterparty for the benefit of the
Investor Certificateholders and any replacement or successor interest rate swap
agreement.
"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 one-month deposits in United States dollars
which 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
12
<PAGE> 21
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 or a day on which banking institutions in the City of
London, England, in Chicago, Illinois 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)(27-34), 8(c)(24-31) and 8(d)(25-32) 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 23.
"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
13
<PAGE> 22
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 19), 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 The product of (i) the PFA Special
than 3% Reserve Required Percentage divided by
2%, (ii) the PFA Special Reserve Account
Factor and (iii) 12
3% or more, but less The product of (i) the PFA Special
than 4% 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
14
<PAGE> 23
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 22.
"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
15
<PAGE> 24
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 17 hereof.
"Rapid Amortization Event" shall mean any event specified in Section
9.01 of the Pooling and Servicing Agreement or in Section 17 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
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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 Section 4.03(b) of the Pooling and Servicing Agreement.
"Revolving Period" shall have the meaning set forth in the Series Term
Sheet.
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"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 22.
"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), (vi) amounts withdrawn from the Pre-Funding
Special Reserve Account pursuant to Section 7(h)(3) and (vii) the sum of the
Swap Counterparty Payments, if any.
"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
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<PAGE> 27
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)(52-54)). 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 sum of the numerators used in calculating the Class
Percentage with respect to Principal Collections for each 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)(19), 8(c)(16) or 8(d)(17), 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.
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"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.
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<PAGE> 29
"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.
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"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 20.
"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.
"Swap Counterparty Payment," if applicable, for any Distribution Date,
shall have the meaning specified in the Series Term Sheet.
"Swap Date," if applicable, shall mean, with respect to any Interest
Rate Swap, the date on which such Interest Rate Swap becomes effective.
"Swap Notional Amount," if applicable, with respect to any Interest
Rate Swap, shall mean the notional amount specified in such Interest Rate Swaps,
provided, however, that the sum of the Swap
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Notional Amounts for all Interest Rate Swaps on any Distribution Date shall not
exceed the sum of the Class A Invested Amount and the Class B Invested Amount on
such Distribution Date.
"Swap Rate," if applicable, with respect to any Interest Rate Swap,
shall have the meaning specified in the Series Term Sheet.
"Swap Trust Payment," if applicable, for any Distribution Date, shall
have the meaning specified in the Series Term Sheet.
"Swap Trust Payment Shortfall," if applicable, for any Distribution
Date, shall mean the positive difference, if any between (i) the sum of the Swap
Trust Payments and (ii) the sum of (A) the Series Finance Charge Collections
allocable to each Counterparty with respect to each Interest Rate Swap and (B)
Series Additional Allocable Amounts allocable to each Counterparty with respect
to each Interest Rate Swap for such Distribution Date.
"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.
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"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.
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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
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<PAGE> 34
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."
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(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
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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.
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(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
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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.
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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
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(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
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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) Swap Trust Payments. An amount equal to the lesser of
(A) the sum of the Swap Trust Payments 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 in the
Series Distribution Account.
(12) 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.
(13) 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
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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.
(14) 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.
(15) 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.
(16) 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.
(17) 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
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shall be withdrawn from the Series Collections Account and deposited into the
Series Distribution Account.
(18) 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.
(19) 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.
(20) 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.
(21) 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.
(22) 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
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(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.
(23) 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.
(24) 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.
(25) 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.
(26) 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
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(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.
(27) 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 (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 Distribution Account. The Class A Modified
Required Amount Shortfall shall be reduced by the amount of such deposit.
(28) 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 (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
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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.
(29) 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 (29)); 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.
(30) 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
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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 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.
(31) 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 (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 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.
(32) 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
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(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 (32)) 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.
(33) 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 (33)); 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.
(34) Swap Trust Payment Shortfalls. An amount equal to the lesser of
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(A) the Swap Trust Payment Shortfall and
(B) the product of
(x) a fraction, the numerator of which is the Swap
Trust Payment Shortfall and the denominator of which
is the sum of the swap trust payment shortfalls for
all series in the Group to which the Series
established hereby belongs and
(y) the amount on deposit in the Group Finance Charge
Collections Reallocation Account before any
withdrawals therefrom with respect to other series
pursuant to a clause in the applicable Series
Supplement for the purpose of covering swap trust
payment shortfalls and after any withdrawals
therefrom with respect to other series pursuant to a
clause in the applicable Series Supplement for the
purpose of covering any payment shortfall for such
series intended to be of a higher priority than swap
trust payment shortfalls
shall be withdrawn from the Group Finance Charge Collections Reallocation
Account and deposited in the Series Distribution Account.
(35) 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.
(36) 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.
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(37) 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.
(38) 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.
(39) 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.
(40) 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
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(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.
(41) 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.
(42) 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.
(43) 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.
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(44) 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 (44)) 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.
(45) 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 (45)) 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.
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<PAGE> 53
(46) 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.
(47) 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
(47)) 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.
(48) 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."
(49) 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.
(50) Payment to the Seller. An amount equal to the lesser of
(A) the positive difference, if any, between the amount of the
Seller Interest (determined as described below) and the
Minimum Seller Interest (after giving effect to all similar
provisions in other Series Supplements, beginning with the
series (including
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<PAGE> 54
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).
For purposes of this provision, the Seller Interest shall be deemed to include
(i) all amounts remaining on deposit in the Series Collections Account after
clause (49); (ii) all amounts on deposit in all Group Principal Collections
Reallocation Accounts after giving effect to clause (49) and all provisions
similar to clause (49) in other Series Supplements; and (iii) all amounts
deposited into the Excess Funding Account (SRC) and the Excess Funding Account
(General) on such Distribution Date pursuant to the provisions of any other
Series Supplement.
(51) 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 (determined as described below) 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). For purposes of this
provision, the Seller Interest shall be deemed to include (i) all amounts on
deposit in all Group Principal Collections Reallocation Accounts after giving
effect to clause (49) and all provisions similar to clause (49) in other Series
Supplements, and (ii) all amounts deposited into the Excess Funding Account
(SRC) and the Excess Funding Account (General) on such Distribution Date
pursuant to the provisions of any other Series Supplements. This provision shall
be applied before similar provisions for any previously issued Series.
(52) 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.
(53) Further payment to the Seller. An amount equal to the lesser of
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(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)(55), 8(c)(56) and 8(c)(57), 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)(52) 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.
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(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
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(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) Swap Trust Payments. An amount equal to the lesser of
(A) the sum of the Swap Trust Payments 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 in the
Series Distribution Account.
(10) 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.
(11) 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
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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.
(12) 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.
(13) 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.
(14) 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.
(15) 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
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<PAGE> 59
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 Amount both 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
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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
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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
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(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
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.
(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.
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(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.
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<PAGE> 64
(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) Swap Trust Payment Shortfalls. An amount equal to the lesser of
(A) the Swap Trust Payment Shortfall and
(B) the product of
(x) a fraction, the numerator of which is the Swap
Trust Payment Shortfall and the denominator of which
is the sum of the swap trust payment shortfalls for
all series in the Group to which the Series
established hereby belongs and
(y) the amount on deposit in the Group Finance Charge
Collections Reallocation Account before any
withdrawals therefrom with respect to other series
pursuant to a clause in the applicable Series
Supplement for the purpose of covering swap trust
payment shortfalls and after any withdrawals
therefrom with respect to other series pursuant to a
clause in the applicable Series
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<PAGE> 65
Supplement for the purpose of covering any payment
shortfall for such series intended to be of a higher
priority than swap trust payment shortfalls
shall be withdrawn from the Group Finance Charge Collections Reallocation
Account and deposited in the Series Distribution Account.
(32) 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.
(33) 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.
(34) 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.
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<PAGE> 66
(35) 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.
(36) 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.
(37) 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.
(38) 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
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<PAGE> 67
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.
(39) 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.
(40) 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.
(41) 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.
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<PAGE> 68
(42) 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.
(43) 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 (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 in the
applicable Series Supplements
shall be withdrawn from the Group Finance Charge Collections Reallocation
Account and deposited into the Series Distribution Account.
(44) 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 (44)) and
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<PAGE> 69
(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.
(45) 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.
(46) 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
(46)) 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.
(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 Series Principal Collections Account.
(48) Class A Controlled Accumulation Amount or the Class A Controlled
Amortization Amount, as applicable. An amount equal to the lesser of
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(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.
(49) 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."
(50) 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 (or, if Class B is a Seller Retained
Class, in the Series Collections Account)
shall be withdrawn from the Series Principal Collections Account (or, if Class B
is a Seller Retained Class, 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 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.
(51) 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
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(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."
(52) 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 (52)) 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.
(53) 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
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<PAGE> 72
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 (53)) 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.
(54) 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 (54)); 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
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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.
(55) 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 (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 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.
(56) 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
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<PAGE> 74
(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 (56)) 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.
(57) 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 (57)) 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
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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.
(58) 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.
(59) Payment to the Seller. An amount equal to the lesser of
(A) the positive difference, if any, between the amount of the
Seller Interest (determined as described below) 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).
For purposes of this provision, the Seller Interest shall be deemed to include
(i) all amounts remaining on deposit in the Series Collections Account after
giving effect to clause (58); (ii) all amounts on deposit in all Group Principal
Collections Reallocation Accounts after giving effect to clause (58) and all
provisions similar to clause (58) in other Series Supplements; and (iii) all
amounts deposited into the Excess Funding Account (SRC) and the Excess Funding
Account (General) on such Distribution Date pursuant to the provisions of any
other Series Supplement.
(60) 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 (determined as described below) 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). For purposes of this
provision, the Seller Interest shall be deemed to include (i) all amounts on
deposit in all Group
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Principal Collections Reallocation Accounts after giving effect to clause (58)
and all provisions similar to clause (58) in other Series Supplements, and (ii)
all amounts deposited into the Excess Funding Account (SRC) and the Excess
Funding Account (General) on such Distribution Date pursuant to the provisions
of any other Series Supplements. This provision shall be applied before similar
provisions for any previously issued Series.
(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
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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.
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(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) Swap Trust Payments. An amount equal to the lesser of
(A) the sum of the Swap Trust Payments 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 in the
Series Distribution Account.
(14) 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.
(15) 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
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(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.
(16) 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.
(17) 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.
(18) 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.
(19) 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.
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(20) 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.
(21) 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.
(22) 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.
(23) 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.
(24) Reimbursement of the Class C Cumulative Investor Charged-Off
Amount from a Subordinate Series. If applicable, an amount equal to the lesser
of
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(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.
(25) 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 (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 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.
(26) 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 (26)) and
(y) the amount on deposit in the Group Finance Charge
Collections Reallocation Account before any
withdrawals therefrom with respect to any
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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.
(27) 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 (27)); 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.
(28) 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
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(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 (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 Principal Collections Account. The Class A
Cumulative Investor Charged-Off Amount shall be reduced by the amount of such
deposit.
(29) 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 (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 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.
(30) 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
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(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 (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 in the
applicable Series Supplements
shall be withdrawn from the Group Finance Charge Collections Reallocation
Account and deposited into the Series Distribution Account.
(31) 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 (31)); 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
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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.
(32) Swap Trust Payment Shortfalls. An amount equal to the lesser of
(A) the Swap Trust Payment Shortfall and
(B) the product of
(x) a fraction, the numerator of which is the Swap
Trust Payment Shortfall and the denominator of which
is the sum of the swap trust payment shortfalls for
all series in the Group to which the Series
established hereby belongs and
(y) the amount on deposit in the Group Finance Charge
Collections Reallocation Account before any
withdrawals therefrom with respect to other series
pursuant to a clause in the applicable Series
Supplement for the purpose of covering swap trust
payment shortfalls and after any withdrawals
therefrom with respect to other series pursuant to a
clause in the applicable Series Supplement for the
purpose of covering any payment shortfall for such
series intended to be of a higher priority than swap
trust payment shortfalls
shall be withdrawn from the Group Finance Charge Collections Reallocation
Account and deposited in the Series Distribution Account.
(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
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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
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.
(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 less
principal payments made in respect of such Class prior to such Distribution
Date.
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(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
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.
(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 less
principal payments made in respect of such Class prior to such Distribution
Date.
(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
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.
(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
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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.
(42) 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.
(43) 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.
(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
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 (45)) and
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(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.
(46) 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.
(47) 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."
(48) 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 (or, if Class B is a Seller Retained Class, in the
Series Collections Account)
shall be withdrawn from the Series Principal Collections Account (or, if Class B
is a Seller Retained Class, in the Series 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."
(49) 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."
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(50) 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 (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 Distribution Account. The Class A Rapid Amortization
Amount Shortfall will be reduced by the amount of such deposit.
(51) 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 (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
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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.
(52) 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 (52)); 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.
(53) 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.
(54) Payment to the Seller. An amount equal to the lesser of
(A) the positive difference, if any, between the amount of the
Seller Interest (determined as described below) 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
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(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).
For purposes of this provision, the Seller Interest shall be deemed to include
(i) all amounts remaining on deposit in the Series Collections Account after
clause (53); (ii) all amounts on deposit in all Group Principal Collections
Reallocation Accounts after giving effect to clause (53) and all provisions
similar to clause (53) in other Series Supplements; and (iii) all amounts
deposited into the Excess Funding Account (SRC) and the Excess Funding Account
(General) on such Distribution Date pursuant to the provisions of any other
Series Supplement.
(55) 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 (determined as described below) 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). For purposes of this
provision, the Seller Interest shall be deemed to include (i) all amounts on
deposit in all Group Principal Collections Reallocation Accounts after giving
effect to clause (53) and all provisions similar to clause (53) in other Series
Supplements, and (ii) all amounts deposited into the Excess Funding Account
(SRC) and the Excess Funding Account (General) on such Distribution Date
pursuant to the provisions of any other Series Supplements. This provision shall
be applied before similar provisions for any previously issued Series.
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
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(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 Swap Trust Payments. An amount equal to the lesser
of
(A) the sum of the Swap Trust Payments and
(B) the amount deposited in respect of the Interest Rate Swaps
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.
(4) 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."
(5) 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.
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(6) Swap Trust Payments. On each Interest Payment Date and each Special
Payment Date, the Servicer shall direct the Trustee to withdraw all amounts on
deposit in the Series Interest Funding Account with respect to the Interest Rate
Swaps and to pay such amounts to each Counterparty in accordance with the amount
of the Swap Trust Payment payable to each Counterparty; provided, however, that
if the amount on deposit in the Series Interest Funding Account with respect to
the Interest Rate Swaps is less than the sum of the Swap Trust Payments on such
Distribution Date, the Servicer shall direct the Trustee to pay each
Counterparty an amount equal to the product of such amount on deposit in the
Series Interest Funding Account with respect to the Interest Rate Swaps and a
fraction the numerator of which is the Swap Trust Payment due to such
Counterparty and the denominator of which is the sum of the Swap Trust Payments
due on such Distribution Date.
(7) 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.
(8) 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.
(9) 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.
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(10) 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.
(11) 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.
(12) 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.
(13) 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,
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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 (13)
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
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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 Party 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.
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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)
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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. Interest Rate Swaps. The Servicer may obtain Interest Rate
Swaps in a form approved by the Servicer to be entered into by the Trustee not
in its personal capacity but solely for the benefit of the Investor
Certificateholders; provided that the sum of the Swap Notional Amounts for such
Interest Rate Swaps shall not exceed the Class A and Class B Invested Amount for
this Series and the Swap Rate shall not exceed the maximum Swap Rate set forth
in the Series Term Sheet. Pursuant to the terms of the Interest Rate Swap, the
Trustee is to receive payment from the Swap Counterparty prior to 10:00 a.m.
Chicago time on any Distribution Date of the amount of any Swap Counterparty
Payment to be paid by the Swap Counterparty on such Distribution Date. If the
Trustee does not receive such payment by 10:00 a.m. Chicago time on such
Distribution Date, the Trustee shall attempt to determine from the Swap
Counterparty the reasons therefore and whether such payment is to be made by the
Swap Counterparty on such Distribution Date. If the Interest Rate Swap has not
been terminated and the Trustee has not received any Swap Counterparty Payment
due on the related Distribution Date prior to 4:00 p.m. Chicago time on such
Distribution Date, (i) the Trustee shall notify the Servicer of such fact prior
to 4:15 p.m. Chicago time on such Distribution Date, and (ii) the Trustee shall
revise the Investors Monthly Certificateholders Statement required by Section 15
hereof
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to reflect that the Swap Counterparty Payment was not received by the Trustee
for such Distribution Date.
SECTION 15. 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 16. 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 17. 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;
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(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 18. 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
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<PAGE> 102
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 18 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 18 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 19. 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 19, 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 19 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.
94
<PAGE> 103
SECTION 20. 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 21. 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;
95
<PAGE> 104
(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 22. 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 22, sell or transfer any Seller
Retained Class of Investor Certificates (the "Purchased Class") of the Series
established hereby (the "Seller Retained Class Purchase Date"), and increase the
Certificate Rate for such Purchased Class in connection with such sale or
transfer, 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, the Seller Retained Class Purchase Date, and the increase in
the Certificate Rate for such Purchased Class, if any;
(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 and the increase in the
Certificate Rate for such Purchased Class, if any, 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
96
<PAGE> 105
(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 22 shall no longer
be considered a Seller Retained Class.
SECTION 23. 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 24. 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 25. 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 26. 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 27. 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 22 and (ii) the Seller shall so elect.
SECTION 28. Issuance of New Series. The Seller will not, at any time
prior to the February 2003 Distribution Date, issue another series in Group One
unless (a) the revolving period with respect to such series is scheduled to
continue until at least the end of the Due Period ending in January 2003 or (b)
the Seller shall have delivered to the Trustee an Officer's Certificate, dated
the date of issuance of such series, to the effect that the Seller reasonably
believes that the issuance of such series will not cause the final principal
payment with respect to the Series 1999-3 Class A Certificates to be made later
than the February 2003 Distribution Date.
SECTION 29. 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.
97
<PAGE> 106
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. 81234CBL4
6.45% CLASS A MASTER TRUST CERTIFICATE, SERIES 1999-3
SEARS CREDIT ACCOUNT MASTER TRUST II
SRFG, INC.
SELLER
SEARS, ROEBUCK AND CO.
SERVICER
(NOT AN INTEREST IN OR OBLIGATION OF SRFG, 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
SRFG, 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 Bank One, National Association (formerly 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
A-1-1
<PAGE> 107
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 November 23, 1999 (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.
SRFG, INC.
By:
-----------------------------------------
Name:
Title:
A-1-2
<PAGE> 108
[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 1999-3" (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 1999-3 or paid to the Class A
Certificateholders. Also issued under the Pooling and Servicing Agreement and
the Series Supplement are Investor Certificates designated as "Class B Master
Trust Certificates, Series 1999-3" (the "Class B Certificates") and "Class C
Master Trust Certificates, Series 1999-3" (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 $400,000,000. 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 December 1999, 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 December 2003 unless a Rapid Amortization Event
occurs prior to
A-1-3
<PAGE> 109
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 November 2009 (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.
A-1-4
<PAGE> 110
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.
A-1-5
<PAGE> 111
[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the Class A Certificates referred to in the within
mentioned Pooling and Servicing Agreement and Series Supplement.
BANK ONE, NATIONAL ASSOCIATION
as Trustee
By:
---------------------------------
Authorized Officer
A-1-6
<PAGE> 112
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.
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.
THIS CLASS B 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 B 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 B MASTER TRUST CERTIFICATE, SERIES 1999-3
SEARS CREDIT ACCOUNT MASTER TRUST II
SRFG, INC.
SELLER
SEARS, ROEBUCK AND CO.
SERVICER
(NOT AN INTEREST IN OR OBLIGATION OF SRFG, INC., SEARS NATIONAL BANK OR SEARS,
ROEBUCK AND CO.)
This certifies that SRFG, 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
A-2-1
<PAGE> 113
"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 Bank One, National Association (formerly 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 November 23, 1999 (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.
SRFG, INC.
By:
----------------------------------
Name:
Title:
A-2-2
<PAGE> 114
[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, by the acceptance of this
Class B Certificate, agrees 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, SRFG by virtue of the
acceptance hereof assents and by which the SRFG is bound.
This Class B Certificate is one of a series of Certificates entitled
"Class B Master Trust Certificates, Series 1999-3" (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 1999-3 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 1999-3" (the "Class A Certificates") and
"Class C Master Trust Certificates, Series 1999-3" (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 $28,250,000. 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 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 December 1999, 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 December
2003 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
A-2-3
<PAGE> 115
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 until the Class A Investor
Interest has 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 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 November 2009 (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 SRFG 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 SRFG (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.
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 SRFG shall be
conclusive and binding on SRFG 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 SRFG 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.
A-2-4
<PAGE> 116
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.
The transfer of this Class B 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 B Certificates are exchangeable for
new Class B 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 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.
A-2-5
<PAGE> 117
[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.
BANK ONE, NATIONAL ASSOCIATION
as Trustee
By:
------------------------------
Authorized Officer
A-2-6
<PAGE> 118
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 1999-3
SEARS CREDIT ACCOUNT MASTER TRUST II
SRFG, INC.
SELLER
SEARS, ROEBUCK AND CO.
SERVICER
(NOT AN INTEREST IN OR OBLIGATION OF SRFG, INC., SEARS NATIONAL BANK OR SEARS,
ROEBUCK AND CO.)
This certifies that SRFG, 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
A-3-1
<PAGE> 119
"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 Bank One, National Association (formerly 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 November 23, 1999 (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.
SRFG, INC.
By:
-----------------------------------
Name:
Title:
A-3-2
<PAGE> 120
[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 1999-3" (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 1999-3 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
1999-3" (the "Class A Certificates") and "Class B Master Trust Certificates,
Series 1999-3" (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 $42,400,000. 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 December 1999, 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 December
2003 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
A-3-3
<PAGE> 121
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 November 2009 (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
A-3-4
<PAGE> 122
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.
A-3-5
<PAGE> 123
[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.
BANK ONE, NATIONAL ASSOCIATION
as Trustee
By:
---------------------------------
Authorized Officer
A-3-6
<PAGE> 124
EXHIBIT B
Form of Investor Certificateholders' Monthly Statement
Sears Credit Account Master Trust II
Series 1999-3 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.,
SRFG, Inc. (formerly Sears Receivables Financing Group, Inc.) and Bank One,
National Association (formerly 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 1999-3 INVESTORS THIS DUE PERIOD
<TABLE>
<CAPTION>
Total Interest Principal
----- -------- ---------
<S> <C> <C> <C> <C>
Series 1999-3
Class A $ $ $
------------ ------------ ------------
Class B $ $ $
------------ ------------ ------------
Class C $ $ $
------------ ------------ ------------
</TABLE>
2. PRINCIPAL RECEIVABLES AT THE END OF THE DUE PERIOD
<TABLE>
<S> <C> <C>
(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 1995-1 Investor Interest $
-------------
Series 1995-2 Investor Interest $
-------------
Series 1995-3 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 $
-------------
Series 1996-5 Investor Interest $
-------------
Series 1997-1 Investor Interest $
-------------
Series 1998-1 Investor Interest $
-------------
Series 1998-2 Investor Interest $
-------------
Series 1999-1 Investor Interest $
-------------
Series 1999-2 Investor Interest $
-------------
Series 1999-3 Investor Interest $
-------------
(d) INVESTOR INTEREST BY CLASS (SERIES 1999-3)
Class A Investor Interest $
-------------
Class B Investor Interest $
-------------
Class C Investor Interest $
-------------
TOTAL CLASS INVESTOR INTEREST $
-------------
</TABLE>
B-1
<PAGE> 125
<TABLE>
<S> <C> <C>
3. ALLOCATION OF COLLECTIONS DURING THE DUE PERIOD
(a) TOTAL COLLECTIONS $
-------------
Principal Receivables Collected $
-------------
Finance Charge Receivables Collected $
-------------
Recovered Amounts added as Additional Funds $
-------------
</TABLE>
<TABLE>
<CAPTION>
Additional
Finance Charge Principal Allocable
Collections Collections Amounts
-------------- ----------- ----------
<S> <C> <C> <C> <C>
(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) $ $ $
-------------- ----------- ----------
Seller Allocation (Seller Percentage multiplied
by total Collections received during the Due
Period) $ $ $
-------------- ----------- ----------
(c) Group One Allocation $ $ $
-------------- ----------- ----------
(d) Series 1999-3 Allocation $ $ $
-------------- ----------- ----------
(e) Reallocations of Collections to Series 1999-3
from other series in Group One and application
of charge-off reimbursements to principal payments $ $ $
-------------- ----------- ----------
</TABLE>
4. INFORMATION CONCERNING CONTROLLED AMORTIZATION AMOUNT
<TABLE>
<CAPTION>
Amount Distributed Total Distributions
this Due Period through this Due Period
------------------ -----------------------
<S> <C> <C>
SERIES 1999-3 BY CLASS
(a) Class A $ $
------------------ -----------------------
(b) Class B $ $
------------------ -----------------------
(c) Class C $ $
------------------ -----------------------
</TABLE>
5. INVESTOR CHARGED-OFF AMOUNTS
<TABLE>
<CAPTION>
This Due Period
---------------
<S> <C> <C>
(a) Group One (the sum of Series Investor Charged-Off Amounts for
all Series in Group One) $
---------------
(b) Series 1999-3 (the sum of the Class Investor Charged-Off Amounts
for all Classes in Series 1999-3) $
---------------
(c) Series 1999-3 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) $
---------------
</TABLE>
B-2
<PAGE> 126
6. INVESTOR LOSSES
<TABLE>
<CAPTION>
Total
-----
<S> <C> <C>
(a) Group One $
------------
(b) Series 1999-3 $
------------
(c) Series 1999-3 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 1999-3 $
------------
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) Recoveries (Recovered Amounts added as Additional Funds on the
Distribution Date divided by Aggregate Investor Interest in
the Trust as of the first day of the Due Period) %
------------
(d) Investor Servicing Fee Percentage (weighted average of Investor
Servicing Fees for Series 1999-3) %
------------
(e) Weighted Average Certificate Rate (weighted average
certificate rates for all classes of Series 1999-3)
%
------------
(f) Series Excess Servicing Percentage (the sum of Portfolio Yield and
Recoveries 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) %
------------
</TABLE>
9. SUMMARY DELINQUENCY AGING INFORMATION
[Sears has completed its conversion to the Total Systems Services, Inc.
("TSYS") account processing system. For a further discussion of Sears
change to a new aging methodology in connection with the conversion of
its receivables processing system to the TSYS account processing
system, see the Trust's Current Report on Form 8-K dated May 14, 1998.]
The Accounts in the Trust have the following delinquency
distribution:
<TABLE>
<CAPTION>
[month/year]
<S> <C>
Delinquencies as a % of balances
60-89 days past due.................... %
----------
90-119 days past due................... %
----------
120 days or more past due............ %
----------
Total Delinquencies %
==========
</TABLE>
B-3
<PAGE> 127
The delinquency rate is calculated by dividing the delinquent balances
as of the end of the Due Period by the balance of receivables in the
Trust at the beginning of the Due Period. Sears and the Bank determine
delinquency levels for accounts using an aging methodology that is
based on the number of completed billing cycles during which the
customer failed to make a required payment. The delinquency data
reflect the percentage of Account balances for which the customer has
failed to make a required payment in each of the last three, four and
five or more billing cycles, respectively.
BANK ONE, NATIONAL ASSOCIATION
as Trustee
By:
-----------------------------------
B-4
<PAGE> 128
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, SRFG, Inc. (formerly Sears Receivables Financing Group, Inc.) and
Bank One, National Association (formerly 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 1: TOTAL TRUST INFORMATION
<TABLE>
<S> <C>
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 .................................................... $
------
9. The aggregate amount of Additional Funds to be added to the Trust on or before the
Distribution Date is equal to ......................................................... $
------
</TABLE>
C-1
<PAGE> 129
<TABLE>
<S> <C> <C>
SECTION 2: SERIES 1994-1
1. The aggregate amount of Series Additional Allocable Amounts during the
related Due Period is equal to...................................................... $
------
2. The amount of interest payable to the Class A Certificateholders on the
current Distribution Date is equal to............................................... $
------
3. The amount of principal payable to the Class A Certificateholders on the
current Distribution Date is equal to............................................... $
------
4. The amount of interest payable to the Class B Certificateholders on the current
Distribution Date is equal to....................................................... $
------
5. The amount of principal payable to the Class B Certificateholders on the
current Distribution Date is equal to............................................... $
------
6. The amount of interest payable to the Class C Certificateholders on the current
Distribution Date is equal to....................................................... $
------
7. The amount of principal payable to the Class C Certificateholders on the
current Distribution Date is equal to............................................... $
------
8. The aggregate amount of Reallocated Class B Principal Collections during the
related Due Period is equal to...................................................... $
------
9. The aggregate amount of Reallocated Class C Principal Collections during the
related Due Period is equal to ..................................................... $
------
SECTION 3: SERIES 1995-1
1. The aggregate amount of Series Additional Allocable Amounts during the
related Due Period is equal to...................................................... $
------
2. The amount of interest payable to the Class A Certificateholders on the
current Distribution Date is equal to............................................... $
------
3. The amount of principal payable to the Class A Certificateholders on the
current Distribution Date is equal to............................................... $
------
4. The amount of interest payable to the Class B Certificateholders on the
current Distribution Date is equal to............................................... $
------
5. The amount of principal payable to the Class B Certificateholders on the
current Distribution Date is equal to............................................... $
------
6. The amount of interest payable to the Class C Certificateholders on the
current Distribution Date is equal to............................................... $
------
7. The amount of principal payable to the Class C Certificateholders on the
current Distribution Date is equal to............................................... $
------
8. The aggregate amount of Reallocated Class B Principal Collections during
the related Due Period is equal to.................................................. $
------
9. The aggregate amount of Reallocated Class C Principal Collections during
the related Due Period is equal to.................................................. $
------
</TABLE>
C-2
<PAGE> 130
<TABLE>
<S> <C> <C>
SECTION 4: SERIES 1995-2
1. The aggregate amount of Series Additional Allocable Amounts during the
related Due Period is equal to...................................................... $
------
2. The amount of interest payable to the Class A Certificateholders on the
current Distribution Date is equal to............................................... $
------
3. The amount of principal payable to the Class A Certificateholders on the
current Distribution Date is equal to............................................... $
------
4. The amount of interest payable to the Class B Certificateholders on the
current Distribution Date is equal to............................................... $
------
5. The amount of principal payable to the Class B Certificateholders on the
current Distribution Date is equal to............................................... $
------
6. The amount of interest payable to the Class C Certificateholders on the
current Distribution Date is equal to............................................... $
------
7. The amount of principal payable to the Class C Certificateholders on the
current Distribution Date is equal to............................................... $
------
8. The aggregate amount of Reallocated Class B Principal Collections during
the related Due Period is equal to.................................................. $
------
9. The aggregate amount of Reallocated Class C Principal Collections during
the related Due Period is equal to.................................................. $
------
SECTION 5: SERIES 1995-3
1. The aggregate amount of Series Additional Allocable Amounts during the
related Due Period is equal to...................................................... $
------
2. The amount of interest payable to the Class A Certificateholders on the
current Distribution Date is equal to............................................... $
------
3. The amount of principal payable to the Class A Certificateholders on the
current Distribution Date is equal to............................................... $
------
4. The amount of interest payable to the Class B Certificateholders on the
current Distribution Date is equal to............................................... $
------
</TABLE>
C-3
<PAGE> 131
<TABLE>
<S> <C> <C>
5. The amount of principal payable to the Class B Certificateholders on the
current Distribution Date is equal to............................................... $
------
6. The amount of interest payable to the Class C Certificateholders on the
current Distribution Date is equal to............................................... $
------
7. The amount of principal payable to the Class C Certificateholders on the
current Distribution Date is equal to............................................... $
------
8. The aggregate amount of Reallocated Class B Principal Collections during
the related Due Period is equal to.................................................. $
------
9. The aggregate amount of Reallocated Class C Principal Collections during
the related Due Period is equal to.................................................. $
------
SECTION 6: SERIES 1995-5
1. The aggregate amount of Series Additional Allocable Amounts during the
related Due Period is equal to...................................................... $
------
2. The amount of interest payable to the Class A Certificateholders on the
current Distribution Date is equal to............................................... $
------
3. The amount of principal payable to the Class A Certificateholders on the
current Distribution Date is equal to............................................... $
------
4. The amount of interest payable to the Class B Certificateholders on the
current Distribution Date is equal to............................................... $
------
5. The amount of principal payable to the Class B Certificateholders on the
current Distribution Date is equal to............................................... $
------
6. The amount of interest payable to the Class C Certificateholders on the
current Distribution Date is equal to............................................... $
------
7. The amount of principal payable to the Class C Certificateholders on the
current Distribution Date is equal to............................................... $
------
8. The aggregate amount of Reallocated Class B Principal Collections during
the related Due Period is equal to.................................................. $
------
9. The aggregate amount of Reallocated Class C Principal Collections during
the related Due Period is equal to.................................................. $
------
SECTION 7: SERIES 1996-1
1. The aggregate amount of Series Additional Allocable Amounts during the
related Due Period is equal to...................................................... $
------
</TABLE>
C-4
<PAGE> 132
<TABLE>
<S> <C> <C>
2. The amount of interest payable to the Class A Certificateholders on the
current Distribution Date is equal to............................................... $
------
3. The amount of principal payable to the Class A Certificateholders on the
current Distribution Date is equal to............................................... $
------
4. The amount of interest payable to the Class B Certificateholders on the
current Distribution Date is equal to............................................... $
------
5. The amount of principal payable to the Class B Certificateholders on the
current Distribution Date is equal to............................................... $
------
6. The amount of interest payable to the Class C Certificateholders on the
current Distribution Date is equal to............................................... $
------
7. The amount of principal payable to the Class C Certificateholders on the
current Distribution Date is equal to............................................... $
------
8. The aggregate amount of Reallocated Class B Principal Collections during
the related Due Period is equal to.................................................. $
------
9. The aggregate amount of Reallocated Class C Principal Collections during
the related Due Period is equal to.................................................. $
------
SECTION 8: SERIES 1996-2
1. The aggregate amount of Series Additional Allocable Amounts during the
related Due Period is equal to...................................................... $
------
2. The amount of interest payable to the Class A Certificateholders on the
current Distribution Date is equal to............................................... $
------
3. The amount of principal payable to the Class A Certificateholders on the
current Distribution Date is equal to............................................... $
------
4. The amount of interest payable to the Class B Certificateholders on the
current Distribution Date is equal to............................................... $
------
5. The amount of principal payable to the Class B Certificateholders on the
current Distribution Date is equal to............................................... $
------
6. The amount of interest payable to the Class C Certificateholders on the
current Distribution Date is equal to............................................... $
------
7. The amount of principal payable to the Class C Certificateholders on the
current Distribution Date is equal to............................................... $
------
8. The aggregate amount of Reallocated Class B Principal Collections during
the related Due Period is equal to.................................................. $
------
</TABLE>
C-5
<PAGE> 133
<TABLE>
<S> <C> <C>
9. The aggregate amount of Reallocated Class C Principal Collections during
the related Due Period is equal to.................................................. $
------
SECTION 9: SERIES 1996-3
1. The aggregate amount of Series Additional Allocable Amounts during the
related Due Period is equal to...................................................... $
------
2. The amount of interest payable to the Class A Certificateholders on the
current Distribution Date is equal to............................................... $
------
3. The amount of principal payable to the Class A Certificateholders on the
current Distribution Date is equal to............................................... $
------
4. The amount of interest payable to the Class B Certificateholders on the
current Distribution Date is equal to............................................... $
------
5. The amount of principal payable to the Class B Certificateholders on the
current Distribution Date is equal to............................................... $
------
6. The amount of interest payable to the Class C Certificateholders on the
current Distribution Date is equal to............................................... $
------
7. The amount of principal payable to the Class C Certificateholders on the
current Distribution Date is equal to............................................... $
------
8. The aggregate amount of Reallocated Class B Principal Collections during
the related Due Period is equal to.................................................. $
------
9. The aggregate amount of Reallocated Class C Principal Collections during
the related Due Period is equal to.................................................. $
------
SECTION 10: SERIES 1996-4
1. The aggregate amount of Series Additional Allocable Amounts during the
related Due Period is equal to...................................................... $
------
2. The amount of interest payable to the Class A Certificateholders on the
current Distribution Date is equal to............................................... $
------
3. The amount of principal payable to the Class A Certificateholders on the
current Distribution Date is equal to............................................... $
------
4. The amount of interest payable to the Class B Certificateholders on the
current Distribution Date is equal to............................................... $
------
5. The amount of principal payable to the Class B Certificateholders on the
current Distribution Date is equal to............................................... $
------
</TABLE>
C-6
<PAGE> 134
<TABLE>
<S> <C> <C>
6. The amount of interest payable to the Class C Certificateholders on the
current Distribution Date is equal to............................................... $
------
7. The amount of principal payable to the Class C Certificateholders on the
current Distribution Date is equal to............................................... $
------
8. The aggregate amount of Reallocated Class B Principal Collections during
the related Due Period is equal to.................................................. $
------
9. The aggregate amount of Reallocated Class C Principal Collections during
the related Due Period is equal to.................................................. $
------
SECTION 11: SERIES 1996-5
1. The aggregate amount of Series Additional Allocable Amounts during the
related Due Period is equal to...................................................... $
------
2. The amount of interest payable to the Class A Certificateholders on the
current Distribution Date is equal to............................................... $
------
3. The amount of principal payable to the Class A Certificateholders on the
current Distribution Date is equal to............................................... $
------
4. The amount of interest payable to the Class B Certificateholders on the
current Distribution Date is equal to............................................... $
------
5. The amount of principal payable to the Class B Certificateholders on the
current Distribution Date is equal to............................................... $
6. The amount of interest payable to the Class C Certificateholders on the
current Distribution Date is equal to............................................... $
------
7. The amount of principal payable to the Class C Certificateholders on the
current Distribution Date is equal to............................................... $
------
8. The aggregate amount of Reallocated Class B Principal Collections during
the related Due Period is equal to.................................................. $
------
9. The aggregate amount of Reallocated Class C Principal Collections during
the related Due Period is equal to.................................................. $
------
SECTION 12: SERIES 1997-1
1. The aggregate amount of Series Additional Allocable Amounts during the
related Due Period is equal to...................................................... $
------
2. The amount of interest payable to the Class A Certificateholders on the
current Distribution Date is equal to............................................... $
------
</TABLE>
C-7
<PAGE> 135
<TABLE>
<S> <C> <C>
3. The amount of principal payable to the Class A Certificateholders on the
current Distribution Date is equal to............................................... $
------
4. The amount of interest payable to the Class B Certificateholders on the
current Distribution Date is equal to............................................... $
------
5. The amount of principal payable to the Class B Certificateholders on the
current Distribution Date is equal to............................................... $
------
6. The amount of interest payable to the Class C Certificateholders on the
current Distribution Date is equal to............................................... $
------
7. The amount of principal payable to the Class C Certificateholders on the
current Distribution Date is equal to............................................... $
------
8. The aggregate amount of Reallocated Class B Principal Collections during
the related Due Period is equal to.................................................. $
------
9. The aggregate amount of Reallocated Class C Principal Collections during
the related Due Period is equal to.................................................. $
------
SECTION 13: SERIES 1998-1
1. The aggregate amount of Series Additional Allocable Amounts during the
related Due Period is equal to...................................................... $
------
2. The amount of interest payable to the Class A Certificateholders on the
current Distribution Date is equal to............................................... $
------
3. The amount of principal payable to the Class A Certificateholders on the
current Distribution Date is equal to............................................... $
------
4. The amount of interest payable to the Class B Certificateholders on the
current Distribution Date is equal to............................................... $
------
5. The amount of principal payable to the Class B Certificateholders on the
current Distribution Date is equal to............................................... $
------
6. The amount of interest payable to the Class C Certificateholders on the
current Distribution Date is equal to............................................... $
------
7. The amount of principal payable to the Class C Certificateholders on the
current Distribution Date is equal to............................................... $
------
8. The aggregate amount of Reallocated Class B Principal Collections during
the related Due Period is equal to.................................................. $
------
9. The aggregate amount of Reallocated Class C Principal Collections during
the related Due Period is equal to.................................................. $
------
</TABLE>
C-8
<PAGE> 136
<TABLE>
<S> <C> <C>
SECTION 14: SERIES 1998-2
1. The aggregate amount of Series Additional Allocable Amounts during the
related Due Period is equal to...................................................... $
------
2. The amount of interest payable to the Class A Certificateholders on the
current Distribution Date is equal to............................................... $
------
3. The amount of principal payable to the Class A Certificateholders on the
current Distribution Date is equal to............................................... $
------
4. The amount of interest payable to the Class B Certificateholders on the
current Distribution Date is equal to............................................... $
------
5. The amount of principal payable to the Class B Certificateholders on the
current Distribution Date is equal to............................................... $
------
6. The amount of interest payable to the Class C Certificateholders on the
current Distribution Date is equal to............................................... $
------
7. The amount of principal payable to the Class C Certificateholders on the
current Distribution Date is equal to............................................... $
------
8. The aggregate amount of Reallocated Class B Principal Collections during
the related Due Period is equal to.................................................. $
------
9. The aggregate amount of Reallocated Class C Principal Collections during
the related Due Period is equal to.................................................. $
------
SECTION 15: SERIES 1999-1
1. The aggregate amount of Series Additional Allocable Amounts during the
related Due Period is equal to...................................................... $
------
2. The amount of interest payable to the Class A Certificateholders on the
current Distribution Date is equal to............................................... $
------
3. The amount of principal payable to the Class A Certificateholders on the
current Distribution Date is equal to............................................... $
------
4. The amount of interest payable to the Class B Certificateholders on the
current Distribution Date is equal to............................................... $
------
5. The amount of principal payable to the Class B Certificateholders on the
current Distribution Date is equal to............................................... $
------
6. The amount of interest payable to the Class C Certificateholders on the
current Distribution Date is equal to............................................... $
------
</TABLE>
C-9
<PAGE> 137
<TABLE>
<S> <C> <C>
7. The amount of principal payable to the Class C Certificateholders on the
current Distribution Date is equal to............................................... $
------
8. The aggregate amount of Reallocated Class B Principal Collections during
the related Due Period is equal to.................................................. $
------
9. The aggregate amount of Reallocated Class C Principal Collections during
the related Due Period is equal to.................................................. $
------
SECTION 16: SERIES 1999-2
1. The aggregate amount of Series Additional Allocable Amounts during the
related Due Period is equal to...................................................... $
------
2. The amount of interest payable to the Class A Certificateholders on the
current Distribution Date is equal to............................................... $
------
3. The amount of principal payable to the Class A Certificateholders on the
current Distribution Date is equal to............................................... $
------
4. The amount of interest payable to the Class B Certificateholders on the
current Distribution Date is equal to............................................... $
------
5. The amount of principal payable to the Class B Certificateholders on the
current Distribution Date is equal to............................................... $
------
6. The amount of interest payable to the Class C Certificateholders on the
current Distribution Date is equal to............................................... $
------
7. The amount of principal payable to the Class C Certificateholders on the
current Distribution Date is equal to............................................... $
------
8. The aggregate amount of Reallocated Class B Principal Collections during
the related Due Period is equal to.................................................. $
------
9. The aggregate amount of Reallocated Class C Principal Collections during
the related Due Period is equal to.................................................. $
------
SECTION 17: SERIES 1999-3
1. The aggregate amount of Series Additional Allocable Amounts during the
related Due Period is equal to...................................................... $
------
2. The amount of interest payable to the Class A Certificateholders on the
current Distribution Date is equal to............................................... $
------
3. The amount of principal payable to the Class A Certificateholders on the
current Distribution Date is equal to............................................... $
------
</TABLE>
C-10
<PAGE> 138
<TABLE>
<S> <C> <C>
4. The amount of interest payable to the Class B Certificateholders on the
current Distribution Date is equal to............................................... $
------
5. The amount of principal payable to the Class B Certificateholders on the
current Distribution Date is equal to............................................... $
------
6. The amount of interest payable to the Class C Certificateholders on the
current Distribution Date is equal to............................................... $
------
7. The amount of principal payable to the Class C Certificateholders on the
current Distribution Date is equal to............................................... $
------
8. The aggregate amount of Reallocated Class B Principal Collections during
the related Due Period is equal to.................................................. $
------
9. The aggregate amount of Reallocated Class C Principal Collections during
the related Due Period is equal to.................................................. $
------
</TABLE>
10. 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:
C-11
<PAGE> 1
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 Agent]
SRFG, Inc. on behalf of
Sears Credit Account Master Trust II, Series 1999-3
[Name of Issuer]
Bank One, National Association
(formerly the First National Bank of Chicago)
[Name of Agent]
November 23, 1999
-----------------
[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 1999-3
----------------------------------------------------------------
[Issue Description]
Ladies and Gentlemen:
This letter sets forth our understanding with respect to certain matters
relating to the above-referenced issue (the "Securities"). Agent will act as
trustee, paying agent, fiscal agent or other such agent of Issuer with respect
to the Securities pursuant to a trust indenture, trust agreement, or other such
document dated as of July 31, 1994 (the "Document").
Morgan Stanley & Co. Incorporated; Credit Suisse First Boston Corporation; Bear,
--------------------------------------------------------------------------------
Stearns & Co. Inc.; Goldman, Sachs & Co.; Merrill Lynch, Pierce, Fenner & Smith
-------------------------------------------------------------------------------
Incorporated
------------
["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
Agent make the following representations to DTC:
-------------------
* This Letter of Representations includes the Addendum attached hereto, which
modifies and supersedes this Letter of Representations to the extent set
forth therein.
<PAGE> 2
1 Prior to closing on the Securities on November 23, 1999, 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 issued 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.
2 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.
3 In the event of any solicitation of consents from or voting by
holders of the Securities, Issuer or Agent 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 5.
4 In the event of a full or partial redemption, Issuer or Agent 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 Agent 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 30 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
2
<PAGE> 3
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 Steward Avenue
Garden City, NY 11530-4719
5 In the event of an invitation to tender the Securities (including
mandatory tenders, exchanges, and capital changes), notice by Issuer or Agent 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
6 All notices and payment advices sent to DTC shall contain the CUSIP
number of the Securities.
7 Issuer or Agent 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 payments 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 Agent 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:
Manager; Announcements
Dividend Department
The Depository Trust Company
7 Hanover Square, 22nd Floor
New York, NY 10004-2695
3
<PAGE> 4
8 The interest accrual period is payment date to payment date.
9 Issuer or Agent shall provide a written notice of interest payment
information to a standard interest announcement service subscribed to by DTC as
soon as the information is available. In the unlikely event that no such service
exists, Issuer or Agent shall provide such notice directly to DTC
electronically, as previously arranged by Issuer or Agent and DTC, as soon as
the information is available. If electronic transmission is not available,
absent any other arrangements between Issuer or Agent 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 telephone
(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
* Such notice shall be sent to DTC no later than 8:00 a.m. on the Publication
date.
10 Issuer or Agent shall provide CUSIP numbers for each issue for which
payment is being sent, as well as the dollar amount of the payment for each
issue, no later than noon (Eastern Time) on the payment date.
11 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. Absent any other arrangements between
Issuer or Agent and DTC, such funds shall be wired as follows:
The Chase Manhattan Bank
ABA #021 000 021
For credit to a/c Cede & Co.
c/o The Depository Trust Company
Dividend Deposit Account #066-026776
12 Maturity and redemption payments allocated with respect to each
CUSIP number 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).
Absent any other arrangements between Issuer or Agent and DTC, such payments
shall be wired as follows:
The Chase Manhattan Bank
ABA #021 000 021
For credit to a/c Cede & Co.
c/o The Depository Trust Company
Redemption Account #066-027608
4
<PAGE> 5
13 Principal payments (plus accrued interest, if any) as the result of
optional tenders for purchase effected by means of DTC's Repayment Option
Procedures 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. Absent any other arrangements
between Issuer or Agent and DTC, such payments shall be wired as follows:
The Chase Manhattan Bank
ABA #021 000 021
For credit to a/c Cede & Co.
c/o The Depository Trust Company
Reorganization Account #066-027608
14 DTC may direct Issuer or Agent to use any other number or address to
which notices or payments of interest or principal may be sent.
15 There will be no partial redemption of the Securities.
16 In the event that Issuer determines that beneficial owners of
Securities shall be able to obtain certificated Securities, Issuer or Agent
shall notify DTC of the availability of certificates. In such event, Issuer or
Agent shall issue, transfer, and exchange certificates in appropriate amounts,
as required by DTC and others.
17 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 (at which time DTC will confirm with Issuer or Agent the aggregate
principal amount of Securities outstanding). Under such circumstances, at DTC's
request Issuer and Agent 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.
18 Nothing herein shall be deemed to require Agent to advance funds on
behalf of Issuer.
19 This Letter of Representations may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an original,
but all such counterparts together shall constitute but one and the same
instrument.
20 This Letter of Representations is governed by, and shall be
construed in accordance with, the laws of the State of New York.
5
<PAGE> 6
21 The following riders, attached hereto, are hereby incorporated into
this Letter of Representations.
(1) Addendum; (2) Schedule A; (3) Schedule B; and (4) Rider Amending
DTC Letter of Representations.
<TABLE>
<CAPTION>
Notes: Very truly yours,
<S> <C>
A. If there is an Agent (as defined in this
Letter of Representations), Agent as well as
Issuer must sign this Letter. If there is no SRFG Inc.
Agent, in signing this Letter, Issuer itself --------------------------------------------------
undertakes to perform all of the obligations (Issuer)
set forth herein.
By: /s/ George F. Slook
B. Schedule B contains statements that DTC ----------------------------------------------
believes accurately describe DTC, the method (Authorized Officer's Signature)
of effecting book-entry transfers of
securities distributed through DTC, and
certain related matters Bank One, National Association (formerly The
First National Bank of Chicago)
--------------------------------------------------
(Agent)
By: /s/ Steven M. Wagner
----------------------------------------------
(Authorized Officer's Signature)
</TABLE>
Received and Accepted:
THE DEPOSITORY TRUST COMPANY
By: /s/ Authorized Signatory
------------------------
cc: Underwriter
Underwriter's Counsel
6
<PAGE> 7
ADDENDUM
TO
LETTER OF REPRESENTATIONS DATED NOVEMBER 23, 1999
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 November 23, 1999, each by and among Sears, Roebuck and Co.
as Servicer, SRFG, Inc. (formerly Sears Receivables Financing Group,
Inc.) as Seller and Bank One, National Association (formerly The First
National Bank of Chicago) as the Trustee.
Paragraph 1: The following is hereby added after the third sentence of Paragraph
1:
"Each certificate shall remain in the Agent's custody subject to the
provisions of the Fast Balance Certificate Agreement currently in
effect between the Agent and DTC."
Paragraph 5: The following is hereby added after the first sentence of Paragraph
6:
"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 14: The following is hereby inserted after the word "Agent" in line 1
of paragraph 14.
", and if requested, shall confirm such direction in writing."
<PAGE> 8
SCHEDULE A
SEARS CREDIT ACCOUNT MASTER TRUST II
MASTER TRUST CERTIFICATES, SERIES 1999-3
CLASS A CERTIFICATES CUSIP NO. 81234CBL4
<TABLE>
<CAPTION>
Certificate Number Principal Amount Maturity Date(1) Interest Rate
------------------ ---------------- -------------- -------------
<S> <C> <C> <C>
1 $200,000,000 November 17, 2009 6.45%
2 $200,000,000 November 17, 2009 6.45%
</TABLE>
---------------------
(1) Last possible Distribution Date.
2
<PAGE> 9
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 New York Banking
Law, a "banking organization" within the meaning of the New York Banking Law, a
member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code and a "clearing agency"
registered pursuant to the provisions of Section 17A of the 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 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.
<PAGE> 10
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 to
Indirect Participants to Beneficial Owners will be governed by arrangements
among them, subject to any statutory or regulatory requirement as may be in
effect from time to time.
[6. Redemption notices shall be sent to DTC. If less than all of the Securities
within an issue are being redeemed, DTC's practice is to determine by lot the
amount of interest of each Direct Participant in such issue to be redeemed.]
7. Neither DTC nor Cede & Co. will consent or vote with respect to Securities.
Under its usual procedure, DTC mails an Omnibus Proxy to 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 Cede & Co.,
as nominee of DTC. DTC's practice is to credit Direct Participants' accounts,
upon DTC's receipt of funds and corresponding detail information from Issuer or
Agent, on payable date in accordance with their respective holdings shown on
DTC's records. 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, Agent,
or Issuer, subject to any statutory or regulatory requirements as may be in
effect from time to time. Payment of principal and interest to Cede & Co. is the
responsibility of Issuer or Agent, 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
purchased or tendered, through its Participant, to Agent [the 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 Agent 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 Agent [or Tender/Remarketing
Agent's] DTC account.]
2
<PAGE> 11
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, Securities
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.
3
<PAGE> 12
RIDER AMENDING DTC LETTER OF REPRESENTATIONS - BEO COLLATERALIZED MORTGAGE
OBLIGATIONS (CMO) WITHOUT OWNER OPTION TO REDEEM/OTHER ASSET-BACKED SECURITIES
/AND PASS-THROUGH CERTIFICATES
As of March 9, 1998, DTC's Reorganization Department relocated and prior to
that, DTC's Dividend Department relocated to the 55 Water Street location.
Following are the new addresses and related telephone and facsimile numbers
referenced in the Letter of Representations.
THE FOLLOWING CHANGES RELATE TO PARAGRAPH 3 OF THE LETTER OF REPRESENTATIONS:
Old Telecopier Numbers Current Telecopier Numbers
(212) 709-6896 and (212) 709-6897 (212) 855-5181 and (212) 855-5182
The confirmation number (212) 709-6870 is now (212) 855-5202.
THE FOLLOWING CHANGES RELATED TO PARAGRAPH 5 OF THE LETTER OF REPRESENTATIONS:
Old Telecopier Numbers Current Telecopier Number
(212) 709-1093 and (212) 709-1094 (212) 855-5278
The confirmation number (212) 709-6884 is now (212) 855-5280.
The new address is Manager; Reorganization Department
Reorganization Window
The Depository Trust Company
55 Water Street 50th Floor
New York, NY 10041-0099
THE FOLLOWING CHANGES RELATE TO PARAGRAPH 7 OF THE LETTER OF REPRESENTATIONS:
Old Telecopier Number Current Telecopier Number
(212) 709-1723 (212) 855-4555
The new address is Manager; Announcements
Dividend Department
The Depository Trust Company
55 Water Street 25th Floor
New York, NY 10041-0099
THE FOLLOWING CHANGES RELATE TO PARAGRAPH 9 OF THE LETTER OF REPRESENTATIONS:
Old Telecopier Numbers Current Telecopier Numbers
(212) 709-1723 and (212) 709-1686 (212) 855-4555 and (212) 855-4556
The confirmation number (212) 709-1270 is now (212) 855-4550
<PAGE> 13
The new address for the Paragraph 9 is the same as that listed above, referenced
in Paragraph 7.
THE FOLLOWING CHANGES RELATED TO PARAGRAPH 10 OF THE LETTER OF REPRESENTATIONS:
Such information shall be conveyed by automated notification. If the
circumstance prevent the funds paid to Cede & Co., as nominee of DTC, by 2:30
p.m. ET from equaling the dollar amount associated with detail payments by 12:00
noon ET Issuer or Agent must provide CUSIP-level reconciliation to DTC no later
than 2:30 p.m. ET. Reconciliation can be provided by automated means or written
format.
THE FOLLOWING CHANGES RELATE TO PARAGRAPH 11 OF THE LETTER OR REPRESENTATIONS:
To facilitate the payment standards, Issuer is required to remit free funds to
Agent by 1:00 p.m. ET on each payment date, or at such earlier time as required
by Agent to guarantee timely credit to the Dividend Deposit Account of Cede &
Co.
THE FOLLOWING CHANGES RELATE TO PARAGRAPH 12 OF THE LETTER OF REPRESENTATIONS:
To facilitate the payment standards, Issuer is required to remit free funds to
Agent by 1:00 p.m. ET on each payment date, or at such earlier time as required
by Agent to guarantee timely credit to the Redemption Deposit Account of Cede &
Co. Issuer or Agent shall deliver Cusip-level detail regarding such payments to
DTC no later than 2:30 p.m. ET on each payment date.
THE FOLLOWING CHANGES RELATE TO PARAGRAPH 13 OF THE LETTER OF REPRESENTATIONS:
To facilitate the payment standards, Issuer is required to remit free funds to
Agent by 1:00 p.m. ET on each payment date, or at such earlier time as required
by Agent to guarantee timely credit to the Reorganization Deposit Account of
Cede & Co. Issuer or Agent shall deliver Cusip-level detail regarding such
payments to DTC no later than 2:30 p.m. ET on each payment date.
2
